"Alas, going long is wrong, and going short is also wrong. The market is too volatile, isn't it?"
Watching the GBP exchange rate return to 1.5250, many intraday speculative traders who were forced to stop-loss couldn't help but complain.
"It seems the GBP exchange rate is still in a volatile platform, but isn't this platform range too wide?"
"Damn it, I was stopped out going long, and stopped out going short too."
"Was the previous trend a bear trap? How did it get back into the volatile platform range?"
"Killing the bulls, then killing the bears, today's GBP exchange rate trend is impossible to trade. Alas... I was stopped out twice within a few hours. I really should have waited until tomorrow's referendum results were out to participate."
"After Birmingham's preliminary voting results are out, there shouldn't be any surprises for tomorrow's referendum results, right?"
"That's hard to say. Today's GBP exchange rate trend is truly erratic."
"The open long and short positions in the market are still upwards of 3 million lots. The bull and bear major players haven't decided a winner yet, and the market volatility is already so large. Subsequently... once the long and short forces in the market become completely imbalanced, and bulls or bears collectively hit their stop-losses, the fluctuation in the trend will be unimaginable."
"High risk, high profit opportunity!"
"The key is that whether you're going short or long, you simply can't hold on during such violent volatility."
"Yes, if you set a stop-loss, it's easily triggered. If you don't set a stop-loss, if you pick the wrong direction and the GBP exchange rate truly breaks through rapidly in a single direction, it will instantly lead to liquidation!"
"Alas, I can't grasp this market, so I can only watch from the sidelines."
"It seems that the long and short sides in the market haven't decided a winner yet, but the current market news is undoubtedly completely bullish. I wonder how Wall Street, as the largest short institution in the market, will counterattack during the upcoming US trading session?"
"Net long positions in the market have rapidly climbed to over 700,000 lots again."
"The GBP exchange rate is still climbing, and the number of short positions in the market continues to sharply decrease. Looking at this situation, it feels like after Birmingham's preliminary voting data came out, the bears can no longer find an opportunity for a full counterattack."
"It's too early to say that. To truly crush the bears' confidence, the GBP exchange rate must climb above 1.5500 points in one go."
"A single surge to above the 1.5500 point mark? That might be a bit difficult."
"It's estimated that once it exceeds 1.5300 points, many traders who are speculating on the long side will start taking profits."
"I feel that before tomorrow's referendum results are out, these major bear and bull institutions in the market won't be able to overpower each other."
"Does that mean the GBP exchange rate will likely continue to trade sideways tonight?"
"Are we going to see a huge volatile range between 1.5000 and 1.5500 points?"
"A 500-point fluctuation range? That's a bit outrageous!"
"The trading volume in the GBP exchange rate market is becoming more and more exaggerated. It feels like all the active speculative funds in the entire forex market are now flocking to the GBP exchange rate market."
"Not just the GBP exchange rate market, but also the spot gold market."
"Yes, yes, the recent trend in the spot gold trading market is basically an inverse correlation to the GBP exchange rate trend."
"Too many funds are doing hedging trades in spot gold."
"The leverage ratio in the spot gold market has not been lowered by the exchange. Overall... under such violent volatility, the trading risk of spot gold is significantly higher than that of the GBP exchange rate."
"Since it's highly probable that the major bull and bear forces in the market won't decide a winner tonight, then just trade it as a volatile market. Go long near 1.5000 points, go short above 1.5400 points, and for stop-loss... set it at a 200-point range. Should that be okay?"
"Hard to say. Deriving future trends from past market conditions has a very low success rate."
"I think it's better to firmly trade in one direction."
Amidst the heated discussions and complaints from numerous intraday traders.
As market trading hours further progressed.
At 9:30 PM Yanjing time, just as the US trading session began, the GBP exchange rate finally broke through the 1.5300 point mark once again, propelled by the active buying support from various funds in the market.
This was an almost 300-point rebound since the preliminary voting results from Birmingham were announced.
