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Follow the Big Money

Actually my trading motto “Follow the big money” is the current interpretation of the old rule “Trend is your friend”.

It is pretty simple - you have to be with the best if you want to survive and win. This is valid for almost every activity in our lives and in the nature. Years ago the markets were pretty simple. Information was spreading much slower and only the ones who can pay knew before the others all the news and could see the quotes. These were the perfect conditions for development of a nice trend. When I started years ago there was no retail forex platform and we had to pay for futures quotes and real time charts. Commissions were much higher that they are today. When there is a trend, the best strategy is to trade in its direction. Today everybody knows what is going on and can see the news and quotes instantly for free. HFTs are trying to exploit every single trading opportunity in distort the market prices. All this is scaring away some of the large market participants and levels the field. All the available information is discounted in the prices the second it is published and everyone who wants to buy has bought. These conditions are not perfect for trends and you can see that more often the market is in consolidation. Trust me, the market will not change. You must.

Trends are not the same, but the requirement to do what the strongest do is mandatory. That is why I changed the “Trend is your friend” into “Follow the big money”. What is the difference? Regarding the trading strategies, now you should be able to trade not only trending markets but also markets that are in range. Much more important is the other aspect. Today various kinds of financial instruments are available to the retail traders. Large markets participants use them, why don't you too? Trade the volatility and time decay with options. This is much easier than the spot and it is not as complex as it seems. If you learn how to use the delta neutral options structures consolidation will be no longer a problem for you.

To be a successful trader is easy. Just do as WD Gann said “use all the tools all the time” and follow the big money.