TRADING INSIGHTS
20YP's
UNDERSTANDING THE HARSH REALITIES OF YOUR ENVIRONMENT
If you want to even stand a chance in this business then you need to truly understand your environment.
With about $6 Trillion Dollars changing hands EVERY DAY the Forex Market DWARFS ALL of the world’s stock markets COMBINED.
However, and unfortunately, it is a statistical fact that about 96% of ALL Forex Traders are losing traders.
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I.e.; career net earnings are in the negative / in the long term they have lost more than they've made.
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That means out of every 100 people that trade Forex, only 4 actually end up with a profit in the long run.
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4! Out of 100!
That 4% are a handful of the BIGGEST MONEY MAKERS in the world - Banks and Large Financial Institutions.
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That 4% collectively make BILLIONS and BILLIONS and BILLIONS of dollars EVERY - SINGLE - YEAR.
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4% of Forex traders make ALL THE MONEY
10's of Billions. 100's of Billions. Those are huge numbers. Hard to comprehend.
WHERE DOES IT COME FROM?
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So, 100s of Billions of Dollars are made by these banks every year. Ok, so where does all that money come from?
Does their trading somehow create NEW money that's never existed before that is now there and is theirs?
No, that's not it.
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Do they create something, a product of any sort, that is sold to generate that money?
No, that's not it either.
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Those 100's of Billions of Dollars, it's already there. It's just in someone else's hands.
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WHO IS THIS "SOMEONE"?
The Forex Market is a zero-sum system. That means money is never really won or lost. It just changes hands. For every $1 that is won, someone, somewhere had to lose $1. So if the banks are (collectively) making tens and hundreds of BILLIONS of Dollars every year, that means someone(s), somewhere, is LOSING tens and hundreds of billions of dollars every year.
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That "someone" is YOU. It's ME. It's ALL OF US.
We are what is referred to as "Retail Traders" and we are the 96%.
UNDERSTANDING THE GAME & YOUR OPPONENT
Most people don’t realize that when you’re trading in the Forex market you are playing against an actual opponent:
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The Banks and large financial institutions who are the literal market movers.
Trading Forex can be likened to a game of chess against The Banks.
“Retail Traders”
(basically everyone else) make money by guessing right on which way the price will move.
The Market Movers make money by moving the price to where they need it to be.
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Often times that involves taking your money
in the process.
Only 10 companies maintain a 65% share of the global Forex market.
That's right. They don't win because they're just that good at predicting the change in values between currency pairs. Or because they have information and intel on a level that us little people down here could never hope to even catch a glimpse of.
No. They're NOT GUESSING. They're NOT PREDICTING. They're not ANALYZING AND SPECULATING. They win because they move the market to where they need it to be. It's just that simple.
The Billions upon Billions of Dollars that they collectively make each and every year comes from….well….pretty much everyone that’s not them. That’s because most traders don’t know how the game works or even realize they are playing against an opponent, let alone how that opponent plays the game.
Contrary to popular belief, all Price Action (price movement) is deliberate and always has a target area it is moving towards.
These can be the small, almost insignificant targets on the 1 & 5 minute time frames….all the way up to the huge Daily, Weekly or Monthly time frame targets that are such a huge priority that The Banks will spend YEARS slowly moving the price back to these areas.
But the good news is that when you are trading with as much money as they do, anything from millions to tens of Billions of Dollars at a time, you are very limited in HOW you are able to trade.
And when you understand HOW your opponent plays the game you're able to recognize what they're doing and you can identify their signature moves in the charts. Their footprints in the Price Action.
You know where they've been and why they were there. You also know where they're moving the price to next.
UNDERSTANDING THE ACTUAL, TRUE NATURE OF YOUR ENVIRONMENT (the Forex Market)
​We come to believe that the Forex Market is a highly complex free market financial system that revolves around the exchange of currencies based on their ever changing and fluctuating values relative to one another that are affected by things like supply and demand; economic data; financial reports; geo political events; etc etc.
Nope. Nope to all of it.
At its most fundamental level, the Forex Market is nothing more than a system of trade set up to legally provide some of the biggest money makers in the world - Banks and Large Financial Institutions - with a virtually unlimited supply of money.
A more simple way to look at it is...
The Forex Market is like a big shark tank.
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The banks (the 4%) are the sharks.
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Retail traders (the 96% / everyone else) are the fish. Shark food. They are the food supply.
The one and only, sole purpose of the shark tank's existence is to provide the sharks with a virtually endless supply of food, contained within its own controlled environment.
The one and only, sole purpose of the Forex Market's existence is to (legally) provide the biggest money makers in the world with a virtually endless supply of money, contained within its own controlled environment.
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Tons and tons of fish are dumped into the tank to feed the sharks.
Just like tons and tons of retail traders are brought into the market to feed the banks.
