This is How Banks ACTUALLY Trade.
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- čas přidán 16. 07. 2022
- This is a video about bank trading strategies and secrets.
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There is a lot of talk about how institutional traders trade the financial markets. The reality is that most people have no idea what goes on a bank trading desk. This video will change the way you see the financial markets by exposing one of the ways that institutional traders brilliantly avoid the problem of knowing which direction price will go. Instead, institutional traders like bank traders worry about volatility instead, which has much easier properties to deal with in comparison to pure price action. This is only possible due to the beautiful and elegant mathematics of the Black-Scholes model, the famous formula that earned a Nobel Prize in 1997. Volatility trading has a prerequisite known as the Delta Hedge. A lot of option traders believe that Delta Hedge is a strategy, but this is not true. Delta Hedge is a prerequisite for various volatility trading strategies. In fact, the Delta is just one of the option greeks that a volatility trader must be aware of. Even though derivatives trading is more sophisticated than pure price action trading in conceptual terms, it’s not devoid of problems. You can also lose money with it if you don’t know what you’re doing. The point here is that institutions know this to be a superior approach to trading with charts. The good news is that you can use the same strategy as a retail trader.
#BankTradingStrategy
Share this video with your fellow traders who think institutional trading is done with price charts!
You Provide The Great Knowledge Free Of Cost... I Want To Know Where Do You Get It From??? Who You Are And What Do You Do???
wru? can you make your explanation video?
What do you think about ICT trading model?
Thank you for sharing your knowledge. Your lessons are very helpful for me to understand and apply in the real-time
First thanks for educating us so brilliantly and waking us up from slumber.
Can you please show us a better way to add to positions once analysis comes out right and trade is moving in direction?
ofcourse some i have figured out yet i wish to know if there is any professional way to do it?
Just Wow! I can see now how the banks are really pulling in the $$. I’m nearly three years into my trading career and I’m ready to take on this style of trading. This is definitely “next level” .
hey Ed...its Kay from Bklyn NY, your old student...thanks for the video as it explained some unanswered questions I had regarding the Volatility Course... only problem I been having is finding the right Options Contracts that are affordable to the retail trader n that will allow me to find a 0 delta ...
Always a pleasure to watch your videos... Keep it up my good sir
Eye opening as always. I havent read the volatility trading books yet. But I will as soon as I accomplish my target of becoming consistently profitable using price action
what happened
You are right sir. Every single CZcamsr is pulling out price chart and explaining institutional trading which is BS.
This is best trading video I have ever seen.
Market manipulation is one thing. That can be done by individual traders with enough capital. Institutional trading is another thing entirely.
man, i knew those price chart was such nonsense.
Amazing man.. thanks for sharing this knowledge.. 👍
Great video. Will you do one on wyckof
Please, make the video more about this topic, we don't get much about it. Thankyou very much
Great Info, thanks for this too..
Outstanding work bro, please make more videos like these , I would suggest the options greeks .
Sure... I will
Great info as always
Fantastic video. Buying stock on SPY is too expensive. So what I do is, if I have an edge based on my system, let's say it is going long. I purchased 3 calls in the money, and 1 put either at the same strike price or one standard deviation below. Seems to work really well.
Best,
CT
This is broken, thanks for the insights and i will definitely get this book. I've been interested in options but I never knew where to start, I mostly trade Currencies and indicies. I can't wait to learn more
I’ve been around the markets since 1999. This video was excellent.
Awesome info. Can you please provide paid tips on indian bank option market
there is no other channel like this
Please do video on volume analysis using volume bars alone .
this content is amazing, has anybody purchased the volitlity trading ebook? Really considering buying but hoping someone can give a review on it?
also I have not been able to find a good GARCH indicator and Implied Volatility indicator to put in the same window... also needed to know what time frame do I view the GARCH and Implied Volatility... ? please send ne word back...thanks
I appreciate learning about the Nobel Prize Money Concepts however, it seems that a trader must have unlimited funds in order to apply these methods. It would be greatly appreciated if you could explain how a retail trader with limited funds can use these concepts. Love your work and commitment to teaching us all. Thank you!
you have to scalp it. he has courses on it
@@AnthonyShukerNo?
