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A way to make money off the collapse of the Euro on Forex?

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    Hey guys, I do a bit of Forex and I make a little bit of money here and there, mostly all fun, which is why I also use demo accounts a lot.

    I'm actually not very good and it just seems to be I'm lucky, but I want to make some proper money. I've heard of people making money of currency collapses and crashes.

    To do this would I have to buy a lot of currency against the Euro, then when the Euro crashes and my currency rises, sell sell sell?

    I'm not to this, so anything would help.
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    A budding george soros here
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    If you're going to short the Euro you'd better make sure your timings are perfect or you're going to lose a fortune, especially if you're leveraged as highly as most Forex traders. Over the coming weeks it's going to bounce up and down like a yo-yo. I would imagine, although i'm far from an expert, your best bet would be to look for knock on effects of the euro zone running into trouble. For instance, if the Greece defaults, the value of gold is going to go even further through the roof. You should also make sure to hedge your trades appropriately.
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    (Original post by Elipsis)
    If you're going to short the Euro you'd better make sure your timings are perfect or you're going to lose a fortune, especially if you're leveraged as highly as most Forex traders. Over the coming weeks it's going to bounce up and down like a yo-yo. I would imagine, although i'm far from an expert, your best bet would be to look for knock on effects of the euro zone running into trouble. For instance, if the Greece defaults, the value of gold is going to go even further through the roof. You should also make sure to hedge your trades appropriately.
    Thanks, I've been watching it bounce up and down against different currencies and trying to find a patter, there isn't one really, but it does seem to keep popping back up to where it was at the start of the day, so I've been buying low and monitoring it and selling high in large amounts, I initially lost some money but then made double that; it's crazy at the moment.

    The gold idea is pretty good, I was wondering if you could shed some light onto why that is?
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    People perceive gold as a 'safe haven' - if the world goes to ****, the price of gold goes up. However, that's not really the case, as no asset is protected from investors selling off to the safest asset, cash. Think about all of the macro problems facing the world at the moment, yet gold has dropped nearly $300 in the past month.
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    (Original post by JMJ19)
    Thanks, I've been watching it bounce up and down against different currencies and trying to find a patter, there isn't one really, but it does seem to keep popping back up to where it was at the start of the day, so I've been buying low and monitoring it and selling high in large amounts, I initially lost some money but then made double that; it's crazy at the moment.

    The gold idea is pretty good, I was wondering if you could shed some light onto why that is?
    As far as i'm aware investors are fleeing to gold, like they traditionally always have, because the currency market is as unstable as you've described! Gold's value, although it does fluctuate, is generally more stable. It is perceived the world over to have inherent value, whereas paper currency which isn't pegged to gold reserves is inherently worthless and only worth what people feel it is worth. Basically; Gold's value will never drop to zero, and it has historically been immune to hyper inflation. When people were wheeling around wheel barrows full of Marks in Germany, it was quite easy to pick up a loaf of bread for a fleck of gold.



    Saying that - post 2008 everyone was under the extremely misguided impression that property values would only go up. Look at that huge spike. If that doesn't say bubble, I really don't know what does. However, I am unsure what will burst the bubble and the rush away from gold back into other markets. Maybe you could just ride the wave a few points and then lock in your gains? That way even if it does go to $2000 you will still have made some money with lower risk. There is of course a risk that the oz price could fluctuate down a few hundred dollars before spiking up, so go easy on that leverage if you use it at all.

    I would read into the gold markets a lot before you take the plunge of investing your hard earned dough.
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    (Original post by crustz)
    People perceive gold as a 'safe haven' - if the world goes to ****, the price of gold goes up. However, that's not really the case, as no asset is protected from investors selling off to the safest asset, cash. Think about all of the macro problems facing the world at the moment, yet gold has dropped nearly $300 in the past month.
    Gold is the default currency of the world, not some rubbish fiat currency. If investors wanted super safety they'd buy some bonds, although they are looking shakey at the moment.
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    (Original post by Elipsis)
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    As far as i'm aware investors are fleeing to gold, like they traditionally always have, because the currency market is as unstable as you've described! Gold's value, although it does fluctuate, is generally more stable. It is perceived the world over to have inherent value, whereas paper currency which isn't pegged to gold reserves is inherently worthless and only worth what people feel it is worth. Basically; Gold's value will never drop to zero, and it has historically been immune to hyper inflation. When people were wheeling around wheel barrows full of Marks in Germany, it was quite easy to pick up a loaf of bread for a fleck of gold.



    Saying that - post 2008 everyone was under the extremely misguided impression that property values would only go up. Look at that huge spike. If that doesn't say bubble, I really don't know what does. However, I am unsure what will burst the bubble and the rush away from gold back into other markets. Maybe you could just ride the wave a few points and then lock in your gains? That way even if it does go to $2000 you will still have made some money with lower risk. There is of course a risk that the oz price could fluctuate down a few hundred dollars before spiking up, so go easy on that leverage if you use it at all.