Facing the surging GBP exchange rate, which seemed to have formed an effective breakthrough in the bullish direction.
At this time, in Shanghai, China.
Inside the 'Magic City Ultratrading Gang' stock main speculative fund group where Su Yi was located.
Xu Qiao, Brother Chen, Old Wu, Old Zhang... and others who were shorting the GBP exchange rate with Su Yi, began to feel distinctly conflicted again.
"Looking at the GBP exchange rate trend, it really feels like it's going to break through upwards!" Xu Qiao said in the group, "Damn it, the intensity and excitement of forex trading are truly much greater than stocks. There are 300-point fluctuations at the drop of a hat. Two hours ago, I was still making hundreds of thousands of dollars, but now I'm almost at liquidation."
"This trend... I feel that President Su is in danger!" Old Zhang responded at this time.
"It's not just President Su; the entire group of major bear institutions in the market is probably in danger," Old Wu said. "I looked at everyone's discussions and various market news. I feel that everyone's expectation for tomorrow's referendum results has quickly converged after Birmingham's preliminary vote count came out."
"If the bullish sentiment in the market truly quickly converges and persists..." Brother Chen pondered for a moment and replied, "Tonight, I'm afraid many major short funds in the market will not be able to withstand the pressure and will choose to close positions prematurely, taking a stop-loss. And as long as major short funds concentrate on closing positions to stop-loss, it will inevitably lead to an accelerated short squeeze by the major long funds in the market. This market pattern... indeed looks very dangerous for the bears."
"It depends on what these Wall Street short institutions do next," Xu Qiao exhaled and said, "During the US trading session, there shouldn't be any new major news released from within the UK. And this... during this brief vacuum of news, gives these short institutions an opportunity to counterattack."
Old Zhang nodded slightly and hurriedly said, "Yes, yes, for these Wall Street short institutions, the US trading session is their home ground!"
"Anyway, I still believe in President Su," Xu Qiao paused, then continued, "If President Su really gets liquidated, then my several million dollars invested will be considered payment for trust."
"Everyone in the group should believe in President Su," Old Wu said, "But... we still need to respect the market trend. To be honest, from the current market trend, as well as various factors like news and sentiment, I truly don't see any possibility for President Su's large-scale short positions to exit profitably!"
"I don't see it either," Old Zhang said, "But I believe 'Huayin International,' 'Aberdeen Asset,' 'BNY Mellon,' 'Citibank'... these large capital institutions that are shorting the GBP exchange rate with President Su are definitely not fools. They've invested such massive funds into the GBP exchange rate market, establishing such large short positions, there must be a very solid underlying logic, and these large capital institutions will absolutely not sit idly by."
And just as Old Zhang had guessed...
As market trading hours just entered the US trading session.
In Wall Street, New York, several short capital institutions, including Citibank, BNY Mellon, and Blackstone Group, further sold large quantities of GBP currency in the offline forex trading market and the black market.
At the same time, media outlets under these institutions also began real-time tracking and reporting on the actual GBP exchange rate trends in the offline forex trading market, especially the black market, creating panic that major global capital was continuing to sell GBP, causing downward pressure on the offline GBP exchange rate.
This was done to alleviate the persistent short squeeze pressure on the GBP exchange rate in the online trading market.
Of course, in the online trading market.
The institutions were also forced to further increase their short positions, forcefully curbing the GBP exchange rate trend near 1.5300 points.
"Mr. Enoch, this won't work!"
Seeing the net long positions in the market still surging, and more and more short position holders in the market starting to close positions for stop-loss, Edmund, head of the market research department at Citibank's Forex Investment Trading Center on Wall Street, New York, frowned deeply.
He quickly looked at Enoch, who was still instructing traders to increase short positions, and warned him.
"Do you have a better way?" Enoch heard Edmund's words, turned to look at him, "Birmingham's preliminary vote count caught us off guard, and before tomorrow morning arrives, before new major news is released in the UK, if we want to curb the desperate counterattack of the major long institutions in the market, this is the only way.