I salute this man my 1st to see someone making ds kind of demonstration
Thanks for sharing information
Love you Eduardo!
Man you are so good .Sometimes I wonder where you learnt from. I mean what do you read that makes your content so exceptonal . You literally kill every topic like a pro 🙌 thanks mate🙏
Please if you can make more video on catching swings and identifying reversal. One love 💕
I'm glad you like my material. I just give my point of view after having read most of the relevant literature on trading, plus I have a lot of persoanl experience with trading. Maybe some people just give their opinion without paying their dues first.
@@fractalflowpro100%. 99% of CZcams traders have never worked trading stock or currencies for a bank. Mathematics is not subjective. Thanks for a great eye opening video. Subbed!
Is it possible for a retail trader to trade with this method?
How can we profit from this method given any answer?
Personally, I hope that more video will be released on this subject. It is revolutionary to me.
Best information on CZcams or anywhere else right here 👆👍
A big thank you! 🙂
In India we cant short stock and hold until expiration. But we can short stock futures instead. Is it possible to make delta neutral in this way??
But how can I trade in volatility ?
Can I have to open different demat account for these?
I am wondering if this type of trading is discernable on a chart?
If a person is going to use price charts, it's certainly not in the way thousands use them. I trade the ES futures almost exclusively and the key to my continual success is knowing the right price levels from which price is likely to react.(along with understanding order flow) Really enjoyed your video.
That's correct!
Can you explain more please
best video ever, beyond all so-called smart money strategies available. Your channel deserves millions sub
thanks for the video! at 8:14 u say we wanna now when volatility is low, and when its high, is there an indicator on tradingview or a site or something that tells u?
Simple put, News Events result in increased volatility
Pls send the link for e book on volatility trading.
Thanks much
Technical analysis is key. Been thrre, done that
A million likes. Thanks for sharing
Brother I want link for that excel
Thank ✨
yes!! finally a video beyond the realm of retail trading 😍🤩
Nice video 👍
Most retails unable to accept this type of simple Delta Hedge that beats all their Technical Analysis astrology type of trading methods. It's not only bank, market makers also use this simple strategy. In other hands, we need more of those speculation trading participation to move the market thought.
Can this be used for straddles?
So this is similar to hedge and dca?, cos i use it on crypto and works really good to increase win rate😊
So the key to read the volatility book
Thanks sir 🙏
Sir when will be ur next video
Can we also just buy calls and puts instead of the underline? SPY is too expensive to purchase shares
Thanks
Ed, Volatility % which you have mentioned in the excel, is it yearly volatility%
Annualized implied volatility
This is a very interesting video, and has me interested in these Institutional/Banking methods in a way I haven't been before. Apologies if you have made a video about the contents of your Institutional eBooks before, but I assume your books - collectively and individually - talk us through the mathematics involved in each.. style(?) and also how we can actually apply these methods ourselves at home? I only trade FX and Cryptocurrencies at the moment, but I'm assuming trading this way involves trading stock options? I really have no idea about any of that at this point, but would love to learn more, preferably from your books, if that's what's involved in this kind of trading.
Thanks again for another fantastic video.
Yes, this involves stock options. I explain the necessary mathematics in the ebooks in the simplest way possible. Some people complicate it way too much. Retail traders can indeed apply such strategies. The only barrier in the way is the knowledge of how to do it.
@@fractalflowpro fantastic, thanks for clarifying. I will buy all the books some time. Also looking forward to the next video courses
@@fractalflowpro expanding on this conversation yesterday, is there a specific order you'd recommend buying these books or does it not matter?
You should start with the Volatility Trading ebook first, then Gamma Scalping, and then Vega Scalping. If you want to get a bundle pricing for all three, send me an email.
@@fractalflowpro ok I will do when I’m ready, financially, thanks.
please create a vedio that will cover this method you just explained in this vedio and ready to buy the Volatility book.One question is that hope this apply to indian market as well
I just did. If you want to know the whole method you can get the ebook.
Thanks for the suggestions.Will buy the book.Thanks again & god bless you 👍😊
Sir pls start a discord community focused on pitchfork trades and analysis . 🙏.
Thank you so much, one of the required videos in general and also for your e books buying, why one should consider or not.
