Forex trading is quite popular around the world. However, many traders are struggling when it comes to making consistent money out of forex trading. Importantly, it all comes down to understanding how the traders at the banks execute and make trading decisions.
Interestingly, bank traders only make up 5% of the total number of forex traders, with speculators accounting for the other 95%. Nevertheless, that 5% of bank traders account for 92% of all forex volumes. It is worth noting that, people should learn more about bank traders and how they trade.
Some people may not be aware that, traders don’t sit there all day banging away making proprietary trading decisions. Interestingly, they spend most of the time, simply transacting on behalf of the bank’s customers. Moreover, it is commonly referred to as ‘clearing the flow’. Traders may perform a few thousand trades a day. However, none of these are for their proprietary book.
Bank traders, forex, and interesting details
It is worth mentioning that, bank traders only perform 2-3 trades a week for their own trading account. Notably, these trades are the ones they are judged on at the end of the year to whether traders deserve an additional bonus or not.
Importantly, traders are extremely methodical in their approach. Moreover, they make decisions when everything lines up, technically as well as fundamentally. Let’s discuss the bank trader’s charts to learn more about forex trading. Peoples should keep in mind that, all they want to know is where the key critical levels. As a reminder, these indicators were developed to try and predict where the market is going.
The bank traders are the market and if a person understands how they trade, then this person doesn’t need any indicators. Notably, traders make split second decisions based on key technical and fundamental changes. This, understanding of their technical analysis is the first step to becoming a successful trader.
Notably, it all comes down to its simple support and resistance. No clutter, nothing to change their trading decisions. Importantly, simple, effective, and highlighting the key levels.
Let’s discuss an important aspect of forex trading, how to make money in forex. People should remember that the key aspect of their trading decisions derives from the economic fundamentals. The fundamental backdrop of the market consists of three main areas. Consequently, that is the reason why it is hard to pinpoint the currency direction sometimes.
Trading and central banks
Forex trading is not as hard as it may appear at the first glance. Importantly, when a person has the political situation countering the central bank announcements currency direction is somewhat disjointed. However, when there are no political issues and formulated central bank policy acting following the economic data. That is when people get pure currency direction and the big trends emerge. Notably, traders are waiting for such moments.
People should pay attention to economic data releases. Interestingly, the key to trading the releases is twofold. Let’s have a look at the first one. An excellent understating of the fundamentals and how the various releases impact the market.
Let’s discuss the second one. Importantly, knowing how to execute the trades with precision and without hesitation. If a person can get control of this aspect of trading. Moreover, if a person has the confidence to trade the events then this person is truly set up to make huge capital advances.
It is worth mentioning that, these economic releases direct the currencies. Notably, these are the same economic releases that central banks formulate policy around. It means by following the releases and trading them, a person knows what is going on with regards to central bank policy. Also, a person will be able to build the capital at the same time.
Last but not least, there are no miraculous secrets to trading forex. A person simply needs to understand how the major players (bankers) trade and analyze the market.