Retail forex trading has become a big business in Australia, turning over $380 million each day. High speed internet and retail exchanges have meant that anyone and everyone can get involved in forex trading, and it has been a very lucrative endeavor for some. However, every now and then a situation arises that just could not be anticipated by even the most experience and educated forex trader. Recent reports by ABC has revealed that many tradershave suffered significant losses in recent times and there are some of these people which has lost hundreds of thousands of dollars and in fact some of the losses have exceeded $1 million. These brokers are now faced with substantial pressure from foreign brokers to pay the money which are due.
This situation resulted because of changes made by the Swiss national Bank
The announcement by this institution that it was going to remove a cap on its exchange rate has surprised the financial markets.Such a cap are mostly in place to better control the stability of an economy and to avoid unnecessary domestic financial problems which could make investing very risky. The problem is when this cap was unexpectedly removed the Swiss Franc appreciate by 30% especially against euro and that has allowed foreign traders who were in possession offrancs to make very handsome profits. The problem was that those traders who were dealing specifically in euros suddenly have investments that were worth a whole lot less than they used to be. As could be expected large investment corporations that has invested heavily in the euro currency has lost millions in the process.
Australian traders caught with their pants down
It seems that some of the biggest losses were among Australian traders who simply did not anticipate the change in policy by the Swiss national bank. It was especially the small traders who had been doing very well in this market who now face a situation whereby if they were forced to pay the money which was lost it would lead to bankruptcy. Some of these people are even in danger of losing their homes and a significant portion of their other personal belongings. Besides the obvious financial problems which are encountered the stress which are brought about by this situation are particularly difficult to bear especially for those families with young children.
The members of several trading organizations are involved
This has once again illustrated the importance of knowing what you’re getting into when you are getting involved in online trading. Although currency trading will always be a risky venture because there are so many sudden fluctuations and changes within the global economy that it’s virtually impossible to anticipate all of those changes. This was clearly illustrated by the sudden and unexpected policy change which was made by the Swiss national Bank which has resulted in substantial losses. However when you are part of organization that understands the global economy and who are able to anticipate fluctuations and are therefore able to provide members with timely advice, then it may just be possible to avert most disasters within the currency trading industry.