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Brokers chasing you for negative account balance

  • #101
  • Jan 19, 2015 4:19pm Jan 19, 2015 4:19pm
Quoting Forexia
All business relationship should be based on good faith not trying to see how much I can get away with after screwing the other party.

All business relationships are based on profit. Only!

Without it, there is no business.

Forexia, as a favor to the rest of Canada, can you please change your location in your profile.

You are embarrassing the rest of us.

Thanks.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #102
  • Jan 19, 2015 4:26pm Jan 19, 2015 4:26pm
Quoting Forexia
If all those LP's REALLY have an ounce of conscience, they would choose to forgive these negative balances from their own clients, the brokers and in turn the brokers can forgive the negative balances from us traders since they were the ones who caused these large negative balances by artificially stopping liquidity thus single-handedly causing the huge 1.8K+ pips drop. If they had stayed in the market and continued to provide liquidity, there would be still negative balances but the carnage wouldn't be this big. This is almost like price-fixing...
Well the LPs had to stop pricing because they couldnt find any liquidity and blew up their risk limits (thats why DB lost 150mm, citi lost 150mm etc) because they tried to provide liquidity until they just could not keep buying (eurchf, usdchf etc) anymore. Also banks started pricing again in few minutes. This rather helped the market by acting something like CME halt and NYSE halts. Of course not having a centralized market in FX makes having proper halts impossible.

So I wouldnt say Banks just tried to take advantage of the situation. Most got whipsawed badly themselves. I think SNB should have taken this action either on weekend or should have provided temporary liquidity right after the announcement.
Think : Trade : Live Life
  • #103
  • Jan 19, 2015 6:33pm Jan 19, 2015 6:33pm
Quoting Spili
{quote} It is also the LP's JOB to mitigate risk. The LPs likely have an algo that detects a large percentage move and triggers a suspension of trading, just like Nasdaq, CME, BATS etc etc. You can't simply expect a financial company to accept open ended risk. Who would insure them, invest in them? Which banks would be willing to extend credit to a company that has such a massive hole in its risk management? How would the financial regulator feel about it? I know you're upset, but don't you see the impossibility of what you're proposing? The LPs...
Unfortunately these forums get full of people who probably shouldn't be involved in the market. What we have seen this last week is just a market occurrence, nothing that most funds, traders and brokers weren't able to cope with. The losses being spoken of in the media are not even large numbers just affecting some companies that already had issues. We are hearing from traders who were in losing trades or with positions open with leverage and no hedging present. Not understanding how it works, as a result blaming everyone else for their losses and expect them covered. More regulation...super idea...not. The financial markets are already tangled in so much conflicting regulation that most of it becomes ineffective. besides the point, regulations only work if they are obeyed and enforced. Enforcement is impossible as this business crosses borders, and as for regulation.....I bet forexia never speeds in his car either, and if he does it's not his fault and the car company should pay the fine.
  • #104
  • Edited 7:02pm Jan 19, 2015 6:44pm | Edited 7:02pm
Quoting stt
{quote} Well the LPs had to stop pricing because they couldnt find any liquidity and blew up their risk limits (thats why DB lost 150mm, citi lost 150mm etc) because they tried to provide liquidity until they just could not keep buying (eurchf, usdchf etc) anymore. Also banks started pricing again in few minutes. This rather helped the market by acting something like CME halt and NYSE halts. Of course not having a centralized market in FX makes having proper halts impossible. So I wouldnt say Banks just tried to take advantage of the situation....
Well this is bit of a self-fulfilling prophecy, if you stop quoting prices, there wouldn't be liquidity LOL because nobody could trade when there is no prices so if there is no trading, then naturally there is no liquidity. There were plenty of Stop-Loss, TP orders in the system that they could've traded against like what they do everyday at various price levels. No what happened was after seeing that there were more stop-loss orders than TP limit orders in their system (yes they do see ALL of our orders because all of our orders eventually end up with them as they are THE ULTIMATE Market Maker), they see that more and probably overwhelmingly larger number of traders are on the wrong side of the market than right and they decided to make a massacre by first stopping the price quotes to let the price free fall all the way to bottom and then come back to fill the orders at this "fair market value" that they set themselves and in liquidity stoppers like Barclay's case, they even fixed the price even lower and filled the trades at prices even lower than the price already established by trading:

