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  • #101
  • Jan 17, 2015 9:25am Jan 17, 2015 9:25am
Quoting stoplossmatt
stop loss matters as a regular contract. otherwise there will be no risk management possible and everything will loose sense. who will guarantee you tomorrow that you are protected at any time and at any position?stop loss must matters same as a trading order. regulators need to make all operators to respect and obey their clients stop loss orders or it will be a huge neglect on clients account. only with stop loss risk-management is possible by anyone. so at the end of the line if there is not a market maker that takes a stop-loss order operators...
Stoploss only works if there is another trader willing to take it.
  • #102
  • Jan 17, 2015 10:32am Jan 17, 2015 10:32am
Quoting stoplossmatt
stop loss matters as a regular contract. otherwise there will be no risk management possible and everything will loose sense. who will guarantee you tomorrow that you are protected at any time and at any position?stop loss must matters same as a trading order. regulators need to make all operators to respect and obey their clients stop loss orders or it will be a huge neglect on clients account. only with stop loss risk-management is possible by anyone. so at the end of the line if there is not a market maker that takes a stop-loss order operators...
This kind of SL you are talking about is available at bucketshops and is called 'guaranteed stop loss'. They can do it because you are trading with them and this environment will not be affected by zero liquidity events. Actually they can do it without guaranteed option but they prefer to cash you for not creating artificial slippage and gaps.
  • #103
  • Edited 11:56am Jan 17, 2015 11:45am | Edited 11:56am
Checking around the internet I was able to see how leverage really became a bad word for economic news outlets.

I kind of agree with the fact that leverage can be used to screw the naive.

Now, the more tricky question is if the naive has the right to let himself be deceived!

If you have an account of 5 or 10K it is almost guaranteed that you will not be able to make any decent money with less than 50:1 leverage.

Of course "decent money" is a vague term. And will change from country to country and life stile to life stile.

Brokers ( MM and ECN) want the maximum amount of customers they can get, and leverage is the best "bait" to bring clients.

On the old days when you had brokers in America offering 500 or even 1000:1 leverage, I remember myself mesmerized by the possibilities.

After my margin call where I saw 70K evaporating, I was introduced Mrs reality!!

Was I stupid and deserved it? I would say yes.

Now in the light of Thursdays events, we can see that naiveness is not the only factor behind a bust.

FXCM lobbied for leverage and ironically became a victim of it !!

They got cot in a big move and were MARGIN CALLED!!

The result is that they had to get more margin from the fist loan shark they could find.

And you know that a loan from a loan shark comes with some pretty nasty liabilities.

So now the MORAL question asked again.

If the biggest broker in America with all its experts, algorithms and models for risk management got cot in a black swan event.

What about the guy with a average IQ and 1K account?

What kind of chances the person really has?

Should he or she be somehow "protected" against something the person don't really understand?

Some people are arguing that in a 20:1 0r 10:1 scenario FXCM would be fine.

I am personally in favor of a reduction of the current 50:1 leverage.

But thats just MHO !!
So, you think you have rights? LOL
  • #104
  • Jan 17, 2015 12:25pm Jan 17, 2015 12:25pm
Quoting ForexOracle
Checking around the internet I was able to see how leverage really became a bad word for economic news outlets. I kind of agree with the fact that leverage can be used to screw the naive. Now, the more tricky question is if the naive has the right to let himself be deceived! If you have an account of 5 or 10K it is almost guaranteed that you will not be able to make any decent money with less than 50:1 leverage. Of course "decent money" is a vague term. And will change from country to country and life stile to life stile. Brokers ( MM and ECN) want...

