Rebirth of the Capital Legend

Chapter 290 A fierce battle between bulls and bears!
"Alas, going long is wrong, and going short is also wrong. Isn't this trend too volatile?"

Seeing the pound exchange rate return to 1.5250, many intraday speculative traders who were forced to stop losses could not help but complain.

"It seems that the exchange rate of the British pound is still in a volatile platform, but isn't the range of this volatile platform too large?"

"Fuck, long positions were stopped out, short positions were also stopped out."

"Was the previous trend a trap to lure the market into a sell-off? Why did it return to the oscillating platform range again?"

"After killing the longs, the shorts are killed again. The trend of the pound exchange rate today makes it impossible to trade. Sigh... I was stopped out twice in a few hours. I really should have waited until the referendum result comes out tomorrow before participating."

“After the preliminary voting results in Birmingham come out, there should be no surprises in the referendum result tomorrow, right?”

"It's hard to say. Today's pound exchange rate trend is really weird."

"There are still more than 300 million long and short positions that have not been closed in the market. The main long and short parties have not yet decided the winner, but the market has already fluctuated so much. In the future... once the long and short forces in the market are completely unbalanced, and the longs or shorts concentrate on stopping losses, the volatility of the trend is simply unimaginable."

"High risk, high profit opportunity!"

"The key is that whether you are shorting or going long, you can't hold on to this kind of violent and volatile trend."

"Yes, use a stop loss. It will be easily triggered. If you don't use a stop loss, if you make a wrong move, the pound exchange rate will break through in one direction quickly, and your position will be liquidated instantly!"

"Alas, I can't grasp this market situation. I can only wait and see."

"It seems that the long and short sides in the market have not yet decided the winner, but the current market news is undoubtedly biased towards the long side. I wonder how the short capital on Wall Street, as the largest short-selling institution in the market, will fight back in the upcoming US trading session?"

"The net long position in the market has rapidly climbed to more than 70 lots."

"The pound sterling exchange rate continues to rise, and the number of short positions in the market continues to decline sharply. Looking at this situation, it seems that after the preliminary voting data in Birmingham came out, the shorts have no chance to fight back with all their strength."

"It is too early to say this at this time. To really defeat the confidence of the bears, the pound exchange rate must be pulled above 1.5500 in one go."

"A wave of upward movement above the 1.5500 mark? That's a bit difficult."

"It is estimated that once the 1.5300 level is exceeded, many speculative long traders in the market will start to take profits."

"I feel that before the referendum result comes out tomorrow, these major short-selling institutions and major long-selling institutions in the market will be unable to do anything to each other."

"Does this mean that the pound exchange rate is likely to fluctuate tonight?"

“Is it possible that there will be a huge range-bound trend between 1.5000 and 1.5500?”

"A 500-point fluctuation range? That's a bit outrageous!"

"The trading volume in the pound exchange rate market is getting more and more exaggerated. It feels like the active speculative funds in the entire foreign exchange market are now all pouring into the pound exchange rate market."

“Not only the pound exchange rate market, but also the gold spot market.”

"Yes, yes. The recent trend of the gold spot trading market is basically in the opposite direction of the British pound exchange rate."

"Too much money is hedging in spot gold."

“The leverage ratio in the gold spot market has not been reduced by the exchange. In general… the risk of trading gold spot is significantly higher than the risk of trading the pound exchange rate under such high volatility.”

"Since it is highly likely that the main forces of long and short positions in the market will not be able to determine the winner tonight, then we can just treat it as a volatile market and trade it. Go long near 1.5000 points and go short above 1.5400 points. As for the stop loss... just set it at a range of 200 points. That should be fine, right?"

"It's hard to say. Using past market conditions to infer future market conditions has a very low success rate."

"I think it's better to stick to one direction."

Accompanied by heated discussions among many day traders and complaints from many day traders.

As market trading hours progress.

At 9:30 p.m. Yanjing time, just as the U.S. trading session began, the pound exchange rate finally broke through the 1.5300 mark again with the help of active long positions from various funds in the market. This is a rebound of nearly 300 points since the announcement of the preliminary voting results in Birmingham.

