Stock price crash: circuit breaker activated, massive margin calls, -522,680 yen, BRL (Brazil) in collapse-class shock!
Naturally, stock prices and the dollar moved weakly, high-interest-rate currencies and commodity currencies were sold, and it was an unfavorable market for long-term investors and those investing with a risk-on stance.
However, Trump’s usual provocative actions occurred, and this time the dollar/yen fell from about 113.8 to around 110.3.
Moreover over several days of decline, the fall was at most about 3.1%.
If this had been a commodity or emerging-market currency that tends to be sold off, what would have happened?
I experienced it firsthand and would like to share.
By way of comparison, I will also introduce Brazil real investments when things are going well again.
If you haven’t seen them yet, I’d appreciate it if you could view them as well.
Even I have undefeated, all-win profits exceeding 1 million yen♪ Trading BRL/JPY (Brazilian real) is possible with only one company! A invincible account is also complete
※ There is a campaign reward; I can introduce one more person to Brazil real trading
【Why is the rate like this? A mistaken transmission, right? A plunge of over 10% already led to many positions being liquidated】
IG Securities’ BRL/JPY trading generally starts around PM 9:15, but on 5/18, when the plunge occurred, I was asleep in preparation for a night shift, so I didn’t look at the market until after 10 PM.
For a moment I thought a global depression might be occurring.
I hurriedly checked rates for USD/JPY and the Nikkei 225 as well.
But there wasn’t a particularly large drop.
Next, I considered an abnormal rate. An emerging-market currency, especially the Brazilian real that is not typically tradable in ordinary FX. Abnormal rate feeds do occur…
Yet the market remained oddly crashed for a long time. Also, on days when Brazilian holidays reduce liquidity, IG’s real cannot be traded, but it appeared that trading could continue at the abnormal value — the currency pair for Brazil was shown as tradable in green.
When I hurriedly checked forex news, several items about the Brazilian real appeared that are not usually covered…
1. Amid suspected cover-ups of Temer’s scandals, stocks and the real sold off.
2. Brazil’s stock index, the Ibovespa, temporarily fell more than 10% and circuit breakers were triggered, trading was halted.
3. Brazil’s central bank announced currency swap auctions to respond to the real’s rapid drop.
In short, something like this.
When I hurriedly checked my email, IG Securities had sent two margin-call notices in a short period.
But there were no liquidations, so I felt relieved and looked back at the market to examine the details, and…
There were a large number of liquidations.
Open positions around 36 yen were forcibly closed at 32.36.
20,000 units × 7 positions = 140,000 units liquidated
Loss amount: -522,680 yen
That’s how it stood.A hard loss in the undefeated real/yen trading, a rare defeat indeed.
How I will approach the Brazilian real from now on?
I’ll write about it in the next installment, but for now I do not plan to largely reduce real trading.
Instead of cutting losses further, I salvaged about 40,000 yen in a little rebound, and then opened additional positions.
Why don’t I run away after taking such a loss?
How do I view a 3% drop over several days for the dollar versus an instant 10% plunge that triggers a circuit breaker for the real?
Additionally, points to be mindful of regarding real trading on IG (pros have already been thoroughly explained, but…)
I plan to delve into these topics next time.
If you create a card or open an FX account, you can receive a high reward of over 10,000 yen
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