Eur and GBP pairs have been the most watched pairs since the Uk Referendum. Prior to the actual event which took place on the 23/24 June. We (me and my mentees) followed it until the final outcome. That did not only help us to stay safe but it was also an opportunity for all of us to learn something out of the whole market situation. As much as I have been trading for years now, I teach and mentor others but I have never traded Brexit before. I was so excited about what I would learn at the end of everything more than being excited about how I was going to kill/milk the markets. I am more excited by making new discoveries. I love learning new things everyday, I am a student for life and so together with my mentees. We stayed tuned to the news and we followed it from the beginning to the end and together along the way, we made some interesting discoveries about the markets (I love my team, sorry I have to say this, I love you team, I know you are reading). One team member jokingly suggested that we should form a Brexit anonymous (B.A) as we felt like we couldn’t stay away from the live Brexit broadcast.
I am not going to confuse you with some copied and pasted information that is too technical for an average trader to read and understand. I am not here to tell you about how many pips did GBPJPY drop by and so forth. I will however talk about real things that happened to real traders, things that I saw and things that I think could have been avoided by my fellow traders. I can proudly say that NO one lost money in my team (not because I am claiming to be a guru who never has losses) but because those who are still new to Live trading were advised (by me) to be on the sideline and play on demo, and those who are trading small accounts as well were given same advice because the spreads were wider and also the slippage was going to be a problem. I am still working on getting the new live traders to gain more confidence, to relax and to be able to control their emotions and fear in the markets (which is the main reason why I do not teach them in groups/for two days). There was no need to expose them to such volatile markets. I so wish trainers and mentors protected their traders(during the storm). Now back to Brexit and how it affected my fellow traders.
I have to say big ups to traders who closed their existing Eur or GBP positions prior to the big announcement. My biggest concern is a trader who thinks it is OK to ignore the economic conditions of a country where he/she trades their currencies. A trader who thinks an indicator controls the markets, a trader who thinks currencies move because his/her indicator made them to move or confirmed this and that. A trader who thought it was OK to start paying attention with such a big event, I am talking about a trader who traded Brexit and lost all his/her money. I am so sorry it happened but it could have been avoided. Paying attention to the economy is a good start, you get to understand how currencies react to certain conditions. I think such a trader should have stepped aside and waited for the dust to settle and let those who are used to trading the economic conditions to trade the Brexit (because they are well positioned to understand and they know when there is a need to be on the sideline and also know how to follow the market sentiments). But unfortunately the buzz was too much and newbies are mostly lured into Forex trading under false claims and selling of dreams, and that’s very unfortunate. Everyone thought they were going to milk the markets. These traders who were wiped out during Brexit are the ones who will tell everyone that Forex is gambling (which is true in their case, they really gambled).
To the traders who believe so much in their system, they also made a mistake of holding on to their positions because of what they confirmed (technically) prior to the final outcome and it ended up badly for most. When the economy is shaken, the markets will do what is suggested by the economy irrespective of what your chart told you prior. The market was so volatile and choppy. My method of trading didn’t allow me to hold on to any GBP or EUR pairs prior to the final outcome because I knew it could be deadly. I am looking forward to next week. I suspect they’ll be more trading opportunities. UK quarterly current account which measures difference in value between imported and exported goods, services and transfers during the last quarter is due to be released on Thursday (30th June) and the UK Manufacturing PMI which is released monthly is due on Friday (1st July). I am looking forward to seeing how it will turn out after Brexit. These are the economic events that I follow month after month.
The event was not about: BREXIT = Sell GBP or BREMAIN = Buy GBP, it wasn’t a straightforward thing. That’s what killed my fellow traders. We also focused more on Gold (which rose up to 15%) and it became a safe heaven. Ftse100 was one of the instruments that we focused on because it responds to the releases like UK Interest rates, UK GDP, housing stats, Inflation data and so forth, read more about it HERE. At the time of this publication, news surfaced that an online petition was signed by over 2M people who are very unhappy about the Brexit and they are requesting a re vote. Thank you for stopping by.