You are prety obssesed with leverage reduction. We all know that, just send a letter to NFA,FCA,.. asking for that.
  • #105
  • Jan 17, 2015 12:31pm Jan 17, 2015 12:31pm
Quoting DavidRP
{quote} You are prety obssesed with leverage reduction. We all know that, just send a letter to NFA,FCA,.. asking for that.
I find amazing that even if we are in a forum created to discuss ideas, people that have nothing to say or add, insist in wasting time posting!!
So, you think you have rights? LOL
  • #106
  • Jan 17, 2015 12:36pm Jan 17, 2015 12:36pm
Quoting ForexOracle
{quote} I find amazing that even if we are in a forum created to discuss ideas, people that have nothing to say or add, insist in wasting time posting!!
Yep, that's why we all know your opinion you have repeat it several times. You want a leverage enough for your account.
  • #107
  • Jan 17, 2015 12:42pm Jan 17, 2015 12:42pm
Quoting DavidRP
{quote} Yep, that's why we all know your opinion you have repeat it several times. You want a leverage enough for your account.
If you are so tired of my opinion there is a whole bunch of other threads you can go and post.

I would suggest you to take your empty posts somewhere else!!
So, you think you have rights? LOL
  • #108
  • Jan 17, 2015 12:45pm Jan 17, 2015 12:45pm
I dodge the bullet in the chf fiasco but my broker didn't, i would have kiss my entire account goodbye if my broker declared insolvent, but fortunately they were able to secure a rescue/loan. By reducing the leverage, we would have to put more money in for margin and if this sheeet happens again, even if u dodge or mde a killing but the broker didn't... Ur ass is still on the line. What really is needed is a change in the broker side to protect themselves.
  • #109
  • Jan 17, 2015 1:30pm Jan 17, 2015 1:30pm
Quoting ForexOracle
So now the MORAL question asked again...... Should he or she be somehow "protected" against something the person don't really understand?
This is the crux and it applies not just to trading but in all areas of people's lives wherein the State (or the King or the Church, etc) may attempt to intervene in people's affairs for their own "good". If I don't want or feel I need medical insurance, why should I submit to the US government's requirement that I enroll in ObamaCare? Some will say that if I don't, the rest of society that does so will be subsidizing my uncontrolled medical expenses, should I incur any. They will suggest that enforced participation in ObamaCare is necessary for the greater good of all. Yes, the Greater Good. The benevolent, paternalistic State wants to help you for your own good and will insist that you be "helped" for the Greater Good of All.

How much of this "help" must I endure? If I want to go out on the State's highways and ride my motorcycle, the State tells me how fast I can go and what I have to wear while I do it. The State tells me what substances I can put in my body, they have even tried to keep me from drinking too much Mr. Pibb. Holy Shit where does it end?

If somebody wants to offer me 1000:1 leverage to trade forex and I understand the implications of that, why should the State try to intervene? People will say that scenario is dangerous to all involved and poses an unnecessary risk to the financial system. Who is right? Is 1000:1 leverage too high? Is 50:1? Should retail forex trading be shut down for good?

I used to live in Reno. There were casinos everywhere, some huge, some tiny. Even a row of slot machines in the Quickie Mart. Wherever there were casinos, there were pawn shops. Some places there were blood plasma places next to a casino. Pretty convenient - if you run out of money playing slots or blackjack, you could skip over next door and sell some blood or pawn your belt buckle to get a little more gambling scratch. No, wait, that's terrible! Utterly predatory! Why didn't the government do something, enact some zoning laws to keep predatory businesses away from the casinos, where people are most vulnerable to their own afflictions?

What "protection" does the State owe you? And, what do you owe the State, or Society, in terms of responsible behavior? These kinds of questions are never fully settled.

Anyway, if it gets harder or even impossible to trade spot forex, you can trade futures and options. Nobody is arguing about the leverage inherent in those instruments (hmmm?). Exchange traded instruments offer a more transparent market, anyway. Easier to trade, in some ways. So, ya'll come, we'll leave the light on for ye...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #110
  • Jan 17, 2015 1:34pm Jan 17, 2015 1:34pm
To cut all this nonsense, is (maybe) something like this:

1. X = (-SNB ’’CHF stay still’’ cost) + (SNB crash return)
...and you can also in another equation add +or- (Swiss economy condition in ’’protection time’’)
2. All the forthcoming worldwide NB’s interventions, maybe even right away.

Why not to move/break market to 0 or for whatever is possible in 1 second?

And then make it still for N years, like most peaceful water?

