Hi there, welcome to traders4traders.
Now I'm here to introduce the first of a
five part series about How Do the Bankers
Trade Forex. This is going to open
your eyes to the small part of the
market that controls the majority of the
volume in the market. Now once you
understand how the bankers do trade
Forex, okay you're going to be a step
ahead of the market and, this is the most
important thing. You'll be trading with
the market, not against it. All right now
what we're talking about with the bankers
now, I've got a whole range of
things here that if I want to sort of
discuss and go through but let me just
sort of a start back from the very
beginning. Now I've read and become quite
frustrated frankly with the number of
people out there who are speaking "I'll
show you how the bankers trade Forex" now
at best its second or third or fourth
hand information. Now the banking
community is very small and I've had a
good look around the place and there's
so many people claiming "I'll show you
how the bankers trade" and it is
extremely frustrating to someone that
has come through the banking industry
with 20 years of experience. So let me
just put my sort of touch on it and this
is first-hand knowledge, not sort of
something that I read. Not something that
I've heard from someone else tell me, or
anything else for that matter.
Alright so the bankers, now what are they
doing different to you as a retail
trader? Well there's probably a lot of
things right,
one thing overall, and this is what
you'll get out of this five-part series
is the simplicity of their trading
systems, their methodology is extremely
simple. Clear technicals, straight up
fundamental drivers and really precise
execution. Now I'll go into detail as we
go through this series but just
focusing on the mindset of the
Banker Trader first and foremost. Now
what they do that's different?
Well let me just come back to where they
actually start, now I started as a
graduate straight out of University with
Citibank in Sydney and basically the
structure of what you do the first year
or two, you are basically learning, you're
learning about the markets, you're
learning about the currencies, the time
zones, which currencies correlate and why
they correlate and then starting to
build some structure around the
fundamental drivers in the market
but they spend a lot of time drilling
into the young guys, okay, all about the
various aspects, the minute details of
the currencies and this is one area
first and foremost that most retail
traders overlook.
You know I've spoken to a lot of people
and over the last eight years in
training thousands of people, I know
firsthand what they do. They turn on
their screens they look at the currencies and they start trading. Now that is
different to what the bankers would do
in the first place,
they will spend a lot of time making
sure that you know, what drives the Euro
what the Euro crosses are connected
to, and which ones move on various
announcements and those sorts of things.
So it's the minute detail that
makes the difference, that's the
foundations for your whole knowledge so
make sure when you are starting, that you
do spend a lot of time and I was going to
say enough time, but a lot of time making
sure that you're having very thorough
understanding of the currencies, the
markets, why the why the prices move and
how to trade those price movements and
then you'll be prepared for the next
step. Now let's just go back
again once again to as you go through
the banks you start as a graduate, you go
into a junior trader role and then if
you're actually quite successful at that
stage, you go into a senior trader
roll and then last but not least you
probably become the chief dealer, right
so there's a bit of a stepping
stone and there's certain levels of
knowledge, experience and things you pick up
along the way. Your risk profile of
course increases through those stepping stones and
that's the way you should to go about
increasing your risk, as you get more
experience and more success, that's when
you step things up. All right now let's
just come back to the bankers and
what's different about the structure of
what they do and their daily routine. Not
only their mental preparation I'll come into
that later on. But the daily routine is
very systematic, right every time you
come back to the screens you need to go
through the same systematic process, now
I know the bankers you know for the first
year, you're getting used to that routine
you're building the routine, the habits
of looking at the charts, looking at the
fundamental drivers, just checking what
the central banks are up to, making
sure that the sentiment, direction, entry
levels are all lined up, and then your
trading. But one thing that
you'll find is okay, the guys are going
into work each day but
generally getting in, when I was in
London and probably less so in New
York but more London, getting into work
around 6:00 a.m. if anything you're
leaving around 5:00 or 6:00 p.m. it's a
solid 12-hour trading day and it is
extremely exhausting, and I was in London
for four years, it was a massive learning
curve, I'd say I probably aged about
fifteen years in those four years the
amount of pressure and flow and volume
it was non-stop, okay but one thing what
we are actually doing, understand what
the bankers do. Now there's two things
they do, they actually transact all the
corporates, all the investment banks they
go through the top tier banks and they
do all the execution for them, right it's
a bit of a tedious role for the forex
traders, okay this is where they lose
most of their money, transacting for
basically the bank's client base which
are the massive corporations and
investment banks as I said. So, the second
tier of what they do is basically what
you're doing, strategic trading, okay
that means you're basically looking at
the market and placing positions around
opportunities where you see direction
and entries and these sorts of things.
