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New individual traders often feel lost and clueless after they spend a few days trading in the foreign exchange market. Specifically, if you are new to the world of Forex, you often feel under-privileged compared with senior traders and financial institutions, especially the banks who seem to have access to market knowledge that individual traders do not. However, what makes the senior traders and banks so successful is no secret; it’s just a matter of experience and resources. The main factors that distinguish them from the rest of the speculating crowd are their superior trading strategies, expertise in fundamental and technical analysis, swift access to financial data releases and command over Forex signals.

Big Players in the Forex Market

Large international banks and foreign exchange banks are the most active traders on the foreign exchange market, accounting for almost 80 percent of currency trading volume. These big players completely dominate the Forex market in terms of trading. The banks participate in currency trading using their huge pool of clients and their own accounts. 2010 Euromoney FX survey revealed that top ten most active traders including Deutsche Bank, UBS AG, Barclays Capital, Citi Bank etc alone account for 77 percent of Forex trading volume. Needless to say, they dictate the bid and ask prices in the Forex market.

The Role of Banks in the Forex Market

This undisputed dominance of banks in the Forex market often leads individual traders to believe that institutional banks have access to secret information about the Forex market. However, while the banks have power, they do not have access to insider information in the Forex market. They do not enjoy the competitive advantage of insider trading over common traders the way professional traders and analysts in the equity market do.

With the passage of time, the advancement in Information Technology has made the Forex market much more transparent and accessible.  Consequently, the transparency and accessibility turned it into a very democratic market.

Today virtually almost every trader has access to the same prices with narrow spreads that are quoted in the interbank market. Beside banks, a new category of market makers, for instance hedge funds, retailers and trading advisors has also emerged on Forex horizon over the past decade. Retail Forex has been growing at a remarkable rate over the past 10 years. Experts believe that this sector accounts for about 20 percent of the Forex market now.

The Competitive Advantages of the Big Banks over Individual Traders

Even though the Forex market is a democratic market where virtually all traders have instant access to the same market-moving-info as everyone else, the first competitive advantage the large banks have is access to high priority news announcements before individual traders. While any trader can watch business channels such as CNBC or Bloomberg, or check Forex news websites like DailyFX.com and Fxstreet.com for news updates, the fact remains that these sources often report news that is too late to trade profitably. Banks, on the other hand, have access to news sources that provide instant news.

These instant news sources include expensive electronic financial data providers such as Bloomberg terminal, Morningstar Direct, FactSet Research Systems, Capital IQ, Reuters, and Jackson Terminal etc. Since these news sources report information before it is released to the public, bankers have an obvious advantage that allows them to predict the market movement and trade currencies before the market actually moves.

Another advantage that banks have over individual Forex investors is access to a network of trustworthy advisors. The big banks not only have the expertise of hundreds of financial advisors, economists and senior Forex analysts, they can discuss the news that is being reported with Forex experts and economists from other banks. They collectively form a consensus about the news and move in a profitable direction with the currencies. Forming quality teams of quality Forex experts allows banks to maximize their profits.

Last but not the least, the banks possess the largest share of trading volume in the Forex market and they have access to the best Forex spreads

How can you Trade like a Banker?

While you may feel under-privileged and disadvantaged in comparison to banks, there are steps you can take to trade like a banker.

To begin with, you need access to instant news sources such as Bloomberg terminal. However, these instant news sources do not come cheap, often costing no less than $1,500 a month. Also, even if you could afford an instant news source, interpreting raw data is difficult for an individual trader. You can only utilize the news to predict the market movement when you completely understand the data. For an individual trader who may be inexperienced, interpreting this information can be problematic.

You can overcome this issue by emulating another superior behavior of banks: working with a team. Working as an individual yields minimal profits, but working as a team can help you interpret data and make profitable trades.