Barclays had filled EUR/CHF sell orders at 0.065 (no extra zero) while at the same time EBS was quoting its session low of 0.85.

http://forexmagnates.com/banks-bucke...nc-volatility/

That's a further 7,850 pip move lower, and on a 100K standard lot, that's another $1.2 million loss right there!! This is the very same tactic that bucket market maker brokers use against retail traders that we are all too familiar, disconnect you from their server or stop quoting your prices when you want your stop-loss order to be hit and then come back hit your stop-loss finally with 20-30 negative slippages only in this case, those liquidity "providers" executed the stop-loss orders with a 2K+ negative slippages and further padded their quotes with a spread of 7,850 pip!!

True there are trading halts in stock exchanges that seems to be similiar to this except in exchanges, it's done in an orderly fashion AND it's BEFORE any major news so NOBODY could trade. So in this case, if they want to do a trading halt, they would have to shut down the quote system BEFORE 4:30 AM when SNB was due to announce their decision AND all pending orders to buy or sell CHF-related pairs would be ALL cancelled by ALL brokers and liquidity "providers" and trading suspended. And then only when the news release is complete, then trading for EVERYBODY would resume and would resume AT THE SAME TIME for EVERYBODY. Then everybody can start to put in buy and sell orders and etc.

If those liquidity providers had stopped providing quotes BEFORE the news release and didn't take in orders and if losses still ensued then the losses would be justified. But since we are not operating in an organized exchange and those liquidity "providers" still want to take in orders before any news release, then they need to continue to take in orders afters. They can't pick and choose.
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Make your losses in demo. Earn your profits live.
  • #105
  • Jan 19, 2015 6:52pm Jan 19, 2015 6:52pm
Quoting Spili
{quote} It is a pretty unfortunate situation, but one that also teaches us something. For one brief moment we got to see the vulnerability of brokers, got an insight to how they operate, got a much better understanding of market gaps and the real risks of trading fx. But even more importantly, for all of the pure chartists, the technical vs. fundamental question was answered - yes, by all means have a technical strategy but you cannot operate that strategy in a vacuum. You still need to be aware of central bank policy, interest rates and upcoming...
Some thoughts that most people need to remember and maybe think about before they continue. I've been doing this for a living for 20+ years now, have had some good times and some not so good, but never bad times, thanks to be trained and educated correctly, and no, that doesn't involve an online course but formal education and years at the University of life. Things have changed, styles come and go, and as you say, technical trading is great but nothing is alone, you must always be aware of fundamental factors. The CHF was pegged, we know that, it was temporary, we know that...so why the big drama. Anyone in a trade there was only going for a quick buck. Hopefully they had made enough previously to cover this loss. It Is a tough market, they all are. If it was easy everyone would be doing it, maybe this is the problem, everyone is trying. There is so much against you that you really need to have you wits about you to succeed long term. Blowing up an account and spending years to make it back is not success, making a consistent profit over a long period of time remaining ahead is success. Have a good look around, be suspicious and be aware that CB's, Governments, and institutions can all do things to turn the market on it's head...temporarily. The CHF peg was one of these things, it's now removed and guess what, it's headed back where it was three years ago. I am aware of funds who had this in their plan, they're now smiling after some pain for a while. There will also be funds on the other side...as per 2008/09.
If you are still trading successfully as you were before last week as if nothing happened, well done. That is how it should be, keep it up. There will be more shocks, keep your heads up and be aware they may be lurking.
Again, good post Spili, a bit of reality for some of the punters.
  • #106
  • Jan 19, 2015 7:05pm Jan 19, 2015 7:05pm
Quoting Forexia
{quote} Well this is bit of a self-fulfilling prophecy, if you stop quoting prices, there wouldn't be liquidity LOL because nobody could trade when there is no prices so if there is no trading, then naturally there is no liquidity. There were plenty of Stop-Loss, TP orders in the system that they could've traded against like what they do everyday at various price levels. No what happened was after seeing that there were more stop-loss orders than TP limit orders in their system (yes they do see ALL of our orders because all of our orders eventually...
In the scheme of things, it is only a small number of brokers finding themselves in this situation, nearly exclusively bucketshops, choose your broker carefully. As for being able to see everyone's orders, if you are serious about trading invest in a decent platform from a top shelf data provider and trade with a reputable broker and you will also see depth of market. It blows me away that people risk money without having all the information and trade on retail platforms which only give you a pretty picture of what some provider wants you to see. We could and can all see where the orders are, it's not rocket science. Depth of market ( and I mean true depth not just an add on package, but identifying orders) is vital information no matter how you trade.
Any business has risk, deal with it however you have to. Some punters will be lucky as some brokers won't pursue debts, thanks to the messy nature of the regulations. Don't get caught again, get it right or get out.
  • #107
  • Jan 19, 2015 7:07pm Jan 19, 2015 7:07pm
Quoting Forexia
{quote} . If those liquidity providers had stopped providing quotes BEFORE the news release and didn't take in orders and if losses still ensued then the losses would be justified. But since we are not operating in an organized exchange and those liquidity "providers" still want to take in orders before any news release, then they need to continue to take in orders afters. They can't pick and choose. {image}
Should they stop taking orders before NFP every month or every CB announcement.....get real.
  • #108
  • Jan 19, 2015 7:11pm Jan 19, 2015 7:11pm
Quoting Greeny
{quote}We are hearing from traders who were in losing trades or with positions open with leverage and no hedging present. Not understanding how it works, as a result blaming everyone else for their losses and expect them covered. More regulation...super idea...not. The financial markets are already tangled in so much conflicting regulation that most of it becomes ineffective. besides the point, regulations only work if they are obeyed and enforced. Enforcement is impossible as this business crosses borders, and as for regulation.....
Positions open with leverage and no hedging present?? LOL Really??? Since WHEN are US traders all of sudden allowed to hedge against their positions now?? LOL

