Retail vs Bank FX Traders | Forex Factory

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Retail vs Bank FX Traders

  • #1
  • First Post: Mar 12, 2015 5:41am Mar 12, 2015 5:41am
Hi , i just want to know does a Forex trader in a bank have an advantage on a retail trader , if so what kind of advantage ??!
thanks in advance .
  • #2
  • Mar 12, 2015 11:19am Mar 12, 2015 11:19am
Quoting tsunamiwave
Hi , i just want to know does a Forex trader in a bank have an advantage on a retail trader , if so what kind of advantage ??! thanks in advance .
Banks as a whole have the obvious advantage of having enough "bullets" to move markets. But a single forex trader in a bank (to answer your question pointedly) doesn't have much advantage over a retail trader.

Check out this thread. Your question more or less answered in Post 2.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #3
  • Mar 12, 2015 12:09pm Mar 12, 2015 12:09pm
Quoting tsunamiwave
Hi , i just want to know does a Forex trader in a bank have an advantage on a retail trader , if so what kind of advantage ??! thanks in advance .
Also aside from what skenobi mentioned(having a higher risk tolerance/firepower), they will have exclusive access to liquidity, in the form of reciprocal agreements with other intermediaries to continuously quote the bid/ask, see 'flow' through their own customers and also from other inter-dealers.
The above gives dealing banks an advantage over the average retail investor(notice i said 'average' lol). This also implies that you, as a retailer, can make money without being on the inside.
It's a mindset, you think like a retail investor, and you'll struggle.

Regards
  • #4
  • Mar 12, 2015 7:43pm Mar 12, 2015 7:43pm
Quoting skfx
{quote} Also aside from what skenobi mentioned(having a higher risk tolerance/firepower), they will have exclusive access to liquidity, in the form of reciprocal agreements with other intermediaries to continuously quote the bid/ask, see 'flow' through their own customers and also from other inter-dealers. The above gives dealing banks an advantage over the average retail investor(notice i said 'average' lol). This also implies that you, as a retailer, can make money without being on the inside.
Somewhat agreed with those other "advantages" you mentioned.

I just didn't mention those advantages in liquidity access, market making, seeing order flow etc, because those are really matters of "access" and doesn't really make a Bank FX trader a "trader." i.e. just another bank employee with advantageous levers to pull.

To my mind, retail traders (and hard-core Bank prop-only traders usually 1-to-2 generations past) are the only REAL traders.

Quoting skfx
It's a mindset, you think like a retail investor, and you'll struggle. Regards
Disagree with this part, tho. I think it's ok to think like a retail investor interested in preserving capital and building equity. It's also ok to KNOW how bank traders think. What is NOT ok is to think LIKE a bank trader. Bank traders have different objectives.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #5
  • Mar 13, 2015 2:21am Mar 13, 2015 2:21am
Quoting skenobi
{quote} Somewhat agreed with those other "advantages" you mentioned. I just didn't mention those advantages in liquidity access, market making, seeing order flow etc, because those are really matters of "access" and doesn't really make a Bank FX trader a "trader." i.e. just another bank employee with advantageous levers to pull.
It's something that is and so i shared. Thread title makes this extra information relevant in this case. I couldn't be sure the OP knew this information.

Quoting skenobi
{quote}To my mind, retail traders (and hard-core Bank prop-only traders usually 1-to-2 generations past) are the only REAL traders.
Couldn't agree more skenobi!
A dealer working a customer order, say a yard of British Pounds, and getting it done how he wants, doesn't make him a REAL trader. Using customer 'flow' to get what you want done doesn't involve any real skill.
Any joker can do this if placed at a desk in short time lol

Quoting skenobi
{quote}Disagree with this part, tho. I think it's ok to think like a retail investor interested in preserving capital and building equity. It's also ok to KNOW how bank traders think. What is NOT ok is to think LIKE a bank trader. Bank traders have different objectives.
In terms of the 'mindset' statement, i was here referring to a knowledge of the mechanics of currency markets. CB's, rates, FX and MO of the institutions/dealers.