Do you really think that few petty ''upside down FF'' traders will do it?

(and then all this nonsense/blame/whining talk about small traders/leverage/''protection'' for poor small traders and bla bla bla)
Any way, I doubt many of you understood what I just wrote, but at least try to ask some different questions.
  • #111
  • Jan 17, 2015 1:43pm Jan 17, 2015 1:43pm
if you loss all account 2 option dead or born. Well this guys 2 options D or B
Attached Image (click to enlarge)
Click to Enlarge Name: FXCM - Losses 2.PNG Size: 42 KB
Belive & Achieve
  • #112
  • Jan 17, 2015 1:54pm Jan 17, 2015 1:54pm
In reading this thread, I see several people openly considering a change from trading forex to futures, given the recent extreme volatility. As someone who actively trades futures, a word of caution: futures are NOTHING like forex. They move in completely different ways. Futures are akin to playing with dynamite. Don't think you can take a strategy that works in forex and automatically be successful in trading futures. It tends to require a completely different skill set. Just my two cents.
  • #113
  • Edited 2:01pm Jan 17, 2015 1:57pm | Edited 2:01pm
Quoting The Fool
Yes, the Greater Good.....Holy Shit where does it end?
Fool aint you scared am stalking you? . You are very right here as usuall. Screw this nonscence with closing retail, and if it comes across mind of some degenerate politician, lets trade options and futures. Trader can always dodge regulation, government is slow.

Noone is so stupid to think investing doest involve any risks. If such a person exists, he deservers what is coming to him. Closure of a broker due to unprecedented move is nothing more than operation risk. Shocks to the market were, are, and will stay. It is part of life I am afraid and pretty sure regulating life is not a solution.

T
"I know one thing, that I know nothing." Sokrates
  • #114
  • Jan 17, 2015 2:00pm Jan 17, 2015 2:00pm
First post, but have been lurking for a while:


I reside in Switzerland and first heard rumors about the SNB possibly dropping the peg sometime last week. I entered a 50K S/L around 1.1985 and a T/P somewhere around 1.195 (i think) mid last week. Sure enough, the sell went through, selling at 1.19866 and the T/P was triggered seconds later at 1.15681. A few minutes later I realized what happened but also noticed that two other trades I had open ( S CHF/JPY) had generated a loss of $550 each. The $2.2K profit from the EURCHF trade offset my two losses... Anyway, I was extremely curious to find out if I could get back in, even though it was impossible to trade the CHFEUR at that time but still decided to put in a buy at market when it was down around 0.97 for a tiny 2K lot thinking the risk was not huge, why not(?). Boom a few minutes later the trade went through at .9727 and a couple minutes later the EURCHF was at 1.04 so I sold at 1.3794.


I would like to know if other traders were able to process trades during the first few minutes. I trade with FXCM (10K account) and am extremely happy with them but also a bit nervous right now.

Good luck out there and stay safe!
When trading: "Empty your mind, be formless. Shapeless, like water."
  • #115
  • Jan 17, 2015 2:09pm Jan 17, 2015 2:09pm
Personally, I'm a little surprised that someone would loan FXCM $300,000,000 in order to continue business as usual using an abysmal profit model. It seems that FXCM must have provided assurances that they would scrap their no dealing desk division or they are dealing with an extremely reckless lender. This sort of calamity is going to happen again. The system of small brokers hooking themselves into the banking system via primary and backup liquidity providers clearly doesn't work. In fact, it is disastrously unprofitable for the broker.

I hope that a solution is found to revamp the no dealing desk model. I really don't want to go back to dealing with shady brokers that only win when I lose. However, since Thursday, dealing with a market maker fronted by the Russian mob seems safer than using a no dealing desk broker.

I'm staying away from all CHF pairs for the rest of the year and will not trade EUR pairs until the QE situation is clear. It could get nasty in EUR pairs next week.
  • #116
  • Jan 17, 2015 2:17pm Jan 17, 2015 2:17pm

just for the records below the current statement on Alpari's website

----
Important announcement

The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. Retail client funds continue to be segregated in accordance with FCA rules. For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari (UK) Limited has not entered a formal insolvency process. The board of directors are urgently considering all options including a sale and are liaising closely with the FCA. We hope to make a further announcement shortly.


