Protecting accounts from an euro collapse

    • outspan
      outspan
      Bronze
      Joined: 07.02.2010 Posts: 1,196
      I hope this is not too much off topic -- it should be interesting to all Eurozone players.

      DISCLAIMER:
      I do not offer financial advice of any kind, I'm not affiliated with any online trading platform, and the opinions expressed here are only my own. Trade at your own risk.

      I'm an Italian resident and, seeing how things are going with our economy and the negative outlook of the euro, I've decided to take steps to make sure that a possible dip of the euro doesn't result in a decrease in the buying power of my funds in my poker accounts, which are all in euro.

      I've been playing around with forex (foreign exchange) for several years, and if you're in the same situation I am, there's a way to hedge the risk.

      Forex is the trading of currency against each other, and you can either BUY (bet on a pair, like USD/GBP, to rise in value, which would mean $$ gains value over ££) or SELL (bet on ££ to rise in value relative to $$). All this is done with financial leverages of up to 400:1, although such high leverages are frowned upon because they're considered way too risky.

      What I've done to reduce my exposure to EUR is to SELL EUR/USD with a 50:1 leverage. This way, if EUR lowers in value relative to USD, the funds in my bank decrease in value relative to USD, but the funds in my trading account compensate this exactly. Therefore, my buying power in USD remains the same (except for inflation on USD since the trade started).

      I know of a very serious online trading platform, which has low fees and no affiliate program (so I couldn't possibly be making money off recommending it), but I will only name it if the moderators think it is ok for me to do so -- this post already sounds way too much like an infomercial. In any case, the principle is the same.

      I'm opening this thread mainly for the benefit of Eurozone poker players, so that we can discuss this, and I hope I'm not too much off topic here.

      If you are interested in playing around with forex, however, make sure you know what you're doing -- there are great websites with free educational material on this topic. But if you do it right, the risks far outweigh the benefits, given the current economic outlook.
  • 15 replies
    • 1984ioc
      1984ioc
      Bronze
      Joined: 16.07.2011 Posts: 712
      I'm not sure are you more interested in your Forex or the actual effects of how the Euro will have on your poker funds.We could be facing a double dip reccesion but we are still a long way off the Euro collapsing as the ECB will just pump billions if not trillions into save it as the powerhouses France and especially our new rulers Germany really need it to survive.Obviously this will devalue the currency

      If the knock on effect continues like at the moment with Italy in trouble and with so much French money tied up in Italian banks etc. if ye do collapse then it could signal the end imo and being perfectly honest i hope it does.

      You should have your money in other currencies other than the Euro or the dollar and cover yourself as much as possible,how this will effect your poker funds i don't know.

      On a side note the unelected government in Brussels who forced the Lisbon Treaty on France,Holland and Ireland should be disbanded and have a democratic election like every democratic area should.Fair play to Germany for now running all our financial affairs while taking all the huge interest payments they have put on the bankrupt nations.

      Fuck the EU,let us have our currencies back so we can take control of our exports and stop having idiotic laws implemented on us by a bunch of lawless donks in Brussels.

      Rant over.
    • outspan
      outspan
      Bronze
      Joined: 07.02.2010 Posts: 1,196
      Originally posted by 1984ioc
      I'm not sure are you more interested in your Forex or the actual effects of how the Euro will have on your poker funds.We could be facing a double dip reccesion but we are still a long way off the Euro collapsing as the ECB will just pump billions if not trillions into save it as the powerhouses France and especially our new rulers Germany really need it to survive.Obviously this will devalue the currency
      By hedging I just want to protect myself against the effects of the euro devaluing, and I'm definitely not interested in the speculative side of it because of the way that market works. In short, banks and other institutions have an unfair advantage so it makes little sense to speculate.


      You should have your money in other currencies other than the Euro or the dollar and cover yourself as much as possible,how this will effect your poker funds i don't know.
      By hedging I'm accomplishing exactly this -- with a 50:1 leverage and selling 100 EUR/USD, for example, I effectively buy 5000 EUR worth of dollars and thus I limit my exposure to EUR. And yes, buying other currencies as well reduces the risk even further, altough you don't really need to overdo it.


      Fuck the EU,let us have our currencies back so we can take control of our exports and stop having idiotic laws implemented on us by a bunch of lawless donks in Brussels.
      I agree with you there... except with our debt, Italy is doomed without the euro. Not that you should care :P
    • 1984ioc
      1984ioc
      Bronze
      Joined: 16.07.2011 Posts: 712

      Fuck the EU,let us have our currencies back so we can take control of our exports and stop having idiotic laws implemented on us by a bunch of lawless donks in Brussels.
      I agree with you there... except with our debt, Italy is doomed without the euro. Not that you should care :P
      And for some reason i thought it was Berlusconi who had power of your media and not the folk in Berlin or Brussels.The power of persuasion eh!So ye need the Euro to survive do ye?

      So what is your plan.Get a massive bailout from the EU (ie Germany) and everything is sorted yea?So you won't mind that ye will be paying astronomical interest rates for years to come and that basically ye are enslaving the future generations of Italy to the wreckless spending that your generation had and make them pay for yer mistakes.Good plan mate and sounds really fair.Look after yourself first as they say.

