This is my made up story about retail forex, it hold no truth in it -
Central Banks
Investment Managers and Hedge Funds
Corporations
Big Banks
The above group have different transactions of which retail traders will never ever get to see.
They transact in an Agreed Buy/Sell Price with the SHARK.
The SHARK arm with that 2 points are happily playing with -
Bank has a small forex trading department catered for the so-called LOW or NO net-worth clients. This is handle by new staff, fresh graduate from uni (they trade like you and me). These guys usually won't last long with the bank like any other insurance agent. But there are exception, they are those that trade like the experts in Forex Factory and make it in the industry. When they become that good they will also leave the job and trade for themselves.
So only the half baked traders are left in the banks for these NO net-worth clients.
Individual Investors
The volume of forex trades made by retail investors is extremely low compared to financial institutions and companies. However, it is growing rapidly in popularity. Retail investors base currency trades on a combination of fundamentals (i.e., interest rate parity, inflation rates, and monetary policy expectations) and technical factors (i.e., support, resistance, technical indicators, price patterns).
Sometimes the PA aligns with FA, this give confidence to the FA traders. All the 123, engulfing bar, whatever patterns ever happened on the chart make the TA trader leap in joy. This keep us in the games.
As the SHARK feed on dumb money they created all kind of patterns and crosses (so regardless what patterns or MA cross, you based your trade on you can be lucky at time) and most time it flows with the News.
The occasional spikes during news is not really clearing stop loss but creating an illusion that PA is responding to the news.
The SHARK is free to take up any retail market orders at their will.
When price goes down, it is not more Seller come to the market BUT more dumb Buyer feeding the SHARK.
When price moves up more dumb SELLER are feeding the SHARK.
And I hope to swim behind the Shark and eat any left over and continue the games.
The problem is that I don't know how to swim. So I decided to drown my demo account.
Central Banks
Investment Managers and Hedge Funds
Corporations
Big Banks
The above group have different transactions of which retail traders will never ever get to see.
They transact in an Agreed Buy/Sell Price with the SHARK.
The SHARK arm with that 2 points are happily playing with -
Bank has a small forex trading department catered for the so-called LOW or NO net-worth clients. This is handle by new staff, fresh graduate from uni (they trade like you and me). These guys usually won't last long with the bank like any other insurance agent. But there are exception, they are those that trade like the experts in Forex Factory and make it in the industry. When they become that good they will also leave the job and trade for themselves.
So only the half baked traders are left in the banks for these NO net-worth clients.
Individual Investors
The volume of forex trades made by retail investors is extremely low compared to financial institutions and companies. However, it is growing rapidly in popularity. Retail investors base currency trades on a combination of fundamentals (i.e., interest rate parity, inflation rates, and monetary policy expectations) and technical factors (i.e., support, resistance, technical indicators, price patterns).
Sometimes the PA aligns with FA, this give confidence to the FA traders. All the 123, engulfing bar, whatever patterns ever happened on the chart make the TA trader leap in joy. This keep us in the games.
As the SHARK feed on dumb money they created all kind of patterns and crosses (so regardless what patterns or MA cross, you based your trade on you can be lucky at time) and most time it flows with the News.
The occasional spikes during news is not really clearing stop loss but creating an illusion that PA is responding to the news.
The SHARK is free to take up any retail market orders at their will.
When price goes down, it is not more Seller come to the market BUT more dumb Buyer feeding the SHARK.
When price moves up more dumb SELLER are feeding the SHARK.
And I hope to swim behind the Shark and eat any left over and continue the games.
The problem is that I don't know how to swim. So I decided to drown my demo account.