Last week, there was a big change in the market, especially when it came to stocks. As retail traders, we all know how the Big Banks operate. But now, retailers are now using the same strategy that they use to get off on the average traders, and the banks are mad. So here’s the question. Do you think the situation in the stock market will affect the Forex market as well?
Retail can not move a market directly. Retail was the spark. The subsequent price action was funds fighting other funds.
In the short term, I see global upheaval on all financial markets. In the long term, markets - if still existing in current form - will be more tightly regulated. Right now, while I’ll still trade Forex, I would avoid the stock markets completely as I consider it almost a slam dunk it’s going to crash.
Why? Because both hedge funds and retail investors will start getting the jitters, and once this sentiment increases in volume and intensity, it’s an inevitable outcome.
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What facts/data do you have to point to “a crash”?
Read this…
The microstructure of the U.S. equity market and the global FX market are entirely different.
For example, if Robinhood were a retail FX broker, it might’ve blown up already as it continued to allow its customers to open long positions (assuming liquidity providers continued to take the opposite side). There would be no clearinghouse to force it to increase its capital buffer.
Simple answer, no. My opinion is that meme trade has rolled over and the overall market has been resilient /rallying. That’s all you need to know. If there was spillover, you’d first see it in the JPY crosses (more risk sensitive).
Yes, fair comment. There are pros and cons, IMO. A head in the sand approach to the disastrous global effects of Covid 19 won’t resolve political climate change challenges, and major economic concerns for all major economies. The world is changing, maybe for the better, but it will never stay in a bubble.
With Biden reversing most, if not all, of Trump’s policies - and without getting into a debate on the rights and wrongs - massive changes are already occurring. The stock market is no exception, and it would be foolish to rely on the status quo being maintained, particularly as Wall Street’s illegal shorting practices have, a few days ago, been exposed.
Which means it is vulnerable to those investors who are now facing a massive dilemma of trust, and could quite likely get the hell out. I would. Never underestimate market sentiment - once a selling trend is put into motion, it’s downward effects are like a roller coaster.
What exactly was illegal about their shorting practices?
Jordan Belfort, author of the book The Wolf of Wall Street , told CNN he believed there was illegal activity happening related to the GameStop …
Can anyone really trust anything this guy says? His notoriety literally comes from pumping and dumping stocks, leaving everyday Americans literally broke.