However, forming a quality team for an individual trader can be very difficult. While most of the traders might be able to read the opinions of experts on the Forex market, they will never be able to accomplish what they could with a 24-hour team of expert economists, researchers, and traders.

Trade like a Banker by Joining LTG GoldRock

Realistically, even if you emulate the banks, you will never achieve your full potential as a Forex trader on your own. You need to seek help of a professional company, with a team of expert financial advisors and traders possessing vast experience of Forex trading and having financial data systems which are available to banks. For instance LTG Goldrock, which provides its members with a 24-hour live trading room, providing its members with access to instant news and a team of experts that they can interact with in real time.

Additionally, LTG GoldRock enables its clients to access the most powerful and comprehensive training and education system and opens up the lucrative world of Currency trading to them LIVE. The company’s professional team of trainers and traders teach the clients the systems, techniques and strategies used by some of the largest banks, institutions and successful investors. Since Forex trading is unpredictable, LTG GoldRock is an invaluable resource, providing the tools and guidance to help you understand market sentiments and trends, investors’ psychology, and money and risk management strategies.

Banker-like-Privileges for LTG GoldRock Members

By joining LTG GoldRock, a new individual trader can actually master the “art” of trading, just like the bankers do. The company’s goal is to provide “an average investor the same profit opportunity that large institutional investors have had and enjoyed for years.” The following list is just some of the banker-like-privileges you can enjoy by being a member of LTG GoldRock.

1. Get the training and education of a banker

LTG GoldRock trains and educates traders in the techniques and skills bankers use by offering them a Professional Trading System. LTG GoldRock’s trading system mainly focuses on price action: the leading indicator for Forex market movement and teaches the customers techniques foreign to most novice traders.

2. Have instant access to financial data and news

LTG GoldRock members are offered instant access to financial data and news. The company also offers members a live professionally run trading room and Trade Text Alert service, allowing you to receive daily text alerts of all LTG GoldRock official signals on your mobile phone. If you want to trade via your mobile phone, you can install the trading platform on your cell phone too.

3. Work with a team of professional trading experts

LTG GoldRock gives you opportunity to interact daily in the live training/trading room with the company’s moderators, economists and professional traders. You can ask questions and place trades with LTG GoldRock’s community of members. They even guide you into each trade with their own live account and suggest the perfect entry and exit points for each trade.

4. Enjoy the most competitive brokerage rates

LTG GoldRock can provide you with the most competitive brokerage rates. The company has well-built working relationship with the largest brokerage firms in the world, with over five decades of experience. The company’s partner brokerage firms execute over a million trades every day and manage more than $4 billion of their clients. With their professional relationships with such reputable brokerage firms, LTG GoldRock offers the most competitive rates to its members along with the peace of mind of being associated with highly reputable brokerage firms.

By way of LTG GoldRock’s guidance and resources, you will learn how to compete with the banks, learn how to think like a banker, and how to establish yourself in the Forex trading marketplace.

Kerwin Rae shared some of his marketing secrets

I recently had the opportunity to speak in Portugal to a group of successful investors and business owners who were at a conference called the Billionaire Boot Camp. During the course of 7 days the attendees effectively studied how Billionaire’s run businesses, how they think, how they act and how they make what seems like consistent successful decisions. I was simply there to share with the attendees the power of learning about the Foreign Currency markets and share with them my views on the current market conditions and how they can best take advantage of learning how to trade Forex.

Now I am not professing to know how all Billionaire’s operate but I did share with the attendees how some of them go about considering financial decisions. What sets successful people apart from the rest is simply the decisions they make in life and business and the ability to make the right decisions at the right time.

This often comes down to a simple set of questions.

1. What is the cost?
2. What is the return?
3. Can the return keep paying me for the same cost?

These are 3 simple questions are what many successful people ask themselves when making a financial decision.

