It is well known that equity traders many times try to seek "advantages" over their competitors. This is the way certain well known hedge funds, business officers and also corporate insiders sometimes trade on non-public information to earn an unfair advantage and also generate some money for themselves. It’s considered Insider Trading, and it is precisely what led to The Galleon Group, that was once among major hedgies in the world, to shut its business and also send its president to jail. Okay, this illegitimate activity doesn’t really exist in the forex market and in the realm of foreign currency trading. Though not completely a level playing field when it comes to the leverage and effect of the large global banking institutions or maybe large hedge funds, it is a lot more level than the equities markets where insider trading and market manipulation goes wild - and that in itself, is refreshing.
Say as an example, your old school friend is employed by a big European hedge fund and is “in the know” that in the next ECB meeting, they will uptick rates around 25 BPS. So you want to take a gamble - since that is what you are truly doing - and go and lever up to buy a bunch of Euros expecting to earn an income. Guess what - no-one will do anything about it, nor could they really take action. This particular sector is so huge and the kind of financial data pertaining to interest rate changes is so frequently leaked days before central bank meetings, that it does not make any difference. Once you've done this for some time, you can kind of get a good feel for the path that central bankers will take. If you study the path of key financial indicators, like the employment numbers, consumer spending and in current history, the housing sector, and combine that with the tendencies of exactly what central bankers have done in certain economic situations, you could get a pretty good understanding of exactly where they will move interest rates.
In forex trading, using an expert advisor or forex EA as a trading tool to supplement existing strategies is not uncommon, whether you are an individual or banking institution. When using this type of software, you can program it to either suggest trades to you or automatically make trades for you, depending on your comfort level and risk appetite An FX expert advisor is a really agile software program that can take any information into consideration and trade based on this data. There are literally hundreds of these software products you can buy, so looking for effective automated forex trading software would only be beneficial. Traders who use EA’s trade based on aspects such as maximum drawdown, income factor, expectancy as well as efficiency. It’s nonsensical to use this information for insider trading Another reason why traders make use of forex EA’s is mainly because they have incredibly quick reaction times as they respond to price movements and perform a transaction within seconds, that gives you an advantage - yet again, this type of approach is not dependent on insider information. However insider information has long been part of the equity markets - however not so much in the vast foreign currency market. If you like day trading forex, you’re not going to make money from insider trading and it will have to come from good honest hard work, good discipline and good trading instincts.