How to lose £50,000 on a £1 bet

John C Burford explains why a central banker's guarantee is usually a signal to foreign-exchange traders to do the opposite.

Today, I want to show you what happens to traders when they follow the crowd.

They get killed!

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Swipe to scroll horizontally
CONTRACTS OF CHF 125,000Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 66,272
Commitments
4,92231,36666154,4258,63460,00840,6616,26425,611
Changes from 06/01/15 (Change in open interest: 1,845)
-6251,6481902,782-7022,3471,136-502709
Percent of open interest for each category of traders
7.4.47.31.082.113.090.561.49.538.6
Number of traders in each category (Total traders: 47)
72249111934Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.