Despite so many FX articles and educational references available online, it is still surprising to see why traders lose their money. They fail to make 3 consecutive trades at a go and as a result, end up drying out their accounts way before their own expectancy. However, experts state 2 reasons which could be the cause of this mishap. 1st – their lack of knowledge and inability to pick trades and 2nd – inadequate usage of their trading strategy! One good suggestion which these experts share is catering to bank Forex trading strategies.
Simply put, one just has to think how banks trade. Statistically, it is seen that bank traders (including those following bank Forex trading strategy) constitute 5% of the total trading population. One may argue that this ratio is pretty less. Yet, this percentage of traders account for around 92% of all Forex volumes existing.
Surely, they must be doing something right if they make for such a colossal trading volume and for newbies, this post will explain some of those Forex trading strategies.
A Look into That Forex Trade Bank Strategy:
Most financial institutions or banks carry out around 3-4 trades in week with their own trading accounts. At the end of the FY, their profit or loss is evaluated. So, as one can make out, their way of trading is very different.
One would not find them scalping trades randomly in trying to gather profits. Their procedures are more meticulous and whatever decisions they make is after checking every aspect of the market. This applies in both the technical part and more importantly, in the fundamental aspect.
In respect to this, some experts clearly point out that their strategy is more dependent on fundamental analysis. Their technical charts are fairly simple. More so like a simple Price Action chart in comparison to a normal trader’s chart littered with Bollinger band, 100 Hour Moving Average, Fibonacci Retracement, Parabolic Stop and Reversal, etc.
How Do They Make Money?
Most banking sectors make their money deriving information from economic fundamentals. Bank Forex Trading strategies take a good look at the political situation which counters the Central Bank announcement. This somewhat disjoints the currency direction and prove to be the areas which are dicey for trading. Contrarily, during phases of no currency movement and most Central bank policies working agreeably to existing economic data, the big trends come about.
With the use of a banks Forex strategy, these traders capitalize on the pure currency directions and take the profits.
Crucial Tips for Newbies:
For those who want to trade with banks Forex trading strategy, they should learn to read economic releases properly. There is a lot of money which can result from these outbreaks. For starters
There are about 7 primary releases, 56 trading opportunities occurring every month.
In a month, there are around 20 trading days (which is again plenty of time).
Every day, around 2-3 big trades come about.
So, it’s safe to say that opportunities galore and all one has to do is watch these economic releases regularly and have patience. Along with that, they should also learn to implement proper money and risk management skills to ensure they bring in cash than eradicate them.
These are some of the rudiments of high yielding bank Forex trading strategies. Do make good use of explanations and information and secure your worthy share for this global treasure chest.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.