You are really first in General, first CZcamsr that has at least real knowledge.
How much time is left to complete your Advance Course? When will it be available to buy?
There is a lot to be done.
Always wondered why do you have a scalping course, even though you say scalping is something all retail traders should stay away from. Now I know. Thank you for the awesome content. ✅
Well, retail scalping is terrible. Institutional scalping is awesome.
@@fractalflowpro yes, I can see that now. Seems really interesting.
@@fractalflowpro is large capital required for institutional scalping?
What do you mean by "large"?
@@fractalflowpro
small capital 0 - 2000
medium capital 2000 - 15,000
large capital 15,000+
Thank you James ❤️❤️❤️
James?
Eduardo
@@fractalflowpro sorry about that. That's another CZcamsr's name. 🙌
goooooooooooood
Question: So the banks can literally just close they're eyes and press either buy or sell. And as long as volatility's good, they're gonna make money?
Doesnt the efficient market hypothesis and everyone using black schloes with morderm technology take off the arbitrage
They trade using complex option strategies that you either have to study maths or like me i studied finance and investment.
Useful video!
Wow I thought I was doing good until I saw your video!
One of the greatest minds came out of the 5 regions
I wish I had invented this stuff, but I didn't. I just learned it.
A great mind doesn't have to be the creator.
Just imagine the people who came up with this.
I dont understand the how it differs from straddle, can you explain?
In the way you apply the strategy, and the way you predict volatility. A straddle is basically just a bet.
@@fractalflowpro if you can expand on that i would appreciate it, i still cant understand the difference.
who can see those numbers on the chart?
Nice, Will this work for Indian Market- Like will price and Volatility get auto updated or has be manually feed?
Most reliable stock option brokers provide platforms that will show volatility and greeks for you.
wow....
Wish i took maths more seriously, now im 18 and have no bread :( also i wanted to ask what course should i buy first to begin with?
If you're interested in the strategy shown in the video you should get the Volatility Trading ebook. For price action, you should start with the FFS or with the Price Action Vol. 1
Not sure what you mean when you say this is different from a straddle (or another delta neutral trade such as a strangle). Straddles can also be viewed continuously and they should be; you don't necessarily have to wait until expiry (for American options). As a retail trader I've been using delta neutral trades for almost a decade. It's far from being unknown to retail traders.
What you're missing is the basis for this kind of trade, which is the perception of volatility through GARCH models.
that looks way more complicated than i thought it would be lol
So I guess this strategy would work nicely on earnings day for volatile stocks like Tesla ?
Yes, but probably not in the way you're expecting.
@@fractalflowpro can you tell me, or perhaps make a video that explains cons of this strategy? From your video seems like it’s so easy to make money this way, and making money trading is never easy.
Also could you tell me if this method is available to use in Europe , since the only options trading broker is interactive broker and I don’t know if they have sufficient infrastructure to make calculations you mentioned ?
I have shown one of the ways you can lose with this strategy in the video. There are other ways. That's what you going to learn in the books also.
@@fractalflowpro I bought the eBook, gonna dig into it over next weeks. Can you recommend a broker that operates in Europe that provides the alogorythm to execute call/puts at the same time?
this method may have lower risks but it is not making A LOT of money. directional options traders would makes tons of money multi baggers when direction is right. the key is to get the direction right.
Sure, but that's a pretty difficult key to figure out, isn't it?
@@fractalflowpro not really. There are some stocks that are “easy” to make many baggers. The bank’s way is a steady way but slow. But they don’t care. Why? Because they have many traders doing for them and all add up. But you as an individual should not emulate the bank’s method. J no o two accounts are the same and to say bank’s way is best is just not true.
@fractalflowpro That's an interesting video and all the specifics of market making have been addressed! The delta gamma neutral and delta vega neutral strategy are indeed the way of market makers. As it is implied in the name, markets makers are paid to provide liquidity in the market and potentially make money off of it. Not much though. They are mainly exposed to theta on a daily basis and vega risks when putting up a delta gamma hedge. And I reckon that market markers trade synthetic options as well. This strategy also contributes to making the market sticky or slippery depending upon the level of implied volatility - the famous breakout of the trend line or pull back situations.
