The Swiss Earthquake

What happened

On 15 January 2015 the Swiss National Bank abandoned its 1.20 floor against the euro without warning. The franc jumped more than 20% in minutes and liquidity disappeared across every franc and euro pair.

Brokers went bankrupt, stops were filled hundreds of pips away and many accounts went negative.

How to survive a day like this

• Check the economic calendar and the news before you trade: these days were announced or brewing for hours.
• Reduce your risk: on extreme days, 0.5% per trade is plenty, because stops can slip far beyond where you placed them.
• Do not fight the first move. The first candles of a shock set the direction for the rest of the session more often than not.