Is it possible to avoid getting wiped out by a move like SNB?
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thread: Is it possible to avoid getting wiped out by a move like SNB?

  1. #1

    Is it possible to avoid getting wiped out by a move like SNB?

    Hi ,

    I have been demo trading quite successfully to the point at which I'm considering going real.
    However the surprise move by the SNB last week and the resultant horror stories have me thinking.

    Was there a means to avoid being wiped out in case you had been long eurchf using a stop loss?

    I guess my question is: are there any brokers that would have ensured the execution of a stop loss even in this circumstance, even with a massive gap?
    Because if not, then trading FX is just crazy.

    Thanks

  2. #2
    Junior Member Cocoandre23's Avatar
    20
    Funny thing about IG was that you couldn't open any EUR/CHF positions with guaranted SLs until it failed.

  3. #3
    Hi , I've been demo trading quite successfully to the point where I'm considering going real. However the surprise move by the picture http://www.forexpeacearmy.com/forex-...ssary/tag/SNB/ last week along with the resultant horror stories have got me thinking. Was there a means to prevent being wiped out if you had been eurchf using a picture http://www.forexpeacearmy.com/forex-...tag/stop loss/? I guess my question is: are there any brokers that would have ensured the execution...
    in case you don't understand why the stops weren't triggered you do not yet understand enough about the market to risk real capital. You avoid situations such as the eurchf by remaining away from pegged currencies or currencies that are undergoing routine Central Bank direct intervention. In addition you avoid situations such as this by saying that nobody will give you a free lunch and you also prevent situations you do not understand. In addition you have a very great think about quantifying risk vulnerability. Knowing the dangers of high leverage would also be invaluable to you.

  4. #4
    Alt11, you have asked the exact same question that's on my mind. The point is that, even with a stop loss, your trading account may get wiped out. That is 1 lesson. Another lesson is that, if your account goes into negative equity, your broker can come after you to get the negative balance. I've traded a small live account with FCXM and'd assumed that the reply to your query was to keep only the minimum in the trading account to maintain margin, and if the worst happened then all of you would lose was that the cash in the account (given that FXCM had been up-front with their promises about not pursuing negative balances). Given what's happened with FXCM this week however, I'm now wondering how in the world you can ever know your risk. . .apart from trading with a broker with CLEARLY stop losses?

  5. #5
    I guess my question is: Are there any brokers that would have ensured the execution of a stop loss even in this circumstance, in spite of a huge gap?

    Due

  6. #6
    Junior Member oxtaysquiroz's Avatar
    9
    Really simple to avoid losing more, when you have a fair, accountable broker.

    Don't have a stoploss however a order that the otherway. With those huge moves those orders almost won't slip and you can't lose anything more(your target ).

  7. #7
    Junior Member Cocoandre23's Avatar
    20
    I guess my question is: Are there some brokers which could have guaranteed the implementation of a stop loss even in this case, even with a massive gap? Thanks
    IG.

    They have a guaranteed stop loss function.

  8. #8
    Really easy to prevent losing more, in case you've got a fair, liable broker. Do not have a stoploss but a order the otherway. With those big moves those orders practically won't slip and you can't eliminate anything more(your target ).
    However, in the case of a huge gap like this the opposite order would not happen to be triggered either, or only when the price reappeared following the gap, so the reduction would nevertheless have been massively greater than the gain of the brief. Anyway your account could be wiped out before the opposite order may be implemented.

    Anyway is not the absence of liquidity argument totally? Considering that the brokers do not actually pass any order when you place one, they just manage the risk betting you are going to blow your account sooner or later?

    What I do notice though is the charts of several brokers had a huge gap although some others did not.
    Are there brokers who actually guarantee the execution of stop loss orders at the set price even in cases like these, or will be at the next best bid the very best any broker will offer?

  9. #9
    quote IG. They have a guaranteed stop loss function.
    Thanks
    Yes, their TOS look fairly straightforward about it

  10. #10
    Great, they currently their risk.
    Fact is that there were quite a few articles out there warning of the risk in the days before it happened.
    The Chinese central bank burnt quite a few traders also last year just like that to get rid of trading.
    But the fact is anything could happen nowadays (terrorism nuclear ...) and you want to understand your stop losses will be triggered whatever occurs.

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