    I would read into the gold markets a lot before you take the plunge of investing your hard earned dough.
    Thanks for that man, really appreciate it. Just spoke to my friend a bit and he said what you said, ride it a bit then get out to keep it safe.

    What would you say about shorting the Euro? Good/bad, too risky? Or is it too big to fall? I'm looking at it now on Forex and while it's insanely jumpy it still seems strong-ish.

    Am I just being too much of a newbie with this? or is the shakiness a sign that it is weak?
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    (Original post by Elipsis)
    Gold is the default currency of the world, not some rubbish fiat currency. If investors wanted super safety they'd buy some bonds, although they are looking shakey at the moment.
    Gold isn't a currency.
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    (Original post by crustz)
    Gold isn't a currency.
    It is a precious metal with perceived inherent value, it can be used as currency.
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    (Original post by JMJ19)
    Thanks for that man, really appreciate it. Just spoke to my friend a bit and he said what you said, ride it a bit then get out to keep it safe.

    What would you say about shorting the Euro? Good/bad, too risky? Or is it too big to fall? I'm looking at it now on Forex and while it's insanely jumpy it still seems strong-ish.

    Am I just being too much of a newbie with this? or is the shakiness a sign that it is weak?
    It would be impossible to gauge the crowd mentality of people in the finance sector without actually working there. Heck, it would be difficult to do if you were there! They can be on TV saying one thing, and be in the back rooms of their offices doing the exact opposite. There are also so many factors at play it is quite difficult to find legitimate patterns to follow in among the randomness. For instance any given market/currency/commodity might jump up 2% or down 2%, and people will run around trying to work out why it happened, when it could just be that one of the huge multi-billion dollar pension funds parked some money in there.

    I would say that shorting the euro is definitely too risky. Firstly you'd have to accurately predict what course countries like Germany are going to take, which depends on their populuce and up coming votes. Then you've got to think about Greece and just how long it is going to hold on before it sinks, quite a few hedge funds have built up substantial portfolios getting ready for when it does and they've been waiting a good couple of years now. And to top it all off you need to work out the repurcussions of everything you predict - how far is it going to slump? How long is it going to slump for? Could they get their acts together and stop the slump from even happening?

    Maybe wait until the crash starts, keep your finger hovering over the execute trade button, then hit GO! when the preverbial does hit the fan. Then ride it down a little and lock in the gains, then wait for the almost innevitable rebound. It's a lot of waiting around, but it is far better to spend a month doing the ground work on a decent trade than it is to try and trade semi-blind day in day out. That would just be gambling! (It is pretty much gambling already, but it would be like playing poker against professionals without even knowing what the cards meant)
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    (Original post by Elipsis)
    It would be impossible to gauge the crowd mentality of people in the finance sector without actually working there. Heck, it would be difficult to do if you were there! They can be on TV saying one thing, and be in the back rooms of their offices doing the exact opposite. There are also so many factors at play it is quite difficult to find legitimate patterns to follow in among the randomness. For instance any given market/currency/commodity might jump up 2% or down 2%, and people will run around trying to work out why it happened, when it could just be that one of the huge multi-billion dollar pension funds parked some money in there.

    I would say that shorting the euro is definitely too risky. Firstly you'd have to accurately predict what course countries like Germany are going to take, which depends on their populuce and up coming votes. Then you've got to think about Greece and just how long it is going to hold on before it sinks, quite a few hedge funds have built up substantial portfolios getting ready for when it does and they've been waiting a good couple of years now. And to top it all off you need to work out the repurcussions of everything you predict - how far is it going to slump? How long is it going to slump for? Could they get their acts together and stop the slump from even happening?

    Maybe wait until the crash starts, keep your finger hovering over the execute trade button, then hit GO! when the preverbial does hit the fan. Then ride it down a little and lock in the gains, then wait for the almost innevitable rebound. It's a lot of waiting around, but it is far better to spend a month doing the ground work on a decent trade than it is to try and trade semi-blind day in day out. That would just be gambling! (It is pretty much gambling already, but it would be like playing poker against professionals without even knowing what the cards meant)
    I was just reading about the Germany thing when wouldn't you know my mum told me she was going to put a lot of money into gold. She works quite high up in finance in a big company. So I guess that's the gold side covered, lol.

    Also you're saying to ride the euro down when it crashes, then wait for it to pick up? Sorry if this all seems a bit dumb, I just seem to have lost track a bit.
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    (Original post by JMJ19)
    I was just reading about the Germany thing when wouldn't you know my mum told me she was going to put a lot of money into gold. She works quite high up in finance in a big company. So I guess that's the gold side covered, lol.

