This is a rewritten version of the video content titled “How To Trade Forex Like The Banks (Exactly How I Trade Step By Step)” originally created by Rino from Backtest Mastery. The material is restructured and expanded to at least 1000 words while retaining the core educational value provided by the original author.
How to Trade Forex Like the Banks: A Step-by-Step Guide Inspired by Rino from Backtest Mastery
Trading forex like the banks is a coveted concept within the financial trading world. Many retail traders struggle due to emotional decision-making, overtrading, poor risk management, or lack of a clear, tested strategy. Institutional or “bank-level” trading involves aligning with the movements of large market participants who tend to dominate liquidity and set the tone in currency markets.
Rino, the founder of Backtest Mastery, shares a systematic approach that mimics how institutional traders operate. This article distills and expands his video lesson into actionable guidance.
Understanding the Institutional Mindset
Banks and financial institutions don’t trade randomly or impulsively. They use:
– Proven methods backed by historical data
– Professional risk management techniques
– Patience and emotional control
– Discipline to wait for premium setups that meet their criteria
Retail traders can benefit immensely by adopting the same principles. This guide will walk you through the core steps to implement institutional-style forex trading, inspired by Rino’s method.
Step 1: Focus on Price Action and Market Structure
The foundation of Rino’s approach lies in price action and market structure, without relying on indicators. This involves understanding how prices move in waves and recognizing key levels where institutions take interest.
Look for:
– Higher highs and higher lows in uptrends
– Lower highs and lower lows in downtrends
– Changes in character (CHoCH): when market structure breaks in a direction opposite the current trend, signifying potential reversal
– Supply and demand zones where price previously reversed with strength
Institutional traders generally react at areas where price shows clear impulsive behavior, rather than at arbitrary support/resistance levels.
Step 2: Identify Institutional Order Blocks
In Rino’s method, identifying order blocks is crucial. An order block is typically the last bullish or bearish candle before a strong move in the opposite direction.
To find valid order blocks:
– Look for a large, impulsive move followed by a retracement
– Detect the final up or down candle before this impulsive move
– Check if price respects this level again in the future
– Prioritize order blocks that caused a break in structure
These levels represent zones where institutions have previously entered trades, and where they may look to enter again.
Step 3: Multi-Timeframe Analysis
Institutional traders assess markets across multiple timeframes. This helps in filtering out noise and aligning trades with higher-timeframe bias.
Rino suggests the use of three tiers:
– Higher Timeframe (HTF): To view overall market direction. Commonly a 4H or daily chart.
– Middle Timeframe (MTF): To refine the trend and look for corrective structures. Often the 1H chart.
– Entry Timeframe (ETF): For precise entries. Typically 15-minute or 5-minute charts.
Using this funnel:
– Determine directional bias on the HTF
– Confirm setup opportunity on MTF
– Find entry triggers on ETF
Step 4: The Entry Strategy
Once the setup aligns across timeframes, traders can use confirmation-based entries. According to Rino’s method, do not enter trades blindly at order blocks. Instead, wait for market confirmation in the form of a shift in structure.
Entry example:
– Price hits a 1H order block
– On the 15-minute chart inside this area, observe a “Change of Character” (e.g., lower highs into higher highs)
– Price makes internal break-of-structure to form a new mini uptrend (on ETF)
– Apply a Fibonacci retracement between swing
Explore this further here: USD/JPY trading.