Hi again, welcome its Brad Gilbert, HappyNew Year, I hope you all had a great time and refreshed yourself for 2018, I thinkit's gonna be a great trading year.
Now I'm here to present part 5 of theseries How Do Bankers Trade Forex? Now this iswhere I'm going to bring all those earlier components together and this iswhere it all starts to make a lot of sense.
I'm going to start incorporatingthe capital management side of things, with the fundamentals, the technicals andthen really focusing on those low risk, high probability trading opportunities, and they're the ones that you really want to get aggressive with.
You've got your capital, you've got it sitting there, you've been very patient you see a very goodopportunity whether it's on the back of a central bank announcement or a keyfundamental release you've got your key entries and thenaway you go and that's how you make a lot of money very quickly, instead ofsort of trading all day and thinking I'll take I'll make five hundred dollarsevery day that's all well and good but what about if I told you did make 20grand every time there's a very good opportunity, and this is what I want todo with this, so what I'll do is, i'm going to incorporate our main trading tool thisis what the bankers are using, okay they're using Reuters, or Bloombergfor that matter now Bloomberg is so much more expensive, that the banksthemselves don't even give it to everyone, okay what you'll find iseveryone will generally use Reuters for their analysis, technical and fundamentalokay what that means is they're looking at their charts and they're also looking atall the news and all the real-time economic data releases through this onetool it's your connection to the market okay and I'll also give you a runthrough the of the website and where we incorporate the various aspects of themarket to make trading simpler for you through our market insight, through ourdaily analysis, the next best trade and a few other features.
All right so let meget started let's get Reuters Xenith up and then I'll start a take youthrough the platform straightaway.
Okay so here we have Reuters, well it's actually called Reuters Icon but there's a couple of features thatReuters took out of this, and they call it Xenith this is more like a retailproduct, now it's a professional platform and I've got professional links it isexactly the same as what the banks have.
What you probably don't have isReuters messenger where you're talking, where guys from various banks talk to eachother this one's of things, but it has every other aspect.
Now let's just putthis together, right now what do you do starting your day? This comes back toalmost, part 1 of this series, how do the bankers prepare right, and this iswhat they do is they incorporate a systematic approach to their analysisnow each day they are looking at the charts very closely these technicallevels as you would have learned through the technical analysis webinar you knowit's a matter of systematically going through and it's almost like join thedots, okay now you can find the key technical levelsthat's where traders know momentum will change very quickly, so they focus on themajor currency pairs okay, now these are the major currency pairs because theyare the easiest to trade, the majority of liquidity and volume goes through thesepairs and that's why they're easier and more systematic on the technical aspects, okay so there's a few things to it but one key thing, now I've got the themajors here right I've got the Aussie, Kiwi, the Yen, Euro, Sterling and Dollar CAD, the little Swissy here probably ever since 2015 when the Swiss National Bank pulled thefloor from under Euro Swiss that's always had a little bit of a raw nervewith me so it gets its own little spot over here on its own page, but funnilyenough, I had it, I have a page here this is what you do with a really good newsservice like Reuters is you actually set up templates to make trading easier foryou and this is what we used to do with the banks right.
I don't want to have to spend time trying to work out research and find out what's going on with your Aussie, Iwill have a page dedicated for instance, okay, to the Aussie Dollar that will, let mejust refresh those pages, that will tell me everything I need to know from theeconomic real time economic data releases, to the news which is just beingrefreshed, I've got the equity markets here for America, Asia, Europe and alsothe key commodities, and I also have, I've got the news up there as well, okay that'sbreaking news, everything to do with the major news as well as the Aussie Dollar.
I've got the currency pair here and the major crosses Okay, Aussie Yen, Aussie Kiwi, Euro Aussie, Sterling Aussie, I can make decisions ifanything comes out, but let me just come back to the start of the day, each dayitself, and this is where we really incorporate on our site you'll start tosee some of these components, so initially, if you are trading and youdon't want to spend $99 a month, that's all this Reuters product is, then what youcan do you will find that we do a lot of this analysis for you, now on thesite like the daily market insight, the daily market insight, the key part to this, and you'll find this on the myFXTradingHub right on there, on the main site it'sto give you an overview, what you need to do is, as part of your preparation is, it's pretty important you understand what happened the previous day with thecurrencies, what did you, why did the Euro go up, okaywhy (if I come back to the major charts here) why did you Euro go a little bithigher what's going on with the US Dollar okay, so put the US Dollar index here, I can see on the snapshot what the US Dollarsdoing against the basket of currencies, now I come back to the majorcurrency pairs Aussie & Kiwi have traded sideways, Dollar Yen a little bithigher, Euro a little bit higher, Sterling chopping away in a big range, and alittle bit of volatile activity on Dollar CADnow, I need to know what's going on, to connect the dots.
