You’re here because you’re most probably a struggling retail Forex trader looking for a holy grail trading strategy. It feels agonizing to imagine just how much you’ve lost while trying to trade Forex with the intention of making a profit.
It got me thinking and wanting to write this post for a very long time: are institutional Forex trading strategies any helpful to the average retail trader? And does such a thing even exist in the first place?
You see, when I first entered the Forex market, I was very excited because I was under the impression that trading was a way of making quick money.
I started off with binary options using a demo account at Binary.com. After playing with the demo account for at least 3 months, I realized that binary options was more like gambling because even with price action trading, I could still not make money consistently with every trade.
The thing with trading binary options is that even when you enter the market when it’s rising or falling, you could still lose on a trade if your timing isn’t right.
And then there is the issue of liquidity. If there is no sufficient liquidity to move the market significantly, then it doesn’t matter whether or not you enter the market using the right price action signals and at the right time. You will still loose. And if you win, it would be merely by chance. Of course this will not continue for a long time because your broker isn’t foolish to let you win all the time. I call this stupid gambling.
And now I found Forex. At first, I was very excited because with Forex trading, all my problems with binary options were solved. I could simply look for the right entry signal and enter the market without worrying of being kicked out of a position in loss due to time expiry limits.
But then, this was the onset of another serious problem in my Forex trading beginnings.
I was very curious to learn how to become a better Forex trader. I learned all the Institutional Forex Trading Strategies you can think about. I studied all Forex indicators on the internet in search for the holy grail of trading.
Then finally, I switched to Forex trading robots and got messed up. One particular robot blew my small amount in minutes as I was trading with less than $200 at the time. I did not go back to using Forex trading robots again until much later when I found a price action trading robot.
Now, before discovering Forex robots, I became accustomed to Forex indicators. I littered my Forex chart with one indicator after the other. My thinking was that the more indicators I used, the more accurate my signals would be.
Am sure you can related to this if you’re like me. When you’re new to Forex trading, somehow you will come to learn that more indicators do not necessarily mean that you’ll have an edge.
In fact, the less the number of indicators on an MT4 or cTrader chart, the more accurate your judgement becomes.
Institutional Forex Trading Strategies
This takes me to the title of this post —Institutional Forex Trading Strategies.
I want to ask you before we can proceed. Are Institutional Forex Trading Strategies the holy grail of trading? If you learn the way banking institutions trade, will you make money like them? Will it change things for the better?
Let me surprise you by saying that you won’t. Remember that you are a small fish. Small fishes don’t control big sea mammals like whales for example.
I see many snake oil salesmen selling all kinds of order flow analytics nonsense. Others claim that if you buy this or that Forex indicator, you will become successful due to one reason or the other. It’s not true.
The reason why you can’t make money even if you have Institutional Forex Trading Strategies at your fingertips
First, big financial institutions are funded properly and can afford to lose money. On the other hand, retail traders like us cannot afford to lose a coin.
Any money lost in the Forex market is a setback. To them, any money lost is a temporary setback that can easily be recovered by the next market entry.
Banks trade at least 2 or 3 times a week. When they do, they place volumes of trades at once, and you often see these movements in the market at certain times of the day.
Banking institutions make 5% of traders in the Forex market. The other 95% is made up of you and me, the average Joe who is trying to compete with them.
You’d be amazed that even with the best Institutional Forex Trading Strategies from a Wallstreet traders, you’d still lose your money somehow. Factor in things like broker cheating, your lack of skill, etc.
Note: I started with Octafx, but now I use Myfxchoice Forex broker. I love their spreads and trading environment in general.
Anyway, with your small capital, you can’t get far if you copy the way they trade. They can afford to stay longer in the Forex market. You cannot do the same — or at least your capital cannot allow you to do the same.
One big swing can kill half of your trading capital if it catches you on the wrong side. This is especially true when trading pairs like GBPJPY, NZDJPY, Gold, Bitcoin and so on.
Banks use trading strategies that are very simple but not suitable for the regular retail Forex trader.
They trade using fundamentals and technical analysis tools. Their approach is often very simple. And thus anyone looking for Institutional Forex Trading Strategies while imagining some supernatural trading techniques in their minds are just pursuing wind.
There is nothing like Institutional Forex Trading Strategies that work. If someone claims that they are selling bank Forex trading strategies, run because they most likely want to steal your money.
Instead of wasting time looking for Institutional Forex Trading Strategies, invest that time in working out your own formula
Successful Forex traders don’t follow the herd. That’s why they don’t get slaughtered in the pig sty.
Let me tell you one thing: If you’ve been around in this industry for at least 2 years and are not successful yet, there is nothing you haven’t learned up until now. You’ve learned everything there is to know in Forex trading.
But what you’re lacking is discipline to work out your own formula and stick to it. Instead, you are still pursuing the unattainable holy grail.
When I discovered that price action trading was better, I immediately dumped my ambition to search for the holy grail Institutional Forex Trading Strategies because I realized I could not measure up to the guys at Wallstreet who were not under any pressure to get rich quickly.
I mean, they are paid well. They drive fancy cars and book expensive holiday resorts. There trading psychology is always in check, not because they’ve learned what you haven’t learned, but because they don’t feel pressured to make money quickly. This automatically converts to less and less mistakes when deciding whether or not to enter the market.
My advice is this: quit searching what doesn’t exist. If you settle for price action trading for instance, learn it and perfect your skills according to your account size. Your psychology can be a bit difficult to tame because, truth be told, every one of us want to make quick money.
But that’s also why I recommend using Forex trading expert advisors because they are not influenced by what you are thinking.
Finally, if you don’t make it as a successful Forex trader, these tips on how to make money with Forex without trading will help you without subjecting yourself to too much risk.