That was when the Swiss Franc was unpegged from the Euro. Yes, such things can happen, like the recent “brexit” effect, but you cannot let fear rule you, otherwise one, would never trade at all. You have to use your head when you trade.
As a Trader you must be able to handle such things by managing your account balance in accordance with your trading strategy and risk appetite. You must also, not put “all your eggs in one basket”, and diversify your trading. For example, one should split capital over several brokers and several accounts and on each of those trade several different strategies and on different instruments and withdraw earnings regularly.
If you handle things this way, and see this as a business, then should such a “crisis” hit you, it will only affect one of your accounts and the impact would be manageable.
EDIT: PS! Also, remember that scalping is usually short-lived and intraday, lasting just minutes and sometimes just seconds, while the “crashes” are usually at week open or on a particular foreseeable day.
yeah, that’s what i might have to do - put my eggs in different baskets. but for someone who has a small account i’m better off trading it all and then when i get something that’s worthwhile , to start diversifying. i wouldn’t like to end up with a zero account, but you can end up in the negative with forex, paying massive debts, which is utterly rigged to me. i feel scared to trade now (the prospect of having a loosing streak at the start doesn’t bother me at all now). maybe a solution is this:
multiple forex accounts with the “no negative balance” promise. then i lose all the money in just one.e.g. all the money in 1 of 4 accounts only.
or use guaranteed stop losses
and that jan 15th chf crash with 800 pip gap on charts was actually much bigger because of the slippage. it was WAY bigger…how do you combat getting a negative balance? i can handle zero, but negative might mean i’m in debt all my life. my job is low paying.
edit: the negative balance protection isn’t guaranteed, so you can in fact still get a negative balance if liquidity isn’t there (which it wouldn’t be in the case of a crash)
EDIT 2: i think i miscalculated. the worst gap was about 4000 pips (it was ster-chf). for 20 pip stop loss that is 4000/20=200X . at 1% standard risk that’s 200%. IE twice your account blown. very ugly indeed but my account is very small so not as bad for me. and i think as i get it bigger i might just use smaller amounts for any sub 30 pip positions. or learn to trade something else. scary stuff, but i think i can handle it still. before i was thinking i might end up with 4X my account blown. feeling better thanks again.
[B]@harpoon[/B], you are getting too worked up! You are trying to cross too many bridges even before you get to them. [I]Slow down and smell the roses![/I]
If your fear is really getting to you, then simply STOP. If this is not for you then don’t trade! It is as simple as that.
However, if you want to pursue it, then think of it as a Business or Profession. With any Profession, you start by going to college or a university and spending a few years learning and then a few more working as an intern gaining experience. You should do the same here. Start with a Demo account and stay with that until you have reached a level that allows you to then move onto a real account.
Take things slowly, a step at a time - Baby steps - Baby Pips!!!
Harpoon.
You could try what I do with one broker.
I deposited a small amount just for my Balls of Steel trades. Once its in the account, I then split it into 4 sub-accounts, each for a different currency pair. That way if one pair has a prolonged bad run or hits a black swan event it doesn’t wipe out the others.
you’re right carnino. I need to calm down a bit. slap myself a few times thanks for the phych talk. i needed it
eddie: interesting. perhaps u are relying on them (a few currencies, at least 2 maybe) to be completely correlated, and splitting up the money equally. It’s diversification perhaps. U cop the gap still but an average of it across the currencies maybe. Wonder what pip size you are talking about.
I think i’ll stick to the major perhaps (usd-chf was about 800 pips gap compared to 4000 on that day…), and only use the crosses when my initial stops are bigger e.g. daily timeframe. But i’ll see. Also, although I couldn’t get my chart to show the exact lead up to the gap, if it was like usd-chf, ster-chf would have had some liquidity before it gapped, perhaps a few 100 pips, so a worst case 20 pip stop loss might have easily run b4 destruction took place. i would be in the predicted direction, not buying it if it’s going the other way (don’t mean to confuse everyone here, this statement may not be correct either)
i wouldn’t mind a little clarificaition on handling news as per the ducks system (we are technical traders, not news traders)
Andy says in one of his youtubes, that generally he worries about only 2 news events, bank rates and NFP. and that he doesn’t trade on these days. i’m not clear on exactly what is meant by this. obviously though, if no trades for those currencies are opened, it means to not open any new trades on those news days. but what if i’m already in a trade, and it’s a
daily timeframe
or 4h timeframe
or 1h
or 15min
and news is coming out soon…
do i exit for all the above situations , or maybe just 1h and shorter since these are riskier? if i exited all positions for 4h and daily trend trades, that means i can’t ride a long 4h/daily trend for longer then a few weeks. so my question is, if one is already in a trade and those 2 types of news is going to come out soon, what do we do (for each timeframe what do we do)?