Okay nothing to do with bank flows and
all these sorts of aspects which you can
come unstuck. Now when you are looking at
the strategic aspect of the bankers the
way they trade, right they are looking
very methodically and very patiently at
the market. Now this is where a lot of
the the Hollywood sort of dramas - you
know Wall Street not really the Wolf of
Wall Street (that was more about partying)
but the other aspects where the
traders are in there they're shouting all sorts of things, now a lot of that is the
futures market it's different than what
the banks are doing, now that doesn't
mean there's not a lot of shouting and
screaming in the bank's there is, but
it's insular. There's no one outside
the bank to come in and watch the team trade
so there's a lot of teamwork going on,
but what they do is, they sit back, and
when there's downtime and there's
nothing going on, they sit back and they
wait, and they wait, and they wait for the
opportunities
now let me just give you some structure
around how the bankers trade and where
you need to get some some skills and
knowledge
first and foremost. Now, a lot of the
confidence that comes that is sort of
perceived by the forex traders, and they
are extremely confident, to the point of
almost being arrogant. Now I was always
sticking up for my traders when I was the
Chief Dealer probably, primarily because
a lot of people thought they were over
arrogant, but if anything you know what
they were confident and they had to be,
this is a tough industry and especially
when you're, on a bit of a losing run you
need to pick yourself up, dust yourself
off ready for another day, and this is
one of the first aspects
their psychological components they
are very hard-headed. Now one of the
first things, the secrets that I was
taught and I taught many of my junior
traders along the way as well, every day is
a new day, right, that means you reset at
the end of each day and at the start of the
next day, it's a completely new day,
regardless of whether you've made 200 grand
400 grand,
whether you've lost a hundred or 200 grand
as well. You can't dwell on yesterday's
performance and this is a very hard
thing for a trader.
Sports people have a week in between
you know games, for traders it's five days
on the trot, two days off and five days
on the trot, it's very, it can wear you
down, the only way you can
psychologically get over the emotional
roller coaster is to switch
off, okay when there's nothing going on.
