How Banks Manipulate Retail Forex Traders – Day Trading Strategy

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How The Banks Manipulate Retail Forex Traders – Day Trading Strategy – http://www.youtube.com/watch?v=CDhXG02KgWE

In this video I walk through some recent market manipulation that occurred around economic data. In general news offers a good opportunity to identify manipulation in the market which gives us a great indication of what smart money is doing. Because 5 banks control 58% of the daily forex volume they must search out liquidity when they have the desire to buy or sell. Simply put you cannot buy what someone else is not willing to sell, and you cannot sell what someone else is not willing to buy.

In order to find liquidity smart money looks for areas of high liquidity as well as certain times where overall market direction will be one sided. If they have the desire to sell they need buying pressure and thus entering the short position is easier when overall market direction is long. News represents a great time when a one directional market is likely to occur and thus allowing smart money a great opportunity to manipulate overall market sentiment.

-Sterling

20 COMMENTS

  1. How much size do you think an individual trader can do before he gets noticed…. lets say the individual knows what he's doing and has a great entry. I scale into 20 lots on my best setups and about 15 lots on other setups. Being a skeptic I can't help but think…. will they put it past me no matter how good my entry is (due to the size I do… will they see me and decide to take it further anyway?). Im basically concerned that its a losing battle for a private trader who wants to do size… because at the end of the day they got the proprietary tech that literally shows everyones positions. I havent noticed anything consistently that i can say makes me think this…. but just wondering what your opinion on this is. I personally believe in all markets…. the market ain't as big as one likes to think.

  2. This is a great video. It's true that if we can follow the bank traders, we will make money most of times.

  3. It's actually when they bid the price that the market moves into the liquidity area not when you put the order in

  4. Forex trading can be very lucrative stuff if youre reactionary based ie NEVER put on a trade before the numbers are out simply REACT to the direction the market is going after they`ve been released!

  5. The problem I have with this is it doesn't always reverse after the big news move. Sometimes it'll keep going in the same direction , or just stay in the same area after the move. I think some of the reverse is retail traders taking profits as well.

  6. The market will do what the market will do — one can only make educated guesses based on trend indicators. Even with 50% wrong entry decisions, one can still make good money consistently. Keep the exposure small so you can withstand adverse market moves — and never be forced to cut your position in a loss. I call this the 'Slow' method to riches.

  7. When he says that only 5 banks control 58% of the market, he probably means that these banks are the biggest market makers. Wonder why is it so bad? — Without these banks, there will probably be no market.

  8. This explanation is true in part, however the reality is that if you look at the re-occuring ratio and pattern that forms during these news periods, you will see what is almost a perfect sinewave type spike inducement, that has actually been test run just prior, in the off peak times. This characteristic and behaviour is merely a very simple and easy way for the market makers to collect s/l and t/p and to ride and front run the liquidity in the process and is compounded by the nature of the blackboxes (brokerages) response to these movements. It regulates any profit accumulated, or long-term positions held by the retail sector hence the almost perfect 360 degree buy/sell ratio that is not always reflected in the volumes.

  9. I just stay away from the news 1/2 hour before and 1/2 hour after. I'm an in and out trader…10-15 pips at a time so I'm able to stay away from the news and trend change. Good video buddy!

  10. This is not really a huge problem. They can and may move the markets with huge equities; I'll just ride along the wave to gain profit using technical indicators.

  11. so true!

    Popular Chart Levels are most often manipulated to create faked Trading Signals and to allow for Stop Runs by the Forex  Manipulators 

    Some manipulated Trading Levels:

     Important Highs/ Lows
     Round Numbers
     Pivot Points

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