You need to knowwhere the focus is coming from, what you will do probably first and foremost isyou'll have a look at the previous economic numbers that came out from theprevious session, and you can usually see this is a little bit of a differentpicture so that the housing starts for instance, 1.
297 million okay versus the forecast 1.
250 so slightly better thanexpected so that's where you should see a slight rally in the dollar and it hasrallied against Dollar Yen but funnily enough Euro has rallied as well, sothere's a few geopolitical events happening here, this is one area that, what you can do is, come into the actual news itself and this is what I was sortof talking about probably going back to part 1 of this series you know, workingout what news is important and what's not all you want to know iswhy did the currencies move up and down okayand here you go, Reuters they're usually just just telling youwhat happened there's no sort of bias in thatDollar firm on tax cut hopes Euro gains on spike in bond yields, okay so then youcan click on that, go through and find out the German bond yields help underpinthe Euro okay, great Australia, New Zealand Dollars hit one week lows on euro as German yields jump yeah that's just like propaganda man whocares? There's no, I'm just looking for the keynumbers, Sterling hits two week low as traders focus on Brexit talks, rightonce the news is out it's old news, right this one here Sterling at twoweek low, that's, that was here 10 hours ago, what's happening to Sterling sincethen it's rallied to the top of the range, so just be careful what you'relooking at you just want an answer why did this particular pair go up or downand it's very important you know why because if that actual event is reversedyou know how to trade it straight away.
So, first, one of the first things I woulddo is I would when I come back to the screens each morning now let mejust tell you about technical analysis the best time to do your analysis is atthe start of your day now think of the traders, like, these guys are human justlike you, they go to work they haven't been at work, most of them don't have alot of the systems at home right, so when they get to work they haven't been infront of screens at least 10 or 12 hours right so what they do is, they haven'tseen the currencies it's very important they go in and see what's happened theylook at the charts and go right okay yeah Aussie Kiwi hasn't done much, Euros higher Sterlings been whipping about and then and then look across the board, sothey're looking to see what's going on and what I they want to do is, they want tofind out if there's been a been a change of the current sentiment, alright andwhat we're talking about there is, this is when you come back into looking atthe overall big picture of of the majors, and what we generally do is now I withour analysis okay, once again looking at the key component of our dailyanalysis, we want to give you a big picture because if you start to look toofinitely at the currencies themselves you canstart to see things like price action that yeah I think it'sgoing up to that, okay so let me just go ahead and give you a bit of a quick lookat the Euros, as I said this comes directly, my analysis and my charts, comefrom Reuters okay so I'm Rangebound waiting outcomeof the US tax bill, fundamentally okay yesterday was sideways andtechnically the Euro was trading sideways and I've got the charts hereexactly like I do at the top here, let me just come back to that so I've got the hourly charts, the daily charts, the weekly charts and the monthly this gives mefour views of what is actually going on in Euro and it's a good way to takeaway the noise of the short-term price action as well as see the overall trend.
Now the overall trend for Euro is basically sideways so when I'm lookingat the short-term stuff if the trend was up but it was breaking through thelevel on the topside I'd probably pay more attention but thefact that it's trading sideways in a bigger trend I'm more inclined to startto think about potential strategies to use, and first and foremost would be likea rangebound strategy it is actually trading quite nicely within this tightrange.
I come back check the news on Euro, see what's going on, and this shouldgive you a bit of backbone to your knowledge around what is actuallyhappening in the Euro it's self you can get a bit of a positive picturethere, and then you're building a view, of what is actually going to happen inEuro.
