Black swan events / CHF Peg -
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thread: Black swan events / CHF Peg

  1. #11
    Junior Member danielasamir's Avatar
    17
    quote Kidding right? It had been the swanniest of black swans the planet has ever seen. It was the *biggest* single move in FX history. Ever. Dozens of businesses went bankrupt, a few hundred investment providers, thousands of traders and not to mention a entire overhaul of risk evaluation in every major western central bank thereafter. Several years of defending the peg prior to the day revealed that the SNB, who had lots of reserves to keep on protecting it had been likely to do so again. The buffer was so wide it meant even if you were on side, shorting...
    No long-term TA traders ought to have been EUR/CHF when this event occurred. The charts had been saying for weeks that only additional drops were to be expected from price. The easy principle of investing what you see rather than what you believe quite certainly applied, let alone not trading what some Swiss lawsuit says he thinks.

  2. #12
    quote Kidding right? It was the swanniest of black swans the planet has ever seen. It was the *biggest* single move in FX history. Ever. Dozens of businesses went bankrupt, several hundred investment companies, thousands of traders and not to mention a total overhaul of risk evaluation in each major western central bank afterwards. Several years of defending the peg prior to the day revealed the SNB, that had lots of reserves to continue defending it had been likely to do this again. The buffer has been so wide it meant even if you're on side, shorting...
    Trip, this is where we disagree because as I mentioned in my very first article, financial history says whenever there is a currency peg there is always a risk it will break later on, possibly from the market attacking it, or even the Central Bank abandoning it. A Black Swan is by definition entirely unforecastable (9-11, Tokyo ground quake etc) whereas previous history with the Swiss currency said 'agreeing' that is exactly why so many stayed away from the cross.

    Yes, the SNB was defending it and had lots of cash but that does not prove anything apart in the peg had held in the past and they had lots of cash. The risk on the downside wasn't always there.

    I concur, shorting the pair was very dangerous that's why many choose to stay well clear of the cross and exchange something less hard with far less risk.

    No I did not exchange it, there was no cause in the charts as you indie, but what there was, was a very horrible looking intraday, day and weekly chart that very clearly stated - DO NOT GO LONG.

  3. #13
    Junior Member danielasamir's Avatar
    17
    It will remain the regret of my trading career for a very long time that I was not brief EUR/CHF for this occasion. There have been repeated bearish signals and shorting opportunities throughout 2014. Hey ho...

  4. #14
    quote Trip, this is where we disagree because as I said in my very first article, monetary history says if there is a currency peg there is always a risk it will break later on, either from the market attacking it, along with the Central Bank left it. A Black Swan is by definition entirely unforecastable (9-11, Tokyo ground quake etc) whereas previous history together with the Swiss currency said 'agreeing' which is precisely why so many stayed away from the cross. Yes, even the SNB was protecting it had lots of money but that doesn't prove anything apart from...
    Fair enough Calculus, you've clearly thought this through. My definition though is some out of the ordinary event sudden from the majority, and the time and scale of the places it in this class. It sounds like splitting hairs but each effect has its origin so it's about numbers. To some tsunami specialist, they'd have averted the yen for example. In the family of this retards flying the planes into WTC, they'd have shorted the stock market presumably. To some specialized long term trader dismissing the danger of SNB intervention, it's a perfect short (Tom!) . However, these are around the margins. All of us have blind spots, myself included and also my purpose is some thing like this could happen to anybody. And like a black swan simply because we have never seen you, doesn't mean they don't exist.

  5. #15
    quote All of us have blind spots, myself included and my point is some thing like this could happen to anyone. And like a black swan simply because we've never seen you, doesn't mean that they don't exist.
    You got that right buddy. EVERY ONE of us is in risk of the most crazy event hitting us hard. And anyone who thinks otherwise is not thinking right.

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