What are institutional traders?


In this lesson “School of Pipsology → Preschool → How To Trade Forex” it’s saying something about “institutional traders”.

What are those ?

It would be useful to have an explanation about institutional traders in the respective lesson.

Thank you.

do you have GOOGLE .?

Great article suggestion. I like Investopedia for getting some quick info. Kudos.

Hi. Besides what the Investopedia article offered, I’ll give my two cents worth.

Institutional investors are often called the “big banks.” They are the huge financial companies with billions of dollars invested worldwide. They are truly the big players in the market, and provide most of the liquidity.

As retail traders, we are simply riding along where these gig guys direct the markets. It’s not really up to us because we don’t have enough money to affect the trends.

Instead, we just have to read and analyze the charts and accept where the price is at. That’s all we can do.

Hope this helps.

Well these guys don’t just read charts to take a trade they take a better aproach maybe we should start thinking is there another way we could use to come up with making a better trade idea !!

This is correct and one of the few times I’ve read someone else explain it this way, however it’s not quite that simple. True you have to follow the institutional money flows, what most retail do is trade against other retail and pick up the small morsels the institutions leave behind (which are much smaller than just a few short years ago).

The “however” is that there are players above institutions, such as central banks, sovereign countries, continents, that can cause the institutional money flows to be incorrect, in the past this was not very often but as liquidity dries up around the world, sovereign countries battle for resources against each other, the institutions are more and more being whipsawed themselves.

This is the new dynamic, how to capture institutional money flow (which is already a standard deviation and more above retail to retail) with sovereign hovering overheard (adding another deviation in to play), it’s why hedge funds are closing because they lost their advantage, I use a platform that tracks institutional, sovereign, continental based moves in core assets (Forex/Futures/Indexes/Stocks), but that extra deviation is hard work, truly hard work.