So you've got your entry levels so from here, you should have a start toget a bit of an understanding of what happened in the previous session nowonce again if I come back and actually have a look at the dailyanalysis I can see where my entry levels, see there's any break in the trend, short term or long term, okay look at the economic data release, what is duefor release and that's the next and most important thing, because the technicalstell us where the entry levels are, it's the economic datareleases, that will tell us what's going to happen in the future and thisis where momentum shifts, so traders look at their entry levels and look at theircharts, they get themselves really tuned in tothe specific entry levels and those key levels where the currencies may changemomentum very quickly then I start to look very closely at the high impactingdata releases, these are the ones that with, like the difference between likethis this one her, e has got three bars existing home sales right, it's thesecond part of a three part series in the home sales data for the US, now ifit's a high impacting data release, we only need a small amount of variance to getthe thing moving, get the US dollar moving right, if it's a if it's a low tier datarelease, well then we need bigger variance to get the same level ofmovement, do you understand? It's like they're allthese numbers can impact whether it's high impacting or low impacting it'stheir level of variance and the numbers that where that volatility will comefrom, so the higher the importance of the data the smaller amount of variance toget them moving, and then you can sort of work out this is how we work out ourtraining schedule through the week, because we're looking for these big oneswhere momentum may shift or change very quickly, and now say for instance the USexisting home sales, we come back and look at the major pairs now the USdollar is the benchmark against all majors so it will impact all pairs so then we'relooking for potential trading opportunities we're looking for trendlines, if anything you've got to really decipher what are good trendlines andwhat's not, this trendline here for instance, I wanna leave this one up andjust give you an example, right we've got the first point up here 119 40 this onepoint next to it is pretty close I'm almost ready to discount it, but thesecond level here coming in around 109 62 it's had two touches really to have aconfidence either in a big trend line you're looking for probably three, sowhat I would do in this instance is I would probably get rid of that, becauseit's giving me a false entry, in saying that there you can see how it's had thatlittle spikes through the level and so it's had a few traders looking at itbut on the bigger picture, it is just trading sideways in a bigger range, almost up towards one nineteen twenty119 20 and down here towards 117 50, this support trendline actually is probably almost too short term as well, but I'll leave it there for the moment just to give me some indication of where, what traders will be focusing on, so what we're looking for is entry levels, right, charts, we've got the news, see there's anyshifting momentum tell us the answers to why the currenciesmoved in the previous session right, this is what all these news services are doingthey are actually trying to tell traders, give them answers to why the, what's happening in the US, US Dollar if it did move what was on the back on wasit the data, economic numbers, was it geopolitical news, was it somethingexternal, and once you understand those key components then you're pretty muchset to trade, right you understand what's going on when you look at thecharts then you'll understand what each of these currencies is doing and whatphase they're in, long term wise, you'll have a very clear understanding, if you saidyour charts up like this, and I've got them for all major currency pairs youwill see very clearly in a short-term and long-term aspect, at a glance whatthey are doing and then you can make decisions so now what we do how do webring this together where's the next opportunity well as I said it comes backdown to the economic data releases, if there's no major economic data releasesand there's not much coming out here in Europe over the next 24 hours okay whatdoes that tell me? Well it tells me a couple of things Euro and Sterling right, I come back to those charts, I look at the technical levels, they have beenrange trading there's no economic numbers to really change things, so I'mmore inclined to start to think about strategies, okay I'm starting to thinkrange trade, if theres no news to change the momentum of the currencies, wellthey should stay within recent ranges, but if you have been trading forsometime and you're aware of what's going on, you'll understand that Sterlingokay there's an ongoing Brexit issue, or negotiations and there are someBrexit talks coming up this weekend so Sterling is pretty much behavingaround the Brexit issue, with regards to the other major currency pairs they've beentrading sideways waiting for more clarity around the US tax bill, nowthis is a geopolitical event which is just haphazard right, geopolitical issuessuck, they stop the currency's the normalflow of currencies around economic numbers which the central banks you know, maketheir decisions around future interest rates so it messes updiscombobulates the natural flow of the currencies and that's a real bad thingfor