Male from Abbeville, AL. It is common knowledge that equity traders often try to look for "advantages" over everyone else. This is the way some big time hedge funds, company professionals and also corporate insiders sometimes leverage non-public data to earn an edge and also earn an income for their firm.
It's known as Insider Trading, which is also just what caused The Galleon Group, which had been once one of major hedgies across the world, to shut its doors and also send its owner to imprisonment.
Okay, this particular illegal activity doesn't truly exist in the forex market and in the world of trading fx. Though not completely a level playing field regarding the leverage and impact of the huge international banking institutions or perhaps major hedge funds, it's more level compared to the equities markets where insider trading as well as market tampering goes rampant - which alone, is nice to know.
Say for example, your good old school friend is working at a giant European hedge fund and he is "in the know' that during the subsequent ECB meeting, they are going to increase rates upto 25 BPS. Thus you want to take a risk - since that is all you're actually accomplishing - and try and lever up to buy quite a few Euros looking to generate a profit. Guess what - nobody will do anything about it, nor can they really take action. This particular market is so vast and the kind of financial details relating to interest rate changes is so frequently leaked days before central bank events, that it doesn't make a difference.
In time, you can start to figure out what some of these governments are going to do. If you study the course of significant financial indicators, for instance the employment numbers, consumer spending and in current history, the housing market, and combine that with the tendencies of what central bankers have done in specific economic situations, you might have a pretty good understanding of where they will move rates.
Something else to consider is that there are a good number of people and establishments who trade by using an expert advisor or forex EA. When using this type of software program, you can set it to either make trading recommendations or automatically make trades in your stead, depending on your comfort level and risk appetite An FX expert advisor is a very agile piece of software which takes any data into consideration and trade according to this information.
There are literally hundreds of these products you can buy, so finding useful forex software reviews would only be prudent. People who use EA's trade depending on factors like maximum drawdown, income factor, expectancy along with efficiency. It doesn't make sense to use this information for insider trading One more reason that traders use forex EA's is because they have amazingly quick response times as they respond to price movements and perform a transaction in just a few seconds, which provides people an edge - again, this kind of technique is not dependent upon insider information.
Sadly insider information has always been a part of the financial markets - however not so much in the huge foreign currency market. If you really like trading fx, you're not going to make money from insider trading and you're going to have to be smarter to make money trading.
Does It Really Affect Forex Trading 4 years ago It is common knowledge that equity traders often try to look for "advantages" over everyone else.More...