BecomeSelfMade

[Argonath]

I know I am late on replying to this, but there are a number of factors that can cause an open trade to become a loss.

1. News.

A great deal of Forex is tied to the news cycle of countries. The US has a number of reports that affect the strength of the Dollar... unemployment, CPI/PPI, Fed int rates, FED meetings, etc...

Remember... right now, the US Dollar is the reserve currency of the world. It affects most, if not all other currencies to one point or another.

2. Swaps

Currency trading between central banks entials a system known as 'swaps'.

A currency swap (or cross currency swap) is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped.

These are in a sense, 'hedges' between banks to cut the risk of loaning or selling currencies such as Treasuries to entities or countries. There is a time limit on when the principals and interest (swaps) are to be paid, and that affects the worldwide currency markets daily, weekly, or monthly.

3. Commodities

Oil, gold, etc..., along with natural and man-made events can change currencies in a moments notice. Even though the Chinese Huan isnt a floated currency for trading, the earthquakes that have been occurring there will affect the value and strength of their currency... especially if their central bank needs to 'print money' (causing inflation without an interest rate raise) to be able to pay for short term catastrophie aid.

Right now for example, in the last 4 months, the Fed has issued (lent) to banks 16% of the total amount of US Dollars printed and used in the world. In essence, without raising or lowering int rates, they have inflated the US Dollar 16%... this causes the value daily to rise or fall against other currencies.

So much happens in the course of a day with Central Banks, News, events, etc... that can swing a trade up or down at a moments notice. But like the stock markets, the law of averages... which PBoxer is based on, will normally ential much more wins than losses because even currencies are governed by the laws of support and resistance.