Black Swan - Are you prepared? | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

The Black Swan Experiment 44 replies

Broker Prices on EURCHF "black swan" Event Jan 15th 2015 2 replies

CHF Black Swan - Show your Broker's Spike 14 replies

Investigating The Next Black Swan 8 replies

Black Swan 9 replies

Attachments: Black Swan - Are you prepared?
Exit Attachments

Black Swan - Are you prepared?

  • #22
  • Oct 16, 2016 7:47am Oct 16, 2016 7:47am
by the way 9 x 1200 is not 9800, but i have measured the movemant for all pairs of gbp/xyz and it was near 9800 pips = 98000 points in 1/2 hour
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #23
  • Oct 16, 2016 7:49am Oct 16, 2016 7:49am
Arabic food needs preparation for few hours

same as the black swan, it needs preparation for many weeks or months

Attached Image (click to enlarge)
Click to Enlarge Name: mosakhen.jpg Size: 111 KB
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #24
  • Oct 16, 2016 7:53am Oct 16, 2016 7:53am
Quoting CindyXXXX
{quote} I just fell in love with you right there in that post where we first met. I know you're married and im straight but lets just make it work... for the kids https://m.youtube.com/watch?v=Y2GqHF6zp10

me too

Attached Image
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #25
  • Oct 16, 2016 7:57am Oct 16, 2016 7:57am
Attached Image
GUYS BE AWARE FROM HUNTING YOUR STOP LOSSES BY YOUR BROKER & BY "GHOSTS"
  • #26
  • Oct 17, 2016 4:19am Oct 17, 2016 4:19am
What have you guys turned my thread into ?
  • #27
  • Edited 10:20am Oct 17, 2016 6:26am | Edited 10:20am
Quoting FXSayWhat
you do realize black swan is everywhere in our lives right?
Too true. Drive your car and the risk of death is always there from some freak accident. And it doesn't matter if you are the safest driver on the road because it won't be your fault it will be somebody else's.

I was listenening to the radio the other day and there was some women who slipped on the stairs and now she's totally paralysed. That's a black swan because 99.999% of people who slip on the stairs don't end up like that.

if you hold Gold, especially in the US, there's always the threat of a black swan as the government forces you to sell back to them at a very low price as they did in 1933.

But as I said in another post if you look at all of the black swans and the direction of the movement it happens in the direction of the major trends in force. Swiss and cable. However, there is always a time that they can occur against the major trend and that's if you get a massive parabolic move. Think 1987 in stocks, 1980 in Gold or the early 1970s in the Grains. So whenever you see one of these big parabolic moves (they will jump out in the chart) you know there's a very big risk of a big move (10%-30%) in a day against you.

The other thing to realise about potential black swans is the odds you won't be the wrong side. You can only have 3 positions in the market, long, short or flat (assume flat is a position) so you have 2 working in your favour and 1 against.

Finally, in the immortal words of Axl Rose - WELCOME TO THE JUNGLE BABY. Jungles by their definition are not safe places unless you're the Apex predator and 99% of traders aren't. In fact, the 99% are more or less (depends where you rank on the 99%) food for the bigger predators. That doesn't mean we can't survive (many animals live long and successful lives in the jungle when they are prey) but if you don't want the chance of being eaten then jungle is not for you. But as FXSayWhat rightly points out there will be black swans everywhere you go.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #28
  • Oct 17, 2016 10:44am Oct 17, 2016 10:44am
Quoting Calculus
{quote} Too true. Drive your car and the risk of death is always there from some freak accident. And it doesn't matter if you are the safest driver on the road because it won't be your fault it will be somebody else's. I was listenening to the radio the other day and there was some women who slipped on the stairs and now she's totally paralysed. That's a black swan because 99.999% of people who slip on the stairs don't end up like that. if you hold Gold, especially in the US, there's always the threat of a black swan as the government forces you...
I can live with a black swan taking place like you mencioned as a freak accident .
The problem is that black swans in forex are getting very comon...
  • #29
  • Oct 17, 2016 11:30am Oct 17, 2016 11:30am
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

STOPS won´t save you at all...
News have nothing to do with black swans...

