Forex Cartel cheat you by manipulating the London fix!
A currency fix is when global exchange rates are calculated every day at 4 p.m. London time. The forex market is open 24 hours a day, but with London accounting for about 40% of the daily trading volume, its close is used for benchmark rate calculations.
There is a 60-second window at the end of the trading day when the rates are calculated. Money managers across the globe use this price fix to determine the price of portfolio assets, making it very important.
The alleged price manipulation by The Cartel can be compared to what is known in the U.S. as "marking the close." That is when a large trader artificially influences a stock's closing price in a direction that unfairly benefits the trader.
The forex trading pool allegedly colluded via private message boards to discuss positions and orders on their books. Knowing each other's positions, the traders allegedly devised a strategy leading into the 60-second price-fix window that would be profitable for their price fills. The traders would front-run client orders as well as push through a large volume of orders to manipulate the closing benchmark prices.
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