Faced with the surging British pound exchange rate, an effective breakthrough trend in the bullish direction seems to have been formed.

At this time in China, the Demon City.

Su Yi is in the main stock hot money group of 'Magic City Ultra Short Gang'.

Xu Qiao, Brother Chen, Lao Wu, Lao Zhang... and other hot money who followed Su Yi in shorting the pound exchange rate market began to feel visibly conflicted again.

"Looking at the trend of the pound exchange rate, it feels like it's going to break through!" Xu Qiao said in the group, "Damn, foreign exchange trading is much more tense and exciting than stocks. It fluctuates by 300 points at any time. In the first two hours, I made a profit of hundreds of thousands of dollars, but now I'm about to lose so much that my account is almost liquidated."

"Looking at this trend...it feels like President Su is in danger!" Lao Zhang responded at this time.

"It's not just Mr. Su. The entire group of short-selling institutions in the market are probably in danger," said Old Wu. "I looked at everyone's discussions and market news. I feel that everyone's expectations for tomorrow's referendum results have quickly turned to consensus after the preliminary vote count in Birmingham came out."

"If the bullish sentiment in the market really quickly turns to consistency and continues..." Brother Chen pondered for a moment and responded, "I'm afraid that there will be a lot of short-selling major funds in the market tonight, and they will not be able to withstand the pressure and close their positions in advance to stop losses. As long as the short-selling major funds concentrate on closing their positions to stop losses, it will inevitably lead to the acceleration of the long-selling major funds in the market. This market pattern... It seems that the shorts are indeed very dangerous."

"Let's see what these short-selling institutions on Wall Street will do next." Xu Qiao exhaled and said, "During the US trading hours, there should be no new blockbuster information released in the UK, and this... during this brief vacuum of information, gives these short-selling institutions an opportunity to fight back."

Lao Zhang nodded slightly and said hurriedly: "Yes, yes, for those short-selling institutions on Wall Street, the US trading session is their home court!"

"No matter what, I still believe in Mr. Su." Xu Qiao paused and continued, "If Mr. Su's position really goes bankrupt, then the millions of dollars I invested will be considered as paying for the trust." "Everyone in the group should believe in Mr. Su." Old Wu said, "But... we still have to respect the market trend. To be honest, judging from the current market trend, as well as news, sentiment and other factors, I really don't see the possibility of Mr. Su's large-scale short positions being able to make a profit!"

"I can't see it either," said Lao Zhang, "but I believe that Huayin International, Aberdeen Asset Management, BNY Mellon, Citibank, etc., these big capital institutions that followed President Su in shorting the pound exchange rate are definitely not fools. They have invested so much money in the pound exchange rate market and established such a large-scale short position. There must be a very strong underlying logic, and these big capital institutions will definitely not sit idly by."

And just as Lao Zhang guessed...

During market trading hours, we have just entered the US trading session.

On Wall Street in New York, several short-selling capital institutions, including Citibank, Bank of New York Mellon, and Blackstone Group, have further sold large amounts of British pounds to the offline foreign exchange trading market and the black market.

At the same time, the media under various institutions also began to track and report in real time the offline foreign exchange trading market, especially the actual pound exchange rate trends in the black market, creating panic that major global capitals would continue to sell the pound, causing the offline pound exchange rate to be under pressure, thereby alleviating the pressure on the online pound exchange rate trading market where bulls continued to squeeze out.

Of course, in the online trading market.

Various institutions were forced to further increase their short positions, forcibly curbing the trend of the pound sterling exchange rate to around 1.5300 points.

"Mr. Enoch, this is not a solution!"

Seeing that the net long position in the market was still increasing dramatically, and at the same time more and more short position holders in the market began to close their positions and exit with stops of losses, Edmund, head of the market research department of Citibank's foreign exchange investment trading center on Wall Street in New York, frowned and glanced at Enoch, who was still instructing traders to increase their short positions, and reminded him.

