The Truth About Automated Forex Trading robot

Several years ago I was in search of trading that was as simple to understand and execute as possible. I had researched so many systems in 10 years of studying and trading and one thing they all had in common was complexity and vagueness. Everyone that claims to have the holy grail says it is a no brainer but when you start to dig into the nuts and bolts of the system you always find glitches. You will start to uncover little tweaks that the system promoter says you have to adjust for one reason or another.

After awhile you have so many tweaks that you begin to wonder if this a system at all. Many times I have asked myself if I would not do better by just flipping a coin. On most systems flipping a coin would be better. This is sad but true. You see the only trading system that is dependable is money management. I know that you hear this glossed over in every book and system out there but the truth is that 99% of success in trading any market is due to money management. This is the dull side of trading and when you are trying to sell a million copies of a book you have to advertise the flashy side of trading.

A good example is to ask someone what they need to do to put more money into savings and a retirement fund. Most, if not all people respond that they need to earn more money. Wrong answer! The correct answer is by setting and sticking to a budget that allows for money to be saved. You see, for most people earning more money is not as easy as just saying the word. Most of us depend on someone in a supervisory position to award us a pay raise. This means that for the most part earning more money is not in our control. How we budget our money on the other hand is totally within our control. This is why if you are going to make a true change in your finances that you have to choose budgeting to achieve your goal. The reason most people say earn more is because in the back of their mind there are other appealing aspects that go along with earning more money.

Trading systems are the same. It is much more appealing to think that you will by a system and it is going to make you rich. Millions is spent each on trading systems, tapes, seminars, and courses. With this many people buying all this stuff and going into trading America should be bursting at the seams with trading millionaires. That’s not exactly the case though. Why not? Because you can have a great system to trade with, but if you can not manage money you will not make money and in the long run you will lose. The only way to make a true change in your trading is also through a money management strategy.

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The first of a two part article….
Fund managers, whether they be equity or bond traders, know all too well that returns are not simply a result of their asset selection prowess.  Many external factors come into play.  But what are the issues facing the professional money manager.

Commodity Trading Advisor, Genuine Trading Solutions of Toronto, find not all fund managers analyze their market risk.  The company explains this is often due to a lack of education and a failure to understand the mitigating solutions for off-setting risk.

Genuine Trading Solutions President, Dwayne Strocen explains market risk as “the unexpected financial loss following a market decline due to events out of your control.”  He goes on to explain that stock or bond market volatility or market reversals can be the result of global events happening in far flung corners of the globe.  Top analysts and fund managers simply do not have the resources to crystal ball gaze and predict those events.

Examples of several major unexpected events that sent shock waves throughout the financial community have been:

-    1982 Mexican Peso devaluation;
-    1987 stock market crash knows as “Black Monday”;
-    1989 USA Savings and Loan Crisis;
-    1998 Russian Ruble devaluation;
-    1998 $125 billion collapse of Hedge Fund Long Term Capital Management;
-    2006 collapse of Hedge Fund Amaranth with losses of $5.85 billion.

In 1994 Bank J.P. Morgan developed a risk metrics model known as Value-At-Risk or VaR.  While VaR is considered the industry standard of risk measurement, it has its drawbacks.  VaR can measure total dollar value of a funds risk exposure within a certain  level of confidence, usually 95% or 99%.  What it cannot do, is predict when a triggering event will occur or the magnitude of the subsequent fallout.  For some company’s and funds, a steep decline or protracted recession can be devastating.  Even forcing some un-hedged firms into bankruptcy.  A triggering event can have a ripple effect forcing people out of work and economies into recession effectively putting more people out of work.  No person and no economy is immune.

If you own a mutual fund, chances are your fund is un-hedged.  Until recently, mutual fund legislation prevented mutual funds from hedging.  Many jurisdictions have repealed this rule however mutual fund managers have been slow or decided to continue with ‘business as usual”.  The reason is that most investors of mutual funds are unsophisticated and do not understand the hedging process and may re-deem their money from an investment strategy they do not understand.

Hedge funds on the other hand do not have these restraints.  Investors are more sophisticated and are more open to the nature of hedge fund strategies.  Some of which are not disclosed due to a fear of piracy by competing hedge fund managers.

Risk reduction solutions are not complicated but do require the services of a professional who understands the process.  This is the role of Commodity Trading Advisor firms such as Genuine Trading Solutions, also known as a CTA.  President, Dwayne Strocen states that while most CTA’s are hedge fund managers, few specialize in risk management analytics.  Our focus is on the analysis of solutions to reduce or eliminate market and / or operational risk.  No matter the role, all Commodity Trading Advisors are specialists in the derivatives market.

The first step is the value at risk calculation to determine a funds risk liability.  A risk mitigation strategy known as a hedge is then implemented.  After all, identification of one’s risk is only beneficial if a solution to off-set that risk is put into place.  Hedging requires the use of derivatives, either exchange traded or over-the-counter.  They can take many forms.  The most commonly used hedging instruments are index futures, interest rate futures, foreign exchange, exchange traded commodities such as Crude Oil, options and SWAPS.

A more detailed explanation of derivatives and hedging will be discussed in our next article.  Now that we’ve identified an easy solution for your market risk worries, the implementation of the right strategy can be as easy as a call to a qualified and registered Commodity Trading Advisor.

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Currency Trading PlatformsTo make the currency Forex trading easier, several companies provide cash Forex online trading. There are the majority of service offered among this activity. The mounting can be as lower as likely sometimes it may that much connect with just a pip. The currency that you like to trade can also be withdrawn form the trading charts itself. Most of the companies apply no conditions or restrictions on the orders of entry. The orders will be executed with just a click. Moreover they will be ready to accept all advisers experts of MT4 specialization. Some companies will also provide you an excellent opportunity for opening free records. You also trade through various platforms available for currency Forex online trading. They will provide as much as possible free information. It will help you out to make your decisions on trading much easier process. They use all the modern technique tools to feed all the streaming trade quotes. You can download these trading platforms online. Currency Trading Platforms All that you have to do is just open a demo or a permanent account. They will also provide some tutorials to learn perfectly about this platform. Apart form this to make the clients convenient wireless trading and contract sizes trainings are also provided. Forex currency trading is a great way to start earning money in the global market. If you learn the game and how to maximize your earnings you can make quite a lot of money with online currency trading. Be sure to study and know what you are getting into cause you can also lose a chunk of change. Stop what you are doing RIGHT NOW and get your Life Changing Currency Trading Platforms Program. It’ll change your Life Forever!

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