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Forex Strategy 10: Low Risk/High Return Currency Trading
Forex Strategy 10: Low Risk/High Return Currency Trading
by ROB BOOKER

 

Welcome to Forex Trading Guide

 

Currency Exchange Article

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The Risks Of A Forex Robot

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Who does not want to have some share with the $3 trillion market turnover that the Forex market gets everyday? If you are one of those newcomers who are learning how to be a part of the Forex trading market and having difficulty to cope with it, you would also receive a lot of talk about getting a Forex trading robot to help you with your trade.

We have hear how good this system is and how a lot of people have gained a lot from using it. But how good is it, really? Could it just be too perfect that we do not want to worry about anything. Contradictory to what most people think, Forex robots would also have downsides.

What are these negative effects?

• Heavy reliance on your equipment

A Forex robot is there to help you not to completely take over for you. A common mistake made by traders is let automated trading programs do the work for them and never ever put even small manual trading. This can turn into a trading disaster in the long run.

If you rely too much on your equipment, what would you do if your computer crashes or you robot encountered problems? Would this be the end for your trading career? Having sufficient knowledge in doing trade manually could save it, making it really essential if you wanted to succeed in Forex trade.

Another thing is that most traders that use automated trading system would just leave their equipment alone. Automated trading system, specifically, Forex robots have the feature called optimization. This would allow traders to check on previous trades and determine how trades have been won in the past. This would allow your system to improve its program. But, there would be times when the optimization process would be too much. It could keep improving its system until it sees that there are no losses on the data. But this could buy time and can even lose transactions in the end.

• Believing its magic

There is no such thing as a perfect system. There are some Forex robot systems that say that they have zero losses under their belt. Systems that claim this could happen aer actually losing their account. There are experts who say that system like this could actually earn a break-even after 20 years!

So, just the same with the first point, even if there are Forex robots that claim to have as much as 95 to 100 percent gain, relying on them too much and letting them do the trading without the trader getting involved could lead to disaster. But traders would have to dig deeper to understand that, actually, their account could end up dipping as much as 75 to 80 percent. Eventually, this could entirely deplete their account.

• Alert signs

Some Forex robots would use bad money management strategies, like stop loss could be larger that the target. Others would not have any trading strategy at all! Some would not allow backtest, which is something that traders should be conscious about.

Bottom line is that no automated trading system could make you rich by millions overnight or in weeks. The Forex market is unpredictable and could be exciting. But to succeed in this field, miracle-workers like automated trading system is not the answer. Of course, it could help or provide the necessary support in Forex trading. But still, a good trading mindset and skill could take you to a long way.

 

Currency Exchange News

Emerging Market Currencies, Debt Rally After Strong US Jobs Data - Wall Street Journal


Emerging Market Currencies, Debt Rally After Strong US Jobs Data
Wall Street Journal
By Erin McCarthy Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--An overwhelmingly strong US job reports triggered a rally for emerging market currencies and debt Friday. Data Friday showed US non-farm payrolls rose by 243000 in January, nearly double the ...

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WORLD FOREX: Euro Midly Higher As Market Waits For Payrolls - Wall Street Journal


Mainichi Daily News

WORLD FOREX: Euro Midly Higher As Market Waits For Payrolls
Wall Street Journal
"We shouldn't get much price movement unless the numbers give us a really big surprise," said Daragh Maher, foreign exchange strategist at HSBC. Currencies that tend to perform well in benign economic environments, such as the Australian and Canadian ...
Dollar Appreciates as U.S. Adds More Jobs, Damping Fed's Easing OutlookBloomberg
Dollar Drops Against Euro on Bets US Payrolls Rose Last MonthBusinessWeek
GLOBAL MARKETS-US data boosts equities, dollarReuters
San Francisco Chronicle
all 177 news articles »

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Dow at 4-year high, Nasdaq hits 11-year high - CNN International


Telegraph.co.uk

Dow at 4-year high, Nasdaq hits 11-year high
CNN International
"The jobs data blew away market expectations," noted Marc Chandler, global head of currency strategy at Brown Brothers Harriman, calling it a "monster" jobs report. "This coupled with other recent reports for January, show the year has begun off on a ...
World stock markets fall ahead of US jobs reportAsian Correspondent

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Despite Intervention, Brazil's Currency Gains - Wall Street Journal


Despite Intervention, Brazil's Currency Gains
Wall Street Journal
... the central bank might step in to stop the Brazilian currency from strengthening further. By the end of the day, the strong US jobs news overcame the effects of the intervention and pushed the real higher. "The market is watching the whole world, ...

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Daily Market Analysis: Currency Report - Forex Pros


Daily Market Analysis: Currency Report
Forex Pros
He also said that the recent currency moves appeared "one-sided." Tokyo will closely monitor the currency market moves and act appropriately, reports quoted him as saying. Azumi told Parliament on Thursday that the recent pick-up in the currency was ...

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Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, TRY - Currency News


Currency News

Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, TRY
Currency News
As ever, the market's reaction was volatile as speculators rapidly adjusted their positions. The shakedown is likely to see the Greenback weaken as global appetite for risk picks up. NEAR-TERM OUTLOOK – NEGATIVE. Whole of eurozone data disappointed ...
Pound exchange rates: GBP EUR jumps higher; GBP USD currency pairs heads lower ...Euro Exchange Rate News

all 4 news articles »

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Speculators On CME Shave Net Short Euro Bets 8%-CFTC - Wall Street Journal


Speculators On CME Shave Net Short Euro Bets 8%-CFTC
Wall Street Journal
That followed weeks of record-setting positions betting against the euro, as the currency union's leaders battle a crippling sovereign-debt crisis. Traders speculating on the Chicago Mercantile Exchange held a net 157546 contracts as of Jan.

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