The False Expectations of the Forex Market

Trade with logic #1 Key Points

A Professional Trader – A full time trader that works at either an Investment Bank or Hedge Fund.


The objective of a Retail Trader – To make money trading, utilizing their own money as capital, therefore the function of a Retail Trader is more closely aligned with that of a Hedge Fund Manager than a Professional Trader at an Investment Bank


The function of Professional Traders is widely misunderstood by the Retail Traders. This is due to misinformation distribution in the media and “Trading Educators” that have never been exposed to Professional Traders and have a structural conflict of interest with their Retail Trader students (through IB agreements).


Retail Traders need to be aware of this conflict of interest before they begin to trade. – Firstly, you need to be aware of the COI to determine firstly if trading is for you, and then secondly once you understand the parameters, you can learn how to operate effectively within them. When you do this, you stand a much better chance of making money over time.


Professional traders need liquidity on the other end – This means 99% of the public population needs to be led as sheep to provide this liquidity to close their orders. Hence the reason why misinformation exists.


Income in trading does not exist – All professional traders have a salary. No one in the professional world gets income from trading… literally no one. So why do retail traders think they can trade for a living? It’s due the misinformation pushed in the media to give people what they want to hear. A way to get rich by sitting in front of a computer/ on their phone and following a few patterns, clicking buy and wealth is around the corner. Playing on people’s desires is what has formed this toxic environment for Retail-Traders. Unfortunately, every professional trader knows that income from trading isn’t true and that’s why they have basic salaries. If trading for income doesn’t exist in the professional world, why should it exist in the retail world? Very important principle to take on board, as it will completely change the way you view the market and align it with the professional (successful) approach – The market (more specifically the market volatility) dictates the opportunities you have as a trader over any given time horizon. You don’t tell the market how much money you can make in a day, week, month or year. The market tells you. This is what the professionals know, and the retail-traders don’t.


A trader’s job is to be a slave to volatility – If the markets don’t move, you don’t make money.


Platforms are for execution only. – People view their trading platform as some sort of resource that is going to make them money. It’s not going to make you a better trader. What makes you a better trader is being able to use fundamental resources used by professionals, not talked about in the mainstream.


We must aim to predict the future, not react to the present. – Professional traders aim to predict the future, whilst the public (sheep) react to the present. Every single day is the same situation.


Retail trader must start in trading as a hobby and make money first with no support except their own work/ processes. The aim is to be self-sufficient, and then look for technology to make processes a lot more efficient and effective – we will discuss this more later.


In summary:

  1. If you’re going to use your own money to trade be under no impression, it’s an income. All professional traders have basic salaries, you should have one too. You should maintain this basic salary.

  2. You should initial trade to begin with as a hobby.

  3. When you get good, at some point in the future, it may become a viable profession. But as it stands, as you’re not a professional trader… keep you basic salary & protect your downside wealth.

  4. Do not take income from your trading account.

  5. Do not take more risk when you’re losing.

  6. View your trading account as an asset in itself, with the aim to increase its value in your life time up until retirement, or even the day you die.

  7. That asset is linked to your balance sheet. Its value is completely dependent on your performance as a trader. So, if you’re good you increase its value and have an option to put more money into your trading account. If you’re bad, you don’t reinvest in that strategy. You try to get better, and when you get better you have the option to invest more money.

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