Hi all,
I posted a similar question a few months back but no real conclusion was drawn. As you all know, the markets are dangerous places. Stop losses don't, and won't always work. Slippage does and will happen. When slippage is a few hundred pips it's manageable, a bad day, but when caught in a 'black-swan' event - such as the EUR/CHF crash, you could be slipped -2000 pips... which could, and did put many many people into negative equity. (Especially if trading at 2% a trade with small targets/stops)
My question then, is how do you treat and prepare for inevitable black-swan events?
I presume people must have something in place - seems silly people trading in the hope of making a profit and the potential of losing everything you own (house etc.) through negative equity claims!
I posted a similar question a few months back but no real conclusion was drawn. As you all know, the markets are dangerous places. Stop losses don't, and won't always work. Slippage does and will happen. When slippage is a few hundred pips it's manageable, a bad day, but when caught in a 'black-swan' event - such as the EUR/CHF crash, you could be slipped -2000 pips... which could, and did put many many people into negative equity. (Especially if trading at 2% a trade with small targets/stops)
My question then, is how do you treat and prepare for inevitable black-swan events?
I presume people must have something in place - seems silly people trading in the hope of making a profit and the potential of losing everything you own (house etc.) through negative equity claims!