But most importantly reset each day, it's
almost like you need to plug your self
into the wall, wipe your memory and start
again. Overconfidence, right (and this
usually happens when you are making
money) is probably the biggest cause of
losses generally when you're in draw down in
or your in a losing sort of phase, and
this happens to all traders in banks,
retail traders, everywhere, investment
banks, fund managers they all go through
this. When you're in a losing phase
you're generally really focused, okay you
are looking probably closer with attention to
detail than any other time, when you
start making money that's when you start
to think, well it doesn't really matter
you've got more money in your account it
wasn't there yesterday and then you
start making stupid decisions and that's
why you need to reset
each day, recalibrate your brain, right
and how do the bankers do this? Hows
the structure, let me
just explain the structure of the
internal mechanics of the bank, so then
you'll understand how they do and what
tweaks them into action. Right, so how do
the managers, trust the bankers, trust the
forex traders to manage the risk
adequately and professionally and
disciplined at all times? Well first and
foremost they're paid a large salary
that gets you in the door, but it's all
about the bonuses, the traders depending
on the level of performance, at the level
of seniority will have certain levels of
budgets. Now my general budget in
London, New York, less so in Sydney was around
five million bucks, I had to make five
million dollars each year, and that's a bit of a tough target, especially
when some of the other guys who have
been around as long as me, have got
budgets of 1 million, just like it's a
little bit unfair because if you're
successful they will just keep putting
up your budget regardless of how
compared to the other team and that's
how they sort of bring it together. so
what the traders do is okay they're given
a budget, now let me just sort of take it
back to a junior graduate level start
makes a bit more sense to you so say
your budget is a hundred thousand
dollars, now this is the way the traders
prepare themselves mentally and it's
quite systematic, they treat this as a
business, as you should as well. So if
your budget, or your target (your goal) for
the year - well let's make it actually 120
grand, then I can break it down into easy
components, so what they'll do is the
trader himself will go into each month
120 grand, he needs to make 10 grand a
month, and then he'd go into each week
you can actually sort of see this
is actually what these are the sort of
targets we would actually give graduates
right, you know, we let them
trade, we let them sort of lose a
hundred thousand, in the big scheme of things for the banks, it's not much
money but it's a big
learning curve so, what you need to
do is, you need to set some goals around
what your specific targets are, and then
break them down into weekly, monthly or
sort of daily, weekly, monthly, yearly
targets, and that way you can manage the
opportunities in front of you make sure
that you are ticking the account over. Now
around that budget, how does
management control it? Well they get
the traders specific limits, okay
position and size limits
they'll have drawdown daily limits, drawdown
weekly limits, drawdown monthly limits.
Now this is the same structure that we
have for our Funded Trader Program and
it's important you understand this, this
is the the professional network in
action, and this is the way that the
senior management controls the trading
teams to make sure they don't blow the
place up, you know there's so many loose
characters like Nick Leeson in the mid to
late nineties when I was in London
brought down Barings Bank, you know it
was the derivatives market but basically
that changed the structure of a lot of
back-end systems and going on forward
from that there's been a whole range of
guys that have stepped over the mark and
the banking systems are very tight and
you have to control the parameters around the
traders on the front end desk so
the traders have limits, now one of the
key components which is completely
different to what retail traders do to
bankers is retail traders your
trading your own money, well that's
actually quite tough you're putting your own
cash up whether it's 10 grand 20 grand
50 grand a 100 grand whatever it is,
right you're risking that cash that is
fundamentally different to what the bankers
do they trade the bank's money, when they
lose with the bank's money they don't
really care too much. So how do they
bring some caring into the forex traders
well it's a quite easy,
quite simply done. Now the bankers before
they become sort of senior traders they've
probably been trading for five
plus years, if not 10 to get to the top
of the tree. Now, the fear of losing if
they actually break limits, right
they're sacked immediately, that's their
whole career on the line. They may have
spent 10 years trying to get there, you
push through limits, you're sacked straight
away.
All right, so how the bankers control
it is, they give them bonuses a that's
the carrot to keep
them going then they sort of focus them
with their limits, okay and then the
whole sort of
you know where you have the fear of
losing your cash, they had the fear of
losing their careers, their security and
everything else, so the fear factor is
quite comparable between the retail
trader and the banker itself so there are
some similar comparisons there. Now
so coming back to the structure of what
they're doing, the mental preparation
each day the routine the systematic
analysis this is where it comes back to
once again as I started the beginning
with understanding the level, the time
and effort they put in to learning the
market. Now you go back sort of 27 years
ago when I first started, there was no
online systems, there was no online courses
you had to sit next to a trader and they
told you exactly was what's going on.
What we've done with our course is
actually jammed that 20 plus years
experience into a hundred plus videos
and now you can actually get a whole
range of that experience instead of
taking a couple of years to get that in
you can get that done in a matter of a
week, or two depending on how much time
you've got to go through things, and
that's where your confidence and
understanding is going to come into play
once you've got confidence around
knowing what you're doing, right all of a
sudden the fear evaporates, okay, you've
got your cash ready to go onto the market,
you've got your understanding of the
market, you're looking for precise
low-risk, high probability entry levels
when you put a trade on you are thinking
this is going to make money, now that all
comes from understanding managing your
cash, right and understanding the market.
