I’m often slightly baffled when writing educational forex articles as to why so many traders struggle to make consistent money in the forex markets. The irony is that most of them actually know quite a lot. The problem isn’t what they know, it’s what they don’t know that really matters.
After spending 14 years working in trading, extracting money from the markets has become second nature for me. Not because of some magical indicator or secret strategy I possess, but because I understood how the real money actually trades.
And that’s where most retail traders go wrong especially the newbies when they first try their hand at trading.
Why Most Forex Traders Are Guessing
Here’s a statistic that should make you sit up and listen:
● Bank traders account for roughly 5% of all forex traders
● Speculators make up the other 95%
● That 5% of bank traders controls around 92% of total FX volume
Let that sink in.
If you don’t understand how that 5% trades, then you’re not really trading, you’re guessing. Educated guessing, perhaps, but guessing all the same.
Now, let me clear up one of the biggest myths about institutional traders.
They do not sit there all day hammering the buy and sell buttons, scalping ten pips at a time to hit their daily targets. In reality, most of their activity is simply executing orders for clients, something commonly referred to as clearing the flow. They may process thousands of trades a day, but almost none of those are for their own book.
How Bank Traders Actually Trade Forex
When it comes to proprietary trading, the trades that actually matter, bank traders typically place two or three trades a week. That’s it.
These are the trades they’re judged on at year-end. These are the trades that determine bonuses. And as you can imagine, they’re not taken lightly. Bankers like to brag about their bonuses, size does matter!
So no, bank traders are not glued to five-minute charts, desperately scalping to “make their number.” They are methodical, patient, and highly selective. Trades are only placed when technical and fundamental conditions line up.
That’s the part retail traders need to understand.
Why Your Charts Are Probably Working Against You
I’m often genuinely dumbfounded when new clients show me their charts. They’re usually littered with indicators, oscillators on top of oscillators, many of which lag price by three or four hours and frequently contradict each other.
Trading like this is one of the fastest ways I know to demolish a trading account.
Bank traders’ charts look nothing like this. In fact, they’re almost boring by comparison.
All they want to know is:
● Where are the key levels?
● Where is price likely to react?
That’s it.
Indicators were designed to try and predict the market. Bank traders don’t need to predict it, they are the market. If you understand how they operate, indicators become largely redundant.
Their technical analysis boils down to one thing: support and resistance.
Clean charts. No clutter. No distractions. Just the levels that actually matter.
Now, before anyone gets excited, I’m not going to go into precise entry techniques here, because they’re almost never where people think they are. Trendlines are simply reference points. Execution is a completely different conversation.
The Real Driver: Fundamentals
Where bank traders really earn the bulk of their money is through fundamentals.
The fundamental backdrop of any currency is shaped by three major forces:
1. Economic data
2. Central bank policy
3. Political influence
And this is why currency direction can sometimes look messy.
When political noise contradicts central bank messaging, markets become choppy and directionless. But when political conditions are stable, central bank policy is clear, and economic data supports that policy, that’s when big, clean trends emerge.
That’s what bank traders wait for.
Mastering fundamentals is not easy. It’s complex, nuanced, and takes years to truly understand. But if you do understand it, you’re positioning yourself on the right side of long-term currency direction, which is where real money is made.
Trading Economic Data (The Right Way)
There is a huge amount of money to be made trading economic releases, but only if you do it properly.
Two things are essential:
1. A deep understanding of how different data points affect currencies
2. The ability to execute trades decisively, without hesitation
If you hesitate, the opportunity is gone.
These are the same economic releases that central banks base policy decisions on. By following and trading them correctly, you’re not only staying aligned with monetary policy, but you’re also growing your capital at the same time.
This is professional trading. Not gambling.
Capital Management: The Part Everyone Ignores
To trade successfully over the long term, you need a comprehensive capital management system. This isn’t optional, it’s your entire business plan.
A proper system should:
● Protect capital during uncertain periods
● Allow for capital expansion when conditions are right
● Define risk-to-reward, position sizing, and exits in advance
When this is in place, your only job while trading is identifying high-quality opportunities. The stress disappears. You’re no longer glued to screens, panicking over every tick.
And here’s a reality check: most bank traders spend large parts of the day chatting on the desk, speaking with other traders, or heading out to lunch with brokers. They are not staring at charts all day.
Neither should you be if you are trading smarter.
Trading With the Market, Not Against It
From there, it’s simply about understanding which strategies to apply, and when to apply them.
Plenty of traders talk about “beating the bankers.” I’ve even seen entire books written on it. But that misses the point entirely.
You don’t want to beat them. You want to join them.
Trade with the market, not against it.
Final Thoughts
There are no miracle secrets in forex trading. No magic indicators. No robots that can truly adapt to a dynamic, global market. The future maybe going that way, but we are not there yet.
Success comes from understanding how the major players analyse, trade, and manage risk. Get those foundations right, and you’re already miles ahead of most retail traders.
At its core, making money in the markets is no different from any other business. Walmart and JP Morgan operate on the same principle; they just sell different products.
Buy at wholesale prices. Sell at retail prices.
Forex is not so different.
