For forex this is the biggest ever but in share markets there were even larger ones.

That depends on whether you read the fine print. Some do.. and some don't. Now we just have to wait to see what happens next. Most brokers will have negative equity on their client accounts. FXCM has USD225 million in negative equity in their client accounts and working on a solution now.

This post has been edited by sleepwalker: Jan 16 2015, 12:20 PM

Excel Market keeps their clients funds on a segregated accounts which means they don't count towards Excel Markets total equity. The problem with that is they have less equity to overcome issues like these and with all the negative equity, they have totally lost their operating capital and cannot meet the minimum capitalization requirements in NZ. They no choice but to stop business since they can no longer trade and have to allow their clients to withdraw. The same can't be said for some other brokers. We'd just have to wait until the storm blows over.

They are not in negative equity balance. The 225 million negative balance is in their clients accounts. Unlike Excel Markets which their operating capital was wiped out overnight and without capital they cannot meet the requirements. FXCM is running into that trouble too but looking at ways to overcome it.

That is what they are trying to work out now. Like I said, unlike Excel Markets which practically ran out of money to even operate, FXCM is not in the red yet but is in the red with regulations. Unless they can find somewhere to inject their equity back up to the levels required by regulations, they might be considered as operating illegally and would make things worse than they are not.

That's what I always do but I do my money management with both accounts combined (money in broker + money in local bank account that is kept for trading). Most importantly I don't trade CHF. It was already reaching a boiling point but there were plenty of greedy traders hoping that the swiss bank would go further into negative interest rate (which they did) but did not expect them to let go of the 1.20 ceiling so quickly. Even Dukascopy, their own Swiss forex broker, made an announcement a couple of months back for all traders to be vary of the 1.20 ceiling and the lack of liquidity below it and that anything can happen.. and it did.

Edit:
In Oct they said this "Reduction of maximum leverage on EUR/CHF exposures
Due to the possibility of a break of the 1.2000 floor in EUR/CHF which may see significant price gaps and cause negative equity on client accounts, Dukascopy Europe is forced to implement a maximum leverage for EURCHF exposures of 1:10 as of 12 October 2014.

Traders trading EURCHF are invited to estimate margin usage at the moment the maximum leverage on EUR/CHF will be reduced and adjust their exposure accordingly if needed."


I guess nobody listened. They even tried to help by reducing margin.



This post has been edited by sleepwalker: Jan 16 2015, 06:02 PM

Only the good ones are actually exposed to the recent swiss jolt as they had real money in the markets. They were the ones at risk. Other better ones are not reviewed as they are not in the USA like SWISS broker Dukascopy which reduced leverage on CHF positions to 1:10 back in October 2014 and warn about the 'emptyness' below the 1.20 peg.

The rest who got away unscathed are the market makers who can make up all sorts of stories to their clients and have very little risk in the market since they are not exposed like Real ECN brokers.

At one point they didn't have retail accounts and then started retail accounts at USD1000. Now they have raised it to USD5000 minimum deposit.

No.. this is common because their spreads can increase to over 40 pips during news. If the spread at that time is over 40 pips, they will open your sell order and then immediately close it due to SL. It happens on almost all platforms unless they can guarantee fixed spreads during news which is not going to happen.

CHF was a totally different story as they weren't expecting the removal of the peg. The spread is determined by the broker. You must always have a SL but you can have one SL that is 100 pips and run an EA to have a virtual SL at 40 pips (or whatever SL your strategy requires). Once the price hits the virtual SL, your EA will stop it but of course this only works with your client running all the time. This prevents stop hunting since the broker can only see your SL that is 100 pips away and not the virtual one.

Do note when I mentioned stop hunting I wasn't referring to the increase in spread situation that you had. Stop hunting has a slightly different meaning to it and you can look it up on google.

And which broker actually guarantees fixed spread during news? You hardly find any of them nowadays.

Also to successfully trade news you'd also need no slippage which is another thing brokers can't guarantee.

This post has been edited by sleepwalker: Jan 21 2015, 07:49 PM

They can't go any lower as they are already 0.05%. The only question now is how much QE are they going to announce and whether that quantum has been already priced in or not.

This post has been edited by sleepwalker: Jan 22 2015, 12:09 PM

That volatility from the leak already seen last night when Euro moved up and down 100 pips each way in less than 30 mins.

And how do you think the IB's transfer money to the broker? The same way you are going to do it if you didn't use the IB. Think of IBs as nothing more than your upline in multi level marketing where they help and support you when you first start. They are not part of the broker.

Have you seen the spread imposed by the IBs? If you are transferring as little as USD1000, it is cheaper to go through wire than using IB.

When I said spread, I mean they their exchange rate (aka spread) his higher than the banks. For example if the bank rate now is 3.7, they might charge 3.8 per USD, that's RM0.10 more per USD. If you transfer USD1000, that's RM100 difference and more than the bank would charge you for wire transfer. You get what I mean now?

And when you withdraw they'd charge you 3.6 per usd, so overall their spread is higher. I was referring to both ends of the exchange rate.. aka the difference.. aka.. their spread which is much bigger.

I know what a spread is and it is used in this context to also highlight the bigger difference in buy/sell that the IB will charge you.

That was most probably last month before the USD skyrocket and the ringgit fell. Some IBs have revised to 3.85/3.65 for this month. Your friends IB with a 40 cents spread is a rip-off. IB's will never charge you a lower exchange rate than current bank rates because they need to transfer your money over to the broker too.

He might be counting pipette as pips but it went up about 80 pips.

This post has been edited by sleepwalker: Jan 28 2015, 09:04 AM

Demo is always friendly.. there's no slippage.. no sudden increase in spread.. all your orders are accepted immediately.. there are no requotes.. all your stop loss are executed ... etc etc etc.. get what I mean?

This post has been edited by sleepwalker: Jan 28 2015, 05:56 PM