The 96% feed the 4%
Day after day
Month after month
Year after year
DIFFERENCES BETWEEN SHARKS (the 4%) & FISH FOOD (the 96%).
The 96% are retail traders. Basically if you're not a bank or financial institution you're a retail trader. It doesn't matter how much money you trade with or how well you may do. You are a retail trader because of HOW you trade. Because of HOW you think. Because of HOW you see the Forex Market.
Sharks and fish food swim, think and do things very differently from one another.
Just like the 4% and the 96% think and trade very differently from one another.
TEACH THE FISH HOW TO BE FISH FOOD
WARNING - For some this may be a hard pill for some to swallow. And the longer you have been trading Forex the harder it will be to accept. But...
EVERYTHING YOU THINK YOU KNOW ABOUT THE FOREX MARKET AND FOREX TRADING
IS WRONG.
Now, it's not your fault. It's that way by design.
But make no mistake. When we say everything, we mean EVERYTHING. All the way down to the most fundamental concepts of how you trade. Such as the idea of entering single, individual trades. Stop Losses. Take Profits. Counting pips. Using basic ideas like "support" & "resistance", these patterns, those and indicators, etc etc.
We are taught these fundamental concepts so that there will continue to always be fish food to feed the sharks. You may stay alive long enough to catch some scraps that fall from the shark's mouth. But that's about it. You will merely survive until the shark decides to eat you too.
See, if you trade like fish food then you're easy prey and you'll never be a threat. You might make money here and there but you will never make money on the level of "wealth". It's just not going to happen trading the way we have ALL been taught and conditioned to trade.
Baby Pips; Forex Factory; Daily Fx....Ever wonder why there is so much FREE info on "how to trade"? Yet 96% of all traders continue losing?
96% - That's almost EVERYONE!
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Do you realize that?
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That means essentially EVERYONE that trades Forex is a losing trader overall.
How? How can it be that bad?
It's that bad because we are taught a concept of how to trade that simply is not sufficient to produce anything significant. Everything you think you know and have learned about the Forex Market and how to trade keeps you at a very minimal level.
AND...if the 4% KNOW exactly how you think and how you trade....and they're the ones that move the market, well, that's just easy pickins.
That's why everyone does things the exact same way. The same patterns. The same strategies. The same indicators. Same terminology. The same philosophies. The same ideas on what's considered "good" or "bad" while you're trading or what you're "supposed" to do or not do.
Literally everything you know about Forex trading comes from other fish food. Sure, some are very smart and advanced. But fish food no less.
If you don't want to be fish food then you have to stop thinking and trading like fish food
and you need to start seeing things and doing things the way the sharks do.
HOW THE WINNERS TRADE
The way The Banks trade is much, MUCH different than your average retail trader or anything else you may be used to. Simply put, banks have money EVERYWHERE in the market, going BOTH directions, ALL THE TIME. They are ALWAYS in profit in some areas while also being in DrawDown in others.
They use their immense and almost unlimited capital to move the price to certain target areas to increase the value of their open positions in that area. Then they move to the next target area; then the next; then the next; and on and on it goes. Day after day. Month after month. Year after year.
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That's pretty much what the Forex market is in a nutshell. The Banks constantly moving the price from target area to target area constantly increasing the value of different groups of open positions they have.
TRADING LIKE THE WINNERS
In an industry with a 96% long-term failure rate the best thing to do if you want to be a winner is to trade like the winners. Our style of trading (strategy) is rather simple and is modeled after how The Banks trade.
A simplified explanation of our strategy is that we load up positions near or on the way to the nearest large targets that have the highest priorities for the banks to bring the price to. Then we sit back and wait for the banks to do the work for us - moving the price to those target areas. When they do then our open positions will increase in value.
Sometimes by an enormous amount.
The below image is from our March 4th TRADE UPDATE
This was after both EURUSD and GBPUSD hit the target areas we were expecting.
You can see how much our SELL positions increased in value virtualy overnight.
We do not utilize the traditional method of trading of opening individual trades with Stop Losses and Take Profits and counting pips. Similar to how we explained how The Banks trade, we usually have a number of open positions in both directions (BUYs & SELLs) at all times.
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Our trading is done by moving our positions around based on the price action while constantly adjusting our EXPOSURE. If we want to focus on the price going up then we'll simply open more BUY lots, or we'll close some of our SELL positions that are in profit, banking those profits while also putting our exposure heavier on the BUY side.
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Then once the price hits a certain level, in order to balance our exposure once again and bring it back to 0, we can either close some of our BUY positions that are in profit, or we can lock in those profits and keep the positive equity by opening more SELL positions to bring our exposure back to 0.
You can see this style of trading “in action” on our TRADE UPDATES page.
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You can read more about how the Forex Market really work on our TRADING INSIGHTS page.
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You can read more about how The Banks trade along with charts showing you exactly what we mean
so you can see it for yourself in our TRADING INSIGHTS: TARGET pages.