traders, so when you see a lot of geopolitical events, the more experiencedyou get the more disdain you'll have for them, and that's why everyone'sreally I'd say, really pissed off with Donald Trump because he's just a walkingticking geopolitical time bomb he loves throwing in random events and that throwsthe currencies around a bit, when there's no geopolitical events, tradingis easier, it's easy to go in here with no economic releases in Europe, UK onEurozone, I will be thinking very strongly about going in with rangetrading opportunities there, but because we've got the ongoing tax bill in the USabout to come out, anytime and then also Brexit, you're probablysitting back and thinking “well let's just wait, wait for that easier trading” so what then you're trying to work out there are some good technical levelshere, the Aussie's sort of grinding sideways so is the Kiwi, Dollar Yen's edging up, what can we look for to get a trade going here? Well that's where it comesback down to these housing numbers right, we get some really strong numbers hereokay, the US Dollar will rally, so then you can come back and go well, if the US Dollarrallies, what's the best pairs to trade in? Well we might get a trade down herein the Aussie down through seven six and a halfwe may see Dollar Yen rally to the top side now it's a bit mid-range ideally I'll belooking for it to break through that level or if it was closer to supportI'll be happy to buy there, but you may have short-term trading opportunitiesaround the data, right, one key aspect, and I could almost sort of started with here, you're always factoring in, so your daily routine is looking at thecharts, seeing where the currencies are, seeing where those important entrylevels are, okay, make sure you check the news, to see why the currencies are, exactly where they are, okay that's a massively important function of what youneed to do, and this is one of the key aspects, I was sort of bringing this in, sothe market insight, understand what this is doing for you, I'm basically giving you an overview of what has happened yesterday, so you can quickly tune up, like why did the currencies move around, and why didn'tthey, and it will be to the point, then ones from there, I'm looking at the technical setupof the majors so you can sort of see, you know, and isolate where the potentialopportunities are, as you can see here most of the majors are trading sideways, and then we'll sort of go through isolated currencies themselves, butwhat's the plan for today, well there's not a lot, but we're waiting for the USCongress to pass that US tax bill and then the majors are sort of stallingon the back end of that, and then it comes back down to again, looking at theeconomic data releases, this is the most important aspect, you go back through nowwe know where the currencies are technically, where's the next fundamentalshift or drive going to come from? It's going to come from these economicdata releases, and that's what you're looking for, okayand from that you connect the dots here you connect the fundamental, the technicalaspect here the currencies with the best trendlines and those currencies withfundamental drivers coming out, they are the major currencies in play for thatday, right can you see how simple it is when you know how and where thefundamentals and technicals fit in, you can all of a sudden see exactly what youneed to do, and when to do it, there's no need to waste six to eight hours infront of the screens, you can actually come back now, and sit back and focus onthese opportunities, and hit them very hard, all right, so you're looking at thekey aspects, and then you're ready to go okay, so that's one of the key things soyou'll have a better understanding around what we're providing you as faras information goes on the T4T side all right, so you've got the news you've gotyour economic data releases, you can see what's going on now, when you are readyto start developing your knowledge you're becoming almost into that sort ofpro level, all the ranges, but if I come back to the technicals here so, when youlook at the currencies on a daily or weekly perspective, these trends, rightyeah you can see them on your charts where do they come from? They come from the central banks these guys, these 8 central bank's control the sentiment ofthose currencies, now this is why, like a service like Reuters, now I've set thispage up myself, but you can see very clearly what the the interestrates are for each currency, the inflation levels, you can sort of almostcompare them very quickly, if I need to go in and sort of check out a lot closerwhat's going on, I can actually go through and see what the topic is to work with whether they were stronger or weaker and that should giveyou a very clear picture of whether that currency is going up, going down, or goingsideways, now one of the issues (and this is probably the last fouror five, six years) all these central bank's, well most of them havehad zero interest rates, the easiest component, the easiest trading is whenthese central banks are making decisions are changing policy or doingsomething different, now a number of them haven't done any different for years, theAussie in particular the RBA have been sitting put for a hell of along time, we are static in the Eurozone, the UK, United States in particular raisinginterest rates, Canada also okay so what are you seeing when that happens?Awesome trading opportunities, because