Avoiding slippage such as the EURCHF crash?
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thread: Avoiding slippage such as the EURCHF crash?

  1. #1
    Junior Member Poterc's Avatar
    22

    Avoiding slippage such as the EURCHF crash?

    Hi,

    beginning to get serious into trading and looking at moving from demo to real cash. The single biggest concern I have right now is slippage. Seeing the EURCHF wreck with individuals having slippage of over 2000 pips it truly disturbs me.

    How can a trader expect to trade with the risk of unannounced news occasions not just wiping their accounts, but putting them into serious debt?

    Should I look for ensured stops?

    Is there some type of prevention somebody can result in these occasions? (I thought it was unpredicted)

    Hope to hear your thoughts,
    Thanks

  2. #2
    Seeing that CHF crash earlier this year (fortunately I had been out of the market that time) made me recognize I will only steer clear of the market when there are forthcoming large central bank statements. lol!

  3. #3
    Junior Member lurefe's Avatar
    23
    seeing that CHF crash before this year (fortunately I was outside of the market which time) made me realize that I will just stay away from the market whenever there are forthcoming large central bank statements. lol!
    I finished trading 15 minutes until it occur.

    I hunted that it was chart/broker mistake.

    Even though many of traders lost their money, think about how many guys with 5-10 K become millionaires in just a few minutes.

    (brokers haven't paid to them I guess)

  4. #4
    Junior Member sadsuky's Avatar
    26
    There are some solutions. . .First, never exchange on a currency that it is central bank (SNB) is mad and got bad history. . .Second, don't trade on a currency that it is central bank is fixing its exchange rate utilizing a counter or a ceiling. Third, never exchange using a retail FX broker as they will not be able to provide a guaranteed stop loss and fast implementation. . .Trade directly using a liquidity provider or a bank, if you don't have a lot of money to exchange with a bank. . .it's simple, got get a fund solution like what I've done following the franc crisis and enjoy ultra fast implementation, super low spreads and real interbank liquidity without the brokers involved with the midst slipping you or playing silly games through news releases/ occasions. . .You can find the fund solution for a few grands and you'll be trading right with a liquidity provider. . .Cheers!!

  5. #5
    Junior Member Jttelight's Avatar
    25
    Hi all, Starting to get serious into trading and considering moving from demo to real cash. The single biggest worry I have right now is slippage. Seeing the EURCHF crash with people having slippage of over 2000 pips it really scares me. How can a trader expect to trade with the risk of unannounced news events not only wiping their accounts, but putting them into severe debt? Should I look for ensured stops? Is there any sort of avoie somebody can make for these events? (I thought it was unpredicted) Hope to hear your thoughts, Thanks...
    It wasn't slippage that occurred during the EUR/CHF flash crash if you may. It was a crash that dried up liquidity in the market. 1st time in history for Forex, in other-words it never happened before this moment. Additionally, it scared a lot of people, because it was one of the things that chances are happening are in the well lets put it extremely unlikely. Nevertheless it happened.

    Now there's no guarantees, no one can assure you something that is unforeseeable, and if they perform. . Well I personally would not trust it. Its up to you to guard yourself not to perform it.

    Now how can a trader expect to trade with unforeseeable risk, its the nature of the monster. You can not say seem, I want in, but I wish to get it done in a lesser intense level please scale my volatility down. Everything comes down to knowing is this something I wish to perform? Recognizing that things might happen out of the blue, and they're doing.

    Concerning picking a broker, I have been saying for years no broker no matter how big or the number of regulators they've been 100% secure. Empires and Giants fall there's no such a thing regarding big to fail The bigger they are the more security damage is left.

    As a trader you need to understand ALL the risk that is involved from the broker all the way to the market to the crazy minds of Central bankers. Everyone wishes to gain for themselves no one is saying lets give the retail traders some profits.

    Start small, diversify, get used to the risk, know that it requires lots of time and you'll lose lots of cash before you experience anything devastating once more its the nature of the monster. Overtime things like that won't scare or bother you.

  6. #6
    quote I ended trading 15 minutes before it happen. I hunted it was chart/broker error. Even though many of traders lost their money, think about how many men with 5-10 K turned into millionaires in only a few minutes. ( brokers have never paid I guess)
    Perhaps, 5-6 lucky men, possibly even less.
    Refusal to pay the profit would be a clear token of scam, as though profits are not valid, the same is with losses.

    This lucky guy from Africa make a lot of profit in a matter of moments with HF http://analysis.hotforex.com/blog/20...elling-usdchf/.

  7. #7
    Junior Member Poterc's Avatar
    22
    quote

    Its your responsibility to guard yourself not for someone else to do it.

    Now how can a trader expect to trade with unforeseeable risk, its the nature of the beast.

    For a trader you need to understand ALL the risk that is involved from your broker all the way into the market to the crazy minds of Central bankers.
    Was just wondering if you could elaborate on the above 3 points you created?

