How to Trade FOREX Without the Broker Being Able to See the Trader's Trades
A dealing desk, or DD, broker is a market maker that trades against its customers, so it's important for traders to hide their intentions from a DD broker --- otherwise the broker may benefit from asymmetrical information regarding traders' price limits and stops. For instance, if prices are approaching the stop loss price for a trader's position, a broker may manipulate the current price so as to trigger the trader's stop --- the trader loses and the broker wins. Trading robots can be used to place FOREX orders dynamically and thus curtail DD broker abuse.
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Instructions
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Install a FOREX trading robot software. Robot software is sold over the Internet; follow the installation instructions that accompany the software. These robots usually have a "stealth mode" that traders use to dynamically open and close trading positions. Normally, a FOREX trader creates an entry order consisting of a limit price to open the position, and stops to take profit and close out a loss. The automatic trading software in a FOREX robot replaces a trader's entry orders with real-time dynamic order entry based on current prices.
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Configure the robot's trading strategies.This depends on the robot you're using, but it typically involves setting the robot's trading rules. You select which technical indicators to monitor and how to set your trading stops --- consult the tutorial accompanying the robot. Trading robots typically support multiple trading strategies. Each strategy is based on one or more technical indicators, such as moving averages and momentum oscillators. When robots use several different trading strategies, brokers are much less likely to recognize a trader's signature trading style, facilitating anonymity.
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Engage robotic trading. After you configure the robot's strategies, set the robot to "Stealth" mode and commence trading. The robot's logic executes trades to enter and exit FOREX positions as prices change. No entry, take-profit or stop-loss orders are entered; instead, the robot closes out a position when prices hit the robot's precalculated exit level. In this way, the DD broker has no warning of the trader's stops.
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Tips & Warnings
If you're concerned about hiding your trades from your broker, consider finding another broker. A nondealing desk broker is a better choice: This type of broker doesn't trade against its customers and exposes all orders to the FOREX interbank market. This market is far too large and liquid to be manipulated by a broker and is a safer bet for traders with privacy concerns.
Trading robots may introduce new problems as they solves the privacy issue. For instance, the trading rules you programmed into the robot may lose their effectiveness over time. It's therefore important to constantly monitor and update your trading strategy. Traders should thoroughly back-test trading strategies and run a series of hypothetical trades before committing money to live FOREX trading.
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