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Forex trading like banks

Forex trading like banks is a term you see all over the internet these days. What’s funny, is that the people that tell you to trade forex like a bank, have never worked at a bank and don’t even know why big banks exchange foreign currency. These people make it seem like a bank is controlling the entire market and planning every single move. This is not the case. Do you want to know more about forex trading like banks? Then read this article.

What do people mean when they say “forex trading like banks”?

Whenever you see forex trading like banks, people will make you believe that certain candles are created by banks and that banks move price this way and that way. Now, there is some truth to this. Huge players can move markets and can absorb liquidity to create an advantage. However, it’s not like most people will make you think this process goes.

When people, or educators, are talking about forex trading like banks, they highlight candles that banks make and they draw levels that banks also supposedly used to trade. You have to realize that a bank is not looking at an MT4 chart and planning to trade once a certain level is hit. This is not how they operate. Thinking this is flawed thinking and will harm your trading performance.

What do big players in the forex market do?

Like I said earlier, banks don’t plan big directional moves in the markets in order to fuck retail traders. They enter the markets to fill orders, generate liquidity and to hedge their longer-term investments or trades. This is what the banks do. This is forex trading like banks. This is not how us retail traders can and will trade. This is not how we can profit from trading the forex markets.

There is a real difference between retail trading and institutional trading. We try to profit from small directional moves. This takes a different approach.

How to actually start with forex trading like banks?

Now that we have the bullshit out of the way, let’s get serious: how to start with forex trading like banks? The way I always explain forex trading like banks, is that you are as prepared as possible and you treat your trading like you are running a business. Banks don’t just draw lines and enter. Every position they take is well-calculated. They know exactly what they need to buy, when they need to buy it and how they need to buy it. They know the costs involved. That’s how you should approach trading as well. But how can you actually do this? By following the following principles:

· Knowing your edge

· Having multiple plans

· Reviewing & learning

· Minimizing costs

These are the most important points to consider when you want to become a profitable trader. These are, in my opinion, how you start with forex trading like banks. So, not by learning a concept that banks “supposedly” use, but by approaching trading the same as banks & professionals do.

Knowing your edge

This is something I spoke about before, and I will do it again: know your edge. Know why you deserve to make money trading. Most people don’t have an edge and the ones that do don’t know their edge, therefore they fail. It’s absolutely vital to know your edge and that’s why we at CDFX Trading put so much time into edge development. Without an edge you fail. Without knowing your edge you fail. So, start by asking yourself the following questions:

· Do I have an edge?

· What is my edge?

· Why & how does my edge work?

If your answer to the first question is “no”, then you know what you need to do in order to improve. You need to get an edge. How do you get one? By learning concepts that work in a market. Then you start with building rules around th