Yeah the financial markets are already tangled with too much regulations yes I agree, but still not enough to stop this unfair trading practices by the liquidity "providers" as we saw last Thursday, just enough to tie the hands of us retail traders behind our back like not allowed to fund accounts with credit card, no hedging and FIFO while the "Big Banks", the liquidity "providers" get away with everything like stopping a market and filling orders with 2K+ pip slippages and still padding their quotes with another 7K+ pips!

http://forexmagnates.com/banks-bucke...nc-volatility/

I wish them good luck in collecting those -ve negative balances resulting from their unscrupulous practices.
Make your losses in demo. Earn your profits live.
  • #109
  • Edited 7:49pm Jan 19, 2015 7:14pm | Edited 7:49pm
Quoting Greeny
{quote} Should they stop taking orders before NFP every month or every CB announcement.....get real.
EXACTLY!! So if you never stop taking orders before the news, you shouldn't be allowed to stop taking orders after! Stop defending for the bank that you work for, you know what you did was s***ty!!
Make your losses in demo. Earn your profits live.
  • #110
  • Jan 19, 2015 7:18pm Jan 19, 2015 7:18pm
Quoting Greeny
{quote} Should they stop taking orders before NFP every month or every CB announcement.....get real.

Two things are infinite: the universe and human stupidity; and I’m not sure about the universe! - Albert Einstein
  • #111
  • Jan 19, 2015 7:42pm Jan 19, 2015 7:42pm
Traders who were long due to the peg were reckless - Lets get that straight. You don't need to be a highly intelligent person to look back over the forums and see the number of people trading that peg level, with or without Stop Losses and usually at the maximum because they were wanting to 'cash in' on the interventions. Considering the tight ranges for extended periods and the breakouts during inventions and perceived safety, why wouldn't you put your house on it!

