The Big Dogs

When Foreign Exchange was deregulated in 1997 , independent traders finally had access to the biggest trading market of the world - forex. But to win profits at this game you have to go up in line with the biggest financial institutions of the global economy. These big guys - we call them Big Dogs …

Unlike other traded markets , the Forex market has no physical location and no central exchange. There are no pit traders to gun your stops , and no insiders to step on your toes. But it is a huge arena with huge players ! It operates through a global network of national banks , commercial banks , global corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate around the clock , spanning the world from one major financial center to the next.

The Forex market is driven by real need and real economic forces between countries and the economic sectors of the world. National banks act to protect their national currency , create favorable exchange rates for importers and exporters , and hedge their debts. International portfolio managers , multinational corporations , long-term holders and hedge funds all use the Forex market to pay for goods and services , transact in financial assets , or to reduce the risk of currency movements by hedging their exposure in other markets.

These are the “Big Dogs” - they own most of the world’s money , and they are doing business , not playing a game.

The role of the small speculator - that’s you and me - is insignificant in the grand scheme of the market. The thousands of dollars you can easily make , by acting nimbly in the direction the market is going , will never be missed by the Big Dogs. You can harvest the scraps off their table. But don’t try to go against them - they will eat you alive !

To follow the Big Dogs , I use a subscribed service called COT. Together with my normal indicators and trading strategy , I am always in the same direction as the Big Dogs …

Shall we give ourselves a name too ? I am thinking of calling ourselves small fish … any other ideas ?