Dan Storey from ThinkBig UK after the Billionaire Bootcamp in Portugal

When the answer to the final question is Yes, then the answer to the investment decision should always be Yes. This is part of the process of making a successful decision and in my view you should be constantly learning and studying what these people do if you want to make it to the top and stay at the top. Think about it for a second. Would you rather invest in a business where the cost keeps paying you for the same cost, or would you rather invest in a business that requires you to put in more capital every month or every year. I am sure you would prefer the former opportunity.

Successful people making decisions quickly and decisively through asking the right questions. They also change their minds slowly through ensuring they also ask the right questions. Unsuccessful people make up their minds slowly and change their minds quickly. This is so true as most people who are not reaching their full potential are constant procrastinators.

The second major tip I gained from the conference was the incredible ability successful people have at leveraging themselves. You may or may not have heard the phrase before look at the doughnut not the hole. This refers to the point that most people will look at what something is going to cost them and not focus on what really matters and that is the return and the leverage that they will gain from the opportunity. Richard Branson is a classic example. A guy who seems to live the most incredible life, tripping all over the world taking part in some of the most exciting adventures all whilst running a billion dollar empire. How does he do it.

1. He asks the right questions and makes good decisions.
2. He doesn’t procrastinate about decisions because he has a process and asks the right questions.
3. He leverages others ability and hires the best people he can find and promotes from within and fosters an incredible culture within his businesses.

Sir Richard when he decides to get involved in a business will spend the first 6 months actively engaged in the business and after that he’s at an arms lengths distance being involved on a need to know and need to be there basis. He leverages others so as it allows him to free up his time to get on with the job of building a bigger better business.

Most business people think they can’t afford to leverage their time because it’s too expensive to hire someone to do their job. I say unless you do leverage your time and hire others to perform day to day tasks your talent and success will never reach its full potential. All of the friends and business colleagues I have that are hugely successful are incredible at getting other people to do their work for them.

Learning to trade Forex successfully will allow you to leverage your money and give you back your time to work on other projects that can help you build your financial portfolio. Since becoming a trader I have spent more time overseas, spent more time with family, helped more people financially, met more incredible people, and built a number of successful business ventures that I would never have been able to do working 9am to 5pm.

Learning to make good decisions and successfully leveraging your time and money is a true path to a happy and fulfilled life.

Trading + Alcohol = Not a winning formula...

An oil dealer at PVM Oil Futures called Steve Perkins is reported to like a game of golf and a good drink, or at least he used too. He recently traded with $520 million dollars after a 4 day booze filled bender and figured he’d place a few trades while he was in the mood at 3.41am on his lap top. The story goes that he wanted to move the market and indeed did, substantially. Problem was he blacked out completely after the trades were placed and openly admits he was so drunk he had absolutely no idea what he was doing.  What was the upshot of his substantial loss? He was fired and banned from trading in the UK by the Financial Services Authority.

It is alleged that he traded 9 million barrels of oil in the middle of the night and lost £350 million pounds.

Where is he now and what is he doing? It was reported recently in the London Evening Standard that he is now rumoured to be in talks about a new trading job trading energy contracts for a Swiss firm. It was reported that when the Financial Services Authority was asked what they were going to do about it, responded with a statement that said: “Mr Perkins poses an extreme risk to the market when drunk.”

One thing that I have learnt through the school of hard knocks is that there is no question all budding Forex traders who join LTG GoldRock have a high expectation on their success in the first 12 months. The most common question I get asked is. “How long till I can make my educational investment back”. Ok a fair question however the answer lies in your commitment to learn to trade and becoming a student of the markets. Traders always overestimate how much money they are going to make in the first 12 months however underestimate what they can achieve over 3 to 5 years if they actually learn the skill and art of trading. A high expectation (which is a healthy thing if the expectation is realistic) is often met by disappointment in the first 3 months which dampens the long term opportunity as the money is not coming fast enough. Especially if they are joining to fix a financial situation. If you are considering joining LTG GoldRock for this reason then please don’t join.

