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  • #801
  • Edited 6:27am Aug 11, 2015 5:54am | Edited 6:27am
Just as a regular reader of the thread here:

Skenobi (edit: and the rest of the pros answering our questions) has not single-handedly created the world's financial system or even the retail Forex.
I doubt that he was behind the decision of SNB in January either or that he summons evil spirits that force us to gamble on the Forex market.
So we might wanna give him a break, respect his experience, time and patience, and perhaps focus on the new and interesting questions.


k
  • #802
  • Aug 11, 2015 10:47am Aug 11, 2015 10:47am
@ kprsa
+1000
Demo only
  • #803
  • Aug 11, 2015 12:05pm Aug 11, 2015 12:05pm
Quoting kprsa
Just as a regular reader of the thread here: Skenobi (edit: and the rest of the pros answering our questions) has not single-handedly created the world's financial system or even the retail Forex. I doubt that he was behind the decision of SNB in January either or that he summons evil spirits that force us to gamble on the Forex market. So we might wanna give him a break, respect his experience, time and patience, and perhaps focus on the new and interesting questions. k
But that would mean accepting reality and understanding that retail traders aren't even shit under anyones boot. This thread is a testament to Skenobi's patience.
Congratulations ScalaFX for coming out of the closet!
  • #804
  • Aug 11, 2015 12:27pm Aug 11, 2015 12:27pm
Quoting skenobi
{quote} {quote} 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 was talking about specifically that situation where those retail traders who already ENTERED the CHF trades during that SNB event. They couldn't just leave, could they? They basically became market markets of course unwittingly holding up the market when all of the LP's capitalized 100000000000 times more all abandoned the market.

In the future of course, I don't know if they can enter the market to trade even if they want to; their trading capital are all GONE, taken by those banks under the convenient guise of "looking after shareholders' interest" blah blah blah bullcrap.
Make your losses in demo. Earn your profits live.
  • #805
  • Edited 1:17pm Aug 11, 2015 12:51pm | Edited 1:17pm
Quoting Forexia
{quote} I was talking about specifically that situation where those retail traders who already ENTERED the CHF trades during that SNB event. They couldn't just leave, could they?
They can leave by just biting the bullet and squaring their trades.

Quoting Forexia
They basically became market markets of course unwittingly holding up the market when all of the LP's capitalized 100000000000 times more all abandoned the market.
If EURCHF traders actually thought they were unwitting "market makers" holding up the market when liquidity dried up, I think they over-estimated their influence on the market. 'Nuff said.

Quoting Forexia
In the future of course, I don't know if they can enter the market to trade even if they want to;
They could just "want to" leave the market altogether. Just a suggestion.

Quoting Forexia
their trading capital are all GONE, taken by those banks under the convenient guise of "looking after shareholders' interest"
Their capital was lost by their retail brokers, not the Banks.

Quoting Forexia
blah blah blah bullcrap.
Sorry if you felt it was all bullcrap. I heartily encourage you to put me on your Ignore list to preclude you reading any post of mine you may find objectionable.

All the best!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #806
  • Aug 11, 2015 1:14pm Aug 11, 2015 1:14pm
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 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,...

1). I left because i still love trading for myself and given the insane amount of red tape and lack of balance sheet within the bank, it was getting hard to take on positions i wanted.

2). I'm in between jobs right now and decided to go at it myself before heading back to a hedge fund.. the fact is, most of those who are left in banks are nothing but glorified market makers / brokers.... prop position is at a minimal.. it's a self reinforcing culture.. those who are risk takers and who love taking huge bets would have left for hedge funds or come out to trade themselves post '08.. those that remained are generally much more conservative looking to retire (the old birds at least).

3). I was on the floor when the CHF occured.. trust me, it took us by surprise as much as it did for retail traders... floor was told to stop trading until we knew the exact damage and what we could to layer ourselves out.

4). I left because i'm still extremely young despite trading on my own and for a institution over the last 8 years... i ultimately am inclined to believe i excel as a speculator, not an investor or a market maker.. it takes two very different characteristic...


hope that answered your question.
There is no royal road to anything.
  • #807
  • Aug 11, 2015 1:18pm Aug 11, 2015 1:18pm
To add on Forexia, we lost almost as much or even more then what you think.. can't say the numbers because it will affect the overall AR for this year which hasn't be release yet.