this is the backbone the central bankstell you, get long or get short or just trade sideways alright, so this is one ofthe key aspects and this what traders at the banks will spend a lot of time on, and they will probably note down whether it's the FED the ECB the Bank of Englandetc what the sentiment it is from those banks, and that's why when you do comeback and look at the economic data releases and almost looking at the centralbank or political events, these events themselves have a life of their ownbecause, for instance on the 21st Mark Carney's speaking, he's the Governorof the Bank of England, now if he says something about interest rates oranything very important for that matter the British Pound will move very quickly, all right so the the whole aspect of bringing in the central bank's right, combining that with economic numbers that's your overall direction, right you get Central Bank sentiment combine that with the fundamentalreleases and when those two match up the currencies go for a big run, now wehaven't had that for a while and there's been a few geopolitical issues whichhave slowed things down, that's why I think it's very good that the US taxbill, it gets approved it's the first major reform in 30 years, now is thatDollar positive or not, I think it is but only time will tell, now one thing that we want to do is through our Pro Trader Course and alsoour Funded Trader Program is get you trading successfully like the bankers, understand the market, it's the simplicity of your technicals, understanding tradeexecution, but understanding most importantly where that currencydirection comes from, and all of a sudden okay, you'll be trading just like thebankers, now I known for a lot of you looking at a chart like this mightseem quite naked right, there's no huge amount of indicators all over it, youcan't see what's going on, but you know what, give it a try, this is where yourtraining will make a big difference, these trendlines we would, Iwas trained like this in 1990 as I said at Citibank and our team were, that the core group of graduates, when I was in a Citibank London, the same thingthe exact same structure, the exact same trading, Citibank New York the same, whenI went back to Commonwealth Bank around the trading team there once again it wasno surprise that the same trading the same technical trading is done at allthe banks through all the levels right, and that's why technical analysis worksso well, so when you're trading in the various sessions, right if you want tobecome a pro, and this is where the bankers are they are pro's obviously allright, it's their career, they make it easy so I've got a I've got a template hereto make it easier for me to identify what's happening on the major currencypairs.
I've got a specific template here to cover breaking news, commodities, news in the commodities which are a major focus at the moment particularlyOil, and then just market news on what's going on the Forex Market, I'vegot my long term technicals, okay I can see all the aspects of allthe major currency pairs in a very short view, I can read what'sgoing on very clearly, the US Dollar as I said it's the benchmark you need toreally know what's going on with the Dollar, so I've got a Dollar page with USDollar economic indicators, US Dollar news, and the Dollar index and the majorcurrencies against the Dollar, they're the most important pairs for me to lookat if, I'm thinking about trading the US Dollar.
The economic data releases, everyday you need to check out what's going on, it doesn't mean you trade all these events, but what you do is you focus onthem very closely and you isolate the best opportunities now, US existing homesales are high impacting data release, is that good or not? Well what you woulddo is you would factor in the major currency pairs, see what's going on withthe Dollar against the majors or even the Dollar index itself, funnily enough we know there's a big geopolitical issue in the back end, so itmay actually prevent that economic number from doing anything, this is whereyou combine your knowledge across all various aspects, then, you know, tospecialize, right what you want to do is specialize on each currency pair, ifyou're not trading all the major currencies, and probably you're havinga look at the major crosses for that matter as well, you are isolating 90% ofthe trading opportunities, alright so make sure you give yourself time to learn and understand all the major currencies okay, you can actually learn, one the key aspectsof getting hold of a system like Reuters is, understanding thefunctionality, once you understand the functionality, it's a breeze and thisis your best tool, and just by going through things you can actually findgood trades, so there's a very good uptrend here in Aussie Yen whichI haven't seen, now I'm going to start to have a look at that once this webinar is over, sofollow the Aussie I've specialized here on the Kiwi if there's somethinghappening on the Kiwi, I can quickly focus on every aspect of the Kiwi, rightsame for the Yen, even the Yen crosses right, isolate the best tradingopportunities, when the Yen crosses go, they can deliver a huge windfall ofcash, so make sure you are paying attention to what's going on, not only onjust a majors but also the major currency pairs, the majorcrosses, China okay, China is a player these days, and the news is veryimportant for Australia and New Zealand the two biggest exporters to China.
