Copy Professional Forex Traders – For Your Success

Why are professional Forex traders paid so much? Because they move the markets! Your best chance of success is by learning to copy them

Have you ever stopped to think about who really moves the markets? Because sure as heck somebody does.

Like you probably, I’ve spent thousands of hours studying currency charts. And I’m sure you’ve noticed something which used to surprise me in the early days.

Let’s say you’re monitoring a particular currency pair. It moves up and down, up and down, just a little bit… for hour, after hour, after hour.

Like watching paint dry, isn’t it? You could be lulled into thinking nothing’s ever going to happen.

And then, with absolutely no warning, it goes ballistic. Either it shoots up like a rocket or it drops like a lead weight flung into the ocean. How can this happen? Why does it happen??

Who really moves the markets?

Now sometimes obviously it’s news, for instance an interest rate announcement. So you can understand that every man and his dog would be betting on a currency going in a particular direction.

But the interesting thing is this: it isn’t just a ‘big news’ phenomenon. It happens at other times. And it raises an extremely interesting question.

Who really moves the markets? Not me, that’s for sure. I could put my entire net worth on a single trade. (Not a good idea!) Wouldn’t change things by a jot. Everybody in the road where I live could put their entire net worth on a single trade. (Still not a good idea.) Wouldn’t change things by a jot.

There’s only one source of ‘big money’ in Forex trading

Let’s just have a quick look at the maths. It’s claimed that over $6 trillion is traded daily in Forex. Well I don’t know about you but I can’t even begin to get my head around that figure.

Let’s do a really rough guesstimate and reckon that most of the $6 trillion or so will be made up of the most prominent currency pairs.

Even if we divide it out and even if it’s skewed towards major currencies, like the dollar, pound and euro (rather than something like the New Zealand dollar or Canadian dollar), there’s still a huge amount of money traded for any relatively prominent pair.

Now who has this kind of money? Not you or I, that’s for sure. Not a hundred or a thousand or ten thousand of us. Yes, fund managers have a lot more capital to put into the markets.

But there’s really only one source of ‘big money’ in currency trading – the largest, most powerful banks. Only they have the power to make sweeping price movements in the markets.

It’s the professional Forex traders working for these banks who are executing these ‘big money’ trades. And precisely because the money involved is so astronomical, these lads (and ladies) can command such big salaries.

We have an indirect power which can be intensely valuable

What can we do about it? Well, directly, absolutely nothing. They have all the power. We certainly can’t compete with them.

But we do have an indirect power which can be intensely valuable. In fact it’s the entire basis of my trading philosophy. Let me explain.

My former Forex trading mentor once told me that one of his greatest insights came after watching a fishing boat coming into harbour.

Now you may be thinking, “What’s this got to do with trading?” But bear with me for a few moments. It’s got an awful lot to do with trading.

How to know where to hunt

My mentor noticed that a flock of sea-birds was following the boat. There were fish on the boat and fish guts were being flung into the water. (Ugh!) But the sea-birds were devouring them with relish.

The sea-birds were highly successful predators. They didn’t waste time searching for prey. They went to where they knew the prey already was.

They went to where they knew the prey already was! That was my mentor’s light bulb moment. Instead of chasing small movements of currency pairs, he decided to do something else entirely.

He knew that only the most powerful banks have the financial muscle to really move the markets. So he decided that, from then on, he’d shadow bank activity and act where they would be most likely to act.

He would learn to take advantage of their professional Forex trading strategies. In effect, he would become like them.

A simple, straightforward insight. Masterful in its simplicity. And yet it was like gold dust. After that, he viewed trading in a completely different light. His trading was transformed.

Sniper and counter-sniper

How can you shadow big bank activity? Surprisingly easily, as it happens. Sure, the big banks move the markets. But the very fact that they do move the markets means that they can’t hide their presence.

I can look at a currency pair and tell you, with absolute accuracy where there is big bank activity. It’s like a sniper. Once he fires, there’s a telltale muzzle flash. A counter-sniper now knows exactly where the sniper is.

Sure, you can trade small price movements. But the constant danger is that they will be swamped by larger price movements. And you will get stopped out.

So why not shadow the big banks and move at the places where you would move if you were them? (Because, if your reasoning is correct, it’s highly likely they will move at these places.)

How can you shadow the big banks?

How can you shadow the big banks? Become aware of big bank activity in the charts. And think to yourself, “If I were putting £10,000,000 on a trade, which currency pair would I choose – and why? Where would I enter? And where would I exit?

