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  • #781
  • Aug 10, 2015 2:11pm Aug 10, 2015 2:11pm
Quoting skenobi
Yes. Deutsche would've been well within their rights to say so because even if GE had threatened to take their business elsewhere, it is very doubtful they would've found another Bank willing to quote for that amount during the SNB unpegging event. {quote} Yes. A corporate client is, more often than not, a hedger not a trader. It would've been irresponsible for a CFO of any large company to leave a large requirement or exposure open to the last minute (as a sudden 100 mio order would seem to be). Under normal market conditions, a large order would've...
If you say so.

Quoting skenobi
Personally I don't like to dwell on "would have" and "could have", and prefer to stay on focused on the present.
Yes because in this case "the present" happened to be largely in the banks' favour. And in the instances the banks MADE it to be in their favour by stopping the price feed. So as a result, you basically eliminated the "could've" and the "would've"'s that might not be favourable to them. With the market being stopped, any of the losing trades would be in a free fall and none of the winning trades on the retail traders side would not be able to take profit. It's like the casino basically stopped making payouts to all the winners but still continued to take money from all the losers. It might be considered a "smart and realistic" risk management on the banks' part but the end result, it's really cheating and dishonest. Market should be a two-way street hence a zero-sum game for ALL. But it's completely skewed to be an all-sum game to the bankers and retail traders have no chance to win.

Quoting skenobi
Well, as I mentioned before, I only dissed EURCHF traders. I respect retail traders who know when to stop making rookie mistakes. I respect that opinion. I just don't think you can prove that observation. Again, if you say so. I did not blame all retail traders. I just put down the EURCHF traders. Let's call a spade a spade. In actual fact, I "insulted" the EURCHF traders.
Well to me any traders are entitled to make a speculation on any event, large or small. That's the whole idea of speculation especially when precaution is taken to reduce the trade size to make a speculative bet that's relative to their trading account. I might not be able to prove with 100% completeness the trade size of every single retail traders who traded during the SNB crisis, but the typical trade size of retail trades during the SNB crisis were well publicized and documented in numerous media sources besides forums. And it is also well documented and proven that retail brokers that you have also deemed to be imprudent and over-extending have taken specific measures to reduce several folds of margin offered on CHF-related currency pairs several months in many cases before the SNB crisis. I might not be able to vouch for every single CHF traders to say that every single one of them traded with reasonable trading size relative to their account size during the SNB crisis but I don't agree that all CHF traders deserve to be put down during the crisis. They were SLIGHTED by the LP's action/inaction and/or their retail brokers' pricing decision. If you want to call it spade a spade.

Quoting skenobi
Since 2. "outside of market prices"? Who is the retail trader (or any single Bank trader for that matter) to decide what is really "market prices"? If the ONLY Bid in the market and the ONLY Offer in the market happen to be far away from each other, is the retail trader going to deny that THAT is the market price (however screwed up it may look)? Sounds naive to me.
What I mean by "outside of market prices" is when the Reuters EBS and Bloomberg published the price quoted by 99% of the LP's as one price and other banks albeit few quote another price several THOUSAND pips away.

Quoting skenobi
I totally agree! But... where they're not stopping making markets, they're definitely widening bid/offer spreads.
And the banks do not? LOL

Quoting skenobi
Institutions have a responsibility to shareholders not to make stupid bets. {quote} Sorry.. Bank traders' duty is to enhance shareholder equity first, and customer relationship is only somewhere down in the list of priorities.
Define "stupid". The banks don't trade during the NFP? The banks didn't trade during the concerted central bankers' Yen intervention after the Japanese Tsunami? The banks certainly stayed away from the EU GExit summit weekend last month, I am sure. You mentioned previously that there were short-term and long-term traders in a trading room. So both of these groups just ignore these events? This, I am really curious to know.

Quoting Forexia
Those LP's reap all the benefits when the market is going their way and yet when the market turns the tide, they were the first to run away and leave others to hold the bag.
[
Quoting skenobi
C'est la vie.
Quoting skenobi
You assumed I qualified ALL retail traders as stupid, when in fact I only insulted a small subset of them. Honest mistake on your part. Btw, "retail traders don't matter" is not an insult in my book. It's plain fact.
You assumed that I care what you think of retail traders or whether retail traders matter or not but it is still a fact that even "a small subset of them" still were not stupid in speculating the SNB event. It was a speculation that didn't turn out profitable for them true and that happens all the time in a traders' life BUT what's different in this case was that their losses were exacerbated and augmented to unmanageable amount by the banks who acted "c'est la vie" to tun the market into an all-sum game for them. That's my point.
Make your losses in demo. Earn your profits live.
  • #782
  • Aug 10, 2015 3:02pm Aug 10, 2015 3:02pm
Quoting Forexia
{quote} Well to me any traders are entitled to make a speculation on any event, large or small.
If you want to make money from trading, you should take only high probability trades. This means that the analysis of the positioning of the market participants and possible outcomes of it should be in your toolbox. In the case with CHF only traders that don't care about the markets could have a position in EURCHF. However, you can use the markets for other purposes such as gambling.
  • #783
  • Aug 10, 2015 3:57pm Aug 10, 2015 3:57pm
Quoting srmfx
{quote} If you want to make money from trading, you should take only high probability trades. This means that the analysis of the positioning of the market participants and possible outcomes of it should be in your toolbox. In the case with CHF only traders that don't care about the markets could have a position in EURCHF. However, you can use the markets for other purposes such as gambling.
That still does NOT excuse the banks for what they did or failed to do during the SNB event. What the banks did during that event, irregardless of what the retail traders did or did not do, was still not right and shouldn't be tolerated.
Make your losses in demo. Earn your profits live.
  • #784
  • Aug 10, 2015 5:29pm Aug 10, 2015 5:29pm
Quoting Forexia
{quote} That still does NOT excuse the banks for what they did or failed to do during the SNB event. What the banks did during that event, irregardless of what the retail traders did or did not do, was still not right and shouldn't be tolerated.
Wait what did the banks do or fail to do during that event that was wrong?