---end---

  • #117
  • Jan 17, 2015 2:18pm Jan 17, 2015 2:18pm

and very contrasting to above, a statement from Oanda I received as account holder on same day, not that I want to rub salt into wounds....


---
Dear xxx,

Early on January 15, 2015, the Swiss National Bank (SNB) sent global financial markets into turmoil with a surprise move to eliminate its three-year-old cap on the franc (CHF).

In the wake of this unprecedented market event, OANDA demonstrated its ongoing commitment to doing right by its clients. Despite suffering losses and vanishing liquidity in the institutional hedging market, OANDA remained true to its 14-year legacy of transparency, integrity and fairness to our clients. OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough (where permitted by regulations).

As a very well capitalized broker, we are proud to report that it is business as usual at OANDA: client trading, deposits and withdrawals are processing normally.

OANDA is proud of its strong reputation for fairness and integrity. We thank our customers for their continued loyalty and welcome new traders who want to experience outstanding service and execution.

Specific questions about individual fxTrade accounts will be addressed by our Client Experience team via http://www.oanda.com/corp/contact/.

Thank you for trading with OANDA,

signature

Ed
President and CEO, OANDA Corporation


---end---

  • #118
  • Jan 17, 2015 2:24pm Jan 17, 2015 2:24pm
Quoting Pippy5000
Personally, I'm a little surprised that someone would loan FXCM $300,000,000 in order to continue business as usual using an abysmal profit model. It seems that FXCM must have provided assurances that they would scrap their no dealing desk division or they are dealing with an extremely reckless lender. This sort of calamity is going to happen again. The system of small brokers hooking themselves into the banking system via primary and backup liquidity providers clearly doesn't work. In fact, it is disastrously unprofitable for the broker. I hope...
Lol. This is no calamity, anyone can go bust. Baker, pub, you and even broker. Wow, what a surprise I hear you say. Wtf unprofitable for the broker? Sure, if he lets his clients overleverage and slips can get underwater and go bust. But so does pub if running on mortgage and doesnt have clients. Wtf revamp dealing desk model? Thats one of the most stable ones. Thanks to the fact broker is kind of little market maker here, there is much little chance he will go bust because he will offer you price he can afford. Thats it. Sure, if you go to some 3rd world DD thief he will offer you such price to margin you out, but thats your fault for trusting your money to a thief. And this extremely reckless lender is nothing more than a shark taking opportunity. Classic aquisition, nothing more and he very well knows what he is doing.

T
"I know one thing, that I know nothing." Sokrates
  • #119
  • Jan 17, 2015 2:26pm Jan 17, 2015 2:26pm
Quoting w00dmann
In reading this thread, I see several people openly considering a change from trading forex to futures, given the recent extreme volatility. As someone who actively trades futures, a word of caution: futures are NOTHING like forex. They move in completely different ways. Futures are akin to playing with dynamite. Don't think you can take a strategy that works in forex and automatically be successful in trading futures. It tends to require a completely different skill set. Just my two cents.
The biggest differences between trading futures & forex is the dollar amount & the # of exit/entry points.
Every tick in Eur futures = $12.50. Forex can have every tick = $ .01 since there are many more entry/exit points between every tick of futures trading and position size can be much smaller with forex.
The actual "movement" is really not that different. It may seem that way watching it live but only because forex can be moving "inside" every tick of futures.
See charts below. Very little difference.
Attached Image (click to enlarge)
Click to Enlarge Name: EURUSDM30.png Size: 24 KB
Attached Image
  • #120
  • Jan 17, 2015 2:32pm Jan 17, 2015 2:32pm
Quoting gravitist
"Trading off-exchange foreign exchange on margin carries a high level of risk and is not suitable for all investors. " Which part of that do you people not understand? Quit your whining and man-up.
Exactly!

And make a better trading plan for the next black swan moment.
..
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