    Also you're saying to ride the euro down when it crashes, then wait for it to pick up? Sorry if this all seems a bit dumb, I just seem to have lost track a bit.
    Yes, when (if) the euro crashes it will be a few relatively easy percentage points riding it down for a fraction of the drop. And when (if) it rebounds and rallys there will also be some easy points to be had on the way up. But this could be weeks away, months away, or even years. I'd get your plan sorted out and look for something to do in the mean time! This trade probably won't make you bucket loads of cash, like it would if you road it from the top to the bottom or vice versa, but if that was an easy thing to do we'd both be on a beach in Monte Carlo surrounded by Russian models wouldn't we!

    You might want to run this advice past your mum if she is more experienced than I am (which isn't difficult). Or if some other users want to step in and correct my strategy or tare it to shreds, be my guest!
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    (Original post by Elipsis)
    Yes, when (if) the euro crashes it will be a few relatively easy percentage points riding it down for a fraction of the drop. And when (if) it rebounds and rallys there will also be some easy points to be had on the way up. But this could be weeks away, months away, or even years. I'd get your plan sorted out and look for something to do in the mean time! This trade probably won't make you bucket loads of cash, like it would if you road it from the top to the bottom or vice versa, but if that was an easy thing to do we'd both be on a beach in Monte Carlo surrounded by Russian models wouldn't we!

    You might want to run this advice past your mum if she is more experienced than I am (which isn't difficult). Or if some other users want to step in and correct my strategy or tare it to shreds, be my guest!
    I'll show her the thread, she knows this kind of stuff, but not too much, she's just around a lot of people who are really into it.

    Haha, I'd love to be there right now.

    On a semi-related note, I saw the XAU/USD slump massively on my ticker about an hour ago now, so I fired up FXCM, brought a load, came back to find myself WAY up, so I quickly got out, made money, then it kept rising and rising and now I feel cheated.
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    (Original post by JMJ19)
    I'll show her the thread, she knows this kind of stuff, but not too much, she's just around a lot of people who are really into it.

    Haha, I'd love to be there right now.

    On a semi-related note, I saw the XAU/USD slump massively on my ticker about an hour ago now, so I fired up FXCM, brought a load, came back to find myself WAY up, so I quickly got out, made money, then it kept rising and rising and now I feel cheated.
    Do you know why it is slumping? Or was it just a punt? What sort of leverage are you using?
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    (Original post by Elipsis)
    Do you know why it is slumping? Or was it just a punt? What sort of leverage are you using?
    100:1, I don't know, but it happened again.... While I had a **** load in it. You won't believe how much I just lost... my mr went below how much I could afford and my position got closed.

    My mum's going to kill me, more than 2 thirds of my account is gone...

    I could ****ing cry right now
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    (Original post by JMJ19)
    100:1, I don't know, but it happened again.... While I had a **** load in it. You won't believe how much I just lost... my mr went below how much I could afford and my position got closed.

    My mum's going to kill me, more than 2 thirds of my account is gone...

    I could ****ing cry right now
    Bloody hell mate, how much was it? Leverage buggers everything up... Whatever you do don't keep trading, switch it off for a while and take a breather.

    [EDIT] You need to remember that studies show that losing money hurts twice as much as the pleasure you will derive from making it. I personally lost 100k last year because my former business partner is a total retard/or a theif, and it was like being kicked in the nuts. I almost threw up.
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    (Original post by Elipsis)
    Bloody hell mate, how much was it? Leverage buggers everything up... Whatever you do don't keep trading, switch it off for a while and take a breather.
    This will be the cause:
    http://www.bbc.co.uk/news/world-europe-15107538

    Look at the damage... (bearing in mind I'm a student who lives off his mum, who is probably about to get cut the **** off):


    I'll probably just keep bugging you here man, I can't bring myself to tell my mum and I'm not going to tell anyone else I know in real life because I'll get laughed down.
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    I'd spent ****ing ages building that up, so much time, I guess that's one argument I had is that although I've lost an insane amount (and probably my sanity for a while at least) I'll be able to say I built some of it up myself.

    I always went in with relatively little amounts, as you can see above, the one time I get carried away I lose it all. Jesus.
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    (Original post by Elipsis)
    Bloody hell mate, how much was it? Leverage buggers everything up... Whatever you do don't keep trading, switch it off for a while and take a breather.

    [EDIT] You need to remember that studies show that losing money hurts twice as much as the pleasure you will derive from making it. I personally lost 100k last year because my former business partner is a total retard/or a theif, and it was like being kicked in the nuts. I almost threw up.
    I feel you man. I never would have understood until now.

    I guess that puts it in perspective, I have to be thankful this isn't my livelihood and I'm just a fortunate kid with generous parents, doesn't change the fact that this will change a lot for me, glad I have my student loan coming to support myself soon.

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