Sorry, I'm not caught up on all the recent replies..
  • #785
  • Edited 6:16pm Aug 10, 2015 5:57pm | Edited 6:16pm
Quoting Forexia
{quote} If you say so. {quote} Yes because in this case "the present" happened to be largely in the banks' favour. And in the instances the banks MADE it to be in their favour by stopping the price feed.
Another way of looking at it: the banks stopped the feed to stop the situation from continuing to be against their favour (as mandated by their responsibility to shareholders).

Quoting Forexia
So as a result, you basically eliminated the "could've" and the "would've"'s that might not be favourable to them.
Yup.

Quoting Forexia
With the market being stopped, any of the losing trades would be in a free fall and none of the winning trades on the retail traders side would not be able to take profit.
Only the people who were long EURCHF (bank and retail) and very few of the shorts (retail only... too bad, I guess, altho they deserve no pity for trading a pegged pair).

The euro was already suffering a crisis of confidence at the time (which I don't think the long EURCHF guys was aware of, it seems), so it's only natural that euro pairs (including EURCHF) would go the path of least resistance i.e. down.


Quoting Forexia
It's like the casino basically stopped making payouts to all the winners but still continued to take money from all the losers.
Yes, it's definitely a casino to those who don't know better. Yes, they PROBABLY stopped paying out SOME of the retail shorts. Yes, they definitely stopped paying out the longs i.e. the losers.

Quoting Forexia
It might be considered a "smart and realistic" risk management on the banks' part but the end result, it's really cheating and dishonest. Market should be a two-way street hence a zero-sum game for ALL. But it's completely skewed to be an all-sum game to the bankers
I TOTALLY agree!

Quoting Forexia
and retail traders have no chance to win.
Not necessarily, but we'll just have to agree to disagree.


Quoting Forexia
{quote} Well to me any traders are entitled to make a speculation on any event, large or small.
Agreed. Everyone is "entitled". No one is saying otherwise.... taking into account the fact that the retail forex "market" is merely a mirror market which piggy-backs on prices from a market where institutionals are trading against each other and not against retail traders.

Quoting Forexia
That's the whole idea of speculation especially when precaution is taken to reduce the trade size to make a speculative bet that's relative to their trading account. I might not be able to prove with 100% completeness the trade size of every single retail traders who traded during the SNB crisis, but the typical trade size of retail trades during the SNB crisis were well publicized and documented in numerous media sources besides forums.
"well publicized and documented" only by people who CHOSE to take part in whatever survey that tried to tabulate such things.


Quoting Forexia
And it is also well documented and proven that retail brokers that you have also deemed to be imprudent and over-extending have taken specific measures to reduce several folds of margin offered on CHF-related currency pairs several months in many cases before the SNB crisis.
The ones that are still around anyway.

Quoting Forexia
I might not be able to vouch for every single CHF traders to say that every single one of them traded with reasonable trading size relative to their account size during the SNB crisis but I don't agree that all CHF traders deserve to be put down during the crisis.
Well, we just have to agree to disagree, because I think they do deserve the put-down.

Quoting Forexia
They were SLIGHTED by the LP's action/inaction and/or their retail brokers' pricing decision.
I don't doubt that they feel slighted. If I had been a silly pegged currency trader (long OR short), I would feel slighted too.

The retail traders' only point of contact with the market is their brokers. LPs (i.e. the Banks) only serve their own self-interests, a feature that is well-documented.

Quoting Forexia
{quote} What I mean by "outside of market prices" is when the Reuters EBS and Bloomberg published the price quoted by 99% of the LP's as one price and other banks albeit few quote another price several THOUSAND pips away.
Reuters and Bloomberg only publish the market's best bid and the best offer. In most cases of dispute, Reuters composite prices are commonly agreed (by the market participants that matter) to be the final reference. No other platforms (where prices can be thousands of pips away, as you say) matter.

Quoting Forexia
{quote} And the banks do not? LOL
I don't understand. The banks do not... what? You can refer to my earlier statement "where they (the Banks) are NOT stopping markets, they (the Banks) are definitely widening widening bid/offer spreads)."