Europeokay, massive market in its own right so I've got a European page here which iscovering Euro, Euro Sterling, the Swiss and Euro Swiss so I can actuallyyou know fine-tune my trade decisions in that European session, but if I want toisolate Euro I can, and I've got specifically just Euro and Germaninformation here to enable me to make decisions around economic data releasesand what's going on the major pairs in the Euro itself, same with Sterling andalso the Swiss, now all these major currencies they have different nuances, okay they are there's different things that impact them at different times, like for instance Dollar CAD is a great example, I always overlay Oil on theDollar CAD chart, now I've got Oil inverted here on the left hand column, right because it correlates, because it's got a positive correlation with CAD butbecause the pair is quoted as US Dollar against the CAD I've got to invert Oil to get that natural visual with the correlation, so what I do is I justoverlay it I can see what's going on basically Oil is driving Dollar CAD moreoften than not, now Oil is rallying okay, so in this chart it looks likeit's dropping but that's actually because it's inverted, that should seeDollar CAD probably potentially drop here, and this is one of the key thingsthat you will learn and connect, the more, if you get the foundation knowledge, bygoing back to part 1 of this series, understanding Capital Management andyour psychological edge that you need right, then go back into capitalmanagement, overlay your fundamental analysis and your technical analysis, nowyou start combining all these components together, then you can start to see wherethese trading opportunities are, and that's when you can start to combinethings like Oil, different commodities different currency relationships, different correlations with different commodities, for that matter and thereyou can start to see very clearly we're the best opportunities are, the central banks, well this is something that you're going to learn more aboutall the time, and traders at the bank's know this as well, we generally know how they work when there's a change of policy how strong that move is, butwe always keep an open view that we can always learn more, now the central bankshave been through a traumatic 8 or 9 years, they have done a huge amount ofquantitive easing which they've never done before now they're trying to unwindthese things and starting to raise rates, this is a great opportunity to start toreally fine-tune all your trading skills because 2018, I think potentiallywe could see a lot of activity from a lot of central banks and that's wherethe best trading opportunities will start from, right, the earlier you canidentify the start of the trade, the better the trading opportunity overall, technically right you can learn technical analysis in a very shortperiod of time, it's about simplicity fundamentally, ok I've already coveredthe central banks, but isolating the high impacting, or the economic data relases Ishould say, not just the high impacting one's but isolating the the economic dataanalysis it's just actual versus forecast, and the Pro Trader Course willtake you through that very clearly so you can get a very good understanding, understanding what function the news has, that's why you want a unbiasedservice like Reuters or Bloomberg for thatmatter, that just tells you what's going on they give you the answers why Euro'shigher, why the Dollar's lower, why is Sterling doing what it is etc etc, that'svery good to the form view and opinion of where these currencies are, and as Isaid, trying to bring all this together can be a bit of a nuisance andthat's why once again we cover these things, right market insight and mostimportantly the daily analysis, so then you can come in check your analysisagainst ours, right if you jump on the 30-day free trial you can get accessto all the courses and all the analysis everything, and then you can start tolearn or retrain yourself to start reading the market like the bankers, right the idea is to trade with the market, not against it, alright and thisis the key aspect, you're looking to combinewhen the fundamental analysis, matches the technical analysis, and we're notlooking for sideways trading activity I wouldn't do anything if it's just tradingsideways, but say the fundamentals are all pointing up, the technicals arepointing up, well our outlook would be up, and when we've got that scenariowe are looking for entry levels and we are looking to put our capital intoplay and that's what it's all about, that's when you combine everythingtogether, and you are trading and making money.
If the fundamentals areworking against the technicals, or they're not all aligned, well then, what you couldbe doing is trading against the market, right, now it doesn't necessarily mean you're going to lose but it's a less consistent method to trade and that's when the bankers do sitback and they take the time, and they just wait for the markets to line up, that's pretty simple, you wait for the markets to line up you can start tomake some big dollars and make some serious inroads into your trading.
Okayso that's the whole summary and the end of the 5 part series on How Do BankersTrade Forex? Now one of the key components of the Forex teams is, weused to line the traders up you know, in a long sort of row, across from eachother and what we used to do, is chat all day, and that's one of the major reasonswhy we set up a 247 Trade Zone to enable you to connect withlike-minded traders people who are, I would say, professional forex traders.
Ifyou're looking to become a Forex trader learn to trade with a market, jump on oursite whether it's the free trial, jump in the 247 Trade Zone and start to connectthe dots it's all there in front of you, we're here to help and what we want todo is, we want to get you through the program and into the Funded TraderProgram to become one of our successful traders.
Once again if you have anyquestions send us an email at info@traders4traders.
com or simply ask usa question once you're in the 247 Trade Zone.
I hope you've enjoyedthis five-part series I've enjoyed bringing it to you, and Ilook forward to working with you through 2018, all the very best, we'll see youagain soon.
Cheerio.
