Black Swan - Are you prepared? | Forex Factory

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Black Swan - Are you prepared?

  • #1
  • First Post: Oct 12, 2016 12:24pm Oct 12, 2016 12:24pm
Movements of 700/1000 pips in a couple of hours or even minutes are becoming more and more comon.
Itīs impossible to have great profit while avoiding these moments. The only way is to have the luck to be out of the market when these Swans decide to fly.
How do you guys do it ?
  • #2
  • Oct 13, 2016 2:09am Oct 13, 2016 2:09am
1. Use stops
2. Keep positions small
3. Stay out of the market during high impact news releases.
4. Trade during liquid market conditions
  • #3
  • Oct 13, 2016 5:21am Oct 13, 2016 5:21am
Quoting limzy
1. Use stops 2. Keep positions small 3. Stay out of the market during high impact news releases. 4. Trade during liquid market conditions
It doesnīt make any difference...
Stops will not be triggered because of slippage
Small risk = small profit
Black swan is impredictable
In my case, i only make 30% a year because i am afraid of black swans. If i suffer 1000/1200 pips sudden spike, my account almost suffer a margin call.
  • #4
  • Oct 13, 2016 5:42am Oct 13, 2016 5:42am
just deposit a small amount of money on you broker account to survive maybe 10 losses in a row but trade it like a big account.
e.g. you have 1000$, desposit 100$ and risk 1% = 10$ not 1$.
  • #5
  • Oct 13, 2016 6:17am Oct 13, 2016 6:17am
Quoting Zemanel
{quote} It doesnt make any difference... Stops will not be triggered because of slippage Small risk = small profit Black swan is impredictable In my case, i only make 30% a year because i am afraid of black swans. If i suffer 1000/1200 pips sudden spike, my account almost suffer a margin call.
You sound like there is no risk in trading at all.

Risk maybe small but reward can be multiple times your risk.

In the end you are only limited by your own ability.

Have you read market wizards.? If black swans are unpredictable how do they have long track records?
  • #6
  • Oct 13, 2016 6:37am Oct 13, 2016 6:37am
Well ... there is aplace to discuss these here @ FF ... wanna hear how they handle too ...., with the bright , willing and able institute trader ..., dont miss the big apportunity while it last ....

hearing they said free viagra tooo , if lasting more then 4 hour ... seek for emergency hospital .....

G luck hope you find it ...
  • #7
  • Oct 13, 2016 6:43am Oct 13, 2016 6:43am
ooopppsss when you find them ... sent a big regards ....

cheers
  • #8
  • Oct 13, 2016 6:56am Oct 13, 2016 6:56am
The writing is on the wall. These events will continue to happen from time to time, burning accounts and whole firms. Liquidity is still good in FX, but like so many markets these days, it vanishes in seconds. I for one have started to cut down my FX exposure to trading one lots, just not interested in something blowing up in my face anymore. I've had numerous close calls, and have withstood Refco, Man, and Alpari, but I feel like I'm pressing my luck. You not safe anywhere really, but I'm heading to the sidelines to take stock of things before I make my next move. I'm 45 now, been in the markets for almost 25yrs, maybe its time to move on. Well see.
Look Sharp/Trade Tight
  • #9
  • Oct 13, 2016 7:10am Oct 13, 2016 7:10am
the breed so call institute trader ... press their luck too , so institute and broker trader olso same same flavor .... WOOOW thats big man....

Dont look back .. its a waisted years .....
  • #10
  • Oct 13, 2016 8:11am Oct 13, 2016 8:11am
The truth? You can only be but so much prepared....we're all sitting ducks, but so are our brokers, and small banks, etc.

 

  1. Cut out exotics. They are way more susceptible to liquidity issues than mains.
  2. Trade with the fundamentals (being long GU during Brexit is dangerous)
  3. Use a reputable large broker, they're more likely to survive the apocalypse, and more likely to be fair with you
  4. Do not over leverage, trading a $200 account and going in the red $5,000 is an issue with your leverage just as much as a black swan event
  5. Only trade money you can lose- it's cliche, but at this point in trading- it's a must. Because the chances of you waking up with $0 account balance is absolutely real. If that happens, and you end up homeless, you're not playing the financial game smartly.
  6. Diversify. Goes with number 5.....there are so many investment vehicles other than forex it's mind boggling

These all seem obvious, but these simple rules will give you the buffer you need in most cases against a shock. Both brexit liquidity issues and SNB peg could be avoided if you had been using these rules..