Quoting Forexia
{quote} Define "stupid". The banks don't trade during the NFP?
Example of "stupid": only the following people trade the NFP (which has become the most pointless statistic to trade since Greenspan left):

1. Big Bank stop hunters.
2. gamblers in some Big Banks who are on the way of washing out,
3. junior bank traders in the big banks (who will get scalped by the stop hunters just so the stop hunters can prove a point),
4. gamblers in mid-sized banks,
5. and retail traders who trade the NFP.

Categories 2 thru 5 frequently become victims of Category 1.

Quoting Forexia
The banks didn't trade during the concerted central bankers' Yen intervention after the Japanese Tsunami? The banks certainly stayed away from the EU GExit summit weekend last month, I am sure.
The banks are well-capitalized and don't trade on leverage. They CAN afford NOT to stay away.

Quoting Forexia
You mentioned previously that there were short-term and long-term traders in a trading room. So both of these groups just ignore these events? This, I am really curious to know.
Most of the long-term ones do (i.e. ignore the events).

Quoting Forexia
You assumed that I care what you think of retail traders or whether retail traders matter or not
erm... I think you assumed that I assumed. We have to agree to disagree, I suppose.

Quoting Forexia
but it is still a fact that even "a small subset of them" still were not stupid in speculating the SNB event.
I did not say EURCHF traders were stupid as a fact. I stated it as a matter of opinion i.e. it is my opinion that EURCHF traders (at the time) were at least silly (at best) and stupid (at worse).

What IS a fact is that, at the end of the day,
1. I insulted EURCHF traders (only) and no one else.
2. Retail traders don't matter (which, in my book, is not an insult).

Quoting Forexia
It was a speculation that didn't turn out profitable for them true and that happens all the time in a traders' life BUT what's different in this case was that their losses were exacerbated and augmented to unmanageable amount by the banks who acted "c'est la vie" to tun the market into an all-sum game for them. That's my point.
As implied before, banks acted in their shareholders' interest in a market that clearly belongs to them. The retail forex "market" is not even a market; it's just an imperfect mirror.

Quoting Forexia
{quote} That still does NOT excuse the banks for what they did or failed to do during the SNB event.
I understand and empathize with the sentiment (altho, I don't empathize or sympathize with EURCHF traders), but...

1. Banks don't need to be excused by retail traders. Banks can pretty much do whatever they want.
2. What they "did" was stop the bleeding which was what their respective managements (acting in the shareholders' interests) wanted.
3. Banks only "fail" when they lose money.

Quoting Forexia
What the banks did during that event, irregardless of what the retail traders did or did not do, was still not right and shouldn't be tolerated.
Tolerated by retail traders "trading" on margin in a betting parlor that mirrors the real market. Nice!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #786
  • Aug 10, 2015 7:18pm Aug 10, 2015 7:18pm
Quoting skenobi
Yes, it's definitely a casino to those who don't know better. Yes, they PROBABLY stopped paying out SOME of the retail shorts. Yes, they definitely stopped paying out the longs i.e. the losers.
No the banks acted like a casino that stopped paying all of the winners, all the CHF longers but still not only kept collecting from the losers, the CHF shorters but they changed rules of the game instantly which made the losers' losses 100X bigger and then kept on collecting.

Quoting skenobi
I don't doubt that they feel slighted. If I had been a silly pegged currency trader (long OR short), I would feel slighted too. The retail traders' only point of contact with the market is their brokers. LPs (i.e. the Banks) only serve their own self-interests, a feature that is well-documented.
No they don't *feel* slighted. They ARE slighted by the casino LP's, the banks.

Quoting skenobi
Example of "stupid": only the following people trade the NFP (which has become the most pointless statistic to trade since Greenspan left): 1. Big Bank stop hunters. 2. gamblers in some Big Banks who are on the way of washing out, 3. junior bank traders in the big banks (who will get scalped by the stop hunters just so the stop hunters can prove a point), 4. gamblers in mid-sized banks, 5. and retail traders who trade the NFP. Categories 2 thru 5 frequently become victims of Category 1. Most of the long-term ones do (i.e. ignore the events).
Good to know. Thanks for the inside look.

Quoting skenobi
1. Banks don't need to be excused by retail traders. Banks can pretty much do whatever they want.
All in all what the banks did and/or failed to do during the SNB event is still not justified by whatever reasons albeit "smart and realistic risk management" or "shareholder interest". At the end of the day, what is NOT right is NOT right. You can have ten thousand reasons to explain it to to "excuse" it away but it is still NOT right and is still not excusable. They might not be able to be held accountable today for their action. And someday changes will and should happen to the forex market just like every single market out there. The banks will NOT be able to do whatever they want for long.

Anyway, good discussion.
Make your losses in demo. Earn your profits live.
  • #787
  • Aug 10, 2015 7:23pm Aug 10, 2015 7:23pm
Was one.. traded for a bb in credit before heading over to trading fx and rates.... think sken covered it pretty well.. if you have any further questions i would be delighted to help answer you.
There is no royal road to anything.
  • #788
  • Aug 10, 2015 7:56pm Aug 10, 2015 7:56pm
Quoting Forexia
{quote} No the banks acted like a casino that stopped paying all of the winners, all the CHF longers but still not only kept collecting from the losers, the CHF shorters but they changed rules of the game instantly which made the losers' losses 100X bigger and then kept on collecting.
Their prerogative, because the game actually belongs to them. Retail traders are just along for the ride in a parallel betting parlor that's not even part of the real Market.