Secondly, the brokers lost the money of the clients but not keeping it segregated in a trust account.... Not us... TBH, we didn't deal with retail where i'm from at all... So whatever goes down was simply this ...



Broker >> account with us >> lost money >> didn't segregate money>> went belly up>> we lost money on the trade + we lost money due to money owed to us by the broker that was unrecoverable.

Hedge funds made a pile.. the banks if u simply google, lost alot.. i was in one of those banks that was mentioned... I'm not saying that the banks weren't to blame for the drying up of liquidity.. we had to pull all b/o from the screens.. but, it wasn't us that caused that crash...
There is no royal road to anything.
  • #808
  • Edited 2:35pm Aug 11, 2015 1:22pm | Edited 2:35pm
Quoting kprsa
Just as a regular reader of the thread here: Skenobi (edit: and the rest of the pros answering our questions) has not single-handedly created the world's financial system or even the retail Forex. I doubt that he was behind the decision of SNB in January either or that he summons evil spirits that force us to gamble on the Forex market. So we might wanna give him a break, respect his experience, time and patience, and perhaps focus on the new and interesting questions. k
Don't worry about people like me, bro. We're probably just scum to some people.

I actually welcome the debate, because it forces me to test the robustness of my belief systems, to see if I still believe what I "preach".

So far, the more I engage, the more I find that my personal trading philosophies are actually reinforced, which in turn makes me more patient in trade selection and less prone to emotional compromise if/when trades go into the toilet.

While I refuse to apologize to emotionally compromised EURCHF traders, I do apologize if I come off as overly defensive of my former counterparts in the institutional world. Not my intent at all.

I'm just sharing my experiences and the harsh truths/realities I've learned along the way.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #809
  • Aug 11, 2015 1:49pm Aug 11, 2015 1:49pm
Quoting skenobi
They can leave by just biting the bullet and squaring their trades.
Squaring the trades? HOW when there was NO price feed and nobody to trade with them? WHO were they going to "square their trades" with? Air??? Cuz that was the ONLY thing existing in the market for about an hour instantly after the announcement. Have you ever actually TRADED or traded forex in the institution that you worked in? Were you there during the SNB event? For about an hour and half, the WHOLE ENTIRE forex market was GONE! No nothing. It was as if it never existed. Tourists were lining up at forex kiosks all around the world and couldn't even get their money exchanged because there was NO price. It was extremely chaotic. All those banks do was hide behind their "smart and realistic decisions"; they have no idea the havoc that they wreak on the world.

Quoting skenobi
If EURCHF traders actually thought they were unwitting "market makers" holding up the market when liquidity dried up, I think they over-estimate their influence on the market. 'Nuff said.
Well when ALL of the banks, the "liquidity providers" were gone, the ONLY orders that were left there were those limit orders by retail traders, then yeah, those retail traders were essentially holding up the market because their limit orders albeit tiny were the only liquidity left. They might not have been published by the "interbank" market system like EBS because we don't have access to it but they were there. Who else was there??

Quoting skenobi
Sorry if you felt it was all bullcrap. I heartily encourage you to put me on your Ignore list to preclude you reading any post of mine you may find objectionable. All the best!
I find that statement that institutions can do whatever all in the interest of the shareholders bullcrap regardless who says it. You are not the only one who's said it and nor were you the first or the last one who will say it. So nothing personal and neither is any part of this debate. The more this is discussed the more I am convinced that changes are needed. And trust me, if I find your posts objectionable I will put you on my Ignore list faster than the speed of light.

Good discussion.
Make your losses in demo. Earn your profits live.
  • #810
  • Aug 11, 2015 1:56pm Aug 11, 2015 1:56pm
Quoting skenobi
{quote} Don't worry about people like me, bro. We're probably just scum to some people. I'm just sharing my experiences and the harsh truths/realities I've learned along the way.
You personally are NOT scum but the institutions that you used to work for are scums with many of the irresponsible, reckless decisions that they have made, the same decisions that we retail traders get scolded, condemned and put down for. And that is the harsh truth/reatlity that we ALL have to live with everyday trading or not trading. At least we retail traders have more integrity (maybe because we can't afford to not having them). We profit, we lose but at the end of the day, we know we did it fair and square and we can sleep at night (besides worrying about the losses).
Make your losses in demo. Earn your profits live.
  • #811
  • Aug 11, 2015 2:27pm Aug 11, 2015 2:27pm
Hi again Forexia,

I see a lot of blind sided attacks on banks in your posts focused solely from a retail traders perspective, especially one that could have lost during the event. Although I understand your frustration with the nature of markets, I don't think you fully understand the in depth market microstructure and encourage you to look further into it. In any case, I just wanted to clear up some misconceptions.

