11. Black Swans and Rogue Traders
No market or investment is a sure thing. Foreign exchange investors must be especially careful, because the Forex market can be blindsided from many different directions. Nothing in the Forex market is "unthinkable." A terrorist attack, an upset in an election, or an off-the-cuff comment from a government official can set off a storm of speculation and trading. Or perhaps a government simply does something everyone assumed was impossible—a devaluation or an intervention. These events are "black swans," which represent something utterly surprising and unusual.
The Inherent Instability in the Forex Market
Swings in currency value always seem obvious in hindsight, but those caught up in them almost never know ...