Detailed advice what to do on Brexit Vote day and day after

So many have been asking what to do on Brexit votes in different forum posts. Here is the advice:

Close all positions.

Turn off computer.

Enjoy nature.

Agreed- anyone trying to enter a new position right now is way too far behind the curve to try and take advantage of the volatility.

I got an idea, not mine but someone did it before and he got into trouble. I confess, I don’t know if it’s legal or not.
Just bet both side of the trade with reasonable SL. It should be a reasonable sure profit unless you are taken out by the SL or it isn’t vilatile enough.

  • 1 on that!!!

(Except I will keep my positions open haha)

and what if both stop losses get hit bevause the security you are betting on both sides first goes 300 pips up and then 600 pips down?

you think thars not possible? well december 2015 the dow made 350 poiunts up and 20 minutes later 600 pounts down on the decition of the ECB to not increase the QE programm. and thats a minor news compared to the brexit and possible falling appart of the EU (THe single biggest economy of the world).

take aside that your margin requirements get higher on these days as all brokers increase them to cover themselves up against losses of their traders loosing more then they have in their account balance.

you are a experienced long term trader who holds positions for months and years, you are excluded from the advice :slight_smile: you must hold them and preferably hedge to cover you positions

This.

But many people don’t appreciate until they’ve been caught a few times that it’s very easy to get the direction right and still lose money, and/or to play both ways and lose twice.

Usually, the few who profit from it are the ones who post about it, while the embarrassed losers tend not to: just another selection-bias typical of the ways in which forum conversations can be so misleading. :wink:

100% agree…

no…

10000% agree!!

applause!!!

:slight_smile:

I blush!!

I wish.

In the meantime I buy GBP because it’s cheap, sell Eur because it’s of better value, and wait.

If we leave then no importing, hope to export before the costs of imports catch up and cause exports to be uncompetitive.

hard to say what a exit would cause. 50% saying currency will go up 50% say down. its pretty much unpredictable what will happen. i only have scenarios onto which i can act afterwards. for example: the broad investment community (not traders) are sure of many company take overs from european side on the island if gbp looses 15% value. on top of that is the ftse looses another 15% then companies like glaxo smith cline are 30% cheaper to take over. brittish companies are a popular take over target the last ten years as weve seen on the car manufacturer industry.

i only see negative sides for both EU and UK in EU maybe falling appart in domino effect and UK citizen beeing disowned of their own industry and degraded to guest workers working for foreign companies in their own country.

but. only scenarios. well see what happens.

my favourite scenario is UK staying and we enjoy a 15% up move on indexes after these down moves of recently and in the next week yet to come.

The market-makers (the sell side) need to spin negative stories to encourage the buy side (the investing/speculating public) to sell stock for indexes so that they can buy it back and keep buying it
cheaper and cheaper…

So no matter what happens with the referendum, I think there is a mega push to get the public to sell
the FTSE100, regardless of news or data or individual component companies within the index, because
of the sell side needing to buy back stock, and being sky-high, it is not a good deal for THEM.

I think also that there is an unclear correlation (from personally observing overlays of the two charts)
between Cable (GBP/USD) and the FTSE100, and also the motivation of different powers around the
debating table that cannot agree on whether a Brexit would mean bad things for the equities side or
the Pound side: for the LSE it would certainly be a big sell-off, and that would be a bad thing in the
short term, but for the Pound the sell-off would actually be a good thing, as only in 2015 the BoE
was still lamenting the inconvenient strength of the Pound which damaged exports…

You cannot have your cake and eat it: you must choose… It is like the US Oil debate: if speculators get
hurt by falling Oil prices but hauliers and commuters benefit from this, who decides which of these two
sides is to be highlighted?

If you need a cheaper Pound for exports, here is the perfect opportunity; if you want your Pound stronger to attract capital investment, then Brexit is a nightmare waiting to happen.

Either way, someone WILL get hurt.

great post PMH, great post.

Thank you all for the advice and I’ve a few questions.
I actually have 2 small account of usd300.00 each, leverage 1:2 (2x).
Does 1 lot equal usd 6.00 on that usd 300 account?
How much is 1 pip if I were to trade 1 lot?
I plan to lose out usd 30.00 or worst case usd 60.00 on both.
How many pips does that equal to?
Let say the spread stay the same on brixit.
I would like to see this figures before I make my decision to trade both side, buy and sell. If SL is reasonable, I may want to set it and I plan to watch my screen like a vulture on the day my trade is on as I plan to leave my TP open.
First the figures, then your advice.
Thank you in advance. :slight_smile:

Even the exporters will hurt on a falling pound.

The common opinion that they win is only true for current inventory, the reality is that we manufacture less nowadays, our manufacturing base is assembly, far eastern parts are much cheaper - and usually payable in USD.

The longer term, there is an opinion that UK inflation will rise faster than anticipated following Brexit, thus raising interest rates and pulling GBP up, but not something that anyone planning ahead can hang their coat on.

There has been a recent upsurge in buying gbp by commercials, helps finance the inventory purchasing pre Brexit.

Most planning is for the short term, many expansion plans just put on hold which is the safest option.

Hi all,

thx for the advice, will close all forex positions! BUT, I would like to stay with my silver and gold positions (buy) as I see them as a longterm investment (in silver I do have a stpl but no tp). Do you think that’s also too dangerous to have or can I stay with them?
Thx in advance for the recomendation!

That is pretty much what I am planning on doing. I’ll wait for the storm to pass before I open new positions.

One thing is for sure, peterma, SOMEBODY will benefit from the sell-off, if not exporters, then someone else… Point is: options (security) are being heavily purchased, so a lot of people are protecting themselves…

For spot-forex traders who do not dabble in options, there is hedging, or staying out altogether…

However, whatever trader you are, the risk is high no matter what.

I think FIAT currencies being on their way out it is just a matter of time before the next best thing

comes along . . . It does not matter what I think anyway, the markets will react in a thousand different

ways, more than we can ever predict, no matter how smart, knowledgeable, or farsighted we may be…

Even the best people in the business have no idea… they just have better ways of protecting capital,

that is all.

Good luck to us all.

All you have to do is use

THE BABYPIPS WEBSITE!!

There, you will find amazing things, like this:

Pip Calculator: Free Online Forex Pips Calculation Tool for Traders

Amazing what a little search can bring up…

:wink: