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

There's one simple and efficient means to avoid being wiped out in occasions like the snb of few weeks ago. The way is: Don't exchange capped currencies! If everyday you play with passion, you're eventually going to get burn. Trade just quot;free-floatingquot; markets, you'd be quite safe.

This^^

But isn't the euro only a set of pegged currencies? What if (crazy idea) the Greeks say ok we are out? Or if Germany does?
Sounds crazy but aren't black swans starting to be as common as ducks these days?

quote Is it not? Okay. That means you would rather set the safety of your money in someone else's hands by over Implementing a trade and relying upon a stop loss? Good luck!

I believe I know what you are saying (sorry I didn't get it first time). You're saying that traders could set their lot size (in your example, 0.01) such that it might require an'impossible' move concerning pips to wash them out? That's making sense to me personally, if I've captured your meaning...?

So if I was trading using #100,000, I could look at the pair I'm thinking of trading and also work out what maximum adverse effect could possibly be (the price going to 0? Can a currency pair ever go unwanted??) , work out that in pips, then make sure my lot size is small enough to cope with that'impossible' fall?

Hi , I've been demo trading quite successfully into the point at which I am thinking about going real. However the surprise move by the SNB last week and the ensuing horror stories have me thinking. Was there a means to prevent being wiped out in case you were long eurchf using a stop loss? I guess that my question is: are there some brokers that would have guaranteed the implementation of a stop loss even in this case, even with a huge gap? Because if not, then trading FX is just crazy. Thanks

Very easy do not trade around news devote 30 min before and after and on every day when it is news like every type of rate decision just don't trade that day. Thats as straightforward as you can get.

It is not about news, timing for entry and exit, volume of position, etc.. It's all about liquidity. Trading pairs with low liquidity you're risking to come across the present time, when there'll be just bulls and bears. Pairs with high liquidity will guarantee your order will be filled with slightest disperse and get lowest slippage (if not get at all). EUR/USD and commodities would be greatest resources to exchange, as liquidity there will not exhaust anyway.
However, occasionally it is wise to back off from your own principles and take risk. During recent ruble collapse I give an attempt to USD/RUB if Hotforex LP were still providing tolerable but likely to faint liquidity of $. Despite of risks to stumble upon a liquidity argument, the profits were worth to jump in.

quote I believe I understand everything you are saying (sorry I didn't get it first time). You are saying that traders could put their lot dimensions (in your example, 0.01) such that it would require an'hopeless' move concerning pips to wipe out them? That's making sense to me, if I've captured your meaning...? So if I was trading with #100,000, I might look at the pair I am considering trading and also work out which greatest adverse effect could be (the price moving to 0? Could a currency pair ever go negative??) , work that out in pips, then make sure my lot size is...

Exactly.
You dont have to go to the intense you stated but in case you did all the greater.
If you're able to cover a move similar to the CHF proceed on black thursday you should be pretty safe in most currency pairs. Utilize that event as your reference for preparing for the worst.
If you have a small account and cannot do this initially then understanding the principle will make certain you are constantly working towards that goal as your equity increases.
Always keep the protection of your equity in your hands.

Hi all, I've been demo trading quite successfully to the point where I'm thinking of going real. However the surprise move by the SNB last week along with the resultant horror stories have me thinking. Was there a way to prevent being wiped out in case you had been long eurchf using a stop loss? I guess my question is: Are there any brokers that could have ensured the execution of a stop loss even in this circumstance, in spite of a huge gap? Because if not, then trading FX is just mad. Thanks

Don't be concerned about this occasion, it is so called black swan. Moreover, do not trade any pairs in which central bank holds rate of exchange artificially and do not enter market before important news releases or monetary policy statements and conventions. Always use stop loss, normally market is liquid enough to execute your SL with very little slippage, of course if you use reliable ECN model broker that doesn't reject trades, it is very important! Since I have been trading forex at reputable brokers I haven't had slippage bigger than 2 pips (I utilize tight SL, about 10 pips and also prevent all crimson news releases).

Happy trading!

quote Exactly. You dont have to go to the extreme you stated but in case you did all the better. If it's possible to cover a move similar to the CHF move on black thursday you should be quite secure in most currency pairs. For preparing for the worst Utilize that event as your reference. If you've got a small account and cannot do so originally then at least understanding the principle will ensure that you are constantly working towards that goal as your equity rises. Always keep your equity in your hands' security.

Thanks. . .that's actually helped my thinking. Much appreciated.

There is one easy and efficient means to avoid being wiped out in occasions like the snb of few weeks ago. The way is: Don't trade restricted currencies! You are eventually going to get burnt, if everyday you play with passion. Trade only free-floating markets, you would be safe.

Great day Spaceduck.

Would you be so kind to tell which currencies are restricted?

Much appreciated.

Hi , I've been demo trading very successfully to the point at which I'm considering going real. However the surprise move by the SNB last week along with the resultant horror stories have me thinking. Was there a means to avoid being wiped out if you had been long eurchf with a stop loss? I guess that my question is: Are there some brokers that could have ensured the implementation of a stop loss even in this case, in spite of a huge gap? Because if not, then trading FX is simply mad. Thank you

Yep! Do not trade Fx.
This is until, however, that you understand the market.

Oh, I forgot to state, perhaps prayer helps in such scenarios although being of the atheist persuasion this is not in my trading program!