Description
Preface xiii Acknowledgments xv 1 What Is the FOREX? 1 Introduction 1FOREX Defined 12A Brief History of the FOREX 13Free-Floating FOREX Market 13Major FOREX Participants 14 2 More FOREX 15 Currency Pairs 15Recommended Currency Pairs 16Why Trade the FOREX 19Volume in the FOREX 19Analyzing the FOREX 23How Profits Are Made 23The FOREX as a Two-Way Market 25 3 Forecasting the Market 29 Fundamental Analysis 29Technical Analysis 32Fundamental versus Technical Analysis 33 4 Currency Options 35 Currency Options Introduction 35Options Pricing 36Advantages of Trading Options 37European and American Options 37Exotic Options 38Lock in Profits 40Accelerate Your Profits 41 5 Creating a Workstation for Trading 43 Workstation Location 43Trading Computer and Accessories 44Internet Connection 45Trading Software Programs 45Continuing Education 48 6 Fundamentals of Trading 51 Introduction to Trading Theory 52Trends Defined 53Trend Cycles 53High-Probability Trading 55Sideways, Nontrend Strategy: Wait for Strong Trends 55Uptrend Trading Strategy: But at Dip Bottoms 55Downtrend Trading Strategy: Sell at Rally Tops 58Symmetrical Triangle 58Ascending Triangle: A Bullish Continuation Pattern 63Descending Triangle 65The Falling Broadening Formation 67Support Breakdown or Resistance Breakout 67The Double Bottom 68Head and Shoulders (Crown) 70 7 Economic Fundamentals 73 Introduction 73Economic Indicators 74Inflation Indicators 76Employment Indicators 78Consumer Spending Indicators 78Leading Indicators 79 8 Introduction to Technical Analysis 81 Technical Analysis Defined 81Technical Analysis Assumptions 82Bar and Candlestick Charts 83Technical Analysis Terms 86Market Patterns: Uptrends, Downtrends,and Sideways Trends 87Support and Resistance 95Moving Averages 95 9 Advanced Trading Charts and Indicators 103 Tools for Technical Analysis 104Bollinger Bands 104Directional Movement Index (DMI) 107Stochastic Indicator 107Moving Averages (Simple, Weighted, and Exponential) 110Moving Average Convergence/Divergence (MAC/D) 116Momentum 119Relative Strength Index (RSI) 119Rate of Change (ROC) 122Volume 122 10 Fibonacci Numerical Sequences and Elliot Waves 125 Introduction 125Fibonacci Rectangles and Shell Spirals 127Fibonacci Retracements 128Fibonacci Extensions 128Fibonacci Time 129Fibonacci Circles 130Elliot Waves 135 11 Money Management Principles 139 Trade with Sufficient Capital 140Exercise Discipline 140Be Patient and Persistent 141Employ Risk-to-Reward Ratios 141Follow Trading Rules 143Accept Losses 144Always, Always Use Stops 144When In Doubt, Stay Out 145Never Overleverage Your Account 145Make Realistic Goals That Can Be Achieved within Reason 146Always Trade with Money You Can Afford to Lose 147Protecting Your Profits 147Keep a Trading Log 147 12 Six Steps to Success 149 Identify Current Long- and Short-Term Trendsand Which Trend to Trade 149Check News and Market Announcements 150Identify Support and Resistance Levels 151Use Studies and Indicators for Entry 151Buy at Dip Bottoms (Uptrends) or Sell on RallyTops (Downtrends) 151Use Proper Money Management 152 13 Getting Started with a Trading Station 155 Access the PremiereTrade Web Site 156Install and Run the Dealing Software 156Open a Demo Trading Account 156Dealing Rates Window 157Open Positions Window 159Accounts Window 161Multiple-Accounts Window 163Orders Window 163Placing a Market Order 164Placing a Stop/Limit on an Open Position 167Change Price on a Stop/Limit (Open Position) 168Delete Stop/Limit (Open Position) 168Close an Open Position 169Placing an Entry Order 170Change an Entry Order 171Canceling an Entry Order 173Reports 173Customizing the Trading Screen 173Trading Station Options 175 14 Corporations in the FOREX 179 Introduction 179Forward Transactions 180Examples of Strategies 181Portfolio Management and Currency Risk 183 15 The Business of Trading 185 Staring your Business 185The Tax Code 186How to Become a Trader 187What If I Don’t Make Enough Money to UseThose Deductions? 188How to Make the Win/Win Better 188 What Kind of Corporation Should You Use? 189 Let’s Take a Look at Some Examples 190 Appendix: Bretton Woods System and Post-BrettonWoods System 193 Glossary 199 Bibliography 207 Charts, Figures and Credits 207 Index 209
