The global economy keeps on seeing more and more shocks and challenges from time to time. In early 2015, it became clear that even the notorious Swiss banks cannot guarantee 100% security and safety of funds, not to mention plain FX brokers, which are constantly in jeopardy of going bankrupt. Does it mean it is better to cancel all FX trading and put the money under the mattress? No, it doesn’t! This is what the representatives of a young but promising FX broker named Forex-Market think about it.
They assume that the way an FX broker conducted its business is the key factor when it comes to financial security, stability and safety of client funds.
Black Thursday Ghost Still Scares FX Traders
Alas, there are plenty of reasons for FX traders to get nervous. Greek problems underlined the Euro, thereby brining it a few steps closer to the parity with the U.S. Dollar. Greece was on the verge of quitting the Eurozone, which only increased the volatility and uncertainty in financial markets. In early June, rating agencies downgraded Greece’s ratings to CCC with a negative forecast. On June 26th, Alexis Tsipras rejected the lender’s requirements. Two days later Greek banks were closed for 2 weeks while ATMs allowed the depositor to withdraw under 60 EUR a day. The problem was building up. Greece threatened the stability of the entire Eurozone. And even though later in July, Greece finally accepted the lender’s conditions, which gave everyone hope to avoid the worst-case scenario, more and more experts start talking about the likelihood of another “Black Thursday”.
If you are wondering what the mentioned “Black Thursday” is, we will remind you that:
In early 2015, the Swiss Franc used to be pegged to the common European currency. However, the Swiss National Bank decided to unpeg its national currency form the Euro, which came as a shock to everyone and resulted extreme volatility in the market of the Swiss Franc (CHF).
As a result, thousands of FX traders with open trades in currency pairs with CHF lost most or all of the capital in a matter of hours if not minutes. Even stop-loss orders were ignored due to extreme slippage. The next day, a number of FX brokers announced bankruptcy after failing to recover after the event, which is now called the “Black Thursday”. The list of such companies included true heavyweights like Alpari UK, for instance.
Is another “Black Thursday” probable? When answering this question, Forex-Market experts say it is necessary to consider both sides of the coin. Indeed, on the one hand, the current period can be viewed as a period when all market values are crashing. The mentioned “Black Thursday” didn’t emerge out of thing air. It came as the result of a series of actions, including the fact that the famous Swiss banking secret ceased to exist when Swiss banks started sharing information with U.S. agencies and secret services about American depositors evading taxes. This undermined trust in the Swiss banking system.
On the other hand, for plain folks trading FX as small-scale retail traders, it is all about the question of how another BT is going to affect their business if the scenario manifests itself eventually.
It should be noted that not every single FX broker out there was affected by the BT. Some of them suffered minor losses while others while others came off clear. There clients kept on trading Forex as usual. So it is all about the broker’s approach to business and safety of client funds. There are efficient mechanism helping the broker to reduce the negative effect of such unexpected events.
Forex-Market experts say that a similar situation has been seen over the last couple of weeks. Therefore, they made a number of urgent steps to reduce the risks. When the Greek crisis reached its climax, the broker announced the possibility of capping the trading for EUR currency pairs along with wider spreads, “close only” trading mode etc. On top of that, the company addressed the traders and warned them about the risks of trading within a couple of days when Greece was on the verge of default.
Forex-Market is reading for another major challenge
Forex-Market was one of the few FX brokers that survived the Black Thursday and are ready for other challenges. The company is flexible enough to quickly adapt to crises. At the same time, the company’s experts are able to foresee such force-majeure events and take all the necessary steps to reduce their outcome. In other words, the company has everything required to face any challenge – a team of experts, sufficient liquidity, innovative technologies etc.
