Day Trading Forex Live – Advanced Forex Bank Trading Strategies

Here is a nice break down of how forex chart patterns are used to compress the supply and demand zones of the market. Understanding where traders tend to put their stop loss is essential in determining where the banks are likely to step in and start buying or selling. 

Knowing how the average retail trader will respond is essential information for one key reason.

Where the orders are is where the banks will likely take the market.

It is a simple matter of supply and demand. If you desire to buy a large number of apples you must find someone or a group of people willing to sell a large number of apples.

You cannot buy what someone is not willing to sell and you cannot sell if someone is not willing to buy.

This is why banks drive the market to and from pockets of liquidity. Learning to spot these areas consistently is the key to picking high R/R based entries.