The traders that had negative balances that were the extreme need to take accountability. When an event like this occurs, its not your brokers fault the SNB decided to take away their apparent right to trade recklessly. Did brokers come after people when they made money during the interventions? It's like people have this expectation that if they take a major risk and it fails that they have the right to complain about it.

IF you bought a property, site unseen and went off the information provided by a real estate and you lost a 100k because the property wasn't worth it - Do you blame the real estate or do you blame yourself for not taking the time to look at all the pieces before investing. Perhaps you blame the bank for lending you the money in the first place.

If you were a pit trader and you were caught limit down on the wrong side for a day, 2 days or more and you couldn't get out, you bitched and moaned about it but you got a slap of reality. Perhaps this is exactly what was needed to sought out the rogues from the reals, the patient traders from the ones looking to get rich quick.

Any other opinion against brokers not being able to save reckless accounts because of the move are hollow and if you put yourself in that position then learn from it and stop bitching and whining. If your cannot pay it then declare bankruptcy. I swear, if everyone was on the right side the would be rejoicing just like they have been in the past when those trades came off.

Tissues are in abundance in this world, perhaps I should be long those.......
  • #112
  • Jan 19, 2015 7:43pm Jan 19, 2015 7:43pm
Quoting teddybomber
{quote} Two things are infinite: the universe and human stupidity; and I’m not sure about the universe! - Albert Einstein
LOVE THAT QUOTE - I'm gonna get a tattoo of it as it is so true right now
  • #113
  • Jan 19, 2015 7:46pm Jan 19, 2015 7:46pm
Quoting Forexia
{quote} Positions open with leverage and no hedging present?? LOL Really??? Since WHEN are US traders all of sudden allowed to hedge against their positions now?? LOL Yeah the financial markets are already tangled with too much regulations yes I agree, but still not enough to stop this unfair trading practices by the liquidity "providers" as we saw last Thursday, just enough to tie the hands of us retail traders behind our back like not allowed to fund accounts with credit card, no hedging and FIFO while the "Big Banks", the liquidity "providers"...
Without those 'Liquidity Providers' and the relaxed regulation you would not be even able to partake in trading Forex. It wasn't that long ago that Forex was limited to banks, large institutions and those with the capital requirements to trade due to leverage restrictions. Perhaps that is what is needed because today Forex and other leverage markets are about 'wannabe' traders getting rich overnight and the market created as a result has just been exposed this month.
  • #114
  • Jan 19, 2015 7:56pm Jan 19, 2015 7:56pm
Quoting Forexia
{quote} EXACTLY!! So if you never stop taking orders before the news, you shouldn't be allowed to stop taking orders after! Stop defending for the bank that you work for, you know what you did was s***ty!!
I do not now, nor ever have worked for a bank or any other institution. Stop trying to blame anyone else for your problems. The whole world is operating under the same market conditions, yet only a minority have any issue with what took place last week. Everyone knows the rules to this game ,or at least they should, if you got caught out there is nobody else to blame. You need to understand that the very same people you are so angry at are the same ones that even allow you to be in the market. Sorry , this is trading, deal with it and treat it professionally or guy and find another hobby, sounds like it's not for you.
  • #115
  • Jan 19, 2015 7:58pm Jan 19, 2015 7:58pm
Quoting Razor_trader
Traders who were long due to the peg were reckless - Lets get that straight. You don't need to be a highly intelligent person to look back over the forums and see the number of people trading that peg level, with or without Stop Losses and usually at the maximum because they were wanting to 'cash in' on the interventions. Considering the tight ranges for extended periods and the breakouts during inventions and perceived safety, why wouldn't you put your house on it! The traders that had negative balances that were the extreme need to take accountability....
Well said. Rogues from reals, and it appears there are a lot of not real traders here but no shortage of gamblers.
  • #116
  • Edited 8:44pm Jan 19, 2015 8:01pm | Edited 8:44pm
Quoting Razor_trader
IF you bought a property, site unseen and went off the information provided by a real estate and you lost a 100k because the property wasn't worth it - Do you blame the real estate or do you blame yourself for not taking the time to look at all the pieces before investing
No I would not blame on the broker or the seller if I bought a property that's worthless and later on not able to sell it (although that broker would be guilty of not fulfilling his/her fiduciary duty to me and false advertising because he/she should've informed me that it's worthless but anyway that's a topic) BUT at the time when I need to sell it I WILL blame the buyer for purposefully telling all my potential buyers and brokers not to buy my property to make it unsellable just to make me desperate and then come back after a lengthy time when I have cut the price to a deep discount and give me a bid price a cut even lower than my offer AND the fair market value of a house with defects; that is what those liquidity "providers". It's illegal what this buyer did and he could be charged with fraud. So that's why I am proposing regulations to make the same behaviour illegal in forex industry.

