How One Can Make Money In Forex

 Earning money in Forex is simple if you know how the bankers trade!

How to make money in forex trading

In my instructional Forex writings, I am often perplexed as to why so many traders fail to make consistent money from forex trading. The answer has less to do with what they do know and more to do with what they do not know.

 After years of working in investment banks, many of which as a  Trader, it is second nature to know how to extract cash from the market. It all boils down to understanding how bank traders execute and make trading choices.

Why? Bank traders account for just 5% of all forex traders, with speculators accounting for the other 95%, however that 5% of bank traders account for 92 percent of total forex volumes. So, if you do not know how they trade, you are just speculating. First, let me debunk the first fallacy regarding institutional forex traders. 

They do not sit around all day making proprietary trading judgments. The majority of the time, they are simply carrying out transactions on behalf of the bank's customers. It is frequently known as "cleaning the flow." They may execute a few thousand trades per day, but none are for their proprietary book.

Also  Read : How To Grow Small Forex Trading Account

How do banks trade Forex?

They only make 2-3 trades each week for their personal trading account. These are the trades on which they are rated at the end of the year to determine whether or not they earn an extra bonus.

So, as you can see, bank traders do not sit about all day 'scalping' in order to meet their budgets. They are quite analytical in their approach and make trading choices when everything lines up, both technically and conceptually. That is all you need to know!

It is relatively basic in terms of technical analysis. When our clients first come to us, their charts often astound me. They are often strewn with mathematical indicators that not only have substantial 3-4 hour time delays but also frequently contradict one another. Trading with these indicators and following this approach is the fastest way to deplete your trading capital.

wrong trading analysis

The charts of bank traders look nothing like this. In reality, they are diametrically opposite. They just want to know where the crucial levels are. Remember that these indicators were created to attempt to anticipate where the market will go. 

The market is dominated by bank traders. You do not need indicators if you understand how they trade. They make split-second judgements based on key technological and fundamental shifts. Understanding their technical analysis is the first step in becoming a good trader. You will be trading with the market rather than against it.

It ultimately boils down to plain support and opposition. There was no clutter, nothing to influence their trading selections. Simple, effective, and emphasizing the key points.

 I will not get into the specifics of where they enter the market, but let me say this: it is not where you expect. The trendlines are simply there to show key levels of support and resistance. Entering the market is a another topic entirely.

correct analysis

How can one make money in forex?

The key part of their trading judgments is taken from economic facts. The market's fundamental background consists of three primary regions, which is why it may be difficult to predict currency movement at times.

Also  Read : Practical Forex Tips

When the political environment is countered by central bank statements, currency direction becomes rather fragmented. However, when there are no political difficulties and central bank policy is implemented in line with economic facts, we have pure currency direction and the large patterns develop. This is what bank traders are looking forward to.

The basic aspects of the market are exceedingly complicated, and mastering them might take years. This is a primary focus of our two-day event to ensure traders have a thorough understanding of each topic. If you understand them, you will be set up for long-term success since this is where currency direction originates from.

Trading economic data releases has the potential to make a lot of money. The key to trading the releases is divided into two parts. First and foremost, you must have a thorough understanding of the fundamentals and how certain releases affect the market. Second, you must be able to execute trades precisely and without hesitation.

 If you can master this part of trading and have the confidence to trade the occurrences, you will be well on your way to making large capital advances. After all, it is these economic releases that actually drive currency movements. 

These are the same economic releases that central banks base their policy decisions on. So, by watching the releases and trading them, you will not only know what is going on in terms of central bank policy, but you will also be developing your capital at the same time.

To be genuinely successful, you now want an exceptionally complete capital management system that not only protects you during times of uncertainty but also propels you ahead to enjoy capital development. This is your whole company strategy, thus it is critical that you nail it first.

Our strict capital management system properly incorporates your risk-to-reward ratios, capital restrictions, and our trade strategy – entrance and exits. When trading, all you have to worry about is locating entry points. 

Having such a system in place will also relieve the stress of trading and allow you to go about your day without having to spend endless hours monitoring the market.

I can tell you that most bank traders spend the most of their day strolling around the dealing room speaking with other traders or going to lunch with brokers. They seldom spend more than a few hours in front of a computer.

 You should use the same approach. You can if you understand the market's technical and basic features and have a complete professional capital management system.

From here, all you need is a basic understanding of the key tactics to apply and where to apply them, and you are good to go. Trust me, if you know how bank traders trade, you will enjoy greater capital growth than you have ever experienced before.

 Many traders have attempted to mimic their strategies, and I have seen a slew of publications on "beating the bankers." But the idea is that you do not want to be competing with them, but rather joining them. That way, you will be trading with the market rather than against it.

So, to summarize, there are no amazing secrets to trading forex. There are no unique indicators or machines that can replicate the dynamic nature of the forex market. You simply need to understand how the market's key participants (bankers) trade and analyse it. If you get these factors perfect, you will be well on your road to success.

How you make money trading and investing in the markets is no different from how you make money buying and selling everything else in life, and this fundamental notion never changes.

 The only difference between Costco and JP Morgan is what they sell, not how they operate or how much money they make and lose. Costco purchases the things at wholesale costs, marks them up, and then sells them to us at retail prices. 

JP Morgan purchases stocks and bonds at wholesale rates, marks them up, and sells them to us at retail prices. It is the same business approach, only with a new product.