The Latest Way For Forex Brokers To Make Money

tundeakins · #1 (**permalink**) 09-03-2008, 05:44 PM

What are the latest way forex brokers are secretly stealing money today?
To be sincere with you.
Newstrading is the latest way for forex brokers to make money which they can only make if a lot of fools do a lot of foolish things consistently. They want you to try to trade the news. Just as they touted 200:1 5 minute chart MA cross overs, RSI, Stochs, Fibs and every other BS technical analysis FAD to make you do many highly leveraged trades that will get you nowhere but get them coining the profits on your highly leveraged trades.

News trading is a losing strategy for news traders and a winning strategy for brokers (just as every other strategy ever touted by any forex broker).

It is punted by the brokers as the latest and greatest new thing. It is. For them. They want you to trade. But they don't want you to make money at their cost. It is impossible for them to hedge against news trading, so they must make sure they don't lose to news traders. If, doing this news traders unfortunately lose (to them) well, everybody can't be rich

ChampionFX they don't allow entries beforehand because they want you to try to out shoot the other news traders while they manipulate the prices up and down to make sure almost everybody gets shot in back of the head.

Some of these companies have structured everything to perfection and some of these forex forums stupidly play along. Set up the news trading shoot-out by saying this or that data release is HOT or 5 star or whatever. (The big give-away is that the weekly jobless claims are supposed to be a hot item. Professional forex traders don't even take notice of it. I kid you not. I look at the weekly data schedule a big investment bank send their clients. Weekly jobless claims is not mentioned EVER.) Analysing the expectations and if this then that and if that then so and bla bla bla. (Most of the time they have these basic if the number is better / worse, then this will happen in any case wrong. And the reason is that the people that tout this BS never watched a news release in their lives before a few months ago. They were to busy searching for the holy grail in ther andomness of 1,5, and 15 minutes price changes and BS technical indicators). They have absolutely no clue of how these news release relate to the forex story line.

At news time they, rip quickly fill the close entry orders ont eh wrong side exaggerate the initial spike while ripping clsoe stops, take all the fools on board, immediately rips it back, rip the stops of this lot, pull it back further to encourage the reverse entries, take them on, rip the stops, 10 - 20 minutes of maniac games. News traders lose broker win.