Now how can you sort of get some of this
control right? The main part of the
control comes back to as I said with the
limits for the bankers, but for you it
comes back to Capital Management the
Four Consecutive Loss Rule that
I have constructed some time ago and
it's a major part of the Pro Trader
course, if you get that right, you are set
to trade and trade forever, right you
will you will have a long trading
career if not successful especially when
you start taking the key components of
technical analysis and fundamental
analysis that you'll learn through these
webinars as well as through the Pro
Trader Course
All right, so confidence, limits, capital
management, right that builds the bankers
structure when they get to the
office. Now one of the other key things
that you need to do is, is actually start
to sort of work out, what you should be
looking at and what you don't look at,
and this is a major part of the 247
Trade Zone that we have and it's trying
to sort of give you that experience,
don't waste your time reading what
Donald Trump would call "fake news" and
there's a whole heap fo that out there these days
if nothing's happening in the market
you'll find Reuters and Bloomberg, the
two prominent you know financial markets
new services, will regurgitate the same
news to try and keep people interested
don't forget they are selling
advertising just like every other
company. So understand when the markets
are ON and understand when they're OFF
as I said the major thing I want you to
take you out of his first step is, not
only the mental toughness that the
traders have each day the way they
conduct their business the way they
execute but it's also the level of
relaxation they have, they have a huge
amount of downtime when nothing's happening
don't go looking for trouble, they don't
sit in front of the screens and just
bang away, bang away all day long. You'd go crazy if you did that they
wait for the big moves and they hit them
hard so they are very patient, in fact
what they do is most of the time, and
you know I was in the banks
almost 20 years, you're out partying
almost four days a week, that's all
during the week the weekends you're
probably sleeping in
because you've worked so hard and you've
been out all night, every night and
that's what they do, they actually take
the time, relax they go out have a good
time they come when they get in front of
the screens though they switch on, and
they are extremely focused, right and
that's probably one thing that I see, and
have heard from a lot of traders out there,
what's difference between me and the other
guys? Well I'll tell you number one, a
lot of people for instance, they're
either working shift work or they've got
a day off and they think you know it's
Wednesday, you know I've got 6 hours
here, I'm just going to turn the screens
on start trading. That is so wrong, 
now sure, occasionally you might find a
market moving at that time on the back
of some economic data release or some
news, but generally you trade when the
market is on right, now generally that's
where it revolves around economic data
releases, now if you are pushing the
market and trying to pull money out of
it, right that's when you're going to
come unstuck,
you can't force the market around, and
the bankers even know this and they are
turning over huge amount of volume so
you wait for the market to deliver the
opportunities for you, and this is why
they focus very closely on the
fundamental aspects of the market, that's
where the cash really is, right if you
can work out where the direction is
going, well then that's that's half the
question, so the traders themselves focus
a lot, and a lot of their trading is
around the fundamental aspects of the
market
one other key component they do
spend a lot of time on is understanding
the Central Bank's. One of the key things
(and this comes back to the daily routine)
once they sort of get into the bank
themselves right,
they come in, they turn their screens on
they check their P&L, as you should when you
when you upload your mt4 or your
trading platform, make sure your cash is
there, if you've made money acknowledge
it, if you've lost money check it out,
make sure you reset for your new balance
now once you've done that the key part
to sort of going on from here, is
really focusing on the central bank's,
the central bank's control the
overall trend, the sentiment, right the
economic data is short term momentum now
if the central bank sentiment is up and
the economic data releases that are
coming out of that specific currency are
up as well, we've got a very good trade
got the trend, we've got a short term
momentum going the same direction, what
we need now is the technical aspects and
that's where the traders will spend a
lot of time each morning going through
and making a note of those key levels.