      Just remember that if Europe was playing poker then it is Germany that is on the button and all the money is flowing its way.They give ye cheap loans and when ye can't pay back these loans,they give ye more loans at higher rates.Do you really want to go down the way of Ireland and Greece yea?

      PS i actually do care as well
    • outspan
      outspan
      Bronze
      Joined: 07.02.2010 Posts: 1,196
      Originally posted by 1984ioc

      Fuck the EU,let us have our currencies back so we can take control of our exports and stop having idiotic laws implemented on us by a bunch of lawless donks in Brussels.
      I agree with you there... except with our debt, Italy is doomed without the euro. Not that you should care :P
      And for some reason i thought it was Berlusconi who had power of your media and not the folk in Berlin or Brussels.The power of persuasion eh!So ye need the Euro to survive do ye?

      So what is your plan.Get a massive bailout from the EU (ie Germany) and everything is sorted yea?So you won't mind that ye will be paying astronomical interest rates for years to come and that basically ye are enslaving the future generations of Italy to the wreckless spending that your generation had and make them pay for yer mistakes.Good plan mate and sounds really fair.Look after yourself first as they say.

      Just remember that if Europe was playing poker then it is Germany that is on the button and all the money is flowing its way.They give ye cheap loans and when ye can't pay back these loans,they give ye more loans at higher rates.Do you really want to go down the way of Ireland and Greece yea?

      PS i actually do care as well
      To be perfectly honest, I think Italian economy is doomed either way -- it's just a question of whether we'll bring someone down with us or not. And, I AM the future generations... I'm not that old ;) and besides, it wouldn't be long at all until the interests would start piling up again. Call me a coward, but I'm just looking to move out of here ASAP -- there's just too much corruption and nepotism and some things are beyond fixing, and I don't see why I should intentionally make my life harder by staying here.

      It's a structural problem, not one specific to Italy or Europe. Once the problem of overproduction started to surface, all the world's wealth started to flow toward finance, a "service" that produces no real benefit. Today, a good 90% of the world's wealth is in finance, owned by banks that speculate on governments to fail for monetary gain.

      Do you wanna guess what the average daily turnover in the forex market is? US$4 trillion. And it's mostly speculative finance.

      I think we're going a bit too much off topic though :)
    • MrMardyBum
      MrMardyBum
      Bronze
      Joined: 14.03.2009 Posts: 2,206
      Not a trader myself, but this thread is very informative and quite an interesting read...

      Cheers to OP
    • akrammon
      akrammon
      Bronze
      Joined: 17.05.2009 Posts: 3,142
      Anyone considered praying for the euro.... ?

      It might not be an enitrely good thing and getting back to old currencies might be better but if it happens now we are all dead.

      Yea I overdramatised it. Anyway, lets just hope it doesnt happen.

      p.s. if italy goes down so does spain/hungary and who knows who else that's for certain. Please stay afloat :)
    • 1984ioc
      1984ioc
      Bronze
      Joined: 16.07.2011 Posts: 712
      To be perfectly honest, I think Italian economy is doomed either way -- it's just a question of whether we'll bring someone down with us or not. And, I AM the future generations... I'm not that old ;) and besides, it wouldn't be long at all until the interests would start piling up again. Call me a coward, but I'm just looking to move out of here ASAP -- there's just too much corruption and nepotism and some things are beyond fixing, and I don't see why I should intentionally make my life harder by staying here.

      It's a structural problem, not one specific to Italy or Europe. Once the problem of overproduction started to surface, all the world's wealth started to flow toward finance, a "service" that produces no real benefit. Today, a good 90% of the world's wealth is in finance, owned by banks that speculate on governments to fail for monetary gain.

      Do you wanna guess what the average daily turnover in the forex market is? US$4 trillion. And it's mostly speculative finance.

      I think we're going a bit too much off topic though :)
      Didn't mean to change the topic of thread outspan or to place you in the older generation bracket either.Take it as a compliment as you seem too mature for the younger ones ;) .Still find some of the stuff relative though.As for emigrating then if that suits you then you should do it.You can always return when you are older.

      Pretty shocked to hear that their is that much traded on a daily basis.Quite staggering tbh.Ok to send you friend request so you can send me a few of those websites etc. that can give me a good overview of Forex if you don't mind.As for the country that ye might bring down then it would probably be France as they have so much tied up with your financial institutions.

      Back to topic now ok i promise ;)
    • 1984ioc
      1984ioc
      Bronze
      Joined: 16.07.2011 Posts: 712
      Originally posted by akrammon
      Anyone considered praying for the euro.... ?

      It might not be an enitrely good thing and getting back to old currencies might be better but if it happens now we are all dead.

      Yea I overdramatised it. Anyway, lets just hope it doesnt happen.

      p.s. if italy goes down so does spain/hungary and who knows who else that's for certain. Please stay afloat :)
      All the time!For it to
      collapse


      Being serious though i don't want that.I just want us smaller nations to have them back because we can devalue our currency when we need to.I also feel we have lost parts of our independence by having some of our laws/decisions made by the unelected folk in Brussels.