I agree that it sucks (now that I'm also a retail trader). The main difference between people like EURCHF traders and people like me is that people like me don't go around looking for trouble e.g. trading pegged pairs and meaningless statistics like the NFP.

Quoting Forexia
No they don't *feel* slighted. They ARE slighted by the casino LP's, the banks.
I stand corrected.

Quoting Forexia
All in all what the banks did and/or failed to do during the SNB event is still not justified by whatever reasons albeit "smart and realistic risk management" or "shareholder interest". At the end of the day, what is NOT right is NOT right. You can have ten thousand reasons to explain it to to "excuse" it away but it is still NOT right and is still not excusable.
And as I've mentioned before, they don't need to be excused by non-participants of their world, and that's exactly what retail traders are... non-participants.

Quoting Forexia
They might not be able to be held accountable today for their action. And someday changes will and should happen to the forex market just like every single market out there.
Someday. Until then, we do what we have to do and try to stop making stupid bets.

In the meantime also, I hope pegged currency traders and NFP speculators stay away from the market.... they're giving retail traders a bad name.

Quoting Forexia
The banks will NOT be able to do whatever they want for long.
Somehow, I think they'll be around to get their way a long time. I really hope you're right, tho!

Quoting Leinadgnow
Was one.. traded for a bb in credit before heading over to trading fx and rates.... think sken covered it pretty well.. if you have any further questions i would be delighted to help answer you.
Welcome to the club...
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #789
  • Aug 10, 2015 8:33pm Aug 10, 2015 8:33pm
Quoting skenobi
{quote} Retail traders are just along for the ride in a parallel betting parlor that's not even part of the real Market.
I don't know how many times and ways you're going to have say this before some people get it ... that ones my favorite description though : )
We are all doing something we have no business doing, and are only able to do it because a company opens up a fake universe of trading to us, one that they can control many aspects of.
  • #790
  • Aug 11, 2015 12:48am Aug 11, 2015 12:48am
Quoting Forexia
{quote} No the banks acted like a casino that stopped paying all of the winners, all the CHF longers but still not only kept collecting from the losers..
Hi Forexia

Correct me if I am wrong, but from what I gathered by skimming your posts you are saying that how the banks acted during the Francogeddon (unpegging of the CHF to the EUR by SNB) was morally wrong because they stopped taking inventory and doing their job IE making markets and giving traders the ability to trade. This led to traders on the right side of the market being unable to close out profitable positions while the ones on the wrong side kept seeing price fall further against them as banks continued to lower their bid/ask prices. Traders on the wrong side quickly saw their accounts blowing out as margin call was hit. This seems rather unfair that banks are allowed to do that and we traders on the buy side definitely got the short end of the stick. The game is obviously rigged in favor of the banks, and in dire need of regulation catching up with the FX markets.

Skenobi, on the other hand, agrees it sucks but also understands that first and foremost the banks will watch their backs before looking out for their customers. He believes protecting profits and shareholder value is a priority to the banks over giving out fair pricing to their customers and getting hurt in the process. He believes, and I agree, that retail traders have accepted the risk of the nature of the FX markets and its transparency, and therefore it was their faults for believing the peg would hold and not being better prepared for the inevitable break. From your point of view retail traders are getting shafted by the banks and banks are to blame for what occurred, but from his ex-bank experience he believes the banks were being smart and protecting themselves. They make the markets and therefore are the markets, if they want to stop taking inventory they have the right to and they are the ones accepting risk of losing clients. Between the hedge funds, commercial businesses, mutual funds, etc. the retail traders are a small fraction of the FX markets. They don't even matter much to the banks and if one day they were gone, it would be business as usual for the banks.

We retail traders are the lucky ones. The banks are allowing us access by pooling our measly accounts together in a market where even $2 million is an annoying number to deal with. In return, we have the chance of making some insane amounts of money from the markets. We are able to run a business with much more freedom than any other job. We are allowed the chance to "create" risk in order to make reward. They do us a favor. Banks play a whole different game. Their goal is to minimize risk and make money from spreads, which is more than fair considering they take the other side of our trade in any direction. If we buy on a breakout and price follows through, they are already stuck in a losing position. Seems unfair from their point of view, but they accept the fact that's how markets work and go on to figure out how to handle the position. We too should accept the fact that banks are in no shape way or form required to quote tight market prices and take normal liquidity conditions trade sizes at all times. They can quote whatever price they want and what sizes at those prices they choose to and in doing so are risking jeopardizing their own client base. Seeing as how it's business as usual with their normal client base, including the small retail percentage, I don't think the Swiss peg fiasco hurt them too much in that aspect.