From the majority of posts found here at FF, i see a heavy reliance on EA's, systems, technical patterns and various other types of hocus pocus that have almost zero to do with the mechanics behind currency movements and market micro structure.
Happy trading to you matey!

Regards
  • #6
  • Mar 13, 2015 2:58am Mar 13, 2015 2:58am
Quoting skfx
From the majority of posts found here at FF, i see a heavy reliance on EA's, systems, technical patterns and various other types of hocus pocus that have almost zero to do with the mechanics behind currency movements and market micro structure. Happy trading to you matey! Regards
...and that's why the majority of the retail traders lose money. They actual don't know and don't care about what they do.
  • #7
  • Mar 13, 2015 3:18am Mar 13, 2015 3:18am
There is no difference except for the fact that bank traders eventually lose a lot more money than retail traders.
  • #8
  • Mar 13, 2015 3:19am Mar 13, 2015 3:19am
Quoting srmfx
{quote} ...and that's why the majority of the retail traders lose money. They actual don't know and don't care about what they do.
Precisely srm!
Just look at the %'s. They go about it all wrong(most traders, not saying all traders).

I find there is a pattern to the majority where they want to try to do it as quickly and with the least amount of work possible. It doesn't help when the industry as a whole pushes 'charts' at new comers and from the very beginning your running in the wrong direction. Some never come back up out of the rabbit hole.
A chart is a tool. Nothing more.
I may turn up to a building site with a hammer and a saw but it doesn't mean i'll build a house.
Time and time again i see retail traders turning up with a hammer and a saw trying to build a 'house' but they have no knowledge, no plan and they are using the tools wrong.

They will be taking small capital amounts and aggressively trying to make huge %'s over a small time spread.
Skenobi mentioned.....
Quote
preserving capital and building equity
and this is the correct attitude.
Regards
  • #9
  • Mar 13, 2015 5:14am Mar 13, 2015 5:14am
Quoting skfx
{quote} the mechanics behind currency movements and market micro structure.
What are these mechanics and micro structure?

If graph is just one tool, what are the other tools?

How building equity?

Regards and green pips to you
Bottomless wonders spring from simple rules, which are repeated without end
  • #10
  • Mar 13, 2015 7:41am Mar 13, 2015 7:41am
Quoting limprobable
What are these mechanics and micro structure? If graph is just one tool, what are the other tools? How building equity? Regards and green pips to you
Order flow analysis.
If you have better knowledge about the markets and trading you can have a pretty good guess about the order flow.
  • #11
  • Mar 13, 2015 11:56am Mar 13, 2015 11:56am
Quoting limprobable
{quote} What are these mechanics and micro structure? If graph is just one tool, what are the other tools? How building equity? Regards and green pips to you
It would be impossible to begin without me becoming a slave to this thread, and that I do not wish limprobable.
I could tell you to use Google but you already know about Google.
If it makes you feel any better it's all the help i had over the last 12 years. Me and Google just slugging it out (:
You'll have to sift through the shit and there be plenty of trial and error but this journey will cost you at a minimum time and sometimes, both time and money.
But what this does is test your resolve and dedication to the task. You build character trudging through the shit, and from experience it'll serve you well.

Enjoy the weekend and happy trading to you and a swift journey.
Regards
  • #12
  • Mar 14, 2015 3:03pm Mar 14, 2015 3:03pm
Quoting skenobi
{quote} Somewhat agreed with those other "advantages" you mentioned. I just didn't mention those advantages in liquidity access, market making, seeing order flow etc, because those are really matters of "access" and doesn't really make a Bank FX trader a "trader." i.e. just another bank employee with advantageous levers to pull. To my mind, retail traders (and hard-core Bank prop-only traders usually 1-to-2 generations past) are the only REAL traders. {quote} Disagree with this part, tho. I think it's ok to think like a retail investor...
Have seen you're using Velocity 2.0?
  • #13
  • Edited 10:47am Mar 15, 2015 10:35am | Edited 10:47am
Quoting skfx
In terms of the 'mindset' statement, i was here referring to a knowledge of the mechanics of currency markets. CB's, rates, FX and MO of the institutions/dealers. From the majority of posts found here at FF, i see a heavy reliance on EA's, systems, technical patterns and various other types of hocus pocus that have almost zero to do with the mechanics behind currency movements and market micro structure. Happy trading to you matey! Regards
All good, bro. No worries!

