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Our Trading Beliefs & Philosophy At Day Trading Forex Live

December 20
04:14 2011

Our Trading Beliefs & Philosophy at Day Trading Forex Live

Over 7 years ago I began my career as a forex trader. I’m sure that my story in the forex market isn’t much different than anyone else reading this. Much like the majority I have literally tried every form of forex trading there is out there, and like the vast majority I had the same negative results. I firmly believe that there is only two variables that separate a profitable forex trader from one that never succeeds. The first variable can be summed up with ones method of trading forex. Simply put 95% of all forex traders fail. If you or I do what everyone else does we will have the same results…this I can promise you. Therefore to restate the first variable of success, we must all break free from the same forex trading strategies you see everywhere or we will continue to fail with the rest of the 95%. Before we get into the meat of this article I want to say it is a bit lengthy. If you are struggling to profit in the forex market I strongly urge you to put forth a few minutes of effort to read this article through to the end.

The forex trading strategy we use is one that you will have never been taught. Its a way of viewing the market from smart money’s (Primarily the 10 largest banks) perspective. After all, the banks are the ones driving the foreign exchange marketplace. Therefore if we want to know which direction the market is headed its only logical we understand the forex trading strategy used by the banks! Above I mentioned there are two variables for success, and the second is your personal ability to endure. If you’re looking for me to tell you this market is easy, and that you can turn 5K into a million in a month, or any other promise your used to hearing then you’ve come to the wrong place. You see endurance is the great refiner of the forex market. Those who are willing to learn, think outside the box, and repeatedly get back up after the market beats them down are the ones who will succeed. Through this article I will discuss the key concepts to the forex bank trading strategy.

To begin it is crucial for you to believe some basic concepts. I’m going to ask you to put down what you’ve been told up to this point in the forex market. I ask that you give some serious thought to what I’m about to say and let the facts speak for themselves. Facts and only facts should guide our decisions as professional forex traders. First lets discuss the 95% failure rate among traders. I was asked before if I really feel this is an accurate percentage representation of retail forex traders and I personally feel like it is at the least a 95% failure rate. Here is a simple test to prove this to yourself….can you think of one person you know who can prove they are profitable to you through either a track record or watching them trade live over the course of time? After teaching well over 1,000 traders over the last 3 years, I’m confident that the vast majority of those reading this cannot think of even one profitable trader. Again I’m not here to skate around the truth I’m here to show others why the 95% fail, and how both you and I can be in that very select special group of 5% that profit in the forex market. The facts of this market are not pretty, but in order to get to the promised land of profits we have to face the facts as bleak as they may be.

Now that we understand that vast majority of traders fail we need to reverse engineer why this happens so as not to repeat it. What I’m about to say next is going to be a radical shift from anything you’ve ever heard. Not only that, but most are going to refuse to accept it because it is so different. Before going any further let’s not forget the proven failure rate among retail traders. Keeping that in mind will help us to remember we HAVE TO be different from them if we are to ever be professional forex traders that consistently produce profits month after month!

The Realization We All Must Face….

Following the standard forex trading strategies commonly found in this market will result in losses. First lets establish what forex trading techniques I’m referring to. In general I’m referring to the belief in trading indicators, bar chart patterns, chart patterns, trading software, EA’s, or any other style of trading that requires a chart or the “face value” analysis of price movement. Now I don’t expect you to understand that statement without some explanation, and that is exactly what I intend to do through the use of questions and a general understanding of market basic.

First we need to understand how forex brokers work as a general rule of thumb. Simply put when you buy they are the ones to sell it to you, and when you sell a currency they are the ones to buy it from you. Forex brokers are the counter party to every trade you place. Therefore every time you make a profit they lose money, and every time you lose money they make a profit. This is an amazingly profitable business model when you consider the massively high failure rate we discussed earlier. Forex brokers are a business like any other, they are there to turn a profit and turn a profit they do. This style of forex broker is called a bucket shop broker, others brokers do process your order in live market and we will cover how this effects us in another forex training article. Understanding this fact about forex brokers is a piece to the puzzle, but we also must understand what this means at its core. To do this I want to recall a conversation I had with a new trader not so long ago…

I started out with statements very similar to what I said above about brokers, and then he abruptly stopped me and said, “just wait right there Sterling…..if forex brokers want you to lose money then why do the majority teach you how to trade chart patterns, read candlesticks, understand price action, and on top of that pay a massive licensing fee for MT4 so you have access to all the indicators, trading software, and EA’s out there?” We were on a skype conversation and it’s at this point that I just started to smile, and it is at this point that everything made sense to him. The forex broker business model is a fact that is not hidden, and the fact that they want to teach you all of the above should be a MASSIVE warning to you! If the brokers thought that the general education they give, or access to MT4 and therefore the most popular indicators, trading software, and EA’s would help you….do you think they would so readily provide it to everyone, and do so for free? Remember there business model profits when traders lose money, and the brokers lose money when the trader profits. If this is a standard model, then we all have to honestly examine why they give us all these so called tools as well as free forex education?