"Do you have a better idea?" Enoch turned to look at Edmund after hearing his words. "The preliminary vote count in Birmingham caught us off guard. Before tomorrow morning, before the release of new heavy news in the UK, we want to curb the desperate counterattack of the main long institutions in the market. This is the only way. Do you want us to reduce our positions, close our positions and stop losses?
This is completely impossible.

Look at the current situation in the market. Once we close our positions and cover them, our losses will be further magnified.

The pound sterling exchange rate at this time has become a prisoner's dilemma for both the long institutions in the market and for the short institutions like us who hold huge short positions. We must completely destroy the opponent's confidence and defeat the opponent.

We simply couldn't leave the market, nor could we complete the operation of covering such a large position.

And, let’s be honest…

I don't think the result of tomorrow's referendum has been decided at this point. For regions in the UK that have not yet announced preliminary vote results, uncertainty remains high.

Also, I heard that Salmond has been inciting many people in Scotland to vote for Brexit.

Moreover, it is hard to say which side of the cabinet has more officials in favor of continuing to stay in the EU or those who choose to leave the EU.

Furthermore, even if the result of tomorrow's referendum is as everyone expected, that is, to continue to remain in the EU, how much support can it really provide to the upward trend of the pound sterling exchange rate?

Isn’t it a fact that internal conflicts within the UK are becoming increasingly acute?
Isn’t it a fact that the EU economies are experiencing sluggish growth and are gradually falling into a vortex of recession?
Since it's all facts.

That means the basic logic and underlying logic of the continued depreciation of the pound has not changed. So... why should we be led by short-term market sentiment?"

"The underlying logic of the continued depreciation of the pound sterling is definitely still there," Edmund said, "but what we are afraid of is that under the influence of emotions, under the short-term consistency of market expectations, many of the main short-selling institutions in the market will be unable to bear the losses and will be forced to close their positions to stop losses.

You just said the market trend at this moment.

Whether it is for the main long institutions or the main short institutions in the market, it is a prisoner's dilemma.

In fact, it is true.

I am worried that someone will rush ahead and close positions on a large scale to stop losses, which will cause the main short-selling funds in the market to trample on each other. Once this situation occurs, the extreme volatility of the market will have nothing to do with trading logic or anything else. "

"No." Enoch smiled and said firmly, "Before the referendum result tomorrow is actually implemented, the thinking inertia of intraday speculative traders is still there. When most short-term speculative funds in the market are holding a volatile pattern, based on the current positive performance of the market, these bullish forces in the market want to withstand the continuous profit-taking and liquidation of short-term speculative funds, and drive the pound exchange rate to above 1.5500 points, and defeat the confidence of the bulls in the market in one fell swoop. It is basically impossible to achieve.

Furthermore, in this position, the Bank of England is bound to maintain exchange rate stability.

Other major long-term institutions would not dare to continue investing huge amounts of funds to force a short squeeze before the referendum results are completely clear.

After all, there are still about 18 hours until the referendum results are announced tomorrow.

In these 18 hours, anything can happen.

If new major negative news emerges next, the long institutions that have invested huge amounts of funds to force a short squeeze at high levels will become increasingly passive.

Therefore, at this time, there is a battle between bulls and bears on the market.

Although the volatility of the market is intensifying, no one has really put all their chips on the line. "

"Mr. Enoch, the latest market news is that the preliminary vote counts in Scotland, Orkney Islands, and Hebrides Islands are basically leaning towards the result of Brexit." Just as the two were arguing, market intelligence officer Boris pushed open the door of the trading room and walked in quickly with an excited and happy look on his face. He hurriedly said, "This also greatly exceeded the expectations of previous institutions."

"Great!" Enoch smiled when he heard the news, "What did I say? The outcome of the long and short positions is still unknown!"

And he just finished speaking.

The pound sterling exchange rate, which had encountered short-selling resistance near the 1.5300 level, suddenly plummeted and broke through the 1.5250 level in just one or two seconds.

On the entire disk.

The main short-selling institutions in the market were attacked by the bulls for nearly 300 points.

When new important negative news arrived, there was finally an opportunity for a strong counterattack. Funds were concentrated and huge short orders were frantically placed at the market price.

(End of this chapter)