That’s what my former mentor does. And that’s what I do. We use different systems. He once (somewhat disparagingly) referred to my system as a tank.

His exact words were, “You can make war with a tank. And you can make war with a catapult.” But hey, guess what? I’ll stick with the tank, thank you very much. Because tanks are more robust than catapults.

Fingers on the buzzers

Am I right 100% of the time? Absolutely not. So far, no trader in history has been right 100% of the time. And Forex trading is not a level playing field.

For instance, the big banks have state of the art information about fundamentals. If someone’s getting up to make a major announcement about the euro or the dollar or the pound, the big banks will probably have a very good idea indeed as to what’s going to be said.

Their traders will have ‘fingers on the buzzers’. If the speaker starts to say what the big banks thought they were going to say, then, sometimes within seconds, vast sums of money go into either buying or selling one particular currency against another.

“If in doubt, do nowt!”

And what will I be doing? Absolutely nothing. Because I don’t know what’s going to be said. And by the time I do learn, it’s often too late. Those ‘fingers on the buzzers’ may have already moved.

Also price movement will probably be far too volatile. Even if the price goes to my ultimate target, I can easily be stopped out first. What’s the point of that?

So if there’s significant news coming out, I don’t trade. As it happens, often even supposedly important news doesn’t affect the markets very much. But that’s not the point. It might seriously affect the markets.

And I don’t want to take the chance. If I miss out on a trade, I simply don’t care. I’d rather miss out than risk getting stopped out.

As long as I have a large amount of winning trades, I’m happy

Occasionally there’s significant news that isn’t announced in advance (for instance, breaking news about a political development). And some of this news will cause me to be stopped out. What can I do about it? Nothing. So I don’t worry about it.

If I lose a few trades about something over which I have no prior knowledge and no control, then so be it. To me, that’s an unavoidable cost of doing business. Every business has unavoidable costs. Why should trading be any different?

I accept that many people do get hung up about losing trades because their ego takes a knock. But I’m not trading for my ego. I’ll happily tolerate a small amount of losing trades as the inevitable price of being able to trade at all. As long as I have a large amount of winning trades, that’s all that matters.

My guess is that a former big bank trader ‘spilled the beans’

It’s important to be aware of big bank activity in the Forex trading markets for two reasons. One is defensive: if you’re trading small price movements, on lower time frames, a big bank initiative can very quickly stop you out.

The other reason – the offensive one – is much more interesting. If you shadow the banks and if you move when they would be most likely to move, you can replicate their success. And that’s exactly what I do.

My guess is that a former big bank trader ‘spilled the beans’ and told somebody, who told somebody, who told somebody. That’s probably how my mentor first learned. And these professional Forex traders’ secrets can make a huge difference.

For instance, there’s a particular indicator which apparently is much favoured by the big banks. When price action is aligned with that indicator, it’s the ‘green light’ to move. And because of this confirmation bias, the indicator becomes a self-fulfilling prophecy.

My approach to Forex trading is exceedingly cautious

Could you somehow reverse-engineer this indicator and find it for yourself? I’m not saying you couldn’t but it seems pretty unlikely. For a start, you wouldn’t know which type of indicator it was (which means you wouldn’t even know where to look). And even if you did discover it, you wouldn’t know that the big banks set such a high store on it.

My approach to Forex trading is exceedingly cautious. I’m Mr Caution, not just in trading but in well-nigh everything. And there’s a very good reason for this – for more than 50 years I’ve engaged in highly dangerous forms of rock climbing which have taken the lives of so many of my friends. I’ve had to be super-cautious simply to stay alive.

My old mentor used to say that I was one of the most cautious traders he’d ever come across. That’s probably why I’m the one using the tank and not the catapult!

Never stop learning about Forex trading

So my suggestion to you is this. If you’re trading small price movements on lower time frames, at least be aware of big bank activity. You can get out of the way if you think they may be going to take advantage of the market. That’s the defensive strategy.

But if you want to use big bank activity as an offensive strategy – in effect copy the strategy used by professional Forex traders – then find a mentor who’s learned these trade secrets and is willing to ‘spill the beans’.

Whichever it is, good luck! But the most important point of all is this: never stop learning about Forex trading. In fact, never stop learning. For me, the whole point of life is to always keep learning and to get better at everything I do.

So take the next step on your journey to trading success and financial freedom

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