Black swan events suck for everyone, including the banks. They are at risk of losing money just as we are, why shouldn't they protect theirselves? When we accept that trading Forex carries a high level of risk and may not be suitable for all investors, whether we know it or not we are accepting that these sorts of things can happen and still decide to take the risk. You are putting the blame on the banks, but I think retail traders could be blamed as well for not fully understanding the risks. For not understanding the macro situation and for believing the peg would be unchanged. For putting all their chips into one account and risking it all. For believing markets are a get rich quick scheme. Yet when liquidity dries up, it's easy to blame the banks from a retail traders point of view. It wasn't only the individual traders and brokers that lost money during the unpeg. Banks also had to take losses and we're looking for ways to minimize any further losses, just like we would. They did whatever they had to and were legally entitled to.

You are right that banks can take blame. But retail traders should also accept blame for not fully understanding the nature of markets and not fully understanding the concept of liquidity in markets. I don't think it's only those two participants either. The SNB central bank should take blame for not announcing anything before hand and just dropping the bomb on the markets. Some retail brokers should be blamed for not being fully capitalized and going under. We can blame all participants of this event, but the fact of the matter is that markets just work out that way. This certainly wasn't the first black swan and it probably won't be the last. Losing traders who got shafted will continue to blame banks for their role in market microstructure during black swans, while the winning traders will continue to reaffirm how important their analysis is and how they should only take the highest probability trades with careful consideration. Complaining isn't what keeps them winning.

There are ways you can be protect yourself during a black swan event. First, as retailers we are lucky because we can find brokers who won't chase negative balances. That's a big plus as major players trading size don't have that luxury and can only take whatever liquidity is available at that price. We also don't have to put our total balance into our accounts. We can just put smaller portions in and take bigger risks on it so it equals out. This way a black swan won't pull your whole account under. Being in the game long enough will allow you to come up with a plentitude of ways around different situations. As much as we'd like to complain and blame others for what occurred, that won't change anything. We have to accept that this is a part of the markets, it's a risk we're willing to accept, and the sooner we accept it and find ways to protect ourselves in that situation the sooner we can get to making more money out of the markets.

It is a good discussion and please don't think I'm on the banks defense. I completely agree that banks have a massive advantage over us. Fortunately, we have our own advantages over them and we either play our role in markets or get out. In any case, this discussion is just a discussion and won't change our trading any, something I do wish you the best in! Good luck!
  • #791
  • Edited 3:25am Aug 11, 2015 1:07am | Edited 3:25am
Quoting skenobi
The main difference between people like EURCHF traders and people like me is that people like me don't go around looking for trouble e.g. trading pegged pairs and meaningless statistics like the NFP. Someday. Until then, we do what we have to do and try to stop making stupid bets. In the meantime also, I hope pegged currency traders and NFP speculators stay away from the market.... they're giving retail traders a bad name.
Well there is actually NO problems with making speculations on any particular currency pairs or any economic statistics. You don't want to do it that's a different story. I trade the NFP all the time like many traders around the world and spreads widen just the same and sometimes you profit and sometimes you lose but do you ever see retail traders complain each time when they lost on NFP. No. WHY not? Because there was an orderly market, albeit more volatile than usual but there was still and always a market. As long as there is a market, we lose in the market, we lose fair and square. There was never any problem. The reason why retail traders got slighted during the SNB event was that the LP's dropped the ball and destroyed liquidity because they ARE the liquidity and single-handedly collapsed the market no matter how you want to explain away their action. This is still what happened. Retail traders didn't really lose during the SNB crisis because of their wrong trading decision; they lost more due to the fact that the market was destroyed by the LP's and there was no way for them to mitigate the losses. In essence, retail traders became the market by becoming market specialists in those exchanges who had to mortgage their homes and personal assets to hold up the market when they were never intended nor capitalized to do so in the first place with just their micro size trades. And indeed the losses that many of the retail traders suffered were indeed the size of a house mortgage in the hundred's of K's dollars.

Those banks really should be ashamed of themselves (since you are not one of them anymore and one of us now so you shouldn't mind me saying so ) when they are capitalized with hundred's of TRILLIONs of dollars and yet they bail when s*** hit the fan and expect retail traders who have 1/100000000000 of their assets to maintain the market.

Quoting skenobi
Welcome to the club...
This is for Skenobi and Leinadgnow: I hope you don't mind me asking a bit of a personal question to both of you and I would totally understand if you prefer not to answer. Why did you leave the institution that you were working in? What made you leave?

Again, good discussion.
Make your losses in demo. Earn your profits live.
  • #792
  • Aug 11, 2015 2:00am Aug 11, 2015 2:00am
Quoting Forexia
{quote} Well there is actually NO problems with making speculations on any particular currency pairs or any economic statistics. You don't want to do it that's a...
Good viewpoint.

Still, as far as retail trading is concerned what the banks did was perfectly legal and happens every now and then. Long time traders have acknowledged the fact and accepted it.

Let's break down what happened on a micro scale: With the breaking of the peg, done by the SNB and not market making banks, there were a flux of strong one-sided orders to sell the currency pair. Already, this could be blamed on the SNB and not our Interbank liquidity providers. Banks were getting put into more and more losing positions as traders sold and they were net buying, and they too were forced to continue selling to each other, causing price to fall even further. As the event got out of control, liquidity was withdrawn and traders were stuck in losing positions. Banks are only there to facilitate exchange. They are not there to take the side of every position a trader wants to enter, especially if it comes at a cost to their pocket books. Like I said, nowhere do they say we will take your order of whatever size and the exact price quoted. We do what we can to protect our capital, so it's only expected they will do the same. Instead of just blaming our liquidity providers, we can blame ourselves as well for letting the market get extremely one-sided, not buying enough and selling too much, and not allowing the LPs to do their jobs AKA facilitate exchange between market participants.

