Intro, multiple sources of income

Hey guys! New to FX trading and very eager to learn, open to any information from experienced traders as well as new beginners like myself. I have many goals that i have set for myself, being newly married and jobs closing down im looking for a way to create multiple sources of income.

Best Regards,

Dante DiCesare

Welcome! You’re in the right place. Just have the expectation that this could take months and maybe even years to get consistently profitable. Plenty to learn tho.

Hello and welcome DonnyDon25. Start your education here Learn Forex Trading at School of Pipsology - BabyPips.com. I wish you all the best.

Welcome to BabyPips! You have come to the right place to improve your knowledge.

Hello and welcome!

Welcome @DonnyDon25! This forum is very active and has a lot of info, however it simply does not work. The harsh reality is simple retail trading will just make you lose money in the end. If I was wrong, babypips would be full with profitable traders.

I advice to learn market maker trading. This will give you the best edge. It basicly lets you trade in line with the banks who control this market. It is what makes me profitable.

Make sure you aren’t reliant on forex for an income stream in the short or even medium term. It’s very hard to consistently profit from and needs to be treated as an extra.

Market maker trading is something interesting, which I don’t currently know much about.

I watched a Youtube clip which made the point that by the time price reached a significant high, most traders wold have buy orders above this, and the market makers would drive price down as soon as these were triggered. In fact the demonstration of this was a shooting star candle.

But they omitted to deal with two arguments. Firstly, in a consistent uptrend, most private retail positions are already short: most traders expect a handsome return from the failure of a consistent trend and jump in first in the counter-trend direction. Its hard to think why a huge number of traders suddenly decide to get long when the positions the broker reports we can see are mostly short.

Secondly, price had already made a stream of significant new highs in the course of the uptrend. So what made them jump on the traders when price reached this particular point, but they ignored the opportunity for easy money at ;least 20 times already?

Not very convinced so far but is there more to it?

This is where many traders make losses as a trend keeps on going. When you keep looking for reversals, they will bite you very hard.

The market makers always want to buy at a cheap price and sell at a premium price. So how do retail traders get messed up in this? Price will induce the retailers in the wrong direction, with retracements for example. These traders will sell, while the banks can buy from them and push the market higher. On the other hand there are traders who still believe in the uptrend. These traders, who trailed their SL’s, will get taken out by the sharp retracements. This is an example of how the market makers move.

Now your question might be ‘‘Why would they reverse price?’’.
The market makers are constanly hedging. They need to get back to certain price levels to mitigate their orders that are in the negative. This is also another reason for retracements.

Does this answer your question?

It seems illogical to believe that market makers aim to take advantage of traders wanting to go long by buying above a new high, when most traders in that market are actually already short.

I appreciate the two groups are not identical - most of those with short positions are probably not going to be placing buy orders.

But if market makers are moving price surely they could more easily make a profit by just driving price higher - they’ve already definitely got traders with shorts open, so they don’t have to speculate on new traders coming in and (possibly) setting buy orders? and if they do drive price down, there’s a lot of traders still short who are going to make money. Doesn’t that neutralise the advantage of the game?

Well if most of the traders are short, pushing the trend up will take out these short traders. They will not reverse till enough liquidity ( opposite party ) is erased. When enough sellers are erased / market makers have taken profit and enough buyers have come in the market/market makers have put in enough of their sell orders, that is when the market makers will retrace or reverse down a currency.

Also they can not just drive price higher as they need to mitigate their own orders. They are continuously hedging.

For the market makers to drive price higher, there needs to be an opposite party who will sell. These sellers are the ones who are being induced into the wrong direction.

A broker’s book report btw does not equal to ‘‘most traders being short or long’’. The playbook of the market makers is what you would have to see, but that is impossible of course. That is why we use price action.

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Hello and welcome! You chose the correct forum to improve your trading knowledge. There is a lot of information here for beginners in trading, so I hope it will be helpful to you.