Rebirth of the Capital Legend

"With this trend, I feel like the 1.5000 level won't hold!"

In just a blink of an eye, the pound exchange rate fell by more than 100 points and fell back to around 1.5000 points. In the United States, Wall Street, Vanguard Capital's 'Amanda' hedge fund trading room, fund manager Cedric sighed helplessly.

"If the 1.5000 level can't hold, then the trend of the pound exchange rate will be very dangerous." Guy, the head of hedge fund asset management, stared at the trend of the pound exchange rate. He paused, then turned his gaze to Bella, a researcher in the market information department, and asked, "Is there still no progress in the current market news?"

Bella responded: "There is no relatively good news. Even the Bank of England has not received any more news. However, there are a lot of relevant news about several major short-selling institutions in the market, such as Citibank, Bank of New York Mellon, and Blackstone Group, but they all tend to be bearish for the market."

"That shouldn't be the case!" Cedric said. "Logically, the pound has fallen to this level, and the Bank of England should take action."

"Does this mean that the Bank of England is planning to abandon the exchange rate?" Caroline, a core trader in the trading room, responded.

"Give up the exchange rate? Probably not," Guy said. "In the current pound exchange rate market, the main institutional groups that are long are mostly European capital, as well as various financial institutions and investment institutions in the UK. If the Bank of England intends to give up the exchange rate, then what they lose is not only the credibility of the central bank, but also the many European capitals and British capital that are long will suffer huge losses, and their own wealth will be plundered on a large scale by a number of short-selling institutions on and off the market."

"But in terms of actual market performance..." Cedric said, "We have not seen strong intervention and long-term behavior from the Bank of England."

"So what do you mean?" Guy turned his gaze to Cedric.

Cedric said: "Market sentiment is increasingly shifting towards the short side, and the net long position in the market is still continuing to decline sharply, which shows that a lot of funds that were previously long are withdrawing rapidly, and every rebound in the pound exchange rate tonight is showing a trend of getting weaker and weaker.

This shows that under the current market forces, the direction of least resistance for the pound exchange rate is clearly downward.

In this case, we can't continue gambling.

At least we should be prepared for the pound exchange rate to quickly fall below the 1.5000 mark, the bullish sentiment in the market to collapse, and the market's decline to further expand. "

"You mean... you suggest that our institution should reduce its long positions at this point to reduce the risk of holding positions?" Guy said, "But the current support line has not really been broken. If this imbalanced large-scale position reduction is carried out, it is possible that the position reduction will be at a relatively low level!"

Cedric said: "I think it is more important to control risks and prevent huge losses caused by the sudden change in sentiment after the pound falls below 1.5000 than to sell at a relatively low level and miss the opportunity of a subsequent rebound in the pound exchange rate."

"The net long position in the market has been reduced to about 15 lots," Caroline reported in a timely manner.

"The latest news..." Bella, who had been refreshing her computer screen and collecting market news, also hurriedly reported, "There is still no movement from the Bank of England, but Citibank is still selling pounds on the black market. At the same time, the black market pound exchange rate has fallen below 1.44 points."

Guy looked around at the three people in the trading room, pondered for a moment, and said, "Okay, let's execute the trading strategy according to what Manager Cedric said."

At this moment, almost all of Wall Street is shorting the pound.

And just as Cedric said, the trend of the pound exchange rate has been shifting increasingly towards the bearish direction.

Moreover, there is no clear positive news.

Under this situation, the pound sterling exchange rate at the 1.5000 mark will not last long.

On the other hand, at this moment, their institution holds nearly 30 long orders on the pound exchange rate. If they do not guard against the risk of extreme fluctuations in the pound exchange rate.

What if the pound exchange rate really fluctuates in the opposite direction of what they expected?

They are really in a completely passive situation.

Seeing that Guy agreed to reduce his position and stop loss at this point, Cedric glanced at the trend of the pound exchange rate and without thinking too much, he immediately issued relevant trading instructions to each trading team in the trading room.

As the order was issued...

A large number of long and short orders appeared in the British pound exchange rate market.