For the ones who lost heavily from the fiasco, unfortunately they learned the hard way exactly how risky Forex trading is. But this was something they were told in the disclaimer and had accepted. Now they have two options:
(1) Accept that it happened and continue trading. Either learn from it and adapt or continue gambling. For the latter I don't have much sympathy .
(2) Move on and leave trading altogether. This business isn't for you.

If you feel the market favors the LPs way too much, that's fine. Nobody said you have to trade with them, let alone trade this market or just trade in general. You made the choice so you deal with the consequences. We know this is a part of the markets and they are legally entitled to do what they did no matter how it might of hurt us retailers, so we will continue to trade with them.

Once again, remember banks lost too. You blame them for our losses, but completely ignore their losses. I have yet to see a bank trader blaming us buy side traders for what happened although they have just as much right to blame us for the "break down of price discovery" as we do them.

And keep in mind, moral and markets just doesn't mix. If you are a morally conscious person then you are in the wrong career. In fact, here is something good ol' Darkstar posted on his site:

"[highlight=rgba(255, 255, 255, 0)]This is not a game for the every kid gets a trophy crowd. By definition half of those who try to do what I do will fail. Winning requires the mindset of a predator, and toward that end, Metagame Thinking is an apex skill. [/highlight]
[highlight=rgba(255, 255, 255, 0)]You really ought stop here and think about the type of person you want to be. [/highlight]
[highlight=rgba(255, 255, 255, 0)]I personally try to every day because having a predatory mindset comes with a number of side effects. For example, on April 15, 2013 I made a meaningful amount of money shorting DJIA Index Futures seconds after the Boston Marathon bombing headlines hit the newswires. Children died, a women lost her leg, and I was thankful for a nice fast win. [/highlight]
[highlight=rgba(255, 255, 255, 0)]Your moral character will be tested. Many find that they arent the person they thought they were. And those who dont have a strong sense of right, wrong, and where to draw the line, could wind up in prison. [/highlight]
[highlight=rgba(255, 255, 255, 0)]In short, be sure you know what youre getting into, and concerned with who you will be when you come out the other side."[/highlight]
[highlight=rgba(255, 255, 255, 0)]It's a battlefield every day in markets. We do what it takes to protect our capital and so do the banks. If the unpegging situation wasn't a learning experience and you still decide to trade, well I don't consider you a trader. I consider you a gambler who will get eaten in the shark feeding frenzy (not you as in you, but you as in general retail traders). Remember, we can either accept our role as it is and play it out or get out altogether. The choice is yours. [/highlight]
  • #793
  • Edited 2:20am Aug 11, 2015 2:02am | Edited 2:20am
Quoting FXMasterSK
{quote} Good viewpoint. Still, as far as retail trading is concerned what the banks did was perfectly legal and happens every now and..
Btw sorry about the weird coding. For some reason when I post from an iDevice it just shows up on its own sometimes lol!

[COLOR=rgba(0, 0, 0, 0.701961)]I can agree with you that it's unfair though. Even ex-bank traders are agreeing with you so there's no doubt about that. [/color]

However, really think about it. We're playing their game, so we have to play by their rules. They, the banks, set the rules however they want and we have the choice of accepting it or not playing at all. It's a fact that banks don't have to quote prices near the current price. They can make their spreads as wide as they want. It's a fact they can change how much size they offer at different price points. It doesn't matter whether it's a support zone, NFP, or a black swan event. Those fact will remain the same. If this was the first black swan event you've been through, now you can really decide whether you want to play this game or not. You're not obligated, but if you play you play by their rules.

You are respectfully entitled to your opinion and I can't say you're wrong anymore than you can say the same to me. But I still don't see any reason for sympathy for the massacre on that day as its those traders faults for not correctly assessing the situation nor having safeguards in place.

Once again, it's not the first and probably won't be the last.

Good luck!
  • #794
  • Aug 11, 2015 3:21am Aug 11, 2015 3:21am
Quoting FXMasterSK
We retail traders are the lucky ones. The banks are allowing us access by pooling our measly accounts together in a market where even $2 million is an annoying number to deal with.
The banks "allowing us"? LOL How?

Quoting FXMasterSK
They do us a favor.
Yeah like there is ABSOLUTELY nothing in it for them. Oh yes I forgot the banks are running a charity by "allowing us retail traders" to trade in forex. LOL

Quoting FXMasterSK
In return, we have the chance of making some insane amounts of money from the markets. We are able to run a business with much more freedom than any other job. We are allowed the chance to "create" risk in order to make reward.
REALLY??? I thought it's not true that
Quoting FXMasterSK
the markets are a get rich quick scheme
So if the market is NOT a get rich scheme, how is it we have the chance to make "some insane amount of money" after being "allowed" by the banks? LOL We are allowed the chance to "create" risk in order to make reward and yet we have to stay away from "black swan events". LOL Well "black swan events" ARE the risk. Without the risk, where is the reward? And you know WHY those events are "black swan events'? Because the banks MADE them so because they ARE the market.

