"Short squeeze" on EUR/USD????

X

xche6670

Junior member
Messages
12
Likes
0
Hello all traders,

Last night there was a "great" event in EUR/USD, minutes before US released their consumer index. Now my unrealized loss is about $3000 (down from an initial $1000 profit).

I tried to google why EUR can be so strong, and some answers talk about "short squeeze". But I still don't know why this is happening.

Can anyone offer any comment on why EUR/USD rise all of a sudden? I'm still holding the position, in hope of recovery early next week.

EUR, please fall in peace......
 
Btw, I heard every day there are about 4 trillion dollars traded on Forex market. Yesterday the US consumer data is attention-drawing so I guess there are more than 4 trillion dollars. At the same time, EUR/USD must be a hot market, and the money on EUR/USD maybe more than 1 trillion? Moreover, I think many traders are holding a short position?

Given the above, I have a question: if the sudden rise in EUR/USD is done by some group, what a HUGE amount of money they put in? What organization can have such a huge fund? I really can't understand this.
 
The 4 trln number is a bit of an illusion. A large fraction of that (especially in the London market) is swaps, which don't have any real impact on exchange rates. Yesterday's data was not of major impact and it was a summer Friday, so in fact the markets were likely a bit thinner than usual. The speculators have been short the euro in size for a while (as per the CFTC figures on futures trading), so it doesn't take all that much on a day like yesterday to get them unwinding positions.
 
On wikipedia from a couple of years ago

The $3.98 trillion break-down is as follows:

$1.490 trillion in spot transactions
$475 billion in outright forwards
$1.765 trillion in foreign exchange swaps
$43 billion currency swaps
$207 billion in options and other products
 
xche6670 said:
Hello all traders,

Last night there was a "great" event in EUR/USD, minutes before US released their consumer index. Now my unrealized loss is about $3000 (down from an initial $1000 profit).

I tried to google why EUR can be so strong, and some answers talk about "short squeeze". But I still don't know why this is happening.

Can anyone offer any comment on why EUR/USD rise all of a sudden? I'm still holding the position, in hope of recovery early next week.

EUR, please fall in peace......
Click to expand...

Holding a $3000 losing position over the weekend? Where is your stop exactly? This may work out for you, but you do realise it could easily gap up lots of pips when it reopens.

First thing is, this is not a huge move. It moved about 80-90 pips, and there was time to get out for less, it didn't move the whole way in 5 minutes. It moves like this and more (and faster) quite often. This is no 'great event' just normal movement.

Second thing is that currency trading from the US picks up a lot after 1ish and on. The Us stock market was opening at 2:30, you'll often get news between 1pm and 3pm so all of these combined mean that you'll often get a decent move between 1pm and about 4pm uk time.

Third thing is, it traded down to yesterday's low, and bounced there, and from there then trended sharply up. So that was at least one warning sign.
 
xche6670 said:
Btw, I heard every day there are about 4 trillion dollars traded on Forex market. Yesterday the US consumer data is attention-drawing so I guess there are more than 4 trillion dollars. At the same time, EUR/USD must be a hot market, and the money on EUR/USD maybe more than 1 trillion? Moreover, I think many traders are holding a short position?

Given the above, I have a question: if the sudden rise in EUR/USD is done by some group, what a HUGE amount of money they put in? What organization can have such a huge fund? I really can't understand this.
Click to expand...

Just my opinion but you shouldn't be trading something which you know nothing about... = $3000 loss.

Peter
 
Please continue trading, as you provide liquidity in the market for people who do know what they are doing.
Thanks for your donations.
 
wackypete2 said:
Just my opinion but you shouldn't be trading something which you know nothing about... = $3000 loss.

Peter
Click to expand...

Honestly, I agree with you. I know nothing about Forex, sometimes just depend on my feeling. I'll stop trading for a few months, seriously learn some skills and try to come back. Thank you for expressing your opinion. Really helpful to me.
 
xche6670 said:
Honestly, I agree with you. I know nothing about Forex, sometimes just depend on my feeling. I'll stop trading for a few months, seriously learn some skills and try to come back. Thank you for expressing your opinion. Really helpful to me.
Click to expand...


A small advice- if you don't know trading , why you go for real money.
Practice a lot with demo account and try to learn the basics of Forex first. Then you go in the real trading- i am sure you will not lose $3000.

Don't lose hope- Have 100% self control over yourself in order to be

Able to think of trading systems
Able to test trading systems, realisticly and not be biased
Know how to manage risk
Understands the importance of money management
Know when to stay out of a trade
Knows when to enter and exit a trade, and how to limit losses
Able to master one's emotions and psychology

:clap:
 
You must log in or register to reply here.

Similar threads

P
Update- EUR/USD
Replies
0
Views
1K
PristineTrading
P
G
EUR/USD Analysis
Replies
4
Views
2K
bitrader
B
G
My thoughts on USD Index / EUR/USD
Replies
1
Views
1K
Xevield
Xevield
F
EUR/USD Trend with Events of Week
Replies
0
Views
1K
fxcapitalvia
F
P
EUR/USD Vs EUR/AUD
Replies
6
Views
3K
PKFFW
P
Top