Quoting Forexia
The banks "allowing us"? LOL How?
First of all, the banks don't need our liquidity to trade period. Banks were making FX markets long before the retail trader came along and retail traders are almost like a drop in the ocean as far as they are concerned. Ballpark figure I've seen mentioned is that retail traders account for >5% of the total turnover of FX markets. Therefore if we were gone, they could care less. So yes, they essentially "allow us" to trade by pooling our little digit accounts together to access the Interbank market, something we could never do on our own. They have no obligation to do that.

Quoting Forexia
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
Sure, what they get out of it is making markets and collecting the spreads IE doing their jobs. Since they rarely make their money from speculation, our losing trades don't just end up in their pockets. The market is bigger than that. On the other hand, what do we get out of it? A chance at freedom. A chance at working in one of the best careers (IMO of course) ever. A chance at changing our lives and making an amazing living. No overheads, employees, or bosses. Being able to trade whenever and wherever we'd like. And for 95-99% of us we get to feed our gambling addiction. I can go on and on, but you get the point..

Quoting Forexia
REALLY??? I thought it's not true that
Not sure what you meant by that..

Quoting Forexia
So if the market is NOT a get rich scheme, how is it we have the chance to make "some insane...
Very misguided post here. Yes, we "create" risk LOL. When we go long at a support level, we "created" risk LOL. What separates good traders from bad is that they only take smart risks. Smart risk would be going short E/U at a key technical level because the Fed is closer to rate liftoff and the trader believes a key data point could help the case. Dumb risk is trading a black swan. Anyone that's been around long enough knows during a black swan event liquidity dries up. They call them black swans for a reason and there's a reason why liquidity dries up, because traders don't generally want to trade during those conditions!

The banks didn't MAKE the black swans. The markets did. All the banks did was continue to play their roles and protect their books. Black swans occur as a result of liquidity drying up. It's not the banks fault that the market participants didn't want to trade long EUR/CHF. The banks aren't going to go down under just to protect us. It's a predatory game, deal with it or get out. Big boys don't just hunt us, they go after each other too. If they get any chance, they will go for a quick kill to make their money. We would too if we actually played a role in the markets. Hedge funds frequently do it. Morality doesn't make money in markets. The sooner you understand that, the better. It's a food chain with banks at the top and us at the bottom. We accepted that when we accepted the disclaimer so there's no reason to complain about how morally wrong and messed up the FX markets are.

Quoting Forexia
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"..
Another misguided statement. These aren't black swan events because liquidity is only temporarily dry, not withdrawn altogether AND the banks as well as market participants are prepared for this. After NFP, FOMC, and rate decisions the market price's value in where they believe it to be and liquidity comes back into the market. If NFP caused a large USD rally, eventually sellers will come back in and start selling once they believe value has been overshot. Everyone know this and are prepared for it beforehand; however, during a black swan there's no preparation, too much uncertainty, and there just aren't participants who will take the other side of your position. In order for there to be a market there must be buyers and sellers. Banks, once again, only facilitate the transactions between the two. They are not there to take our positions, hold our hand, and carry our losses at their risk during unknown and unexpected strong one-sided liquidity situations. I don't see them pointing fingers at us saying, "It's all you damn traders fault for withdrawing liquidity and trading on one side of the market!"

Quoting Forexia
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..
They are always there? No, if it's a black swan event in that market, trading WILL get halted. The flash crash in 2010 showed how a large move could drive out any participant had they been overleveraged in no time at all. Before the new circuit breakers were put in place what do you think happened in those markets during crashes? And sure, when trading isn't halted they need to take the other side. But each market has its own pros and cons. More on that below.