      The EUSSR as it is now called i believe.
    • Xeonz123
      Xeonz123
      Bronze
      Joined: 22.08.2011 Posts: 264
      Intresting post.
    • outspan
      outspan
      Bronze
      Joined: 07.02.2010 Posts: 1,196
      Originally posted by 1984ioc
      Didn't mean to change the topic of thread outspan or to place you in the older generation bracket either.Take it as a compliment as you seem too mature for the younger ones ;)
      No worries mate ;)


      Pretty shocked to hear that their is that much traded on a daily basis.Quite staggering tbh.Ok to send you friend request so you can send me a few of those websites etc. that can give me a good overview of Forex if you don't mind.As for the country that ye might bring down then it would probably be France as they have so much tied up with your financial institutions.

      Back to topic now ok i promise ;)
      Sure, I'll send you the links if you want. However if you want to trade speculatively (which after reading those materials you'll be tempted to do), just remember that consistently profiting from forex is extremely difficult. There's a lot of trading strategies around and tools to create them, but they mostly rely on optimization over historical data to predict patterns in the future, which just doesn't work. Forex can be useful, however, if you just want to minimize your risk by holding money in different currencies.

      I'm a sw engineer, and at one point I developed an AI-based program that used genetic algoritms, neural networks & nonlinear parameter regression to predict market behavior and place the trades for me, but it didn't perform as expected. That's why I switched to poker in the first place -- all you can reliably do in forex is minimize risk, but making money is, basically, down to chance. In poker, ability is much more of a factor :) .

      I don't regret spending time learning forex though, it was a fantastic lesson in money management. That's why now I use my own BRM formula, which has been working great for me -- you can read about it in the first post of my blog if you're interested.

      PS: what the hell, I'll just give you a link here... should not be against forum rules. http://www.babypips.com/school/
    • Tarhonya
      Tarhonya
      Bronze
      Joined: 18.07.2010 Posts: 694
      Originally posted by outspan
      I developed an AI-based program [...] but it didn't perform as expected. That's why I switched to poker in the first place
      :coolface:
    • 1984ioc
      1984ioc
      Bronze
      Joined: 16.07.2011 Posts: 712
      Sure, I'll send you the links if you want. However if you want to trade speculatively (which after reading those materials you'll be tempted to do), just remember that consistently profiting from forex is extremely difficult. There's a lot of trading strategies around and tools to create them, but they mostly rely on optimization over historical data to predict patterns in the future, which just doesn't work. Forex can be useful, however, if you just want to minimize your risk by holding money in different currencies.

      I'm a sw engineer, and at one point I developed an AI-based program that used genetic algoritms, neural networks & nonlinear parameter regression to predict market behavior and place the trades for me, but it didn't perform as expected. That's why I switched to poker in the first place -- all you can reliably do in forex is minimize risk, but making money is, basically, down to chance. In poker, ability is much more of a factor :) .

      I don't regret spending time learning forex though, it was a fantastic lesson in money management. That's why now I use my own BRM formula, which has been working great for me -- you can read about it in the first post of my blog if you're interested.

      PS: what the hell, I'll just give you a link here... should not be against forum rules. http://www.babypips.com/school/
      Thanks outspan for the link.Exactly what i was looking for tbh.Just want to have a good overview of it first before i would invest or think about investing in it anyway.

      I will catch you in your blog during the week ok when i have a bit more time.GL at the tables and if you do find a program to crack the markets then i will gladly test it out for you just to make sure it works ok ;)

      Thanks to Giovani Trapattoni for getting us into the Euros as well.Living legend!
    • fuzzyfish
      fuzzyfish
      Bronze
      Joined: 12.01.2010 Posts: 862
      Euro collapse would suck in so many ways IMO. Then again eurozone can't go one like this. Southern European countries simply have a completely different way of doing things and that makes sharing a common currency a difficult task. We could just divide the eurozone into two currencies. Although this could potentially make the "northern €" go up in price by a lot and inhibit the exports of northern countries.

      Who knows, maybe the whole mess is orchestrated to depreciate € and boost our economy :)
    • outspan
      outspan
      Bronze
      Joined: 07.02.2010 Posts: 1,196
      Originally posted by 1984ioc
      Thanks outspan for the link.Exactly what i was looking for tbh.Just want to have a good overview of it first before i would invest or think about investing in it anyway.
      As you read it just remember that, even though the information there is excellent, that website is a part of a network that is littered with affiliate links to online trading platforms, so they have every interest in cleverly distorting information here and there just enough to make you think that making money in forex is way easier than it actually is. If you do end up deciding to trade forex, I'll give you a link to a platform that has no affiliate programs and much lower fees because of it.


      Thanks to Giovani Trapattoni for getting us into the Euros as well.Living legend!
      Long live the Trap ;)
    • conall88
      conall88
      Bronze
      Joined: 02.01.2009 Posts: 1,715
      don't you think that eurozone collapse would affect other territories?...