Any forex trader that want to learn to trade the forex market like a pro only has to lean to trade like the banks do. So much has been said about the banks and how their trading method is the one stop shot for making it in the forex market. Well, there are other strategies that can be use to achieve success in the forex market but the strategy used by the bank is in high demand and the reason is simple. The banks pump in so much money into trading the forex market that they just control the way things go in the market.
The banks comprise of about 5% of all forex investors, while the retail traders take up the other 95%. As a result of the huge volume of trade capital at the disposal of the banks, they control a whopping 92% of the whole forex market volumes in trade. This is to say that 92% of securities traded in the forex market come from the banks, and that is how they are able to control the market with their volume. Because there is no way 8% volume in trades of the forex market can stand 92%. Another point to this is that the banks usually trade the same securities in the same position. That is to say that when they want to buy, they go all the way to buy; if they are to sell, they go all the way too.
HOW DO THE BANKS TRADE
From all that has been said so far, it is obvious that any retail trader that trades like the bank is in for a successful career in forex trading. The important thing at this point is to learn to trade like the banks. It is actually not as simple as it sounds; it takes a good study and practice to master it and start benefitting from it. Here is an outline of how banks trade the forex market.
They trade just twice a week, or trice, with highly methodological approach with regards to precised fundamental and technical analysis. Talking about technical analysis, there is no need for indicators. These indicators are designed to try to predict where the market is going. The bank directs the market, so there is no need for indicators. All the bank traders are after are the key critical levels in every trade. Traders often think that the trend lines are a good place to enter the market, but for the bankers, it is only an indication of the key support and resistance.
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