Quoting Forexia
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..
Your difference isn't fully accurate. A black swan is a black swan for a reason in that it is an UNFORESEEN event. Trading gets halted before the black swan? Uh no, the Down Jones dropped 998.5 points during the flash crash before rebounding. Stock markets didn't stop, wait for the event to occur, and then resume. Sounds so illogical. And this was a smaller episodic volatility event compared to past events. The SNB were the ones who dropped the news on the markets without warning. Most traders have blamed them for what they did. Why are you blaming all banks and now the FX market?

Quoting Forexia
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!
Now it seems you're going from blaming all banks to laying blame on just the banks who were on the right side.. What I'm getting is that you're just looking for someone else to blame besides retail traders. Funny. Sure, maybe many retailers each lost thousands from the event. But In the bigger scheme of things thousands is nothing. Straight from WSJ: "Citigroup Inc. and Deutsche Bank AG will each lose about $150 million on the francs appreciation, said people familiar with the firms. Goldman Sachs Group Inc. said Friday that the francs move will be immaterial to its earnings. Losses at Barclays PLC will be in the tens of millions of dollars, people familiar with the bank said." There were hedge funds who lost billions. Sorry, but I'm still not seeing any reason to feel sympathetic for the retailers who accepted the unknown risk and now complain because their accounts were blown.

Not sure how you went from dishing banks to dishing the FX markets altogether, but let's revisit trading 101 and talk about the pros and cons of the FX market vs other markets in a nutshell.

Other markets: You've already mentioned the specialists who must take the other side in the other markets. There are circuit breakers in place as well to halt trading during adverse conditions for ALL participants. An open order book for all to see, although I can't say this counts since there are still ways to hide your tracks. Good volatility in this low interest rate environment. Etc.

FX: The ability to trade micro accounts! You need thousand and thousands to trade equities and futures, no wonder there's more professional traders and less gamblers in those markets. The ability to trade with high leverage! This is a double edged sword, but in the right hands you can make some amazing returns. 24 hour trading! There's so many inefficiencies you could exploit over the 24 hour period. Lower fees! Most brokers generally charge a spread whereas in equities and futures you pay commission. So much information! Although not all is useful and there are way too many scams, you don't have to pay any money for courses or books and could learn how the market works if you applied yourself hard enough. The ability to go short! Make money (or lose for the losers) both ways! And during normal interest rate market environments the FX market has massive volatility and nice macro trends to take advantage of. This could be another double edged sword, but if you know how to exploit it props to you.

I'm not going to get into all the pros and cons of each market. Each market is different as is each trader and you have the choice to pick whichever market you want to trade based on your trading style. If you hate the FX market, simple, don't trade it. However putting it down as worse than the other markets is just not true and completely based on personal opinion.

It seems from your replies no matter what anyone tells you, it won't change how you feel. Although I don't agree or even care, I respect your opinion. I think we have all said plenty from both points of view and can at least agree that FX markets are different than other markets, and if you don't like it you shouldn't trade it. Whatever route you choose to go from here, I wish you well and happy trading!
  • #812
  • Edited 10:25pm Aug 11, 2015 2:28pm | Edited 10:25pm
Quoting Forexia
{quote} Squaring the trades? HOW when there was NO price feed and nobody to trade with them? WHO were they going to "square their trades" with? Air??? Cuz that was the ONLY thing existing in the market for about an hour instantly after the announcement.
Point taken. If am not mistaken, however, all the trades have been closed forceably by now?

Quoting Forexia
Have you ever actually TRADED or traded forex in the institution that you worked in?
Since 1995, yes. Have had plenty of experience of dried up liquidity since then.

Quoting Forexia
Were you there during the SNB event?
As an observer, sure. The rest of us more rational traders were on the sidelines for quite a while as far as EURCHF was concerned.

Quoting Forexia
For about an hour and half, the WHOLE ENTIRE forex market was GONE! No nothing. It was as if it never existed. Tourists were lining up at forex kiosks all around the world and couldn't even get their money exchanged because there was NO price. It was extremely chaotic. All those banks do was hide behind their "smart and realistic decisions"; they have no idea the havoc that they wreak on the world.
(Concerns already answered in my previous posts)

Quoting Forexia
{quote} Well when ALL of the banks, the "liquidity providers" were gone, the ONLY orders that were left there were those limit orders by retail traders, then yeah, those retail traders were essentially holding up the market because their limit orders albeit tiny were the only liquidity left. They might not have been published by the "interbank" market system like EBS because we don't have access to it but they were there. Who else was there??
Those "limit orders by retail traders" you mentioned were on retail broker orderboards.

