Rebirth of the Capital Legend

"Haha, Mr. Su is right." Hearing Su Yi's confident words, Meng Shengfei was encouraged. He laughed and praised, "We should seize the opportunity to defeat the main bulls in the market. As long as the market forms a situation of longs killing longs and a unilateral downward short trend, even if the Bank of England intervenes, it is impossible to go against the direction of the entire market and forcibly support the market."

"With millions of long and short orders, the Bank of England cannot influence the market trend." Kong Fansheng paused and responded, "Once the unilateral trend of long killing long is formed, no one can stop it. At present... the unilateral trend of long killing long is just one step away from forming."

"We can't be too optimistic." Frederick said calmly, "It seems that the uncertainty of tomorrow's referendum result is still very large."

"Boss Su... the pound exchange rate has started to stabilize around 1.4800." As the others discussed, Qu Zecai, who had been paying attention to the changes in the pound exchange rate and the profit and loss of the fund's positions, immediately reported, "Should we reduce our positions appropriately at this point to reduce our overall holding costs and expand our risk tolerance?"

Su Yi thought for a moment and said, "No need for that. Judging from the current market expectations and trends, it will be difficult for the pound exchange rate to return to the large fluctuation range of 1.5000 to 1.5400 before the referendum result is officially announced tomorrow."

"Do you want to further increase your holdings?" Qu Zecai continued to ask.

Su Yi responded with a smile: “Not necessarily, just as Mr. Frederick said… the unilateral trend in the market has not yet been fully formed.

Even though the pound exchange rate has fallen below the previous large shock range platform.

However, many intraday speculators in the market still hold speculative views that are mainly based on the view of volatile trends. This means that at the current position of the pound exchange rate, without any new negative market stimulus, there will definitely be a large number of intraday short-selling speculators taking profits and locking in profits.

At the same time, the main bullish institutions in the market had just been killed and were somewhat confused.

They will also take advantage of the fact that the intraday long speculators have basically completed their stop losses, and a large number of intraday short speculators have a strong desire to take profits and exit.

Launch a quick counterattack to recover some of the huge losses caused by the sharp drop in the pound sterling exchange rate.

in other words……

Since the pound sterling exchange rate is currently in need of a rebound, we are not in a hurry to increase our positions further on a large scale at this point.

After the longs in the market continue to cover part of their positions and the shorts have closed their positions in large quantities.

That is to say, after the short-selling momentum in the market is further brewing, we will further increase our holdings to sell off the decline, and the opportunity will be much better than it is now."

"Yes, I agree." Meng Shengfei nodded in response, "Nothing can be accomplished overnight. At this moment, there is no new negative stimulus in the market news, and the market sentiment has almost been vented. In this case, if we continue to insist on increasing our positions and shorting, we will not only fail to achieve good results, but will also make us lose the current market initiative."

"Next...it depends on the counterattack strength of the bulls in the market." Kong Fansheng said.

"If the Bank of England still holds its hands, the bulls' counterattack will not be very strong," said Frederick. "Confidence has been lost, and it will be many times more difficult to rebuild it than before."

"That's true." Meng Shengfei said, "How else can we say that confidence is more important than gold in the financial market?"

"Well, you know what, now the trend of gold spot and the British pound exchange rate has formed a completely opposite trend." Kong Fansheng said, "It is estimated that many major institutions of various capital systems around the world have established huge hedging orders on the British pound exchange rate and gold spot at the same time."

"This is predictable," Su Yi said, "but the main battlefield for long and short positions will definitely still be the pound exchange rate."

"Mr. Frederick, the black market pound exchange rate has collapsed to around 1.4300," Adrian, Frederick's assistant and head of product market information at Aberdeen Asset Evolution No. 1 Hedge Fund, reported at this time, "and the run on capital from all over the world is still continuing, and there is no sign that the Bank of England will continue to sell off US dollar reserve currencies to save the pound exchange rate."

Frederick nodded slightly after hearing Adrian's report and said, "It has been such a long time, and the Bank of England has not made any new moves. This should be enough to show that the Bank of England has indeed changed its trading strategy due to the uncertainty of tomorrow's referendum results and has given up on defending the pound exchange rate."

