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Technical analysis of the currency market
Thu, Aug 10 2006, 16:59 GMT
by FXstreet.com Team
About the Author
Boris Schlossberg serves as Fundamental Analyst at Forex Capital Markets. He has been an independent trader since 2000. He is also a frequent contributor to SFO Magazine with articles focused on risk management.
Book Synopsis
Global currency markets combine unparalleled leverage, high short-term volatility, low execution costs, and significant long-term trends in an atmosphere of laissez-faire regulatory oversight to create the nearly perfect trading environment. Multinational corporations and multibillion-dollar hedge funds have long relied on these markets to efficiently hedge risk while taking advantage of its many rapid profit opportunities.
Now, with Internet services and networks providing direct access to the interbank foreign exchange market, retail speculators of all sizes and bankrolls are discovering the profitable advantages of FX trading. Technical Analysis of the Currency Market shows you how to combine classic technical analysis tools with hard-won knowledge of FX market trends, trading ranges, and player’s behaviors to dramatically expand and improve your trading possibilities.
This dynamic and all-inclusive FX trading primer provides you with a practical, market-proven arsenal of currency trading weapons and solid tactical knowledge. From a focused look at how the FX market works to specific trading setups designed to produce high-probability profits in the widest possible range of market situations, Technical Analysis of the Currency Market explores:
- Important similarities and differences between the FX market and equity, option, and other financial markets
- Five key themes that drive the currency markets and which technical tools traders can use to best exploit them
- Technical analysis insights and examples for both trend and range trading setups
- Five chart patterns, well known to equity analysts, that have proven effective in currency trading
- Oscillator strategies for spotting quickly developing divergences between momentum and price
- Methods for spotting common price patterns that are the building blocks for understanding and interpreting price flow
Many of today’s most successful traders garner the bulk of their profits in the currency market. Technical Analysis of the Currency Market will show you how to eliminate costly learning-curve mistakes and—whether you are new to currencies or a seasoned trader—give you the skill and confidence you need to carve out a small but profitable niche in the global currency market.
Contents of the book:
- Chapter 1 - FX 101 1
- Chapter 2 - Is It All Just Random? 25
- Chapter 3 - The Secret to Trading 29
- Chapter 4 - Show Me the Data! 41
- Chapter 5 - Trend Is Your Friend? 59
- Chapter 6 - Gauging Range 79
- Chapter 7 - Fibs Don’t Fib 99
- Chapter 8 - Patterns and Antipatterns: Know Your Mark 113
- Chapter 9 - Know Yourself, Know Your Setup 143
- Chapter 10 - Setups! Setups! Setups!
Chapter 9: Know Yourself, Know Your Setup
"Who are you? What are your strengths and what are your weaknesses? Do you thrive amidst chaos or require regimentation and stability? In trading, the answers to these questions are far more important than any setup you can devise. At its core, trading is a game of psychology, and no amount of reading, no computerized back-testing, no advanced seminar work will produce long-term success if your trading style is in conflict with your basic personality. Contrary to popular belief, successful traders do not change their approaches to adjust to the market but rather find market environments that best suit their inherent strengths. That’s why in books like Jack D. Schwager’s Market Wizards (New York Institute of Finance, 1989; HarperBusiness, 1993) you will find very successful traders following diametrically opposite approaches to the market and often dispensing what appears to be contradictory advice. In fact, it’s not at all inconceivable to imagine two market wizards taking opposite sides of the same trade yet both walking away with a profit (...)"
**Click the image below to download the full Chapter 9 for free**
Published on Thu, Aug 10 2006, 16:59 GMT
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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
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