Singapore Forex - How we made money from GBP flash crash 2016
Woke up last Friday morning, 7 October 2016 to this headline:
What happened to GBP? – Fat Finger or Flash Crash?
The fall of GBP might be a shocker for most traders and probably encounter margin calls and/or freeze screens. However, some traders might find this incident and its movement is somewhat similar to SNB Flash Crash.
Previously we think that the market is behaving illogically because after the Brexit, the GBP should drop but instead it was being held up.
Due to the sideways price movement, we suspect that there was a possibility of shorts accumulation during the 1.5 months after Brexit. It feels like the market was just waiting for SOMETHING to happen.
What we really think
Once the market had accumulated a considerably huge volume of shorts together with the tremendous pressure for Brexit (again) and low liquidity in the market - after US session, the GBP crash seemed inevitable.
During the 900 pips down movement, GBP long traders could also face slippages in their account. Stop loss levels were not triggered but was flushed out instead due to the low liquidity in the market.
The plunge wasn’t trigger by any news, unlike SNBomb and GBP plunge across the board (all GBP crosses), so it is very likely that we had witnessed a flash crash in GBP itself.
What if these big move is already expected in "The Alien Room"
However what if I told you that the big move was already ‘predicted’ in “The Alien Room” 1 week ago? The Aliens aren’t surprise by the huge movement in GBP crosses because we were expecting at least 700 pips movement in GBPCAD and 600 pips movement in GBPAUD using the Tflow® method. *smiles*
See what Binni said in The Alien Room about GBP before flash crash
GBPCAD short profited 475 pips
GBPAUD short profited 600 pips
The Aliens are making monster pips in GBP trade
— TerraSeeds FX Tflow® (@terraseeds) October 10, 2016
Parity in GBP? Insane yet potential levels in GBPUSD and GBPSGD
Coincidentally, local paper Shin Min Daily interviewed Chief Trainer Binni Ong on 04 October. Binni believes that if GBPUSD could not maintain 1.28, it could go to parity or even 0.95. In addition, she observes that there are no signs of rebound in the GBPSGD. 1.7 is a technical support which broken could lead to more GBP losses.
This flash crash of GBP could be one of the worrying signs of instability, and this is not the first time we have seen in the market. Read here for past events
What do you think?
To your trading success,