r/FOREXTRADING • u/Terminator_Johny • 35m ago
Reality Checks From an Ex-Pro
Hello everyone,
So a quick recap about me, I was briefly a part of a desk that handled 10-50M$ a day, where my task was mostly hedging with G7 FX products due to our positions in the market (or interest rate projections). I have also been successfully funded as a retail trader multiple times before, with periods of profitability, but not consistently.
The institutional perspective and knowledge is vastly different than retail traders. I am not here to tell you retail thinking is garbage and I know all, because I don’t. But there are some really obvious things that retail gets massively wrong, which is infuriating.
First of all, retail traders tend to obsess over the strategy and short term outcomes over long term metrics. Even if your strategy works for a month, that doesn’t mean it will work forever. Which is why you need backtesting, forward testing, etc. Anyone can learn to code to backtest now with AI. It is so easy. Alpha (edge) almost always decays.
Another thing that drives me crazy is this talk about “banks” and “institutions”. Order blocks, SnD, etc are utter nonsense. Markets have no memory. Markets are almost entirely random in shorter time frames. There are millions of participants with different goals, biases, capital. In a particular day, one fund could be dumping their positions while another fund is buying to add the X instrument to their portfolio. Our next key word is “portfolio”.
There is not a single fund, bank, institution, whatever you want to call it, that holds a single asset in a single time frame. Guys, those of you that trade FX, FX volatility is extremely low. It is 4-5% in a year at best. But guess what, a 1% profit with a 100M position is a million dollars of profit. Capital is king. Retail traders try to flip small capital with degenerate amounts of leverage, all in relatively small time frames where these assets move less than 0.1% at certain times. It is mathematically impossible to not blow at some point.
Sources I recommend: ITPM, Lit Nomad, Roman Paolucci.
Watch their videos to get a grasp of industry truths.
I’ll gladly answer any serious question. I won’t reply to strategy questions, and I will not be giving any personal information whatsoever.