And when so many long liquidation orders poured out at the same time, the already shaky pound exchange rate instantly collapsed from around 1.5020 to 1.5005.

At the same time, the risk of the pound falling below the 1.5000 mark is increasing.

In the market, more and more intraday long speculators began to close their positions and stop losses, and more and more groups of speculators who followed the trend began to short sell further.

“It feels like the time has come to officially break through the 1.5000 mark!”

Seeing that the pound exchange rate was getting closer and closer to the 1.5000 mark and the key support position that would break through the confidence of long positions in the market, Meng Shengfei's eyes lit up in the trading room of the second investment department of Huayin International, which was linked to Huayi Capital headed by Su Yi. He said excitedly: "The long and short forces in the market are being completely unbalanced. In this situation, I feel that we only need to further guide it, and the market trend will be completely reversed, and the main long institutions in the market will gradually step into a self-trampling situation of long killing long."

"The long and short forces in the market are indeed becoming further unbalanced," said Kong Fansheng from the Investment Department. "The net long position has shrunk to around 15 lots. You know... a few hours ago, the net long position in the market was close to 100 million lots."

"What about the Bank of England?" Faced with the ideas proposed by the two, Su Yi did not make a decision immediately. Instead, he asked Frederick, the manager of Aberdeen Asset Evolution No. 1 Hedge Fund, who was more knowledgeable in market information and intelligence gathering, "Mr. Frederick, is there any unusual movement in the Bank of England at present?"

Frederick responded: "According to the information we have received, the Bank of England has not further increased its intervention in the market, nor has it expanded its investment in US dollar foreign exchange reserves."

"It seems that the latest preliminary vote counting results released by Shetland Islands, Orkney Islands, Hebrides Islands and other places have completely confused the Bank of England's original market intervention plan and its plan to snipe Wall Street short capital." Su Yi smiled and said, "The market exchange rate of the pound fell to 1.5000 points, and the Bank of England did not immediately intervene strongly.

This shows that there is already huge uncertainty about the outcome of tomorrow's referendum.

The Bank of England does not dare to make reckless moves and waste its US dollar foreign exchange reserves, let alone blindly support the market and go against the market trend. "

"Mr. Su means that... the Bank of England is likely to give up its strong intervention and support for the pound exchange rate?" Kong Fansheng understood instantly, thought about it, and continued, "But if we don't save it now, and wait for the bullish sentiment in the market to further weaken, the entire market will completely fall into a situation where the bulls kill the bulls. It will be more difficult for the Bank of England to support the market or stabilize the pound exchange rate, right?"

Su Yi replied with a smile: "No, referring to the trend of the 'Swiss Franc Black Swan' last year, once the long forces in the market are completely destroyed and the extreme trend of the pound exchange rate breaks out, there will be very few long positions left in the market. Instead, the huge short forces that need to take profits will become the new long forces in the market.

The so-called bulls are the potential bears, and the so-called bears are the potential bulls."

"So... Mr. Su agrees with my proposal just now?" Meng Shengfei said with a smile.

Su Yi nodded slightly and said, "Since the long and short forces in the market are already unbalanced, and the Bank of England is affected by the uncertainty of tomorrow's referendum results and dares not show its trump card, it continues to release large amounts of US dollar foreign exchange reserves to the market to quickly stabilize the pound exchange rate. At this moment when the pound exchange rate is already at the key support level of 1.5000 points, we naturally should not waste the opportunity."

"Haha... I've been waiting for President Su to say this." Meng Shengfei couldn't help but laugh excitedly. Without waiting for the other two to respond, he immediately turned around and instructed the traders in the trading room, "Immediately, immediately focus on increasing short positions at the market price, suppress the trend of the pound exchange rate, and break through the 1.5000 mark in one go."

After hearing what Meng Shengfei said, each group of traders quickly began typing away on their keyboards, continuing to short the British pound exchange rate.

And at the same time as each trader is operating.

Kong Fansheng from Investment Department 1, Su Yi from Huayi Capital, and Frederick from Aberdeen Asset Management's Evolution No. main hedge fund all issued the same instructions as Meng Shengfei to the trading groups of the funds they were in charge of.