also, my sense is that with the other news types we don’t worry about exiting a position, regardless of the timeframe.
(been reading forex books but not much on there about handling news. the details i need that is…)
ECB rate decision coming up later today. Using a bit of discretion and trying to keep myself safe, I [U]wouldn’t[/U] have been looking for any new trade opportunities on EUR pairs today (not that there was probably any …)
On the flip side if I was already short lets say Eur.Usd and up +70, 80 or more pips with an ECB or FOMC rate decision due out today, I’d need to think how I was going to let that Eur.Usd trade play out (or not play out).
[B]Just a few options you’d have (for the above example) pre-rate decision: [/B]
leave trade alone,
move SL to BE,
move SL into profit
move TP +40, 50 or more pips away from current spot price,
closed trade out for the full profit.
Probably no: [I]if it does this than do this[/I] type of answer as there are many variables.
Thanks Andy. You’ve pretty much clarified it for me. i take it that it applies to all timeframes. For the slower frames (4h+) I might just “leave trade alone” as trend following suits me.
and thank you all for assisting me. this duck is jumpin a little off the ground now…
(maybe you could add this info to future versions of the Duck’s file. only if you think it’s worth it of course)
Is anybody still using this system succesfully? I have read most of the thread, always had this in the back of my mind, thought I would give it a go - but cannot find any posts after 2014 - especially not any myfxbook accounts or something concrete - the handful I found were all deleted (probably blown accounts)
I understand that this system cannot be used alone, and I do not intend to - I want to use it in conjunction with my trendfollowing strategy, but do not wish to waste money and effort on something that was once held in high regard, but then seemingly faded over the years…
Yo, rihan, I love your location - one of my fav. movies. Err- if I am off base. sorry. The captain , from the beginning states this is a way to look at the charts, it isn’t really a ‘system’ to follow blindly. You need to use your own understanding of the charts. And yes, it does work! I am not making a ton of $, but I am much better off than I was. ***You need your own understanding , then apply this info. - - -so if I may be so bold - - for yourself -define a trading ‘system’ = then look and see how it correlates here, if you can do that … you might find yourself making a few $.
rihan: still testing, but i imagine it works . captain is posting here from time to time, so i reckon it would work and is a current working system. you should back-test it all manually and score yourself. you go through loads of charts and situations, but you learn it faster i think.
I reckon so too … it’s one of the very best threads the forum has to offer.
When not specified to the contrary, it always means “applied to the [I]close[/I]”, and that would be true of the MA’s mentioned in this thread, too.
Another equally sensible alternative would be to apply it to the “typical price”, which is the average of the high, low and close (H + L + C divided by 3), but for a system like this, the difference between that and just using the close probably isn’t going to be significant anyway, so I honestly wouldn’t bother: just the close will be perfectly ok.
Just having a quick review of the market this morning and I’d fancy Aud.Usd to head lower in the coming sessions.
I’m bearish and there is a nice area of support down at 0.7488 I[/I], this highlighted area could be used as a potential profit target or trade management point if you do get short this pair when all 3 Ducks line-up in the same direction.
To me, it does look like price action is determined to push lower this week. Also, this pair has an average daily pip variation figure of 86 pips so don’t be afraid to let your winners run!
You do know that [I]YouTube[/I] has a search facility, do you not?
And you do know that his user name here is “[I]Captain Currency[/I]”?
[B]Wow, it was so difficult to find![/B] https://www.youtube.com/user/CaptainCurrency
thanks for the phych talk. i needed it
4H bullish chart attached 