And the retail forex market, if I may remind the casual reader on this thread, is not even a real market i.e. it's just a parallel betting parlor mirroring the REAL market i.e. the institutional spot FX market. Therefore, I think it's rather presumptuous for EURCHF retail traders to think that their "orders" are "holding up" the REAL market in any way, shape, or form.

Quoting Forexia
{quote} I find that statement that institutions can do whatever all in the interest of the shareholders bullcrap regardless who says it. You are not the only one who's said it and nor were you the first or the last one who will say it. So nothing personal and neither is any part of this debate. The more this is discussed the more I am convinced that changes are needed. And trust me, if I find your posts objectionable I will put you on my Ignore list faster than the speed of light. Good discussion.
I am, however, putting you on MY Ignore list, as I feel this is actually the wrong thread for you to address the EURCHF retail traders' cause you bring up.

Note however that I'm not banning you from this thread (it's not my thread anyway); I just won't see your posts anymore.

The best of luck to you in getting your issues resolved elsewhere!

Cheers!
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #813
  • Aug 11, 2015 2:33pm Aug 11, 2015 2:33pm
Quoting kprsa
Just as a regular reader of the thread here: Skenobi (edit: and the rest of the pros answering our questions) has not single-handedly created the world's financial system or even the retail Forex. I doubt that he was behind the decision of SNB in January either or that he summons evil spirits that force us to gamble on the Forex market. So we might wanna give him a break, respect his experience, time and patience, and perhaps focus on the new and interesting questions. k
Nothing wrong with a bit of a friendly, intelligent discussion. That's what forums are for, so that people can freely share knowledge and their viewpoints, and others may form their own opinions and decide whether that information is of use or not. I personally don't see this as a Forexia vs. Skenobi battle, just two different people from two different worlds sharing their opinion..

As much as I've learned about Skenobi from talking to him, I can tell he honestly probably doesn't even care one bit. He has absolutely no reason to defend himself and his openness and accurate understanding of the markets with a predatory tone of sarcasm is what allows him his success.

Very thankful to you Skenobi and others!
  • #814
  • Aug 11, 2015 2:50pm Aug 11, 2015 2:50pm
Quoting skenobi
{quote} Point taken. If am not mistaken, however, all the trades have been closed forceably by now?
For those who weren't in retail trading, NO none of the stop-loss orders by retail traders were executed by the brokers and because as stated many times before, because there was NO liquidity, no prices, no counterparties for them to do with. Since as skenobi pointed out before, all retail brokers are customers of the banks so when banks stop the price feed and basically refused to trade then HOW were those trades going to be closed? People were basically watching their losing trades bleeding more and more losses and there was NOTHING they could do to CLOSE those trades. And for those trades who were closed, they were filled at levels SEVERAL thousand pips away from the market price, consensus of the price levels of majority of market makers, widening the losses of retail traders even further.

Quoting skenobi
Those "limit orders by retail traders" you mentioned were on retail broker orderboards. And the retail forex market, if I may remind the casual reader on this thread, is not even a real market i.e. it's just a parallel betting parlor mirroring the REAL market i.e. the institutional spot FX market. Therefore, I think it's rather presumptuous for EURCHF retail traders to think that their "orders" are "holding up" the REAL market in any way, shape, or form.
EXACTLY what I said. Those orders were there but not available to be traded upon. So ok from a reality point of view, because they weren't available to be traded upon so they weren't really "the market" BUT technically they REALLY were the only liquidity left albeit tiny.

Quoting skenobi
I am, however, putting you on MY Ignore list
Ok chacun son gout. LOL
Make your losses in demo. Earn your profits live.
  • #815
  • Aug 11, 2015 3:12pm Aug 11, 2015 3:12pm
Quoting FXMasterSK
The banks didn't MAKE the black swans. The markets did.
Ok but WHO is the "markets"? LOL I mean we talk about the "market" as like it's a mythical figure that's just out there hovering over us, THE "MARKET"!! LOL

Have you ever wondered what is the "market"? What makes up the "market"? You are obviously not a trader and who's basically here trolling with paraphrased copy-and-paste comments from others, but since you are here, I will still educate you and all the rest of the potential trollers out there. Have you ever wondered what "market" is?

