Are you ready to meet the black swan? - page 14
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The regulated broker has given a clarification:
Protection against negative balance
We are not obliged to provide professional clients with protection against negative balance. Consequently, if your account has a negative balance, you will have to pay in additional funds. This means that you may incur losses in excess of your deposit.
This is an organisational oversight by the broker itself, I don't think the customer has anything to do with it.
"A black swan is ahard-to-predict and a rare event that has significant consequences."
Here is an example of one of the black swans that flew to the Swiss franc on 15 January 2015:
The consequences were quite devastating.
You can actually see for yourself.
Here are some numbers on this swan:
Trading during the Black Swan is suicidal because of the rabid spread.
Even if you have positions open in the right direction, there is no guarantee that you will not get a margin call because of the spread.
When the next black swan arrives - this is the question one wants to know the answer to, but alas...
But I have a feeling: in the next year or two a huge swan will fly in - and it won't be easy...
It is clear that the best way to survive a black swan is not to trade when it arrives.
And of course, there is another big risk: will your broker withstand such amount of margin calls with negative balance?
Even if you were lucky: you had an order opened in the right direction and without takeprofit, you had no limit orders, you were not eaten by a margin call, and you managed to close the trade on time...
The question remains whether your broker will be able to pay back your hard earned money.
Forewarned is forearmed!
What are your thoughts on black swan protection techniques in EAs? And is it realistic to catch a wave?
Stop Loss
Stop Loss
If there is huge slippage (like on the franc in 2014) then a stop loss will not save them. I haven't come across it.
If there is huge slippage (like on the franc in 2014) then stop loss will not be saved they say. I have not come across it.
But there is still one way-100% effective-whatever force majeure will survive.)) Simple
But there is still one way-100% effective-whatever force majeure it takes.)) Simple
100% only in one case - do not trade.
100% in only one case - no trading.
Wrong. There is. In the sense that--that you won't lose your entire deposit--but only the funds you've built up for maximum risk.
Wrong. There is. In the sense that you won't lose the entire deposit... but only the maximum risk funds.
Or rather, not the deposit, but the total funds allocated to the trade.
Wrong. There is. In the sense that you won't lose the whole deposit-- just the maximum risk.
How is it 100%? Even if you turn out to be in the black, the probability that after the black swan your broker will not be able not only to issue a profit, but even just to return the deposit is very far from zero.
After every black swan many honest brokers go bankrupt
How can it be 100%? Even if you are in the black, the probability that after a black swan your broker will not be able not only to give out the winnings, but even just to return the deposit, is very far from zero.
After every black swan many honest brokers go bankrupt
I say, only the funds allocated to the maximum risk will lose (for example, I have 20-30% of all funds) - and the rest will remain in your pocket.) We trade on the shoulders - why do I need all money to trade - that I can not trade an amount of 10 000 USD with 3 lots and a maximum risk of 30% - after which I stop the trade and optimize. Why do I have to deposit all my funds--can't I deposit 3 000 and use them to trade 3 lots? Yes, I can. That's the advantage of leverage. Of course it's not for public accounts. But for myself and for those who understand---100% guarantee--that in case of force majeure--only the loss will be predetermined by myself.
I say, only the funds allocated to the maximum risk will lose (for example, I have 20-30% of all funds)-and the rest will remain in your pocket). We trade on the shoulders - why do I need all money to trade - that I can not trade an amount of 10 000 USD with 3 lots and a maximum risk of 30% - after which I stop the trade and optimize. Why do I have to deposit all my funds--can't I deposit 3 000 and use them to trade 3 lots? Yes, I can. That's the advantage of leverage. Of course it's not for public accounts. But for myself and for those who understand---100% guarantee--that in case of force majeure--only the loss will be predetermined by you.
And then, when force majeure has happened - I use the remaining 70% saved by the same scheme - 3 000 KOSAR. That is, the depo more for 3 force majeure in a row can withstand))