Once you've got those key levels down pat,
you've got the general sentiment, then
we're just looking for that last piece
that fundamental aspect to fit in with
the trade. Now a lot of the time, say
the sentiment is up, we've got a good
entry level on the topside, but the
fundamental news comes out weak, ok well
that's when you put your pens down, turn
your computer off and you think well
where should we go for lunch?
That's what the traders do, as I said
they don't go looking for trouble
if there's a trade on they trade, if
there's not, they don't do anything.
That's what you've got to do first and
foremost, don't waste any of your
hard-earned cash
chasing the market. If there's a trade on,
put the order on, if there's no trade on,
well don't put anything on, and don't waste
several hours sitting in front of the
screens thinking maybe something will
happen, because it won't, and actually
if it did happen it would be completely
random, right and you wouldn't know what
to do anyway. So the key aspect for the
mental managing, and mental
preparation of the bankers is they are
sort of pretty relaxed every day they go
to work, they know what days they're
going to be busy, and what time of those
days is going to be particularly busy
and they focus on those times. Outside of
that it's tools down, rest, relax, go out
and party. Well that's what you
need to do with your trading plan, is
get hard-headed with your methodology,
your mental preparation,
don't let winning trades
dominate your 
psychological aspect because you will
start to become a different person and
your close friends and
partners will tell you you are being a
bit of a loser because all of a sudden,
you think you're a bit of a 'rock star'
now that's a sure way to start losing
cash, I can tell you that, now it's about focus,
confidence, understanding the market,
limits, okay having some structured
around your capital management which is
extremely important, that is the most
important aspect outside of this one,
which is the psychological sort of
preparation that you need to have to get
you in the groove straightaway, so
there's a lot of aspects people sort of
come to the screens when they first
start trading
they think about the technical aspects, "I need it look at the
charts" they Google the crap out of the
charts and (I'll come into the
technical analysis in the fourth of this
series) but you know, it's overused, but
people are using technical analysis
and throwing indicators all over it for
direction as well as entry levels and
all these sorts of things, basically
they are doing that because they don't
understand the market, if you don't
understand the market you're going to have
a huge amount of fear in the market
you're going to be lacking a massive amount of confidence I
should say, every time you go to trade
and, soon as you put a trade on you'll
close it out, once you understand
what you're doing and what the market is
going to deliver
you've got your capital management
that's when you're ready to really sort
of start rocking and get things moving,
all right, now this is a whole
series as I said, will open your eyes to
the way the bankers actually prepare
themselves. There's a number of tools
they use, whether I mentioned it
before Reuters or Bloomberg, now we use
Reuters, this is your connection to the
market. I'm going to go through this very
thoroughly so you understand what to
look at and what not to look at, right
but, understand first and foremost, now
I was going to do this webinar last in the
five-part series but I think it's most
important that you understand the edge
that you need to have, to be a successful
trader. As I said, most of it comes from
from confidence and that comes from
knowledge of understanding what you're
actually doing, the markets, execution
looking for that direction and sentiment
from the central bank's, and some of
these aspects you can get through the
course, other things you're going to
learn as you sort of trade and
experience these the release of these
events themselves, and in particular the
central bank's, you know the release of
the rate decision, the statement, the
press conference, the minutes there's a
whole range of structure here around
various economic data releases and most
important the central banks that do
control the overall direction of the
currencies, if we get nice clean trends out
of the central bank's, we make a lot of
money, right and that's so important
to you to get this right from the very
beginning. If there's not a trade on, do
not feel pressured to trade, as I said the
bankers relax, they wait they've got 12
months to make their budget right
and that's where their bonus comes in, so
if they make a budget, so one day out of
say 200 it's no big deal,
20 days is no big deal, you know,
you need to have this same aspect and if
you're sitting at home (and I get this
quite a lot) a lot of people stop work
and they want to become full-time traders,
they're looking for that lifestyle