I will give you a hint. It starts with a "b" and ends with a "s". Yes, that's right! It's the banks!!!! Ding, ding, ding, ding, ding, ding, ding, ding, ding, ding!!! We have a winner!!!!

Yes the banks IS the market. So yes the markets did make the "black swans" and since the banks IS the market so they DID create the "black swan" event. I know you are not interested to know because you are just here trolling but TRY to think about this comment for a moment, do some research and try to understand why this comment is correct before you troll another post.


So homework for you today, FXMasterSK: Understand WHY the banks IS the market. There will be a test on it tomorrow.
Make your losses in demo. Earn your profits live.
  • #816
  • Aug 11, 2015 3:24pm Aug 11, 2015 3:24pm
Quoting FXMasterSK
Sure, maybe many retailers each lost thousands from the event. But In the bigger scheme of things thousands is nothing. Straight from WSJ: "Citigroup Inc. and Deutsche Bank AG will each lose about $150 million on the francs appreciation, said people familiar with the firms. Goldman Sachs Group Inc. said Friday that the francs move will be immaterial to its earnings. Losses at Barclays PLC will...
First of all, retail traders didn't just lose thousands, many lost ten's of thousands and even hundreds of thousands, much more than they invested with their broker. Just an FYI. Second, the loss has to be in relative to their assets. Banks might have lost million's but their assets is in trillions, that's TWELVE zero's. Retail traders might have lost ten's of thousands and even hundred's of thousands but how much is their assets? You and I should know how many zero's is that.

And hedge funds who lost billion??? Billions??? Do you know what are hedge funds??? LOL

Ok another homework assignment for you: Learn about hedge funds and the difference between hedge funds and banks and understand why it's NOT possible for hedge funds to have lost billions. I need a book report on that and it's due tomorrow.

NO posting in the forum for you until the two homework assignments now are done. LOL
Make your losses in demo. Earn your profits live.
  • #817
  • Aug 11, 2015 3:53pm Aug 11, 2015 3:53pm
Quoting Leinadgnow
To add on Forexia, we lost almost as much or even more then what you think.. can't say the numbers because it will affect the overall AR for this year which hasn't be release yet.
I know the banks lost money too and although you might not be able to say the specific numbers but we have the ball park figure.

http://www.bloomberg.com/news/articl...-seen-mounting

But you know what? This is a bit of the banks' own doing though. Because the banks IS the market, so the banks really do have a bit of control on how much is the losses. If the banks had been there making the market, the losses might not have been this large but instead the banks stopped the price feed and let the price free fall and then turn around and fill all the trades at the very rock bottom (for all those euro buyers) then of course the loss is going to be disastrous. The banks thought they could make a killing but it backfired because all their clients can't pay. I don't believe it that the spread has to be SO wide that there is no price to quote. This is NOT the first time that those major events happened and NEVER was the price feed stopped and NEVER for this long. There had been dried-up liquidity before in events like these but NEVER for an HOUR like this time.

Quoting Leinadgnow
Secondly, the brokers lost the money of the clients but not keeping it segregated in a trust account.... Not us...
Actually NO 99% of the retail traders who lost money were really due to their trading losses and not because of not able to recover the funds back from the brokers. There were only a few brokers, 3 or 4 so far I believe went bankrupt because of the SNB event. And out of the 3 or 4, there was only ONE broker that was unregulated and the founder basically took off with all of the traders' money. With the majority of the brokers that went down the funds ARE segregated, the biggest being Alpari UK, traders are getting their money back albeit very very slowly due to I believe the incompetence of Special Administrator appointed by the FCA (ample discussion of that in the Alpari UK discussion thread) and very possibly politics.
Make your losses in demo. Earn your profits live.
  • #818
  • Aug 11, 2015 4:15pm Aug 11, 2015 4:15pm
Let me give you an example..



Retail trader buys through his broker 10 lots of EURCHF with stops at 1.20 for example..
Broker goes to instit boys and say, okay i've got 5 lots of EURCHF to sell.. (10 hedge for the retail. he takes 5 lots to buy as well for his prop book)
Theortically, retail trader is hedged his 10 lots stop at 1.20 with the broker...