Then, the three main short-selling institutions jointly concentrated on shorting the pound exchange rate.

When tens of millions or even hundreds of millions of US dollars are instantly poured into the British pound exchange rate market.

The pound sterling exchange rate, which had been hovering around 1.5005 to 1.5020, suddenly plunged downward again, breaking through the 1.5000 mark at a rapid pace. Within a minute, it reached a low of 1.4980.

Moreover, after more than half a month, the pound exchange rate broke through the 1.5000 point again.

A large number of long-term funds and short-term funds in the market quickly realized that the pound exchange rate had turned to a short-term trend and could no longer maintain the large shock range of 1.5000 to 1.5400 points.

then……

The next moment, it was 1:22 a.m. Yanjing time.

As the pound sterling exchange rate broke through the 1.5000 mark, a huge amount of long positions began to be quickly and frantically covered, and at the same time, a huge amount of short orders were also like a flood, venting wildly on the market.

With the combined assistance of longs covering their positions and shorts forcing longs to sell off.

At 1:23, in just one minute, the pound exchange rate plummeted to 1.4900.

After that, the pound exchange rate did not even stabilize at 1.4900 for 20 seconds before it continued to plummet.

At 1:25, the pound exchange rate hit 1.4830.

In just a few minutes, the long and short situations in the pound exchange rate were completely reversed, and the long and short net positions in the market turned from a net long position to a net short position for the first time.

Of course, this also made the 'Hua Yi Capital' institution headed by Su Yi.

The short positions of the two institutions linked to this, Huayin International and Aberdeen Asset Evolution No. 1 Hedge Fund, have all entered a state of large floating profits.

Among them, the main hedge fund is 'Hua Yi Cheng Yuan No. 1' headed by Su Yi.

With 22 short positions in the pound, the unrealized profit has exceeded US$3 million.

"Fuck, this trend is too fierce."

Noting that the floating profit of the fund product he led exceeded 5000 million US dollars in just a few minutes, Meng Shengfei couldn't help but exclaimed: "In just a few hours, the fluctuation of more than 500 points, from a loss of tens of millions of dollars to a profit of tens of millions of dollars, it was really a second of hell and a second of heaven. It was really too exciting."

"The name 'Demon Pound' is really well-deserved!" Meng Fansheng couldn't help but sigh excitedly at this time.

"This is just the beginning." Su Yi heard the two people's exclamations, smiled softly, and said, "The market's long and short positions have just begun to reverse. At this time, the main long positions in the market are still as high as more than 300 million lots. This shows that the real drama... is still to come."

"It is still not easy to completely destroy the main long positions in the market and make the market completely form a situation of longs killing longs." Frederick was not too excited at this time, and he said calmly, "This wave of negative reactions has almost exhausted the emotions, and the rapid decline of several hundred points is enough to attract a large number of intraday speculative orders in the market to stop profits.

The profit-taking of most intraday speculative traders will weaken the market's momentum to continue to fall.

In addition, the main bullish institutions in the market will never sit idly by and wait for death.

I think that in the future, when the referendum result is not completely settled tomorrow, the pound exchange rate may fluctuate greatly.”

"I completely agree with what Mr. Frederick said," Su Yi said, "However, since the Bank of England doesn't dare to show its trump card and is forcibly supporting the market despite market pressure, it means that the variable of tomorrow's referendum result leaning towards Brexit is really large. In other words... relatively speaking, the concerns of short sellers in the market are definitely smaller than those of long sellers. In addition, the plummeting black market exchange rate has a pull and influence on the trend of the open market exchange rate. It is basically unrealistic for the long sellers to regain the initiative in the subsequent market trend.

But..."

Su Yi paused, his eyes suddenly gleaming with a sharp light, and he smiled confidently and said, "I hope that the long main institutions that are still entrenched in the market, who have lost the initiative in the market and are in a state of floating losses and are reluctant to stop losses and reduce their positions on a large scale, can continue to invest more funds and continue to struggle and fight back. After all, only in this way can we grab extremely rich profits in this battle between longs and shorts, and in this Brexit referendum event that is enough to change the history of global economic and financial development."