Do you want us to reduce positions, close positions, and cover stop-losses? That's completely impossible. You see the current situation in the market; once we concentrate on closing and covering positions, losses will further amplify.
At this point, the GBP exchange rate market, both for the long institutions and for major short institutions like us, holding massive short positions, is a prisoner's dilemma. Without completely crushing the opponent's confidence, without completely defeating the opponent, we simply cannot exit the market, nor can we complete such a large position covering operation.
And, to be honest... I don't think at this moment, tomorrow's referendum results are already a foregone conclusion. The uncertainty remains very high in various regions of the UK where preliminary vote counts have not been announced.
Also, I heard that Salmond is already inciting many people in Scottish regions to vote for Brexit. Furthermore, it's really hard to say which side, those in the cabinet who favor remaining in the EU or those who choose to leave, has more officials.
Moreover, even if tomorrow's referendum result is to remain in the EU, as everyone expects, how much upward momentum can it truly provide to the GBP exchange rate trend? Isn't it a fact that internal conflicts within the UK are becoming increasingly sharp? Isn't it a fact that the EU economy is struggling with growth and gradually falling into a vortex of recession? Since these are all facts.
That means the fundamental logic, the underlying logic, for the continued depreciation of the GBP exchange rate has not changed. Therefore... why should we be swayed by temporary market sentiment?"
"The underlying logic for the continued depreciation of the GBP exchange rate certainly still exists," Edmund said, "But, what I fear is that under the influence of sentiment, and a brief market consensus, many funds among the major short institutions in the market cannot withstand losses and are forced to close positions for stop-loss. You just said that the current market trend, for both major long institutions and major short institutions in the market, is a prisoner's dilemma.
In fact, it is. I worry that someone might jump the gun and concentrate on large-scale stop-loss closures, leading to a mutual stampede among the major short funds in the market. And once this situation arises, the extreme volatility of the market will have absolutely nothing to do with trading logic or anything else."
"No," Enoch smiled, still firmly stating, "Before tomorrow's referendum results are actually announced, the inertia of intraday speculative traders' thinking remains. While most short-term speculative funds in the market are expecting a volatile pattern, relying solely on the current small positive news in the market, it's basically impossible for these bullish forces to push the GBP exchange rate above 1.5500 points, overcoming the continuous short-term speculative funds taking profits and closing positions, to utterly crush the bullish confidence in the market.
Furthermore, at this level, apart from the Bank of England which is bound to maintain exchange rate stability, other major bullish institutions probably dare not invest massive funds for a high-level short squeeze before the referendum results are completely clear. After all, there are still about 18 hours until tomorrow's referendum results are announced. Anything can happen within these 18 hours.
If new major negative news emerges next, then the bullish institutions that invested massive funds for a high-level short squeeze could become even more passive. So, in the current market's bull-bear confrontation, although market volatility is intensifying, no one has truly staked all their chips."
"Mr. Enoch, the latest market news: the preliminary vote counts from the Orkney Islands and Hebrides Islands in the Scottish region are basically entirely leaning towards a vote for Brexit!"
Just as the two were arguing, market intelligence officer Boris pushed open the trading room door and walked in quickly, his face alight with excitement and joy.
He hurried to say, "This also greatly exceeded the previous expectations of various institutions."
"Good!" Enoch smiled upon hearing this news, "What did I tell you? The outcome of the bull-bear battle is still unknown!"
And as soon as he finished speaking.
The GBP exchange rate, which had already encountered short resistance near the 1.5300 point, suddenly plunged, breaking through the 1.5250 point mark in just one or two seconds.
Across the entire market.
The major short institutions in the market, who had been fiercely counterattacked by the bulls for nearly 300 points.
With the arrival of new important negative news, they finally ushered in a strong counterattack opportunity, concentrating funds and frantically selling massive short orders at market price.
(End of chapter)