Keep postiions small:CORRECT
  • #30
  • Oct 17, 2016 11:31am Oct 17, 2016 11:31am
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$.
Also wrong, ever heard of negative balance...trade too big and they will force you to sell your house!!!!!!!!!
  • #31
  • Oct 17, 2016 11:32am Oct 17, 2016 11:32am
Quoting limzy
{quote} 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?
Very inocent indeed....
  • #32
  • Oct 17, 2016 11:34am Oct 17, 2016 11:34am
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-...

SO IS GBPUSD EXOTIC???????????
  • #33
  • Oct 17, 2016 11:37am Oct 17, 2016 11:37am
Quoting numbnuts
{quote} 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.
CORRECT: every trade able to survive a 2000 pip collapse...at least one should have a Position Size exposure to blow most of the account in that Scenario...BUT AVOID NEGATIVE BALANCE......
  • #34
  • Edited 2:44pm Oct 17, 2016 1:18pm | Edited 2:44pm
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 ?
First of all, there is risk to trading just as there is risk in every other business. You can't eliminate risk but you can lower it. Second: Blowing your account is not the problem, getting in huge debt is.

Lowering risk:
I'm a short term trader, I have an average holding time between 5 and 15 min probably (haven't looked at my trade history, but that should be pretty close I think). That alone lowers my risk significantly. Ultimately I'm more often flat than having any market exposure.
Some people say these black swans come without any warning signs. I tend to disagree here. Black swans appear due to events that were not priced in or during iliquiid market hours. Regarding the SNB: they pulled the floor in one go - ugly? hell it was! But in the end we all knew or should have known that the floor created huge tension in the market. Tension means it can explode so you better do your due diligence and either stay away or trade the controllable direction only.
Market hours/pairs with low liquidity: don't trade them. If you need the thrill go to Vegas, bungee jumping or whatever.

Debt/Protecting your assets:
Well, to be brutally honest here, at some point you simply have to accept that a 700 pip gap might blow your account, or let it be a 1000 or a 2000 pip gap.
Speak to an expert in your country on how to protect your house or other assets. A holding company or a trust are perhaps better solutions than having it in your name.
If you're a small trader a broker with a no debt guarantee like activtrades (or others) might be a solution or go the guaranteed stops route IG offers. Other people may prefer trading via a limited liability company structure (for example a LTD in the UK, GmbH in Germany or Austria ...).
In the end: do your due diligence on what options you have handling a worst case scenario. Oh, and always have some spare money to fund a new account - you may blow your account or your brokers goes tits up. You can't control everything so it's mandatory to be prepared.

Trading is a leveraged business and you should realize that. You're not trading 1 lot, you're trading 100 000! Other businesses are leveraged too, trading isn't the only one. Many property related businesses are highly leveraged as well - they use there assets (property) as collateral when borrowing money for new projects.
  • #35
  • Edited 2:10pm Oct 17, 2016 1:50pm | Edited 2:10pm
Quoting cuchuflito
{quote} STOPS wont save you at all... News have nothing to do with black swans... Keep postiions small:CORRECT
Quoting cuchuflito
{quote} CORRECT: every trade able to survive a 2000 pip collapse...at least one should have a Position Size exposure to blow most of the account in that Scenario...BUT AVOID NEGATIVE BALANCE......
Quoting Zemanel
{quote} I can live with a black swan taking place like you mencioned as a freak accident . The problem is that black swans in forex are getting very comon...
When it comes to FX black swan events, there are two types we often encounter. 1 is manageable, and 1 is nearly impossible to mange. It's important to have them categrized and know which situation you are dealing with by the time you get caught.

