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  #21  
Old 18.01.2015, 15:23
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Re: In Need of Advice (Huge forex trading loss)

Hey - no kicking a guy when he's down. Everyone makes mistakes.

Just remember it's only money. I would take a deep breath and re-read your contract with a fine-tooth comb and then try to get legal advice on whether it abides by Swiss law (see if there's room to move). Then, schedule a meeting with your bank to negotiate. I'm sure you're not the only one in this position right now. Explain to them the situation and see if you can agree on something workable. If not and you don't think there's any room to fight them from a legal front, *then* I would think about other options.

Just make a plan, check with a few people that it makes sense and then go through with it. Even with bankruptcy from what I've read, they're required to leave you with a living wage - so that's worst case right? Everything else is upside.
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  #22  
Old 18.01.2015, 16:21
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Re: In Need of Advice (Huge forex trading loss)

sorry to hear about your losses Toxedopants. FX sucks. if possible try and remember it is only money and you will have it solved.

I had a friend in the Netherlands who had a similar story when the internet bubble burst 15 years ago. He went bankrupt as a person and that was not nice. After a couple of years on the minimum wage level he was cleared for his debts. He went back in the internet business and now lives on one of the Islands in the Caribic (as a wiser man).
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  #23  
Old 18.01.2015, 17:21
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Re: In Need of Advice (Huge forex trading loss)

Also, if you happen to be in the UK, going for an IVA may be an alternative to bankruptcy: http://en.wikipedia.org/wiki/Individ...ry_arrangement
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Old 18.01.2015, 18:28
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Re: In Need of Advice (Huge forex trading loss)

Everything depends on the OP's circumstances, age, plans etc, which I don't know, but bankruptcy has to be the last resort, given the far-reaching effect it can have on your ability to take out a loan, a mortgage, to start a business, perhaps even to be eligible for certain jobs or migration etc. S/he needs to do some careful research before taking the bankruptcy route.

If the bank knows that the OP is seriously considering bankruptcy, and therefore unlikely to get their money back, they might be far more accommodating towards a compromise or offering extended repayment terms.
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  #25  
Old 18.01.2015, 18:32
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Re: In Need of Advice (Huge forex trading loss)

So how much are we talking about here (order of magnitude), 10k 100k, 1M, 10M?

Tom
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  #26  
Old 18.01.2015, 18:38
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Re: In Need of Advice (Huge forex trading loss)

There are a lot of nervous banks in CH right know who are petrified they wont be paid. Remember owing a large amount of money to the bank is as much their problem as it is yours. Read your contract, negotiate hard if you can and good luck!
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  #27  
Old 18.01.2015, 19:35
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Re: In Need of Advice (Huge forex trading loss)

The others have covered this already, but as usual, I'd like to take the opportunity to reinforce that: stop losses will not protect you from this kind of event. Do not rely on stop losses as a wipeout protection. Stop losses are only "reliable" in normal market conditions. If you read the terms and conditions on execution at your broker and exchanges (which you should, and if you haven't yet, do so), you'll realize that they very clearly state that stop losses are not guaranteed and the exchange will actually actively suspend their execution if they deem it necessary (e.g. to avoid cascading short selling).

Many people don't know this and blissfully "protect" themselves with stop losses and are then (somewhat rightfully) surprised when their stop loss executes at a really bad price (or not at all).

Why can this happen? Because the way order execution works allows for fundamentally two types of stop orders:

1. Stop limit - these guarantee execution at the limit price (or better), but they do not guarantee that the order will actually be executed. E.g. if the price falls below the limit before your order is executed, it will not be executed at all.
2. Stop market - these become simple market orders once the stop price is reached. E.g. the threshold is breached and then the order is executed at whatever the current price may be.

Why can't price and execution guarantees co-exist? Because the price curve is not continuous. In other words, prices move in arbitrarily large jumps not across a smooth continuum. One second the price of the euro is 1.2 francs, then the news hits the market, and suddenly all liquidity disappears at the 1.2 franc level, and without any intermediate steps, reappears at 1.0 franc. This means that any stops in-between will either not execute (if they had a limit above 1.0) or they will execute far below where the stop threshold was set (if they had no limit).

This is also the reason why you can lose more than your investment capital. Just as stops are not guaranteed, brokers cannot guarantee that they can liquidate your account before you get into massive negative equity. This is also why every broker clearly states for leveraged products that you can lose more than you invested. This is not some far fetched exotic scenario encountered by those trading arcane products. If you are leveraged in any way, or short sell something, you are exposed to the risk of losing more than your capital.

