How can you predict a market collapse?


How can you know if a market collapse in forex is near? Is it possible to know almost exactly?

Hi…why do you ask?

Try this:

So I can know when to be outside of market. I don’t want to loose.

Tons of money is lost during a market collapse, but fortunes are also made off of them. You’d be missing an opportunity to make $$ by staying out.

You can’t accurately predict one. You can’t accurately predict anything in the market.

You can guess and use probabilities and money management to create an edge.

I’m sure i’ve seen an FX crystal ball on Ebay…

Look no further:

The Crystal Ball Forum

Many fortunes have been lost betting on predictions of coming market trends; many fortunes have been made following trends after they have begun.


Perhaps you want to start with mark the price important level, one related to major support resistance, and any price psychological level. For example eu price drop big time when breaks 1.2000 which consider as psy level. It’s all based on technical approach.
Other thing must be related to fundamental event, i dont have deep knowledge upon it. Perhaps other able to give better reference, any resource related to bank rate,.inflation, gdp, etc.
Last thing I curently develop is, a choice to react to the market movement instead of predict.

… Hello everyone!

I was looking back on this [post](post

and I noticed that we are still at that 6,800 - 6,900 level on the FTSE (UK) 100 shares index: since its

creation in 1983, this index has risen to this area for now the third time, every seven-eight years…

As I mentioned in my two entries on the linked thread post, this is an economic cycle that coincides

(rather than being necessarily caused by) significant technical levels such as this one.

What an example like this show (see attached chart from Trading Economics via FXCM / Trading View)

is that cycles may be self-fulfilling, but until the ‘turn’ to the next phase of the cycle is confirmed, nobody

can ‘call a top’ (or a bottom) without adding unnecessary risk to their strategy. In this case, specifically,

you will notice for example that in this accumulation/stall phase of the current FTSE 100 cycle we are

seeing a much longer ‘linger’ around that same level, and that the ‘crash’ is taking much longer to

come to pass… HOWEVER, the saying ‘Past performance is no guarantee of future results’ is not just

a cliche’ for FX sales people! What we are all aware of is that even in economic cycles there are no

exact repetitions, nor indeed anything can be predicted with exactness just because it has happened

before… We could have a ‘cycle within a cycle’, where a previously clear pattern loses shape and is

in some way warped…

This reminds me of back to the future 2 when marty goes into the future and buys a sports almanac … then when his enemy steals it, he goes back into the past and becomes a millionaire with the knowledge!

I think the sad truth is that there is no way to predict the future. nobody could predict what happened with the swiss franc for instance. the swiss national bank even went on record some days before the event to say that there would be no major changes! i think the best that we can do is to follow market research and good analysis closely. I myself am more of a fundamental fan…

Look to see whether the bulls or bears are hurting.

Whoever’s hurting, hurt them some more.

Reflexivity. Soros.

The New Paradigm for Financial Markets
Alchemy of Finance

“In foreign exchange… a sustained price movement can be self-validating, because of its impact on domestic price levels.” -George Soros [I]The Alchemy of Finance[/I] page 30


Predicting a collapse is far beyond my capabilities.

Paul Tudor Jones did an amazing job of it in 1987 but that is far from the norm of even the best hedge fund managers.

Robert Schiller has been screaming about the eminent collapse of the S&P for a couple of years, as it continues to soar higher and higher. Dr. Schiller among his many accomplishments correctly predicted the collapse of the U.S. housing market a year in advance, but few heeded his advice. He also has a Nobel prize in economics so I can safely say he is a smart fellow. But greed deafens one to the voice of the sage.

The best I can do is prepare and protect my account for a large correction:

Use of a stop loss being item one.

Adjusting the limits on my broker’s software to minimize the chance of my stop being completely passed over in a fast market.

Staying away from certain markets that are too risky for my taste.

Never chasing a price. Staying disciplined about the set-ups I want to see before entering a trade.

Using a broker that will honour their stops. The CHF SNB debacle really showed which brokers backed their clients in the aftermath and those that were riding on the edge financially.

Ultimately being prepared to switch directions and climb on board the market collapse for profits. After all somebody has to be on the other side of all those bad trades and profiting , might as well be you.