Forex market the world’s biggest market with turnover more than 5 trillion per day is not any more a trustable one. Recent research shows that the turnover in forex trading has dramatically dropped the last year. Do not ask your self why! It’s obvious that central banks the biggest manipulated organs but also the legal ones are behind the loss of billions.
Starting from BOJ interventions made at 2:00 am in a quite night back in 2011 although that intervention was caused for a reason, the devaluation of JPY in order to pick up inflation. The action took place without any programmed BOJ meeting, or even a prior warning through a media transmitted interview or speech from the bank’s governor. Nobody blamed no one at that time even though half of the trading accounts worldwide closed that night due to insufficient funds. Some officials they said it was because Japan was hit by tsunami during the same day. Others were blaming the system “algorithm” mistake due to lack of liquidity.
Coming closer to 2013 when SNB introduce a flat exchange rate for the EUR/CHF pair at 1.20 as a minimum exchange rate. At least SNB is not taking actions at 2:00am when everybody is sleeping. SNB is taking their actions on a programmed SNB meeting during working hours.
In 2016 markets and traders were caught by a surprise when SNB abandon their program for flat exchange rate of EUR/CHF. The decision was a disaster for many brokers and individual traders. It was announced later that many brokers are closing down and the losses are exiting 150 billions.
Don’t blame SNB it was again mistake of the algorithm system the price fluctuation from 1.20 down 0.90 and back to 1.05. At that time the liability for the crush was given to the liquidity providers (banks) because they stopped the liquidity to the brokers, traders could not buy or sell or even to trigger their stop losses. The result I mention it above 150 billions vanish from the forex market.
Friday October 7th 2016 2:00am GBP the world’s 3rd most traded currency collapse from 1.2630 to 1.18 in general or 1.13 some brokers and even 1.08 at saxobank trading platform. Losses unknown till today.
Whoaoooo…..! what a coincidence at 2:00 am when everybody sleeping when all markets are closed. Can you believe it?
They said the dropped was cause because of the lack of liquidity at that time most probable someone sold aggressively the pair and cause that dropped. Are you kidding guys? Are you serious now? In a 5 trillion market anyone could change the price 1500 pips? Without the help of BOE or BIS(bank of international settlement) or SONIA.
Thank god BOE’s Governor Mr. Carney order an investigation in order to find out what cause the so called “flash crash” or computer failure or maybe “fat finger” and so what! someone will pay back the billions lost at that night?
Mr. Carney’s investigation is spread between “fat finger” job to BIS and to SONIA
The Sterling Overnight Interbank Average Rate (SONIA) was established in 1997 by the Wholesale Markets Brokers' Association in Great Britain. Prior to the SONIA the Wholesale Markets Brokers' Association had no Sterling overnight funding rate. This void created volatility in England's overnight interest rates. When the SONIA was created, it gave a stability to overnight rates and also encouraged the creation of the Overnight Index Swaps markets and the Sterling Money Markets in Great Britain.
After central banks killed everyone they decide to implement new ways more safer for the electronic trading the algorithm system or the computer failure how they call it. In order to avoid again the loss of billions while Europe is sleeping, Los Angeles is drinking beers in the pups and Chinese are shaving before they go to job. Remember 2:00am
Most probable they will implement the same auto closing system that was introduce after the 9/11 attacks when markets collapse more than 15% in minutes. The system is as follow, if the markets collapse 7% intraday the stock market is closing automatic, no more trading. Markets will reopen next day if markets collapse 5% then is closing automatic for 3 days and it will reopen with restrictions on trading.
For now if you still have money in your account for trading, keep trade. I wish you good luck.
Prepared by Petros achilleos