If tomorrow, all of the banks decide to stop providing price feed during every single NFP, Fed rate decision, FOMC meeting minutes, every single one of them will be "black swan events". But NONE of them right now are. We are still able to trade through all of those events IF we want to. Aside from widened spread, you can still trade through them. WHY? Because the banks maintain the market as they should.

In pretty much all of markets for all other financial instruments like stocks, bonds, and even speculative derivatives like futures, options, when "black swan events" happen, the market is ALWAYS there. Those specialists, clearing houses are ALWAYS there to make the market no matter what happens to and in the market. No matter what happens, as long as you want to trade and as long as there is no trading halt, there is ALWAYS someone there ready to trade with you.

But ONLY in forex market, where market is only open when the banks are making money. When the market is not going their way, they jump ship and leave others holding the bag. And just so you know, the banks' stopping the price feed is NOT the same as a trading halt. In the event of a trading halt, the ENTIRE market is shut down and NOBODY is allowed to put in any orders or trade BEFORE the major "black swan event". And the market only opens AFTER the event has happened and the market has had time to digest the event. So in the SNB case, if there had been a proper trading halt, NOBODY would be able to place any orders, buy or sell BEFORE the SNB announcement but only AFTER the announcement. And by that time, the market would've digested the news and the price would've been at a new level reflecting the announcement accordingly but since nobody was allowed to trade during the announcement due to the trading halt, so nobody would've lost or gained during any price gaps that might have been created reflecting the different between the price before the announcement and the new price level after the SNB announcement but there would be no trades during that gap. That's the difference.

BUT that's NOT what happened, market stayed open so all the banks who made the "right" bets were still able to reap all the profits but only were shut down when they didn't feel like taking up losses. Only in forex market!
Make your losses in demo. Earn your profits live.
  • #795
  • Aug 11, 2015 3:22am Aug 11, 2015 3:22am
Quoting FXMasterSK
{quote} Good viewpoint. Still, as far as retail trading is concerned what the banks did was perfectly legal
Only legal FOR NOW. Won't be for long.
Make your losses in demo. Earn your profits live.
  • #796
  • Aug 11, 2015 3:41am Aug 11, 2015 3:41am
Quoting Forexia
{quote} Well there is actually NO problems with making speculations on any particular currency pairs or any economic statistics.
Not any economic statistics. Just the NFP. And pegged currency pairs (a tiny percentage among a host of other more liquid pairs).

Quoting Forexia
You don't want to do it that's a different story.
I do trade the calendar when I have the time. Just not the NFP.

Quoting Forexia
I trade the NFP all the time like many traders around the world and spreads widen just the same and sometimes you profit and sometimes you lose but do you ever see retail traders complain each time when they lost on NFP. No.
Probably just the traders you know. The ones I know (including some institutionals) think it's just plain annoying.

Quoting Forexia
WHY not? Because there was an orderly market, albeit more volatile than usual but there was still and always a market. As long as there is a market, we lose in the market, we lose fair and square. There was never any problem.


Quoting Forexia
The reason why retail traders got slighted during the SNB event was that the LP's dropped the ball and destroyed liquidity because they ARE the liquidity and single-handedly collapsed the market no matter how you want to explain away their action. This is still what happened. Retail traders didn't really lose during the SNB crisis because of their wrong trading decision; they lost more due to the fact that the market was destroyed by the LP's and yet they were still on the hook for all the losses on the market.
(Future readers will note that I also disagree with the above quote for reasons I've already outlined in my 3-4 posts prior.)

Quoting Forexia
In essence, retail traders became the market by becoming market specialists in those exchanges who had to mortgage their homes and personal assets to hold up the market when they were never intended nor capitalized to do so in the first place with just their micro size trades. And indeed the losses that many of the retail traders suffered were indeed the size of a house mortgage in the hundred's of K's dollars.
As for retail traders who trade on credit, no one put a gun to their heads to stay. They can always leave and invest in mutual funds (or something).

Quoting Forexia
Those banks really should be ashamed of themselves (since you are one of them anymore and one of us now so you shouldn't mind me saying so ) when they are capitalized with hundred's of TRILLIONs of dollars and yet they bail when s*** hit the fan
I don't mind at all as I'm not really interested in convincing you in particular. Future readers of this thread will note that Banks are capitalized with hundreds' of trillions of dollars (your words) of capital provided by SHAREHOLDERS to whom they ultimately answer to. Future readers would do well to put themselves in the shareholder's shoes and think on this matter further.

On the subject of the proper apportionment of blame, future readers will note that I have already said my peace in posts just prior to this.


Quoting Forexia
and expect retail traders who have 1/100000000000 of their assets to maintain the market.
Bank traders don't expect anything of retail traders as, in their collective minds, retail traders don't even directly exist in their institutional universe.

I'm afraid retail traders are all alone in their feelings (if any) of being shafted.