  1. the one that moves fairly small (up or down within 100 pips in less than maybe 5 minutes) typical example, is somewhat management with all these sl, small risk and stay flat approaches you have discussed above. I think we have already established this understanding here

  2. the ones that moves anywhere over 500 pips in 2 seconds, are the ones you cannot avoid unless you are out of the market by the time it happens. When it happens, you either go "broke" or go "rich".

    It's my suggestion to tell you that don't even think about how can u predict or avoid no.2; otherwise it wouldn't be called black swan. Not even your brokers and major high-risk financial institutions be able to predict it and protect from from black swan related bankrupt when this happens. Look up what happen to FXCM last year, and you will know what i am talking about.

    Luckily, the no.2 does not happen quite often. and of course there are ways to reduce the change of you getting caught in a black swan event. Just like how you manage risk via. control techniques, avoidance, prevention, reduction, segregation, separation, duplication and hedging, black swan event can be somehow managed using these techniques to reduce damage to your account.

    it would be a long writing and something i might share my thoughts on in the future.



--------------------------------------------
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%
  • #36
  • Oct 17, 2016 1:55pm Oct 17, 2016 1:55pm
Quoting cuchuflito
{quote} Also wrong, ever heard of negative balance...trade too big and they will force you to sell your house!!!!!!!!!
thats not wrong, its your problem when you choose a broker who chases you to pay for negative balance.
  • #37
  • Oct 17, 2016 2:03pm Oct 17, 2016 2:03pm
To prepare for Black Swine is to stay away from forex trading. Your computer is sitting on time bomb. When it explodes we take it and move on as long we're still alive.
Make all mistakes in demo and rain in pips in live account
9jatrader All Time Return: -66.1%
  • #38
  • Oct 17, 2016 2:07pm Oct 17, 2016 2:07pm
Some good points perhaps on how to avoid markets before a possible black swan move. My point was you are still at risk even though you have no open positions in the market that took the dive.
Look Sharp/Trade Tight
  • #39
  • Oct 17, 2016 2:19pm Oct 17, 2016 2:19pm
Quoting JensG
{quote} I'm a short term trader, I have an average holding time between 5 and 15 min probably (haven't looked at my trade history, but that should be pretty close I think). That alone lowers my risk significantly. Ultimately I'm more often flat than having any market exposure.
There's another big anti-black swan strategy in-built to short term trading Jens and that's your stop is going to be relatively close (I would think) to the current price. So a trader might be long Cable at 1.2240 looking for a short term pop up to 1.2260+ and be working a 5-20 tick stop. In the 30sec-120sec time period before any of these mega moves you often get some real jumping in the price and that would more than likely take the trader out either right around his stop or with no more than 10-20 ticks of slippage (remember, price will be very very jumpy, it will not just dump without having at least a few upticks in that 30-120sec time-period.

Not saying I've described the above that well but I think you'll get the point - stops near the present action should be generally fine.
Road To Wisdom? To err and err and err again, but less and less and less...
  • #40
  • Oct 17, 2016 2:37pm Oct 17, 2016 2:37pm
Quoting Calculus
{quote} There's another big anti-black swan strategy in-built to short term trading Jens and that's your stop is going to be relatively close (I would think) to the current price. So a trader might be long Cable at 1.2240 looking for a short term pop up to 1.2260+ and be working a 5-20 tick stop. In the 30sec-120sec time period before any of these mega moves you often get some real jumping in the price and that would more than likely take the trader out either right around his stop or with no more than 10-20 ticks of slippage (remember, price will...
I've never thought about that but yes, you're right A stop that is very close to the current price is much more likely to be honoured, especially when you constrain yourself to times of greater liquidity.
Personally I move the stop with me. I start at a safe distance so I have room to cover little spikes (according to your logic that would also be the time of having a greater risk seeing my stop "ignored") but move it close to a few pips off the current price once it's in profit (which would gradually lower that risk).
0 traders viewing now