I'm not sure that everyone in banks are markets makers though. There are swap dealers, interest rates traders, etc. And hedge funds traders, who are also institutionals, trade their own synthetic instruments such as "(AUDUSD - NZDUSD) / GBPUSD" or "CLH2024/TSLA". I believe retail traders should indulge in synthetics to make serious money.
Basically an inverse iron condor
No
@@fractalflowprodifferent positions held but same concept
Strategies like iron condors are conducted discretely, not continuously.
Thank you for the video, but... Buy 30 call options and short 1.5k shares and the PNL is 0, no premiums, no spreads, no gamma decay, no need to use charts to gauge for support and resistance levels, yeah, right... Reminds me theoretical physics with ideal conditions in a vacuum....
This type of trade is closed before expiration. The P/L is the sum of the change in option premium and the change in the capital allocated in the stock. There is no way I can show all the details of this in just one video. This goal here is just to show the possibility of making money regardless of market direction, but as I mention in the video, there are problems to avoid. No doubt about that.
@@fractalflowpro isn't it similar to selling puts at the same time instead of selling shares directly? You pay premium twice and the market needs to move either direction enough to cover both premiums. Given that the probability of share price moving enough to cover for premium even in a single direction is already included in the option price, it is a pretty lousy strategy especially if one doesn't use charts to time the buys/sells and gauge for support/resistance?
You can create a Delta Hedge by buying calls and buying puts instead of using the underlying stock. That requires less capital in fact, and the effect of greeks is more pronounced. Timing in this strategy is about volatility, not price. It's about comparing historical volatility with implied volatility. Nothing to do with support/resistance or anything like that. You mentioned selling puts... in the institutional domain, short selling options is almost a sin because of the negative gamma effect.
@@fractalflowpro I meant "buying puts instead of selling shares", good I didn't do this mistake in the market :). Thank you for the replies and clarifications!
I'm glad you didn't make that mistake also! haha
Can you please create a course on bank trading?
I have written three books about it
I'll admit, this video is a lot different than the "Smart Money Concept" videos that claim to teach us how banks are trading, but I don't see anything in this video that conclusively tells us this is how banks are trading on the FX interdealer market. I like most of your videos, especially the one about volume and the other about candlestick patterns, but this one just doesn't hit the sweet spot for me.
What would tell you that this is how banks trade exactly?
@@fractalflowpro Someone that can be verified to have worked for a bank trading the FX interdealer market with some kind of evidence that can be linked to an inside source to confirm that this is how they're trading. Or to sum it up, basically a whistleblower that's about to get shunned, blacklisted, and possibly sued out of existence by the cartel of all cartels (the big banks).
You need to free your mind from conspiracy theories first. Trust me. It will be liberating.
@@2pacisakilthemc21 you must think Tupac is in Cuba for real huh?
@@fractalflowpro Okay, I'll give you that. That's one thing you were right about......the military is actually the cartel of all cartels.
I keep hearing that nonsense from those who follow 'smart money concepts' in channels like TraqFX, PipsOfPersia, MentFX, and the originator Inner Circle Trader. They like calling themselves institutional traders all the time because they think their order blocks track where institutions place their derivative orders. Most people think that it is the only working strategy that exists, as it brings them closer to institutional trading without having any knowledge about derivatives.
To me, the order flow strategy is just a hack. It's still pure retail strategy. That's why they keep modifying it with Wyckoff and other patterns or concepts to make it more credible.
Anyway back to the point of your video. So if volatility is stuck low for a long time, banks will go into recession, until someone kicks the markets moving again.
Volatility never gets stuck low for a long time because it's a measure of uncertainty.
What do you think is the best strategy then ??!!
If we do that for 10 Zears wouldnt we be rich or someth8ing
is that option gambling?
Does it look like gambling?
😴
When everything is said and revealed, if you are not an institutional trader, no way to make money. The conclusion = don't trade, Don't learn, Don't buy, don't watch. Get back to your job and your TV, get back to your ps5 haha
Watch the video again.
Just because you can’t trade doesn’t mean others can’t
Hahahagahagaha
Go cry somewhere else.
Garbage conclusion.
Damn - you are smart as hell. Definitely have learned more from you then all others combined