I met one of my absolute very best graduates for coffee at my local coffee shop here in Noosa today. His name is Jimmy and he is honestly today living the life of his dreams. I am so proud of him!!  He trades for a few hours in the evening when he wants too, he relocated his family to the Sunshine Coast from Melbourne 12 months ago this week and he told me today he is so happy and loves his new life. He does what he wants, when he wants and is now truly financially independent and has the skill and knowledge to be anywhere in the world and create a recession proof income for himself and his family for the rest of his life. Now that’s a skill most of you would love to have I am sure. Here’s what he did.

Jimmy was a student of the markets for over 12 months before he began earning in some weeks, more than he use to make in 3 months driving his courier van. For the first 12 months he learnt to trade, studied hard and became a dedicated sponge for learning how to trade, without the expectation of huge profits. What he did was set himself up for long term success. You see most traders give up inside 12 months because they are not making the money they expected, and most of the time also not following the rules that apply to successful trading. However those traders who “make it” are prepared to put the money in the back seat and the knowledge and skill firmly in the front seat and learn how to use it professionally to their long term benefit. Their profits may be small in the first 6 months and some make no profit at all, however so long as they are not losing money consistently they are learning the skill of trading. The question will be, will they continue to refine their performance so as they continue to improve their results as Jimmy did.  Have you heard of any household name major brands in the world that have done this? There are dozens and dozens of them.

Let me ask you a quick question. If you could be given an opportunity to learn how to potentially replace a full time income, spending 4 to 6 hours a week for the next 12 months to 18 months learning part time how to do trade, would you take that opportunity? Before you answer yes or no let me remind you of the benefits of getting it right.

No staff, live anywhere in the world, have a recession proof business that requires no overhead to run, no marketing and advertising to do, no money or customers to chase, work what days you want,  keep your risk and money management to 1% or less, build your cash flow at your own pace.    Ok now answer Yes or No? If you answered No then I don’t think trading is for you.

Getting the expectation right from day #1 is critical as it will set you up for long term success and when you hit the hurdles and bumps in the first 6 months that you MUST power through, you are actually able to do it. The realistic expectation for a trader for the first 3, 6 and 12 months is to learn the skill of trading, have a heck of a fun time doing it, make a nice small profit that outstrips what capital could have been made in a bank or managed fund. If they can achieve better than a managed fund in the first 12 months then they are on the right track to being able to join the likes of Jimmy and others who are truly living a wonderful rich and fulfilling life as a trader, 2 and 3 years on from when they started. Where are you going to be in 2 to 3 years from now? Are you prepared to spend the first 12 months learning or don’t you have the time? I know you have the time, it’s whether you really have the commitment.

All the best.

One aspect of trading that you must understand and take on board RIGHT NOW is this. The market is only a two horse race. Buyers and Sellers are the only horses in this race and the price is either going up or down. How simple is that. Yeah I know what you are thinking, it has to be more complicated than that, ITS NOT!   Simply looking at a trend and placing a trade with a trend has the probability of continuing in the direction of the trend rather than reverse and go the other way. But why is it humans consistently try and build systems and indicators that over complicate things. The more complicated you make things the less likely you will make money, period.

What you need to do is find a simple system that has the balance of probability on its side and simply play it with great money management. The worst case scenario will likely be that you will not lose money. But if you try and over complicated things, jump from one strategy to the next and don’t work your way through the losing and winning streaks of the simple system, you will never make money trading Forex consistently.

The KISS principle is not taught often enough (keep it simple stupid) and if most traders simply committed to a simple system that trades with the trend, managed their risk to a minimum, ensured their profits are always bigger than their losses (even if it is by only 5%) you chances of making money are significantly improved.

Here in a nut shell are my two opinions and hunches for the next 3 months.

1. The aussie dollar to continue to steadily rise
2. We will also see a steady increase in the price of gold.

As Traders it’s important to stay up to date with the latest Forex News and global market movements. It would be ignorant to be in the business of Trading Currencies and not know what is happening around the world to each of the currency pairs.

