Thread: The One Nobody Talks About

94952

Originally Posted by ;

Another thingwe also say the market but Currency Market isn't just one central market - it is 8 or 6 giant banks connected, each creating their own independent markets.

Soit will really depend on what your own liquidity suppliers do (throughout your ECN)... the orders in your portal will probably be significantly different from ECN into ECN.

Not really -

the majority of ECN platform suppliers share the exact same major contributors. . .worldwide. That's the reason why its called ECN - electronic communiions network. If JPMorgan is your ideal offer for 5million all of ecn's that utilize JPMorgan as part of their network will observe that same offer if in NYK, LDN or Tokyo.

If someone lifts the offer for 1 million and also the price stays, the offer will probably soon be down to 4 million, provided JPM is still the best offer.

In fact, most of the time that the bid in addition to the offer consists of several contributors piled behind each other on a first come first serve basis - depending on the order type (fully observable, iceberg or hidden).



regards

94952I Attained the honor of a neg balance after a gap (not fx) It Is Possible to protect yourself with guaranteed stops with some brokers

94952

Originally Posted by ;

Use logic thanks. .

My post wasnt about logic, it was about the fact that a number of brokers do warn of adverse balance and the chance of these things happening. Whether they pursue as you state $500 of backed balances isnt a concern of mine. Although, there is that possibility of this going from... state 3000 to -$500

94952You alter your nationality, title adress get giveaway your possessions prior to attorney come to your loved ones and divorced.

Rest is brokers difficulty.

Mathematics of money managment Ralph Vince states the financial tool with risk limited to purchase price is long options.

94952Whilst operating for CFD supplier I had the displeasure, although intriguing experience, of liasing using a client that went right into a 6 figure debit on his own account due to a stock losing 75% in one gap down (this was a time ago, not a recent event).

So that I can tell you that the broker needs their money back somehow, thing is that in FX the prospect of such a gap down is of course extremely remote.

94952

Originally Posted by ;

In mathematics of cash managment Ralph Vince states the sole financial instrument with risk limited to buy price is long options.

nope. Has limited risk. Thats why long options are limited. If you buy, the farthest it can go down is 0. It can go up infinitely, if you market. In FX, a currency pair can never achieve zero, because currency prices are relative.

94952

Originally Posted by ;

in forex, a currency pair may not reach zero, because currency prices are relative.

And all swans are definitely white? The German Mark in 1920's Germany was unworthy. The Zimbabwean Dollar now is unworthy. These are times, nothing can be ruled out entirely.

94952

Originally Posted by ;

And all swans are unquestionably white? The German Mark in 1920's Germany was worthless. The Dollar now is worthless. All these are pretty extraordinary instances, nothing could be ruled out.

It is not technically worthless. It is almost so, but it nevertheless is worth something such as 0.00000000000001 dollars or whatever. It is not technically untrue, but for all intents and purposes it's. It nevertheless is worth a thing, although It may have no buying power in the world.


Edit:

by the way, I wasn't saying currencies themselves couldn't go to zero, I said currency PAIRS mightn't. Look in my previous post.

94952

Originally Posted by ;

nope. Has limited risk. Thats choices are restricted. If you buy, the farthest it could return is 0. If you sell, it could go up. In FX, a currency pair can not reach zero, since currency prices are relative.

1. Leverage is often necessary for fixed fractional (or similar) money managment.

2. It's irrelevant whether something can go to zero or not, if a person uses margin for leverage.

3. Long choices are the only way to obtain leverage without exposing one to the risks of margin. You pay the option writer to undertake this risk in the option premium.