Two Sides Of Forex Market

Feb 28, 2023

Every time I tell people that I trade the professional side of the forex market, most of them go cross eyed. They think that being a professional client (by broker's definition) already means you're a "professional trader". However, being a professional client and trading the professional side of the FX market have nothing in common and are completely different things. It's like comparing apples and potatoes.

Let me clarify: a professional client can trade the retail side of the market as well, not just the professional side. It would be stupid for him to trade retail, but he can. Likewise, a trader who is considered a retail client (by broker's definition) can trade the professional side of the market as well, not just the retail side.

There are no restrictions nor special tools that are needed to trade the professional side of the forex market. The two differences are as follows:

  1. In professional trading you trade by using a professional, not a retail strategy,
  2. To successfully employ your professional strategy, you are using your professional understanding of how the forex market (actually) works.

The two points above are interconnected because it is possible to develop a professional strategy only if you build its foundation on correct beliefs and on correct understanding of how the market works. There's just one correct way to trade this market and that way is called the professional way. 

If you don't understand the difference between professional vs retail then most likely you're trading on the retail side of the FX market. When you trade on the professional side, the difference becomes very obvious and you're always aware of what both sides are currently doing.

To put it shortly, retail traders rely heavily on backtesting and mechanical strategies, they're usually impatient and always looking for shortcuts, their strategies keep expiring or experiencing drawdown periods and they believe in probability models. While professional traders are focused on explaining every single movement of the market - why and who is moving it at the moment, they spend thousands of hours in front of their charts learning about the market and they only act when they are (almost) 100% sure about where the market is going to go. That is only possible when you have acquired a true understanding of how this market works. Retail trading is the opium for the masses while professional trading is the real thing where you need extreme amounts of patience, dedication and time investment.

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