I enter in forex market in march, so i don’t know what happen on 15 Jan 2015.
I was just reading different forums on different webs to study forex. Here interesting thing i found.
People are saying, Pay the debt to broker otherwise some People knock at your door with stick in their hand and seize your furniture. :26:
I decided to check CHF chart to see what happen on 15 jan. there i see more than 2000 pips movement with CHF.
Now question is, are all traders doing trade without stoploss, if not how there balances go in negative.
If they are on stop loss, and still broker throw them in negative balances, then i say,
Take a stick in hand and knock the door of broker and ask him where is our stoploss , pay our money or we are going to seize your furniture and computers. :60:
And one more thing can we save ourselves from this kind of incident in future just simply saying never trade CHF currency, if not how can we avoid this kind of incident in future.
Well the simple answer is to always set a stop loss :18: However! I do in-fact trade sometimes without a SL if I can identify a strong support or resistance level and I “know” it’s going to hit. Because sometimes I don’t know how large my draw down is going to be before I hit it so I just sit back in the chair and be my own stop loss. And as far as the possessions go… take em, I don’t really care. Those damn things cost me money anyways. I’d probably be a lot less distracted.
There are other threads here explaining exactly what happened, you just need to look for them.
Basically, a broker can only close your trade at stop if someone is willing to take the other side of the trade. In this case no one was taking the other side, so price plummeted in a few seconds.
Actually , those people who traded with CHF on 15 jan, are saying that they set the stop loss, but didn’t trigger, broker say that price jump soo fast , their system didn’t trigger stoploss , and even margin call and stopout level , and their balance go in negative.
Thats what Ive just explained above. If there is no one to take the other side of the trade the price keeps falling (in milli-seconds) until someone does buy.
The scary thing is this could all happen again, all you can do is go with a broker who guarantees a limit on the losses you will be liable for - read the small print
Once CHF bite you , he can bite you again, is this a simple solution to save ourselves by just saying never trade CHF, because i didn’t see any other currency move that much.