Here is the deal—I have heard over and over again that the Forex market cannot be moved by any one trader. That is just not the truth. The argument is that because the Forex market has such a high daily volume that it is not as easily moved by big traders.The thing that they don’t tell you is that the high daily volume takes into account every tradable currency. The last time I checked you don’t trade every tradable currency at one time, so the number of $1.3 or $1.5 trillion is really irrelevant.What you need to pay close attention to are the currencies that have good liquidity. This includes every dollar pair, the EURJPY and the GBPJPY. These are the highest volume currency pairs there are.This is what the big boys look for, because they can move the market and suck the “dumb money” in. They do this through buying and selling large amounts at a time during certain news releases, dumping their positions and turning them in the direction they really want to go. This absolutely happens and you need to know how to follow their lead so that you can get your piece of the pie.
Secret #2: You can’t trade with technical analysis alone
I once fell prey to this trap. Early on in my career as a trader I though that my bad trading was a result of not having the right technical analysis approach so I was constantly changing my approach. This didn’t work. I use technical analysis in my trading strategy so I am not trying to bash it. All I am saying is that sometimes you can get analysis paralysis so to speak. Many of you are thinking that your bad trades are due to not understanding enough about technicals…99% of the time this is not the case. Many traders don’t understand market sentiment and therefore they fail miserably. Here is the best piece of advice I can give to you about using technical analysis: It only influences how much relative weight we give to the fundamentals. Once you begin to understand this you will see technical analysis from a whole different light and it will become a lot less complicated.
Secret #3: You can make thousands of dollars in a matter of minutes
OK, I think I may have lost some of you here. For most traders this is the exact opposite of their normal routine. Many times they are losing thousands of dollars in a matter of minutes.How is this done? Let me give you an example. On November 3, 2006 we had the last Non-Farm payroll announcement. If any of you pay attention to these numbers you will remember that the numbers were way off of consensus which caused the market to immediately spike up. However if you would have bought off of these initial numbers you would have lost a significant amount of money. The reason is because of the revisions that came out afterward.Knowing how these triggers work could have made you an easy 70 pips. In a situation like this it is a no-brainer to “load the boat,” in which case if you would have done this you would have made a lot of money in a matter of about 15 minutes. If you were trading a $50,000 account using the right strategies you would have made about $7,000. That’s 14% in one trade. Not too shabby for a day’s work. The beauty of it is this kind of trade happens at least once a month. If you used nothing else but this one strategy alone and never made another trade during the month, many of you could quit your 9-5.
Secret #4: You can capture 300-1000 pips in a matter of weeks
Most fundamental systems out there do not teach you the most valuable secrets of fundamental trading: LONG TERM PROFITS. The reason is very simple…most don’t have the slightest clue how it all works.By long term profits I mean that you hold a trade for 2-5 weeks. But here is the thing…once you know what to look for you can spot one of these trades nearly every month. You take your position (which is usually larger than normal) and you rest for the next 2-3 weeks because it is so secure you don’t have to worry. The key is proper money management and proper risk reward analysis. You have to know when to push the limits so to speak.Here is the beauty of this kind of trade…not only do you make a substantial amount of pips, but most of the time you make great daily income in interest. There are certain currencies that this works beautifully on. Keep reading to find out more…
Secret #5: You don’t have to have a Master’s degree in economics or have had to work for a bank for 20 years to use fundamental analysis
This is what the “Mystic Gurus” would want you to think…but it is just not the truth. Once the big picture clicks in your mind you can begin to pick out the finest trades in that big picture. This is how an understanding of fundamental analysis begins.It is like laying a foundation. Fundamental analysis is the foundation for every big trader out there. If you don’t even have the foundation laid and you are trying to build the finished product, how can you expect to be successful?The bottom line is this…I don’t have a Master’s degree in economics, and although I do have some financial background from my previous career, I haven’t worked for a bank for 20 years as a trader and yet I still have managed a way to understand how this works.
You have to get rid of the preconceived idea that this is impossible for you to understand. Let me give you a golden nugget…think you can, think you can’t, you’re right either way.What you need to do is pick one currency at first and learn how that currency is affected by the news. That is what I did. I went back in time and I found out when the biggest moves in the market happened and I found out what was going on economically, politically, and socially at that time.It’s not rocket science. If you can read you can do this.
Secret #6: You don’t have to be able to withstand big down draws in your account in order to trade like the banks
This is the most absurd lie I have heard yet. It comes from people that don’t know how to trade and don’t know how the banks trade. Banks are conservative when it comes to losing money. They just don’t like to do it. Do you?The answer is no, of course. No one likes to lose money. There is something built into our DNA that equates losing large amounts of money to the same pain as getting hit in the head with a frying pan.With that said many bank traders get fired if they have more than a 5% down draw in their account. Does this shock you? Well it is the truth. Why do you think they have so much money to trade with? Because they don’t lose. They steadily build equity and it makes them very, very rich. Listen, they have been in this game for a long time. Remember this was their playground for years before it was ever made available to the speculative trader. They use key fundamentals to signify technical breakouts and reversals.
Secret #7: 80% of the profits made in this market are made only 20% of the time
Why is it that so many traders think they have to trade all of the time? It is a proven fact that the above statistic is true. Ask any bank analyst out there and they will tell you this is true.The “Big Boys” love to steal the small traders’ money when the market is in the range. The fact is it is in the range 70-80% of the time. This is easy for the banks to do because they all do the same thing at the same time. Trading in the range means that the market stays within a tight price range for a given period of time without any major longer term runs.For example if the euro trades between 1.2400 and 1.2700 for 2 months it would be in the range. Contrary to popular belief among some fundamental traders, this is not when the most money is made. The money is made when due to key fundamental changes the market breaks out of this range. When it does this you will see 600-1000 pip moves in a very short period of time.This is the kind of fundamental analysis the banks and other big traders use. This is where the big money is without a doubt. Most traders never make it to this level because they got all of their money stolen from them by the banks when the market was in the range. Therefore they have no trading capital left to load the boat when a big move occurs.
Secret #8: Stand on the shoulders of giants
This is the one secret I have learned in my trading career that has made everything else pale in comparison.Simply put, you don’t need to re-invent the wheel.You don’t need to start from scratch every time you sit down at your desk to trade. If you were going to build a car, then you would study the cars of the past. You would probably look to some experts that could teach you the lessons they have learned over the years about building cars. Trading is no different. It’s been around for a long time, and lots of really smart people have spent a lot of time testing, tweaking and perfecting their trading.This is an immense resource for anyone who wants to trade profitably. If you want your trading to work, don’t try to make it happen from scratch…look at what has worked in the past.Use that as a starting point and a model for your trading…and you will be on your way to trading profitably.
Secret #9: Get a mentor
Okay, this last secret may be the toughest to actually follow through on…which is why I left it for last.Nevertheless, if you can pull this off, then you are on the path to trading success.If you can find a mentor, someone that can show you the ropes in your trading, well…that’s the ticket.As I mentioned above, you don’t want to re-invent the wheel. You want to be able to leverage all the great trading talent and skills that have come before you. The easiest way is to learn from someone else who has been there and already made the mistakes and figured out the important lessons.
That being said, it can be difficult to find someone who will show you the ropes, give you shortcuts, and help you avoid the mistakes. You want someone who has been down that road and already MADE THOSE MISTAKES FOR YOU.
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