Regular contact and support from your mentor is a must.

It is something you often hear about but rarely does anyone use mentors effectively and not many people actually have one.

I kind of fell across my mentor and you can call it luck if you want, but he’s 27 years older than me, old enough to be my dad but has taught me so many valuable lessons on the past 5 years I wanted to encourage you to consider getting yourself one. I can hear you saying “AB where do I start?”.

Well the traits of the mentor you want are simply the traits of the person you want to become. You see when I met my mentor who is also now probably my best mate and the Chairman of my company.

I had no idea he was going to be someone I looked up too and gained life lessons from. I just admired what he stood for and the lifestyle he had.

I bet you know someone you would like to be like. Someone you look up too, they stand for the things you stand for, inspire you and are successful. Go and buy them a coffee or dinner and be straight up with them and tell them that you respect and admire them and was wondering if you could chat from time to time with them about what you are doing in your life and ask for their advice. I do this all the time still today, and it is amazing what happens.

You see, what goes around comes around, and if you just throw the stone into the lake today, you just never know where the ripple ends up going. Just don’t forget that it works both ways. We all have our own strengths and experiences which could be exactly the traits that someone you know is looking for in a mentor. So remember to keep the door open and remember to pay it forward.

Go on, try it and tell me what happens. I bet it is a positive worthwhile experience and you are glad you did it.

Forex is an unique market where as the price moves from one pip to another pip you as the trader can chose what each point is going to be worth before you enter the trade. For example if we are buying shares on the stock market each share will have a specific value, for example $1.20. You can’t alter it.

When you invest in Forex, the trading platform will ask what you want each pip (or point) to be worth. In other words if the EURUSD is trading at 1.1976 and it moves to 1.1977 that is one pip. You can chose the smallest volume to be 0.01 which is essentially .10c. You could have each point be worth $10,000 if you account could handle it.

That brings me to the point of traders making or losing pips and applying the real return on investment.

Here is an example trader John.

John takes 10 trades in a month and makes a +400 pip result with a 60% success rate of hitting his profit target.  You would assume that John would be pleased with this result. He can hold his head high as a  winner, he made +400 pips and a nice profit.  Or did he?

John took 10 trades and risked 0.5% of his trading account on each of the winning trades. He gets 6 of his trades correct and 4 incorrect. The profit target on each winning trade is +100 pips. A total of +600 pips and a return on investment of 3% (0.5% * 6 = 3%) . The other 4 trades he gets incorrect and each losing trade is only -50 pips however each losing trade he risked 1% of his account not 0.5%. A total of -200 and loss of 1% on each trade which is a total of -4%.

So what is John’s real result.

The result is +400 pips (+600 – 200 = +400)  A positive result…… but hang on a minute!!!

On the 6 winning trades he made 0.5% on each winner which is +3% return on investment. But on the losing trades he risked 1% which is -4%. What is John’s total return on investment?

His real result in return on investment is -1% even though his pip total was a handsome +400.

So my point is that even if a trader says they have lost -400 pips in a month does not mean they made a loss on their account, just as when someone says they made +400 pips does not mean they made a profit. What is the only measure of success in Forex is what their ROI (return on investment) was on the trade, not the pip total.

Later this week I will share with you what a professional risk calculator looks like and how successful traders manage risk in Forex and focus on ROI and not pips.

It would certainly be an exciting time to see the Renminbi as the code RMBUSD or do you think Washington might prefer USDRMB? I am sure if China has its way if it every does float on the markets RMB will be the base currency. I won’t be holding my breath for it to happen any time soon, the Chinese do things at their own pace and it’s proved to be an interesting strategy over the past decade with most of the world’s economists and central banks eagerly anticipating what China’s internal policies are for it’s still rapidly growing and demanding economy.