    1) How can one protect themselves? You said you've got to understand all the risk. . But what are those and where would you find them out?

    2) Also, are you indiing that this is an ongoing risk you've got to take while trading Forex?

    3) Are there any prevention procedures? Surely it was not just luck people weren't trading it in this time? (news? etc?)

    Thank you for the comprehensive reply,

  8. #8
    Member Ranti's Avatar
    42
    You can't control slippage, it is in the brokers discretion. If you would like to try and avoid it, exchange through times where there isn't high volatility. I really don't think your concern is slippage, your issue is if liquidity dries up and your broker can't fill your stop. If you're that worried trade an account with higher leverage and deposit a small sum, keep the rest of your capital in a bank account.

  9. #9
    Junior Member Jttelight's Avatar
    25
    quote Was just wondering in the event that you could elaborate on the above 3 factors you created? 1) How does one protect themselves? You mentioned you have to know all of the risk. . But what are those and where would you find them out? 2) Also, are you indiing that this is a continuous risk you have to take while trading Forex? 3) Are there some prevention procedures? Surely it wasn't just luck people weren't trading it in this moment? (news? etc?) Thanks for the detailed answer,
    I will try to attack the questions 1. I can only answer them from my expertise and understanding and not base it on a whole for everybody so this are individualized answers.

    1) First you need to acknowledge that the worst thing you can imagine could happen, does not indie that it will, but it can a lot of individuals think things that are unlikely or unlikely that wont happen, just wont happen. I on the other hand believe that worst case scenario is obviously a possibility. What is worst case scenario. The CHF flash crash might happen to be one. . The occasions of 2007 if the housing bubble burst is just another instance.

    There is many ways to protect yourself essentially you never want to keep all your funds in 1 account ( you understand do not keep all your eggs in 1 basket trigger if it drops all your eggs are gone) 2nd do not keep all of your money in the accounts either 3rd have money on both sides all in all what your doing is if anything occurs all it induces is a speed bump yes shedding money sucks yes unforeseeable events suck, but you're ready for them. Its like being people apocalypse men only your doing the same with money your making sure if the worst occurs it wont hurt it will sting, but your protected. Be sure to have more then 1 broker. . If a person goes belly up exactly the same thing that your shielded.

    Two) Absolutely Forex is 24 hours 6 days a week market. It crosses 3 time zones it according to economical stability or so lack off. Anything could happen at any moment, An earthquake some where, stock market crash, tidal wave, all this may lead to instability in a country and will create the market to react. Does not indie the events will be extreme, but there's always a degree of risk and it affects in size not all events occur in a flash, but it takes longer and people still do not see them coming.

    3) I can't speak for many people. I wasn't trading it in the moment, because I knew that it was unsustainable, I did not understand that they'll pull the rug underneath everybody, but I did understand that the peg would succumb to much pressure and at worst it would bend and perhaps even bend a lot. Not many events are connected to an alert system. We're used to understand or expect events and take precautions or even transaction the risk. Years ago things used to be a lot more volatile then they are now. There was a lot more sudden movements, and volatility however after 2010 things have less or more mellowed out, and some individuals are somewhat complacent. Waiting in anticipation for occasions rather than always being around the guard.

    Forex market is even though missing some ground still the greatest market on the planet. It's still quite volatile, things are different today then they are used to be the market is always quite dynamic. It constantly shifts and changes, we are confronted with most manipulation that has been ever succumb to FX. On top of it all were in a currency war. . Everyone is trying to find the easy injection and individuals who must experience the joy of cash needs it back. . So as China is losing traction others are attempting to fill in the gap by following the same foot steps cheap labour. Other nations are attempting to re-grow GDP which is done with inflation which is hard to do when everybody is attempting to compete with the cheapest price. . Consumer wins but economy wise it generates rifts and openings.

    My advice is learning the demo is very good, but read books such as Market Wizards -- Discover macro economics - Geopolitics - and - ch up on current events for the last ten years. The more knowledge the better you're equipped, yes its a lot of work. Forex isn't an overnight success story, a lot of individuals need it to be. I needed it to be, but it took me a lot of learning a lot of years and a lot of tears lol. You stick with it, you tackle it and wrangle with it, and always keep your eye on the goal.

  10. #10
    Junior Member lyskiddie's Avatar
    14
    quoteNow there's no guarantees, nobody can guarantee you something that's unforeseeable, and should they perform. . Well I wouldn't trust it.
    If you're outside the US, IG Markets do offer guaranteed stops as well as regular ones. They're expensive (additional spread) should you want to use them but they protect against slippage irrespective of the liquidity. If you exchange contrary to a pegged currency then you might want to take a look at them.

    IG is a $4 bn recorded UK company that has been around for 40 decades. They lost about $50m throughout the CHF debacle but their stocks barely budged.

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