Quoting Forexia
{quote} This is for Skenobi and Leinadgnow: I hope you don't mind me asking a bit of a personal question to both you and I would totally understand if you prefer not to answer. Why did you leave the institution that you were working in? What made you leave? Again, good discussion.
After a brief Jerry Maguire-esque moment of clarity (induced by the Lehman Brothers debacle), I left after 16 years because
1. 12-to-16 hour working days were taking a toll on whatever's left of my personal relationships.
2. Manufacturing dodgy derivatives structures for my sales colleagues to hock to their customers was beginning to leave a bad taste in my mouth.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #797
  • Edited 4:21am Aug 11, 2015 4:07am | Edited 4:21am
Quoting skenobi
As for retail traders who trade on credit, no one put a gun to their heads to stay.
Well those retail traders really couldn't leave anymore when all of the LP's abandoned the market; their stop-losses weren't taken! So they had no choice but to stay. And they NEVER expected themselves in the first place to all of sudden become the only market makers left with their micro trade of just several thousand dollars. LOL

Quoting skenobi
Future readers of this thread will note that Banks are capitalized with hundreds' of trillions of dollars of capital provided by SHAREHOLDERS to whom they ultimately answer to. Future readers would do well to put themselves in the shareholder's shoes and think on this matter further.
REALLY? They actually hold themselves to answer to shareholders and actually make sure everything they do is in the shareholder's best interest? When was the last time they did that? Was it when they were pushing second and third mortgages on homeowners who clearly don't qualify? Or was it when they over-leveraged themselves (funny how the banks always accuse retail traders of doing so) in trading in mortgage backed securities? Or was it when they pay all of their CEO's hefty bonuses with bailout money when they know they are supposed to use the money to restructure their business? When it's time to get what they want at the expense of others, oh now the shareholders' interest comes to play. LOL

You know when we retail traders "over leverage" and screw up, we get called stupid, imprudent, naive, gambler and nobody gives a s*** and instead we are told to "deal with the consequence". But when those banks over leverage and screwed up and threw the entire world into a financial crisis, what do they get? They get more money! LOL You think they give a s*** about the interest of some shareholders who has like 100 shares when they can get away with destroying an entire world's economy and threw millions of people out of jobs and out of their homes?

Quoting skenobi
Or maybe I'm afraid retail traders are all alone in their feelings (if any) of being shafted.
No no, trust me. We are NOT the only one who realized that we got screwed. http://www.financemagnates.com/forex...nc-volatility/

And the authorities ARE noticing too...

http://www.bloomberg.com/news/articl...rrency-trading

http://www.financemagnates.com/insti...nks-last-look/

And things are being done:

http://www.wsj.com/articles/forexs-l...bed-1432768404

Quoting skenobi
After a brief Jerry Maguire-esque moment of clarity (induced by the Lehman Brothers debacle), I left after 16 years because 1. 12-to-16 hour working days were taking a toll on whatever's left of my personal relationships. 2. Manufacturing dodgy derivatives structures for my sales colleagues to hock to their customers was beginning to leave a bad taste in my mouth.
Ok. All the best.
Make your losses in demo. Earn your profits live.
  • #798
  • Aug 11, 2015 4:21am Aug 11, 2015 4:21am
Quoting Forexia
{quote} Well those retail traders really couldn't leave anymore when all of the LP's abandoned the market; their stop-losses weren't taken! So they were REALLY forced to stay. And they NEVER expected themselves in the first place to all of sudden become the only market makers left with their several thousand dollars of trade size. LOL
My original premise stands: They can still leave.

Quoting Forexia
{quote} REALLY? They actually hold themselves to answer to shareholders and actually make sure everything they do is in the shareholder's best interest? When was the last time they did that?
When they made money, which is basically every year.

Quoting Forexia
Was it when they were pushing second and third mortgages on homeowners who clearly don't qualify? Or was it when they over-leveraged themselves (funny how the banks always accuse retail traders of doing so) in trading in mortgage backed securities?
Not fair to compare spot FX guys with fixed income derivative pot-heads. Spot FX didn't cause sub-prime.

Quoting Forexia
Or was it when they pay all of their CEO's hefty bonuses with bailout money when they know they are supposed to use the money to restructure their business? When it's time to get what they want at the expense of others, oh now the shareholders' interest comes to play.
Yup. C'est la vie, as I said.

Quoting Forexia
LOL {quote} No no, trust me. We are NOT the only one who realized we got screwed.
To the regulators: Good luck with that!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #799
  • Aug 11, 2015 4:27am Aug 11, 2015 4:27am
Quoting skenobi
{quote} My original premise stands: They can still leave.
How?

Quoting skenobi
To the regulators: Good luck with that!
Yes one bank at a time. That's how changes are made.
Make your losses in demo. Earn your profits live.
  • #800
  • Edited 10:21am Aug 11, 2015 4:41am | Edited 10:21am
Quoting skenobi
{quote} My original premise stands: They can still leave.
Quoting Forexia
{quote} How?
What do you mean, "How"?

Retail forex is practically a zero-barrier-to-entry endeavor. Zero-barrier-to-entry implies zero-barrier-to-EXIT.

A trader makes a conscious decision to ENTER the forex market; he can make a conscious decision to leave.
I'm not trying to convince anyone. I'm not in the "convincing" business.
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