It's too bad the "prime banks" will find this uncomfortable. They asked for it.

http://forexmagnates.com/banks-bucke...nc-volatility/
Make your losses in demo. Earn your profits live.
  • #117
  • Jan 19, 2015 8:34pm Jan 19, 2015 8:34pm
Quoting Greeny
{quote} I do not now, nor ever have worked for a bank or any other institution. Stop trying to blame anyone else for your problems. The whole world is operating under the same market conditions, yet only a minority have any issue with what took place last week. Everyone knows the rules to this game ,or at least they should, if you got caught out there is nobody else to blame. You need to understand that the very same people you are so angry at are the same ones that even allow you to be in the market. Sorry , this is trading, deal with it and treat...
So you DO work for a bank. Well I hope you sleep tight at night knowing that you have robbed people millions of dollars, euros, pounds of money with your shady practice.
And I would have to thank the liquidity "providers" for their charity for "allowing me to be in the market" LOL yeah like they gained nothing with us in the market; it's purely just charity work. LOL

I am not being allowed to treat trading professionally when I have to deal with others that are unprofessional and don't play fair. You want to make a profit against me, you make it fair and square not with tricks that you can pull just because you are big. That's not trading; that's bullying.
Make your losses in demo. Earn your profits live.
  • #118
  • Jan 19, 2015 8:35pm Jan 19, 2015 8:35pm
Quoting grin
Forexia has trouble accepting that stop loss order is a tool of limited utility. Instead of using another and better suited tool he is attempting to invent some sort of monstrosity.

He get's it...

Quoting Forexia
{quote} I don't even trade with SL on news announcements. If I don't feel like trading on that news, I just exit before the news. If the news is really major, chances are the price will spike so fast by the time your SL is hit, you would've already lost 30 - 50 pips at least. It's better to get out when the price comes back on the other side. You lose far less that way sometimes you are even able to break even. With the market so trendless these days, not even news events will set any trend. I have seen price turns right around even on NFP!...
He took a gamble and lost.

Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
  • #119
  • Jan 19, 2015 8:39pm Jan 19, 2015 8:39pm
Quoting Magix
{quote} He get's it... {quote} He took a gamble and lost.
Oh wow you actually went through my posts? I posted that comment long time ago and in a totally different forum topic LOL Awwwww.... It's true I don't trade with a SL on news events which in this SNB event, would've been useless seeing what those liquidity stoppers did. The price would've had a chance to come back if it had been allowed to but all the liquidity colluded to shut down the quote system.

Well like I said our loss is their loss really. It's just we haven't gotten much for them to take to make up for the negative balances except our house and a car and maybe some cash and mutual funds that we actually have with them cuz those same liquidity "providers" are our banks too LOL so have fun selling our 2-bedroom bungalow and honda sedan to recover those negative balances that you helped create!! LOL
Make your losses in demo. Earn your profits live.
  • #120
  • Jan 19, 2015 8:44pm Jan 19, 2015 8:44pm
Quoting Forexia
{quote} Oh wow you actually went through my posts? blah blah blah blah blah, would've been useless seeing what those liquidity stoppers did.

Actually, just went through a couple of the charts you posted and seen these words.

Seriously...

If you can't play and prosper by the same rules as others, you should find a game that suits your needs...not wait for a market to change to suit you.
Money Can't Buy Happiness. Poverty Can't Buy SHIT! You Choose!
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