  • #11
  • Oct 14, 2016 12:00am Oct 14, 2016 12:00am
thanks for giving good idea for trading.
  • #12
  • Oct 14, 2016 12:23am Oct 14, 2016 12:23am
Quoting Pharm0r
The truth? You can only be but so much prepared....we're all sitting ducks, but so are our brokers, and small banks, etc. Cut out exotics. They are way more susceptible to liquidity issues than mains. Trade with the fundamentals (being long GU during Brexit is dangerous) Use a reputable large broker, they're more likely to survive the apocalypse, and more likely to be fair with you Do not over leverage, trading a $200 account and going in the red $5,000 is an issue with your leverage just as much as a black swan event Only trade money you can lose-...
I agree with all your points. I must however point out that I had no open positions in EUR/CHF, but still lost access to my funds for a considerable time. And lets be honest, had that GU spike been larger, there may have been more problems with firms
Look Sharp/Trade Tight
  • #13
  • Oct 14, 2016 4:05am Oct 14, 2016 4:05am
Quoting PayTheLimit
{quote} I agree with all your points. I must however point out that I had no open positions in EUR/CHF, but still lost access to my funds for a considerable time. And lets be honest, had that GU spike been larger, there may have been more problems with firms
Yes true, surprised even now we didn't hear anything about firms being effected. Then again, operating at 400+ leverage usually writes the ticket for firms....only a matter of time

Access to your funds is a very scary ordeal. That is exactly why I switched to TDAmeritrade. One of largest US firms...insured to 250k
  • #14
  • Oct 16, 2016 12:32am Oct 16, 2016 12:32am
Quoting Zemanel
Movements of 700/1000 pips in a couple of hours or even minutes are becoming more and more comon. Its impossible to have great profit while avoiding these moments. The only way is to have the luck to be out of the market when these Swans decide to fly. How do you guys do it ?
It's very difficult do prepare for it. If you can anticipate and prepare for it then it's wouldn't have been called a Black Swan. The best a person can do is not to overtrade and not to trade too large of a size. Then if a Black Swan comes it reduces of the change of getting wiped out.
  • #15
  • Oct 16, 2016 12:34am Oct 16, 2016 12:34am
Quoting Pharm0r
The truth? You can only be but so much prepared....we're all sitting ducks, but so are our brokers, and small banks, etc. Cut out exotics. They are way more susceptible to liquidity issues than mains. Trade with the fundamentals (being long GU during Brexit is dangerous) Use a reputable large broker, they're more likely to survive the apocalypse, and more likely to be fair with you Do not over leverage, trading a $200 account and going in the red $5,000 is an issue with your leverage just as much as a black swan event Only trade money you can lose-...
Points 3 - 6 that you listed out are very good points, especially point 5.
  • #16
  • Oct 16, 2016 4:31am Oct 16, 2016 4:31am
you do realize black swan is everywhere in our lives right? you can only avoid by reduce your risk. one good option is stay flat, and that always gives you the best protection.

I am not here to speak the event where you get a drop of 15000 pips in a matter of 2 second. If you get caught in that case, you are really fucking luck.

I have been in the FX for over 10 years trading from 5m to monthly chart. Black swan events are always there, the problem for you is that you just cant tell where the next black swan event is going to take (it takes you somewhere). but yeah, their are always around the corner, before the news, after the news, during open and close of the major exchange market, war, election, speech, and ect. Knowing how to trade these events will help you spot potential Black Swans.

good trader go out and dance while it's raining, bad trader ONLY goes out when the sun shines.


--------------------------------------------
Trade Idea on TradingView @FXSayWhat
Trade Tweet on Twitter @MidnightLambada
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
  • #17
  • Oct 16, 2016 5:23am Oct 16, 2016 5:23am
Quoting mambomango
just deposit a small amount of money on you broker account to survive maybe 10 losses in a row but trade it like a big account. e.g. you have 1000$, desposit 100$ and risk 1% = 10$ not 1$.
There is only one way to properly protect yourself from black swan events - including broker risk - and mambomango nailed it. Keep only enough capital at your broker to cover margin requirements and put the rest in an interest bearing savings account. That is the correct and responsible use of leverage.
si hoc legere scis nimium eruditionis habes
  • #18
  • Oct 16, 2016 5:56am Oct 16, 2016 5:56am
Quoting CindyXXXX
{quote} that's the dumbest sh*t I've ever heard (well not really but..) No ones prepared for whats coming. That's exactly why they haven't let it happen yet. But the more they dig, the worse it's going to be. Just not so much for "them" And OP is right, the times they are a changin' https://www.youtube.com/watch?v=PJhmKF4npMs
Care to share your history this year? let me see if you know a thing about dealing with black swan event other than just that meaningless dead sounded song stuck in loop in your head.

BTW i am 2016 rank 65th on FF.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
  • #19
  • Oct 16, 2016 6:54am Oct 16, 2016 6:54am
Quoting FXSayWhat
{quote} Care to share your history this year?
Quoting CindyXXXX
{quote} I'm #2 BTW ... by my own regulation
that's what i thought.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
  • #20
  • Oct 16, 2016 7:20am Oct 16, 2016 7:20am
Quoting CindyXXXX
{image} im flattered man but unfortunately for you, you quoted the wrong post. Theres a few people not so happy with you and your public flurtations. But what would i know? its your trade now, time to manage what you opened whay does he do? Does he averhae down, or cut his loss https://m.youtube.com/watch?v=yf9OAFML_Eg
good night, Cindy.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
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