Institutional Concept of Trading

Institutional Concept of Trading

What is Institutional Trading?

Institutional trading is a trading style that differs from the more common ‘retail trading’(not to be confused with ‘retail traders as unless you trade at a bank; hedge fund or large institution you’re still a retail trader). Institutional trading is focused on specific price action and price levels that Banks and Large institutional will be trading at.

Institutional Style Trading Sponsorship

When trading with an institutional style you’re trading in line with the banks and large corporations so we know when the big players have stepped into the market and left their footprints so we’re a lot more likely to spot potential prices moves and then be on board with the significant distribution move. So essentially we have a better chance of catching the best trades.

Institutions vs Retail Traders

Institutions have to use someone else’s liquidity to take their large positions as forex is a zero-sum market they have to pair their orders with another party and the by far the most vulnerable group to target are retail traders because their trading patterns are widely known by everybody in the forex game it’s easy pickings for banks and corporations to locate where the majority of the retails traders stops losses (liquidity) is and use their liquidity for their own trades.

Exiting Trades

Also since we trade like institutions we also exit trades like institutions as we can spot where they will potentially take profit and cut their trades and where they may look to start reversing price for another leg, by us knowing this so we can prevent our trades from reversing on us and we can get the most out of our trades.