The OP just got an expensive lesson in this, and I'm really sorry for what happened to them. It could have been any of us. Even veteran traders sometimes fall to some tail event like this. It's like stepping into a pile of shit, it happens even to the most vigilant. The system is really complicated with many obscure little rules. Fingers crossed they can sort it out in the best way possible and that the loss was not absolutely devastating.
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  #28  
Old 18.01.2015, 20:10
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Re: In Need of Advice (Huge forex trading loss)

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It could have been any of us.
I certainly do agree about not kicking a wo/man when down. But not sure about the above. It could have happend to any trader, I imagine- but not really to any of us- as most of us will never be rich but also never be poor- as we would never accept the kind of risks involved in said trading. For one reason or another- mainly because we know we just can't afford to lose.

Bonne chance, and hope something can be worked out leaving doors opened to the future.

Like Castro, we discussed the night before finally bringing in savings from the UK (which we should have done right from the start, of course, in 1909 edited 2009!!!) - and the next day, it was too late. And like him, we could kick ourselves for missing the boat. Not quite the same though.

Last edited by Odile; 18.01.2015 at 21:11.
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  #29  
Old 18.01.2015, 21:08
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Re: In Need of Advice (Huge forex trading loss)

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Like Castro, we discussed the night before finally bringing in savings from the UK (which we should have done right from the start, of course, in 1909)- and the next day, it was too late.
1909 eh? You're certainly wearing very well. ( sorry couldn't resist)

We were thinking of doing the same but will hold off for a bit now. Fortunately we got the money from Belgium already.
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  #30  
Old 18.01.2015, 21:13
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Re: In Need of Advice (Huge forex trading loss)

ooops- my dad was born 1912 so ... corrected

Ahhh well- will be paying a lot less tax next year, so every cloud ... and all that. Yep- will hold off a bit- very lucky we don't have to cash in.

Last edited by Odile; 18.01.2015 at 21:31.
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  #31  
Old 18.01.2015, 22:37
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Re: In Need of Advice (Huge forex trading loss)

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I certainly do agree about not kicking a wo/man when down. But not sure about the above. It could have happend to any trader, I imagine- but not really to any of us- as most of us will never be rich but also never be poor- as we would never accept the kind of risks involved in said trading.
Sorry, I should have qualified "any of us" a bit more. I meant those diving in the deep water section of trading (high risk) as is/was OP in all likelihood judging by the highly unfortunate predicament.
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  #32  
Old 18.01.2015, 23:21
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Re: In Need of Advice (Huge forex trading loss)

I didn't really understand the losses either, even after glinaa's explanation. So I went searching and found something a bit more in layman's terms that might help anyone wondering how leverage/spread betting really works:

"...if you place a bet worth €1,000 with a margin rate for the applicable tier of 5%, you only need to provide position margin of €50 to place the bet. If the price of the product moves against you by 10%, you will lose €100. This is double your initial investment in the bet."

Most people of course play with larger sums of money. The currency swing of the last week was pretty substantial before the dust settled, so it's not hard to see how even non-rich folks could have lost a bundle.
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  #33  
Old 18.01.2015, 23:32
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Re: In Need of Advice (Huge forex trading loss)

There's quite a bit of discussion considering that the OP hasn't added any details or replied since the first post
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  #34  
Old 18.01.2015, 23:34
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Re: In Need of Advice (Huge forex trading loss)

Well yes, but he is an 'old' and known member of EF.
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  #35  
Old 18.01.2015, 23:35
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Re: In Need of Advice (Huge forex trading loss)

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There's quite a bit of discussion considering that the OP hasn't added any details or replied since the first post
Usual EF speculation....
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  #36  
Old 18.01.2015, 23:59
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Re: In Need of Advice (Huge forex trading loss)

**sinking into depression**
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  #37  
Old 19.01.2015, 00:36
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Re: In Need of Advice (Huge forex trading loss)

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**sinking into depression**
I'd be tempted to take on the bank and try to make them share the pain. This is new territory for them, too.

It would require a lot of work, but you could end up acquiring all kinds of valuable legal and commercial experience.
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  #38  
Old 19.01.2015, 00:54
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Re: In Need of Advice (Huge forex trading loss)

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I'd be tempted to take on the bank and try to make them share the pain. This is new territory for them, too.

It would require a lot of work, but you could end up acquiring all kinds of valuable legal and commercial experience.
It sounds like there is nothing to lose by trying this
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Old 19.01.2015, 01:31
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Re: In Need of Advice (Huge forex trading loss)

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**sinking into depression**
tut tut. Please remember that it's only money. You made it once, you'll make it again. You're alive, now smile.
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  #40  
Old 19.01.2015, 08:12
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Re: In Need of Advice (Huge forex trading loss)

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........ but you were very poorly advised about risks.
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uhm....why was he?
Because it seems from the OP that he lost more than he could afford.

OP, so sorry for the predicament you are in, you can only talk to the bank, and maybe also to a good lawyer. 300 CHF or so may be money well spent here. Good luck.
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