Quoting M967
{quote} Have seen you're using Velocity 2.0?
I'm assuming you meant Citi Velocity which I alluded to in this thread. To be honest, I didn't even know or noticed it had a version number (i.e. 2.0), but if you say it does, I'll take your word for it. .

Maybe you should tell us what's really on your mind instead of asking me a question for which the answer is well apparent.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #14
  • Mar 15, 2015 10:46am Mar 15, 2015 10:46am
Anyone mention no spreads? Super tight spreads along with the aforementioned access to deep liquidity.. & the knowledge of how deep it is as not to give away their intentions if a market's liquidity is thin.
ForexOrderFlow.com Return This Year: 9.3%
  • #15
  • Mar 15, 2015 11:02am Mar 15, 2015 11:02am
Retail Trader=You're Always your Own Boss!/Entrepreneurship Mindset,Trade in pajamas,Flexible time

Bank Trader=Slave,Intense Stress to perform well,Longer hours etc.,
  • #16
  • Mar 15, 2015 11:48am Mar 15, 2015 11:48am
Quoting skenobi
{quote} All good, bro. No worries! {quote} I'm assuming you meant Citi Velocity which I alluded to in this thread. To be honest, I didn't even know or noticed it had a version number (i.e. 2.0), but if you say it does, I'll take your word for it. . Maybe you should tell us what's really on your mind instead of asking me a question for which the answer is well apparent.
Obviously yes, there's 2 versions, both useable, just need some independent review of it, functionality, etc.
  • #17
  • Mar 15, 2015 12:12pm Mar 15, 2015 12:12pm
Quoting M967
{quote} Obviously yes, there's 2 versions, both useable, just need some independent review of it, functionality, etc.
I only use it when I'm bored. Or when I need to scratch my academic itch. Or if I see an interesting headline from the email updates I get and I need to log on to read more.

As for the dry subject of "functionality" (I'm assuming you meant website usability), I have no opinion. I don't use that website as much as I use Forex Factory, and I think that says a lot about what I think of Big Bank analyst commentary services.

I never ever use Velocity (or any similar website) to influence or drive my trading biases. In any case, I'm not easily influenced.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #18
  • Mar 15, 2015 12:16pm Mar 15, 2015 12:16pm
Quoting skenobi
{quote} I only use it when I'm bored. Or when I need to scratch my academic itch. Or if I see an interesting headline from the email updates I get and I need to log on to read more. As for the dry subject of "functionality" (I'm assuming you meant website usability), I have no opinion. I don't use that website as much as I use Forex Factory, and I think that says a lot about what I think of Big Bank analyst commentary services. I never ever use Velocity (or any similar website) to influence or drive my trading biases. In any case, I'm not easily...
I see, anyway thank you.
  • #19
  • Mar 19, 2015 3:43am Mar 19, 2015 3:43am
Hello,

Thanks for answers.

Why just before or after a new, price go in one direction and then go in the opposite? ( i read lots of thniks about that but never conviced).

Regards and Green pips to you
Bottomless wonders spring from simple rules, which are repeated without end
  • #20
  • Last Post: Apr 1, 2015 10:04pm Apr 1, 2015 10:04pm
Thanks all for your Help.. sorry i've been away for some time so i couldn't participate ...

so if u think there is no leverage in info for bank traders .. can banks lose ? and how ?
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