"Haha... the Bank of England has given up on the exchange rate. This time... European capital that followed the Bank of England to go long on the pound exchange rate on a large scale, especially several large capital institutions and financial companies in the UK, will probably be greatly disappointed." Meng Shengfei laughed happily, "I really want to see the expression on Godfrey's face who is in charge of the 'Huifeng Huanyu No. 1 Hedge Fund' product and is firmly going long on the pound exchange rate.

This guy has been bullish on the British pound exchange rate on various occasions before.

Moreover, relying on the financial background and confidence of Huifeng Bank, it is not panicking at all and claims that it can invest tens of billions of US dollars to go long.

I don't know if this guy still has the courage to say this at this moment.

Do you still dare to hold your long position of 40 lots until the referendum result is announced tomorrow?"

"I'm afraid that Godfrey's 'Huifeng Huanyu No. 1 Hedge Fund' has already reduced its positions and stopped losses on a lot of positions?" Kong Fansheng said, "The market situation has taken a sharp turn for the worse. As a mature fund manager, even if the underlying logic of the trading strategy has not changed, the market trend has exceeded previous expectations and plans. It is reasonable to respect the market trend and take corresponding stop-loss remedial measures."

"It's hard to say." Su Yi said, "In the financial market, it's not that easy to correct mistakes immediately."

As expected, just as Su Yi expected...

Just when the fund managers of the three major short-selling institutions, Huayi Capital, Huayin International and Aberdeen Asset Management, all breathed a sigh of relief and were delighted with the trend of the pound sterling exchange rate.

The trading department of 'Huifeng Global No. 1 Hedge Fund' also located in Hong Kong.

Godfrey, the main hedge fund manager, was anxious and kept asking Jeremy, the head of the market intelligence department, for the latest news.

Due to the firm belief in going long on the pound exchange rate.

It is also because of the firm belief that the Bank of England will continue to invest huge amounts of funds and will release large amounts of US dollar foreign exchange reserves to maintain the exchange rate trend of the pound.

This is the main fund product he is in charge of.

With 40 long positions in hand, when the pound exchange rate just plummeted and quickly fell below the 1.5000 support platform, he did not have time to reduce his long position even by one lot.

This means that the floating loss of the long position in the pound sterling exchange rate held by the main fund product he is in charge of has reached nearly US$5 million.

"No, the Bank of England still hasn't made any new trading arrangements." Jeremy said, "Regarding the news about tomorrow's referendum, there are no new preliminary vote count results. It is estimated that further news will be clear... It will be better after the official referendum starts tomorrow."

"If we really wait until tomorrow when the referendum officially begins, it will be too late." Ernest, the head of the market research department, said, "The market has already begun to turn from long to short, Mr. Godfrey... My suggestion is that we should reduce some of our long positions at this point and control the risk of holding positions while the fund's losses are still within an acceptable range. What do you think?"

Godfrey glanced at Ernest, then turned his gaze back to the trend of the pound exchange rate. After thinking for a while, he said, "We have missed the best opportunity to reduce our positions. At this time, the bearish sentiment in the pound exchange rate market has been vented. There is no need to reduce our positions to stop losses."

"Well, I agree with what Mr. Godfrey said." Trading team leader Gerald responded hastily, "Although the preliminary vote count results in several major Scottish regions such as the Shetland Islands, Orkney Islands, and the Hebrides Islands are far beyond the expectations of the institutions, overall, the referendum result tomorrow is still likely to lean towards staying in the EU.

In other words, the underlying logic of our trading strategy has not changed.

In the past one or two hours, the reason why the pound sterling exchange rate has fallen sharply by hundreds of points is still driven by emotions, coupled with the deliberate actions of the main short-selling institutional groups in the market.

I observe the changes in long and short positions in the entire market, especially the changes in positions of major global institutions.

It was found that although the number of long and short positions changed dramatically, the positions held by major institutions did not change much.

Currently, under the short-term negative stimulus and the deliberate guidance of various major short-selling institutions, the short-term market sentiment of the pound sterling exchange rate has been vented.

