Here at the Institute we encounter countless people with Trading backgrounds. One of the largest hurdles most of them have trouble overcoming is their willingness to accept how much manipulation there really is in the Forex Market.
Our methodology focuses on shorter term trades (Usually less than a day in any given trade), which is where you see the most prominent manipulation of price; especially during high news events. By reading the manipulation, thereby using it to our advantage is how we are able to get our consistency from our trading. After all, who doesn’t want to be in the same trade as Goldman-Sachs’ Forex Division?
The following article is what we teach to our new students trying to get their arms around what really takes place in the Manipulation cycles.“Just how much is it really manipulated?”
If you are looking at a chart smaller than a 1 week time frame, you are watching the Accumulation, Manipulation, Profit Release process in action. Investment Banks and Financial Institutions trade lager lot sizes than any Retail Trader could ever dream of, and those trades require a massive amount of liquidity to cover. Hence, leading into any major Market swings (which you know they are taking advantage of) they need to set the stage beforehand by getting the Retail Trader to either buy in the wrong direction or set their stop at a convenient level they have set up for the pending stop-out.
Have you ever had a trade going where hit your stop at the final push short/long only to turn at that very point and massively push leaving you behind with a big negative? That last push up/down is actually why the Market moved your foreseen direction after you got stopped out. Countless other Traders had their stops there as well, which after gathering the liquidity that was there, causes the Market to turn from that very point. From your pocket straight into the Market Makers.”Reading the manipulation/stop-out is key to the best entries and confidence to catch swings.” Market Makers know where the liquidity in the Market is. When you place a stop order you are sending your battle plan straight to those that would use it against you. This is no reason not to use a stop-loss, but rather a reason to learn how to read manipulation. Even if you were to not place an actual stop order in the trade, your “comfort level” to ride it negative would still be at roughly the same price level.
Luckily for us Retail Traders it takes a simple process to run the complex Forex; one that can be learned.
Stay tuned for the part 2, which will cover more of the technical aspects of the Manipulation process.
Also be on the lookout for our Primary Course. A FREE course designed to teach the basics of the Market Maker’s Business Model.
Director of the FX365I Smart Money Course