Forex ‘prop firm’ traders benefit from the Ukraine-Russia inspired forex trends

War is horrible in every shape and form. Lives are destroyed and homes are lost. There are no winners.  Wars have ramifications in all areas of civilisation and the capital markets are no exception. 

There are always going to be winners and losers in the markets and the current, awful situation we are seeing unfold daily in the Ukraine conflict is doing just that.  As traders, our job is to make money in the markets, regardless of what is actually driving them.  

The trends that we have been witnessing in the Forex markets have been pretty unrelenting with very small corrections. This has led to the explosive growth we are currently seeing in traders passing these exceedingly popular “prop firm challenges.” For my followers that don’t know what prop firm trading is, here is a simple explanation. Rookie or low capitalised retail traders are able to put up a small fee to take a challenge with the prop firm. They are given risk management rules that they have to abide by. If the trader meets these requirements in the verification phase, then they are given a funded trading account. These accounts can be quite substantial. 

Sounds great, yeah? In reality, many of these challenges are designed for the trader to fail which will result in the loss of the “audition fee.”

I can almost feel the excitement from these ‘traders’ that now think they have ‘cracked it’ and are true market professionals. Why is this happening? Well, because of the trending FOREX markets. 

Look at the momentum meter chart below. I have set this to the daily time frame — any currency above the line is deemed to be strong and below weak!  Also, note the trajectory of the lines. At the top, we see the AUD, CAD, and NZD almost at a 45-degree angle pointing up. Below, we see the 45-degree angle of the downward sloping JPY; the Euro has been trading with the same negative bias. 

The point is this: anyone buying the AUD CAD and NZD and selling the JPY and Euro could not have failed to make money! These recent trends have hardly witnessed a pullback. So, all the prop firm traders are hitting their challenge targets with little effort. To be honest, it would have been hard to lose money! 

A warning to those out there that think trading is easy: the true challenge will come when the trends break and normal market conditions prevail.