Risk for Retail:

10 lots of EURCHF @ 1.20 with the broker

Risk for Broker:
10 lots of EURCHF (client) + his 5 lots of EURCHF

Risk for banks:
5 lot of EURCHF or flat assuming he gets out and market makes and not take a prop view.


Market crashes.

Broker cant get out .. and loses alot of money on the EURCHF 5 lots + 10 lots because the market gaps retail trader owes him money and plus he is down as he only hedge 5 lots.

Bank gets out but assuming they cant because of liquidity issue, he loses 5 lots on the EURCHF

Retail, whatever the market has gap to because they cant get out of their 10 lots..

Broker goes bust.. retail loses whatever money he has left with them because the broker pooled his money to go into the prop book instead of using a segregated account.

Everyone blames the bank for pulling liquidity..


See, the whole point of the gap is that everyone lose or makes money base on where that gap occurs... No one could have predicted the SNB from pulling a stunt like that... the bank has a right to protect their own liquidity and pricing as well as positions.... why should they fill an order base on the fact that the cannot get anything from the streets at that price? it is done on a best possible basis... its not guaranteed...

While the instit boys did honor some contracts when they sorted out the mess, they cant fill everyone at that level.... hence the world.. GAP....


you might think that they refused to provide liquidity for maor events and try to shake those retail out.. i assure you, it is due to the regulations and risk controls in place at the banks whereby if a certain limit is hit, everything freezes. Blame the regulatory environment that we are in and blame the lack of b/s ....

You are right to state that it has never been for an hour like this time or NEVER this long... its because this is the first major liquidity issue ever since those bullshit regulations have been put in place... its a simple fact.. when everyone is extremely cautious and loads of red tape is in place, liquidity is going to dry up due to the inability to take on any risk on their balance sheet. its that simple..
There is no royal road to anything.
  • #819
  • Aug 11, 2015 4:24pm Aug 11, 2015 4:24pm
Quoting Forexia
{quote} Ok but WHO is the "markets"? LOL I mean we talk about the "market" as like it's a mythical figure that's just out there hovering over us, THE "MARKET"!! LOL Have you ever wondered what is the "market"? What makes up the "market"?
If this were true we could, for example know the properties of, say, metals, just from knowing the properties of its constituent atoms. We don't.
More on topic, we could anticipate the behaviour of groups, solely by knowing a bit about individual psychology of the group members.
Things just don't work that way.

There are emergent phenomena in each of these fields that are not reflected by and cannot be reduced to the individual units.

More is different.

Jack Schwager: What is the most prominent fallacy in the public's perception about markets?
Paul Tudor Jones: That markets can be manipulated. That there is some group on Wall Street that controls price action in the markets. I can go into any market and create a stir for a day or two, maybe even a week. If I go into a market at just the right moment, by giving it a little gas on the upside, I can create the illusion of a bull market. But, unless the market is really sound, the second I stop buying, the price is going to come right down. You can open the most beautiful Saks Fight Avenue in Anchorage, Alaska, with a wonderful summer menswear department, but unless somebody wants to buy the clothes, you will go broke.

(from Market Wizards)

It turns out that even the Swiss National Bank couldn't fight the market.

Cheers,
k
  • #820
  • Aug 11, 2015 4:38pm Aug 11, 2015 4:38pm
Quoting kprsa
{quote} More is different. Jack Schwager: What is the most prominent fallacy in the public's perception about markets? Paul Tudor Jones: That markets can be manipulated. That there is some group on Wall Street that controls price action in the markets. I can go into any market and create a stir for a day or two, maybe even a week. If I go into a market at just the right moment, by giving it a little gas on the upside, I can create the illusion of a bull market. But, unless the market is really sound, the second I stop buying, the price is going...

Not to put words in the legend's mouth, but I believe he has strayed significantly from this view over the 25 years since the original Market Wizards was published.

It is more accurate (not completely accurate) to say that he finds central bank manipulation a headwind to macro trading, and in some cases a serious international macroeconomic problem.

http://blog.themistrading.com/wp-con...ctober2010.pdf (on renminbi-dollar weak peg)
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