For many short-term speculative funds during the day, long positions have generally completed stop losses.

And the shorts are taking profit and covering in large quantities.

In other words, in the pound exchange rate market at this time, the potential momentum for a sell-off is far smaller than the momentum for a rebound.

In this case, we definitely cannot carry out large-scale liquidation and stop-loss operations at this position due to the influence of market sentiment.

If we did this...

That is helping our opponents to suppress the game, which is totally disadvantageous to us.”

"From the market trend, the pound exchange rate has actually fallen below the previous oscillation platform range." Ernest said, "That is to say, the trend of the pound exchange rate has chosen to break downward. If we blindly judge the short-term sentiment changes at this time, and think about waiting for the pound exchange rate to rebound rapidly and reduce losses, and then appropriately reduce positions and stop losses, if we encounter new negative market conditions, the pound exchange rate goes against the technical trend and further falls directly, and continues to break through the support of 1.4500, the consequences... will be unimaginable."

"It shouldn't be." Gerald said, "The market has no momentum to fall at this moment."

"Probably not?" Ernest chuckled. "This is not the judgment and strategic logic that a mature trader should have."

"Okay, no need to argue." Seeing that there were considerable differences of opinion among the team, Godfrey continued to ponder for a while before raising his hand to interrupt the argument between the two sides and said, "The overall trading strategy remains unchanged, and we will continue to hold our positions and see... The guy named Su from Huayi Capital was able to withstand hundreds of millions of dollars in losses and hold his positions firmly despite holding a huge short position. Why should we not be able to do the same?

Since we have chosen to enter the market at this critical juncture of the Brexit referendum.

Choose to gamble on this battle between bulls and bears.

So, at the critical moment, we must not be cowardly, nor should we waver in our confidence in holding positions, because once the confidence is shaken, it will be difficult to truly correctly judge the direction of the market and it will be difficult to analyze its fundamental logical changes.

In the financial market, if you can't withstand losses, you naturally won't be able to hold on to profits.

I just don't believe that the Bank of England can completely abandon the foreign exchange market and the exchange rate of the pound. I just don't believe that this referendum on Brexit, which is obviously a farce, can actually turn into the fact of Brexit.

After all, among the current senior British government officials.

It is in the best interests of these people to continue to stay in the EU and continue to be tied to the EU economy.”

"But if the pound sterling exchange rate moves beyond our expectations again..." Ernest paused and continued, "What if the pound sterling exchange rate quickly falls below the support level of 1.4500? You know... the black market exchange rate is still collapsing at this moment!"

Godfrey gritted his teeth and said, "If the pound exchange rate continues to deviate from our expectations, if the pound exchange rate actually falls below the 1.4500 mark, then we will follow the strategy you mentioned and conduct large-scale concentrated stop losses."

"Okay." Ernest nodded and sighed helplessly.

Godfrey knew that he was facing internal disagreements and was firmly bullish despite huge floating losses. If anything went wrong, he would be fully responsible, so for a while, he felt even more pressured.

Fortunately, his judgment was basically correct.

As the market trading hours continued, the pound sterling exchange rate rebounded after hitting a low of 1.4805.

At 2 a.m. Yanjing time, the pound exchange rate returned to 1.4870, rebounding more than 60 points from the bottom.

At 2:41, the pound exchange rate returned to 1.4940, and there is only 1.5000 points of space left before it can re-enter the 60 mark.

At 2:49, the pound sterling exchange rate rose to around 1.4960.

However, the pound sterling exchange rate rebounded strongly again in just over an hour.

Godfrey stared at the market and hesitated for a moment, but he was still unwilling to carry out large-scale liquidation at this position when the fund still had a floating loss of nearly 3 million US dollars.

But also missed the opportunity to reduce positions at previous high levels.

At this time, the two affiliated institutions, Mitsui Yoshitomo Investment Co., Ltd. and Tianhe Capital, which were also expecting the pound exchange rate to return to the 1.5000 mark, were also reluctant to carry out a concentrated large-scale liquidation of their long positions when they were holding large floating losses.