The Four Groups

There are four groups in the forex market. There are the novice traders –

the greenies, the ones who try to outrun the bear and lose every time.

In addition to the novice traders, there are three other levels of

participation in the forex market: the dealers, the institutional traders, and the

advanced traders.

The dealers are the most powerful and they make the market, setting prices

and putting together deals.

The institutional traders work in banks, wire firms, or government

agencies. They trade huge amounts of money at a time, and the size of their

trades gives them enormous power.

Next, there are the advanced traders. This group

is comprised of people from all across the world,

sitting in smaller investment firms, offices, or even

their homes. You can be a part of this group. In

some cases, the advanced traders are the smartest

group – trade for trade – than any other group.

Because they don’t move a lot of money on each

trade, they don’t have as much power as the

institutional players. Because their trades are brokered

by the dealers, they’ll never have absolute trading power. But, because there

are so many novice traders – the advanced traders have plenty of people that

they can outrun. Your goal as a forex investor is to aggressively take money

out of the pockets of the novice traders.

Don’t feel bad about that. Someone’s going to take your money along the

way, and it’s going to teach you, very quickly, lessons that can only be learned

through failure. So, every time you take money from a novice trader, just

remember: you’re teaching him a valuable lesson. After a while, you might

even enjoy watching your hiking companion being eaten by the bear.