Davidee

Here's an article on brokers trading against you if you are interested. In short, it says the following. Brokers tend to fall into one of the three categories, Market Makers, STP brokers and ECN's. An STP broker passes all it's clients trades directly to liquidity provider and has nothing to gain from it's clients losing and never trades against them. If anything, an STP broker would want to see it's clients succeed and make money so that they keep on trading. ECN brokers simple provide a true market place where all their clients, retail traders, banks, financial institutions can trade against each other on an equal basis - ECN brokers don't care which of their clients wins and which of their clients lose as they're clients are effectively trading against each other. Market Makers (brokers with a dealing desk). These brokers initially take the otherside of their clients trades and in doing so literally make a market and provide liquidity. They could, if they wanted to, hold on to the otherside of their clients trades and profit from their clients losses if they wanted to but they probably don't. Most market makers probably just seek to match their clients trades with the trades of other clients who want to do the opposite and hedge the difference (what they can't match) in the market and seek to profit from the spread. Hope that helps.

Well it looks like they removed the link so you can't read it... There is no stop loss, and you should not use leverage either. I believe trades need to be taken out manually in the even of a 1987 or 2008 'black swan' but other than that stop losses will degrade the performance of any trading system by typically getting you out at a worse price than you otherwise could have.

I have one that you might be interested in but it's for stock market indices, not Forex. The rule is enter a long position whenever a stock market index closes at least 10% lower than the highest closing price in the previous 20 days and hold that position for 120 trading days.

A record breaking week indeed, but nevertheless it will provide long-term traders with some excellent buying opportunties. For example, there are mechanical trading systems that simply take a long position on a stock index when it falls 10% in a month or more and then hold the position for 24 weeks. The results on indices like the Dow Jones or the UK's FTSE 100 are that oveer 60% of these trades are winners and over twice as much money is won than is lost. They say that a fall of 10% is a correction, 20% falls or more often signals the arrival of a new bear market. Corrections need to be seen as opportunites.