Trade Like an FX Dealer

Meet Arnold, a bodybuilder chef from Pipfornia who trades forex. Arnold uses a mechanical system based on breakouts, which he’s named the Terminator System. He follows it with strict discipline—no emotion, just strategy—hoping to terminate enough pips to buy his own Harley Davidson and cruise down Pip-nice Beach.

However, despite sticking to his plan, Arnold struggles to make consistent profits.

A Typical Scenario for ArnoldArnold receives a buy signal from his Terminator System, as EUR/USD breaks out of its current resistance level. He buys at market price. After a brief gain, the price reverses and stops him out. Moments later, he gets another signal to short EUR/USD, which he follows, selling at market price. The price initially moves in his favor, but then consolidates and reverses, hitting his stop loss before falling another 100 pips.

The Simple Truth: It’s a Zero-Sum GameTrading in the forex market is tough. You can be disciplined, follow your plan, and manage risk, yet still see many of your trades result in losses. Worse, you may watch the price eventually go your way after being stopped out.

The reality is that forex trading is a zero-sum game. Every time you place a buy or sell order, there’s someone on the other side of your trade. One person wins, and the other loses.

The Role of Forex DealersMost of the time, that “someone” is a forex dealer. Forex dealers are professional traders who take the opposite side of retail traders’ positions, providing the liquidity that makes the market function. While retail traders struggle, dealers often profit by quickly unloading positions and earning from the spread.

Why You Should Trade Like a DealerForex dealers win most of the time due to their advantages, such as access to order flow information and the spread. While retail traders face significant disadvantages, understanding how dealers think and trade can help you overcome these obstacles and become profitable.

Trade Like an FX Dealer

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