change, well I can tell you the lifestyle
change, trading fits in with what
you're doing. You don't sit in front of
the screens for the six, eight, ten hours
a day, and I have met loads of people to
do that
it is extremely pointless at the end of
the day you can't see the forest from
the trees. Being fresh being very
specific but being mentally tough and
prepared and disciplined to look at the
markets, identify an opportunity or not,
if there's not, well have a look through
and analyze the market and see where the
next potential event might be, when the
currencies might move, if it's not for a day
or so, well come back tomorrow, don't sit
in front of the screens and just hope that
something might happen and try and
generate cash out of thin air because
that is a sure way to start losing cash,
and once you start on the slippery slope
you'll start chasing the market and
that's one thing that the bankers don't
do at all. Okay so, one of the key things,
I'm just looking across at the various
aspects here, I've got some sort of key
notes here that I want to highlight
for you, so I think one of the key things
okay, is just first and foremost expand
your knowledge right, as I said the most
important thing, and this is why they
don't give junior traders or the
graduates you know (they're called
graduates because they've just got into
the joint) but they don't know as much as
they think they do. As a senior
trader and I was a Chief Dealer for
about ten years, you're looking at the
graduates, I would be thinking okay two
years time they'll be ready to become
junior traders, and the junior trader will
be a junior trader for probably two or
three years okay if he's good enough, and
actually blows the budget out
of the water
well then we'll set him up with more
cash, and he becomes a senior trader so
there's a stepping stone to your 
whole career, but you won't have a career
unless two things, you get the
psychological edge and understand what
you're doing,
you get the capital management structure
around your whole trading system and
this is going to control
not only your cash, your trade plan, your
risk reward ratios and your trade
selection. It all comes back to this
major component you get those two
components in place, and now you're ready
to start trading, and you're ready to
start learning. Now the next video will
be on Capital Management, then as I said
we're going to move into the Fundamental
analysis you know the economic data the
central bank's then the Technical
analysis and then last of all in the
five-part series I'll be
bringing it all together, and show you
how this system works and how the bankers really sort of focus, and this is
where you are computing okay, when you
see an opportunity, right
you see, say Euro data release, all of a
sudden you know the technical levels, you
know the central bank sentiment, you hit
you trade, the currencies on the way
and your cash is making money. If it
turns around on you you're getting out
the trade very quickly locking in some
profits or just taking a small loss, this
is about being dynamic and understand
that you can learn more all the time, but
having the foundations is the key to
this, right and this is why I want to
present this this webinar first, is get
yourself prepared, alright this isn't
just about Googling "How does technical
analysis work?" It's about structure,
right, structure around your preparation,
getting your systems up, your trading
platform, if you're looking to become
professional I'd get Reuters on as well
connecting with networks whether it's
traders4traders or someone else, right
you need to be speaking to people that
have got experience about, and understand
how the bankers do trade Forex and this
is one of the key things that we do in
the 247 Trade Zone is, I'm
giving out sort of knowledge and
experience firsthand to our clients,
and that's the difference between you
know, learning straight away or trying to
decipher the market by yourself for six
twelve months or even two years, okay
probably losing a lot of money during
that whole process. So that's pretty much
it I want these webinars to
be short and sweet and precise, and get
you ready for the market and get you
ready for your trading career. As I
mentioned the
next in the series will be Capital
Management - the most important aspect
of your trading system. If you have any
questions on this webinar or any
of the other parts of the course
jump online at info@traders4traders.com
or jump in to the 247 Trade
Zone if you're doing the trial,
free trial that is, and you can ask us these
questions directly, not only will I be
providing answers, we've have got a huge
amount of professional traders as our
sort of client base and these guys are
extremely accurate with everything they
do and if anything, they do trade the
market like the bankers and that's why
they're more successful I hope you can
join us for the journey I look forward
to working with you and I'll see you
for the next webinar shortly
Cheerio