Plain and simple forex brokers are so sure that if they get you to start using the mainstream forex indicators, EA’s, trading software, candlesticks, chart patterns, etc… then they have you hook, line, and sinker. I cannot state it any simpler than to call it all fallacy put there to extract money from retail forex traders. I understand many reading this if not most have probably spent months if not years trying to be profitable with the “tools” we have been discussing. It’s at this point that you must be honest with yourself and ask just whos “trading tools” are you using. I would argue that they are the tools of the forex broker and banks, and I’m proven right 95% of the time when another trader walks away having never realized their dream.

For a moment let’s just assume that all the talk about forex brokers giving you the tools mentioned above so that you fail is a false statement. In fact let’s not even consider the brokers. For this illustration I want you to go to your favorite forex forum on the web today. Go into the strategy section of that website and what are the trading systems you see based off of? After a quick search you will see indicator based strategies, price action strategies, charts pattern setups, candlestick pattern traders, trading software, indicators and the list goes on and on. If we know 95% of traders fail, and we now know what form of trading they are doing then why in the world do thousands and thousands of forex traders continue to follow the same path and expect different results. Right now you know the facts, its been proven through logical reasoning and therefore the choice is yours.

Trade With The 5%…

I want to now present you with my belief, and again base it off of the facts so we can all come to the same logical conclusion. It’s well known that the banks are the driver of the currency market. By learning how to identify when they are entering the market, and what direction they are entering, this is all that we need to know! This is exactly what the Forex Bank Trading Strategy is all about. By getting away from every single “tool” losing traders use and tracking smart money you can identify market direction consistently! Most say that it is impossible for retail traders to know when a bank is about to drive the price….what do you think? It is well known that smart money has no other choice but to enter the market over time. Because of the sheer volume of their position they must accumulate a position rather than simple take a trade with the click of a button as you or I might. This fact gives us a distinct advantage! The banks accumulation leaves a figurative “foot print” that we at Day Trading Forex Live have over time learned to identify, and therefore understand not only when smart money is entering a position but more important what type of position they are taking, either long or short. If you properly identify the position that is being accumulated you will be taking the same trades as the mega banks, and simply put banks don’t lose.

It’s important to understand that all patterns, either chart patterns, candle patterns, or other price based setups can all be and frequently are manipulated by the mega banks. Smart money can and does create patterns in the market in an effort to trap traders for their benefit. If a bank is looking to enter a long position they must create those willing to sell it to them, and conversely if they are looking to sell the market they must entice someone to buy it from them. Every trade placed has a counter party to it. Because of this smart money on a daily basis creates the patterns discussed to trap traders into the false position before often driving the price the opposite direction. The same holds true for EA’s, trading indicators, and other forex trading software. In general these “tools” are used by the banks to trap traders in the false direction of the market. Doing so creates buyers when smart money wants to sell, and sellers for when they are looking to buy.

Have you ever felt like the market the majority of the time turns up when all your indicators, chart patterns, and systems are telling you to go short, or it turns down when every “tool” you use is telling you to go long. This is not a coincidence, this is not a fluke, it did not happen by chance! Unfortunately this is hidden from most traders because these patterns seem to work when you are testing them. You may design a strategy, it starts to look good, you then go live and have a few good trades only to within a short period of time get wiped out. Most then repeat this pattern over and over until they leave the forex market never having realized their dreams. The banks have a business model like every other successful business out there and retail traders are the predictable “fuel” they use to enter and exit their positions. Once you understand their model you can be part of the profitable 5%, and this model is exactly what we intend to teach you! You can be successful in the forex market you just have to do 2 things. Number one you must break the cookie cutter mould of most forex traders. If your using ANYTHING the majority of forex traders use to trade forex you will have their same results of loss after loss. The second key to success is to track smart money. Learn the forex bank trading strategy we outline on this site and stick to it! Learn to take the same trades as the banks, and you will profit like the banks!

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  1. manish
    manish January 02, 14:44

    Hi,STERLING. Your articles have opened my eyes to look at forex trading from a different angle. However there is one thing i dont undersstand is how. come some or all banks decide which direction to trade cumulatively and what time of the day do they trade together like this.Please enlighten. Many thanks.

    Reply to this comment
  2. Iron
    Iron August 04, 05:54

    Sterling says we shouldn’t trade the way 95% of all the other losers do and one thing I’ve noticed a lot of traders using is the Stochastic Indicator, if you go to the Babypips website you’ll see the site gurus use Stochastic all the time in their trade predictions and trade ideas. I really don’t know if its working for them or not but that site seems to be promoting the use of it. I personally think Stochastic is the most useless indicator that I have tried to use and removed it from all my charts a while ago.

    Reply to this comment
  3. Benney
    Benney April 26, 22:42

    Now I understand why in over three years in forex I have n’t been profitable! Thank you so much!

    Reply to this comment

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