Invest as if you were an FX dealer

Let me introduce you to Arnold.

Arnold is a bodybuilding chef who trades in Wikifornia.

He, like many other traders, uses a breakout-based mechanical technique.

Arnold has even given it a name: the Terminator System.

He follows his system without emotion and with rock-solid dedication (which is how he achieved his abs and bazooka biceps).

He aspires to terminate enough pips to be able to get his own Harley Davidson and ride down Pip-nice Beach.

Arnold, unfortunately, struggles to produce consistent gains while sticking to his game plan and not letting the markets get to him.

A normal case for Arnold

Arnold receives a buy signal from his Terminator System as EUR/USD breaks out of its trading range.

He makes purchases in the market.

After gaining a few pips, the price reverses and he is stopped out. He gets another signal a few minutes later. It's time to short EUR/USD this time.

Arnold, like any smart trader, sticks to his system and sells at market price.

He's up 10 pips in a matter of seconds, and the pair seems to be heading for extra lows. The impetus is then abruptly lost, and the pair begins to consolidate.

A few more minutes have passed... Then, all of a sudden, the price reverses and hits Arnold's stop loss order....only to drop another 100 pips!

“I'll be back...” he tells himself over and over.

Only if Arnold was aware of the reality...

It's a Zero-Sum Situation!

Trading in the currency market is not easy, as we've repeatedly stated.

You can be the most disciplined trader in the world, following his trading plan to the letter and adhering to risk management guidelines, yet still lose the bulk of your deals.

Worse, once you've been stopped out, you'll see price gradually move in your favor and hit your profit targets.

It's important to keep in mind that forex trading is a zero-sum game.

EVERY TIME YOU PLACE A BUY OR SELL ORDER, SOMEONE ELSE IS TAKING THE OTHER SIDE OF YOUR TRADE.

Someone is victorious and someone is defeated.

Most of the time, a forex dealer is the one who takes these positions.

Forex dealers are professional traders who take the other side of the market from ordinary traders, hence providing the liquidity required for the forex market to function properly.

Banks, on the other hand, are in the business of making money, and dealers can make a lot of money by promptly dumping their positions and profiting from the spread.

The truth is that forex traders win the majority of the time. As a result, you should attempt to trade like a dealer.

“A dealer？” you're probably wondering. I've heard a lot of negative things about dealers: they never fill in at the proper price, and their spreads are ridiculous. “Why would I ever want to be like one？”

To be honest, dealers are just like you: they're trying to earn a profit every time the market rises or falls.

Retail traders, on the other hand, are at a significant disadvantage because dealers have so many benefits (the spread, information on order movements, etc.).

You may overcome these obstacles and become lucrative if you understand how dealers think and trade.