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GBP Pairs - Illiquid Market - Blown Accounts - What price did you get?

mlawson71
Oct 14 2016 at 11:43
1487 posts
Some brokers are hiking the GBP pairs margins due to the 'flash crash'. (https://smnweekly.com/2016/10/07/ig-group-hikes-gbp-forex-pairs-margins/ ) and I suppose others will follow suit as well. What's the point of doing so now though, considering that the crisis already happened and it's very unlikely for the same thing to happen all over again in the foreseeable future?

stian
Oct 14 2016 at 11:46
325 posts
Brokers with negative balance protection are probably a bit scared of the potensial cost of such flash crashes. And because the liquidity is much thinner and GBP is much more voletile now, it does make sense for them to be more careful.

xgavinc
Oct 14 2016 at 12:14
235 posts
mlawson71 posted:
it's very unlikely for the same thing to happen all over again in the foreseeable future?


Don't be too sure. Warnings are going out from all the banks about potential market volatility. Apparently traders are also notably under leveraged for the upcoming US election.

Notable events (not in any particular order):

1. Hard Brexit
2. US election
3. US interest rate hike
4. Russia and China vs. Syria (and if the US gets involved an even bigger issue)
5. North Korea

For every loss there should be at least an equal and opposite profit.
mlawson71
Oct 20 2016 at 10:35
1487 posts
Some brokers, at least, have decided to compensate their clients for some of their losses during the flash crash (https://smnweekly.com/2016/10/12/admiral-markets-compensates-traders-in-gbpusd-during-flash-crash-due-to-price-spike/). Hopefully more will do the same, because a lot of people lost a lot of money.

watchme
Oct 25 2016 at 08:58
582 posts
Good read guys. :)

Never Give Up or Give In To The Market
fx4btc
Oct 26 2016 at 07:05
97 posts
@mlawson71 - That is great to hear, unfortunately the brokers I were using basically said,

We're true ECN STP, you are at mercy of the liquidity provider and there is nothing we can do for you.

https://fx4btc.com/2016/10/gbp-pairs-illiquid-market-blown-accounts-price-get/

xgavinc
Oct 26 2016 at 07:47
235 posts
fx4btc posted:
@mlawson71 - That is great to hear, unfortunately the brokers I were using basically said,

We're true ECN STP, you are at mercy of the liquidity provider and there is nothing we can do for you.

https://fx4btc.com/2016/10/gbp-pairs-illiquid-market-blown-accounts-price-get/


Same here, I still prefer real market conditions, a processed order is done and final. There is no room left for later manipulation, process reversal (orders just closed / cancelled with no loss or profit, for no reason), etc. If a broker can make black swans, white swans and grey swans into non-events after the fact.... it would raise a few questions for me.

For every loss there should be at least an equal and opposite profit.
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