Does your trading strategy go against the bank? If so, you will never succeed in forex. The flawed strategy is the reasons for 99% of failure in forex. Traders often follow those strategies which are not controlled by them. Why? They spend less time educating themselves.
They should learn the forex bank manipulation strategy first.
Banks work in three-phase, accumulation, manipulation and distribution. Once a trader understands the “manipulation points” of trades, they can make a profit easily. They should have in-depth knowledge of when bank participants enter and exit from the market and what is the best time to open and close trading positions.
This may take time to learn how price moves. But it plays an important role to understand how smart money works. Without educating banks manipulation you can’t make any successful trading strategy.
Keep reading to know more!
Why Do Banks Manipulate Forex
Wondering to know why banks manipulate forex? Banks do indeed manipulate FX, but not every time. Banks enter the market when they need to create liquidity. The main purpose of this is to engage more buyers and sellers.
As we know for every buyer, there needs to be a seller. Similarly, every seller needs a buyer. The FX chain moves around retail trader, broker and banks. Banks and brokers know how retailers will trade. They know what type of indicators and charts they will use.
They are much updated than traders. They use this technical information about smart money when they want to induce buying but traders want to sell. They use the same information to induce selling when the traders want to buy. This occurs mainly in consolidation hours.
Forex Bank Manipulation Strategy
The main aim of this strategy is to identify the manipulation points when banks or big participants enter or exit the market. They are based on demand and supply chain in the market.
Banks try to move the market in three-phase. Below is a brief description of these three phases
3. Trend or Distribution
As banks contribute massive trading volume, they must enter the position from time to time. Accumulation marks the entry timing of the bank in trades. You can see this on charts as range bound and sideways price action. This is called accumulation as smart money makes a wide entry in such positions.
After this, traders enter the market in search of liquidity, trapping moves and stop hunts. This time marks the manipulation point with manipulation spread or manipulation candle, spikes.
Banks create this liquidity to engage the traders. The false push at the end of accumulation face is a marketable factor to track smart money growth in the market. So, manipulation comes right after accumulation.
The final step of this phase is the trend or distribution. By understanding the manipulation, we can identify in which direction banks want the price to move. This anticipation of the trend gives us a profitable trade.
This way, traders achieve the main goal of avoiding the false break and making a profit also. Usually, the bank and forex broker trade against you.
Though this strategy is strange from what you are using already. But it’s highly applicable. It will take time to anticipate the reason behind the price move. When you master this, you can make a consistent profit. You will start trading in the direction of the bank.
How Do Banks Manipulate the Forex
You might have read about broker’s manipulating forex to make money. If low controlling authorities like brokers can do so why banks can’t? Banks are big bodies and major controlling authorities of the financial market.
They can easily manipulate forex. So, it’s a misconception that such a big financial market is impossible to get control over. Let’s see how this happens.
Banks Control 79% Trading Volume
The main power stream of the Fx market goes in the hand of 10 banks. These are responsible for controlling 79% of the trading volume of the money market every year. Taking the advantage of this control they can move anything in their favour.
Banks Manipulate Fx Through Netting Position
When there are big fixes in the foreign market, banks take the advantage of this situation by netting position. Each bank book order from customers to transact the fix.
Some customer wants to buy, while others want to sell during the fix. Bank nets the buyer with selling to net the position that goes in the bank’s favour.
For example, if customers want to buy euros mostly during the fix, the bank will buy euros at a lower price from the market to set the fix. After netting the required position it will sell the same euros at a higher price to the customers
Banks Manipulate Fx Technical Charts
The manipulators of banks are well aware of your technical charts. They know what type of indicators and signals you are using Them can manipulate these technical charts and indicators to manipulate Fx.
They will cross every boundary to run the market in their favour. Though legal or illegal. Many banks are fined for being guilty of manipulation but they damn care!
Banks Can Manipulate Price
Banks are one step ahead of brokers in manipulating price feed. They are the main bodies and issue all price feed to brokers. When retail traders place an order, they hold the price to get more contracts.
Banks or manipulators at the same time move the price in their own favour. This new price feed is always against the trader’s expectation. Though this type of manipulation is more common on the broker’s end, So, they can change this price
Chat Rooms Officials Are Guilty of Manipulation
Have you ever visited the central banks? You might see chat rooms cabins. What do the officials do there? In a recent bank scandal, these chat room officials are found guilty of manipulating banks.
They act as the middle man between bank authorities and brokers. For instance, Citigroup was fined hugely for this causing bank manipulation. They made huge money teaming up with chat room buddies.
They manipulated fix and earned a big amount. They were fined which they paid. But the media did not give huge coverage to this news.
Banks Manipulation FX By Hunting Stop Loss
You might be thinking its FX brokers who break resistance and support orders just before the market moves in a positive direction. The reality is that both brokers and banks are involved in hunting stop loss position.
When your broker hunt stop-loss position set at these important points, its banks behind them.
Banks do so because they want to fill these positions by hunting your stop-loss positions. That’s why if brokers are responsible for causing direct manipulation banks are guilty of causing indirect manipulation.
Identifying Bank Manipulation & Day Trading Strategy
By locating the manipulating points, you can easily identify bank manipulation. It is the point when the largest manipulators enter or exit their positions based on areas of supply and demand.
Market makers match each order that traders place to a counterparty that takes the opposite side of the trade.
Banks make an entry in trade at consolidation times. To do so they need liquidity in the Fx market. When you can locate these manipulating points, you can place the stop loss.
Watch this video to identify these points technically.
Frequently Asked Questions
What is the most profitable forex strategy?
There are three most profitable forex trading strategy, scalping Strategy Bali, Candlestick strategy Fight the tiger, and profit parabolic trading strategy. You can find the details of these strategies on many trading websites
How do banks control the forex market?
Banks are major controlling authorities. They can control FX directly teaming up with brokers. About 79% of the trading volume of Fx is controlled by 10 top world banks. Banks hedge funds by manipulating prices, and trades.
Is forex trading Manipulated?
Yes, forex can be manipulated by banks, brokers and market makers. They do so by forcing prices to a certain level where there is a lot of stop orders. The main reason for doing this manipulation is to stop brokers from entering in the wrong direction in the market. Though certain manipulating ways are illegal and cheating to traders.
In the end, everyone should learn forex bank manipulating strategies. This way they can identify manipulating points and make profitable trades.
As s real traders, we cannot get into the forex business without a forex broker. ICMarkets is an authentic broker which is regulated and do not manipulate the spread. All the brokers usually get liquidity from the big banks.
Banks indeed occupy massive positions, but they leave certain clues behind. A smart trader gets the advantage of these clues, and trade in the same direction as banks are trading.
For this, acknowledge yourselves about how smart money works. The main reason behind failure in trade is that traders work on flawed strategies. Be practical and read the depth of the market!