You don't have to be very leveraged to double or clean out your account when there's a 30% change in price. Buy 1000 units of USDCAD with 5% margin requirement, and you will walk away with $300 after a 30% move in your favor. Nobody expects these big sudden moves with currencies. That's why heavy leverage is required. Otherwise, you're wasting your time, whether or not you want to call this gambling. I.e play it safe and make minuscule amounts of money, or take bigger risks and make it worth your while. However, if you make it worth your while, a sudden unexpected big price change will wipe you out. Don't try to compare this with stock trading. This is a different ballgame. Last night I bought 2k units of cadchf. If I had a $100,000 account would this trade be worth my while or is it a waste of time given the more typical price movement in this pair? Would it be worth my while if we had a 30% change? It probably would be. Do you see the problem with your argument?
He was unaware of what happened in chf. I didn't bother to point it out. As it would be a waste of time because I didn't actually believe he trades.
Sorry, I didn't realize that. In that case, you may be right. I was only trying to show how one can risk $50 (5% margin on 1000 units ) and increase it by 6 times with a sudden 30% change in price. This really puts into perspective the risks you're actually taking trading currencies.
All markets are risky like that when the big gorillas are allowed a free reign. There's no possibility of fix other than regulation. Risk management is essentially by passed. Given the unlimited nature of the loss, even those who are heavily diversified would get killed if not beaten half dead. You will see none of the banks are affected. They are all in the game together. If people can see what the banks get up to, perhaps they can avoid being devoured alive.
That's not the issue at all, d08 trades just fine I reckon, doesn't trade CHF Pairs, much like myself, didn't realise the extent like myself no doubt. The issue is EJ after the fact ofcourse, posts up that he made money off it, while never posting a CHF trade before, yeah I believe him. He was a losing trader before hand, and even if true it's 100% fluke that he had a long CHF somewhere and made a killing putting him up 50%, before that he was losing, 1 fluke black swan does not make you a profitable trader IMHO. If he's of posted before hand, go Long CHF cause this is going to happen, fair enough but come on. Some of the great all time traders have had 2.9BILLION with a B wiped out from that little move from the sound of it.
And you've repeatedly failed to prove this, trades which we've spotted have went 500pts the wrong way, you later claim you changes sides on, yeah right, you've proven your right 52% of the time and the rest you have to hold out while being down -500pts for ages, yeah great. I posted 9 trades in a row, without any losers but ofcourse you'll ignore that. Then you keep ranting on about the banks, if your so smart, why are you losing ? and why don't you tell us how to beat the banks ??
You can't regulate yourself out of risk. In this case, the only way to mitigate risk is to fully knock the small players out of the game. Do you really want that? Even conservative risk management can eliminate your account in a hurry. My risk in any trade is at most the margin requirement. The margin requirement SHRINKS as the permitted leverage rises. More normally, I stop myself out long before I lose that margin requirement. Under normal circumstances this keeps me relatively safe, but when a big move happens, I too will be hurting. You can't protect against the big move unless you opt out of the game altogether.
How could you go with the CHF move ?? blind luck that you where in and the right way before hand, wasn't predictable at all, if it was then it wouldn't of caused the damage it caused. There was no orders to join, it was there, then it was 30% higher, nothing for anyone to join.
If you can predict it! This particular big move was a shock for everyone. Nobody expected this however hindsight being 20/20 we probably should have expected it. If you were lucky to be on the right side, you doubled your account, otherwise you lost everything and more.