Currency Trading for Dummies

Discussion in 'Educational Resources' started by expiated, Apr 6, 2023.

  1. expiated

    expiated

    As far as the other topics touched on by this book, the following is a recreation of its table of contents, and if not faithful to the original, is probably pretty close...

    Currency Trading For Dummies, 3rd Edition
    by Kathleen Brooks, Brian Dolan
    Released February 2015
    Publisher(s): For Dummies
    ISBN: 9781118989807

    Part I: Getting Started with Currency Trading

    Chapter 1:


    What is Currency Trading?
    Speculating as an enterprise
    Currencies as the trading vehicle
    What Affects Currency Rates?
    Fundamentals drive the currency market
    Unless it’s the technicals that are driving the currency market
    Or it may be something else
    Developing a Trading Plan
    Finding your trading style
    Planning the trade
    Executing the Trading Plan from Start to Finish

    Chapter 2:

    What Is the Forex Market?
    Getting Inside the Numbers
    Trading for spot
    Speculating in the currency market
    Getting liquid without getting soaked
    Around the World in a Trading Day
    The opening of the trading week
    Trading in the Asia-Pacific session
    Trading in the European/London session
    Trading in the North American session
    Key daily times and events
    The U.S. dollar index
    Currencies and Other Financial Markets
    Gold
    Oil
    Stocks
    Bonds
    Getting Started with a Practice Account

    Chapter 3:

    Who Trades Currencies? Meet the Players
    The Interbank Market Is "The Market"
    Getting inside the interbank market
    Bank to bank and beyond
    Hedgers and Financial Investors
    Hedging your bets
    Global investment flows
    Speculators
    Hedge funds
    Day traders, big and small
    Governments and Central Banks
    Currency reserve management
    The Bank for International Settlements
    The Group of Twenty

    Chapter 4:

    The Mechanics of Currency Trading
    Buying and Selling Simultaneously
    Currencies come in pairs
    The long and the short of it
    Profit and Loss
    Margin balances and liquidations
    Unrealized and realized profit and loss
    Calculating profit and loss with pips
    Factoring profit and loss into margin calculations
    Understanding Rollovers and Interest Rates
    Currency is money, after all
    Value dates and trade settlement
    Market holidays and value dates
    Applying rollovers
    Understanding Currency Prices
    Bids and offers
    Spreads
    Executing a Trade
    Trading online
    Orders


    Part II: Driving Forces behind Currencies

    Chapter 5:

    Looking at the Big Picture
    Currencies and Interest Rates
    The future is now: Interest rate expectations
    Relative interest rates
    Monetary Policy 101
    Looking at benchmark interest rates
    Easy money, tight money
    Unconventional easing
    Watching the central bankers
    Interpreting monetary policy communications
    Official Currency Policies and Rhetoric
    Currency policy or currency stance?
    Calling the shots on currencies
    Taking a closer look at currency market intervention
    Financial stability
    Debts, deficits, and growth
    Gauging credit risk
    Geopolitical Risks and Events
    Gauging risk sentiment
    Risk on or risk off?

    Chapter 6:

    Understanding and Applying Market News and Information
    Sourcing Market Information
    The art of boarding a moving train
    Taking the pulse of the market
    Rumors: Where there’s smoke, there’s fire
    Putting Market Information into Perspective: Focusing on Themes
    Driving fundamental themes
    Analyzing technical themes
    Reality Check: Expectations versus Actual
    The role of consensus expectations
    Pricing in and pricing out forecasts
    When good expectations go bad
    Anticipating alternative outcome scenarios

    Chapter 7:

    Getting Down and Dirty with Fundamental Data
    Finding the Data
    Economics 101 for Currency Traders: Making Sense of Economic Data
    The labor market
    The consumer
    The business sector
    The structural
    Assessing Economic Data Reports from a Trading Perspective
    Understanding and revising data history
    Getting to the core
    Market-Moving Economic Data Reports from the United States
    Labor-market reports
    Consumer-level data reports
    Business-level data reports
    Structural data reports
    Major International Data Reports
    Eurozone
    Japan
    United Kingdom
    Canada
    Australia
    New Zealand
    China

    Chapter 8:

    Getting to Know the Major Currency Pairs
    The Big Dollar: EUR/USD
    Trading fundamentals of EUR/USD
    Trading behavior of EUR/USD
    Tactical trading considerations in EUR/USD
    East Meets West: USD/JPY
    Trading fundamentals of USD/JPY
    Price action behavior of USD/JPY
    Tactical trading considerations in USD/JPY
    The Other Majors: Sterling and Aussie
    The British pound: GBP/USD
    The new kid in town: Trading the Aussie
    Understanding Forex Positioning Data
    How to interpret the data
    The FX fix
    Forex and regulation

    Chapter 9:

    Minor Currency Pairs and Cross-Currency Trading
    Trading the Minor Pairs
    Trading fundamentals of USD/CAD
    Trading fundamentals of NZD/USD
    Tactical trading considerations in USD/CAD, AUD/USD, and NZD/USD
    Trading the Scandies: SEK, NOK, and DKK
    Swedish krona — “Stocky”
    Norwegian krone — “Nokkie”
    Danish krone — “Copey”
    Cross-Currency Pairs
    Why trade the crosses?
    Stretching the legs
    Trading the JPY crosses
    Trading the EUR crosses


    Part III: Developing a Trading Plan

    Chapter 10:

    Training and Preparing for Battle
    Finding the Right Trading Style for You
    Real-world and lifestyle considerations
    Making time for market analysis
    Technical versus fundamental analysis
    Different Strokes for Different Folks
    Short-term, high-frequency day trading
    Medium-term directional trading
    Long-term macroeconomic trading
    Trading on Auto-Pilot
    Potential inputs to drive an EA system
    Caveat emptor on models
    Using social media for trading: The power of the crowd
    Developing Trading Discipline
    Taking the emotion out of trading
    Managing your expectations
    Keeping your ammunition dry

    Chapter 11:

    Cutting the Fog with Technical Analysis
    The Philosophy of Technical Analysis
    What is technical analysis?
    What technical analysis is not
    Forms of technical analysis
    Finding support and resistance
    Waiting for confirmation
    The Art of Technical Analysis
    Bar charts and candlestick charts
    Drawing trend lines
    Recognizing chart formations
    Fibonacci retracements
    The Science of Technical Analysis
    Momentum oscillators and studies
    Trend-identifying indicators
    Trading with clouds — Ichimoku charts

    Chapter 12:

    Identifying Trade Opportunities
    Developing a Routine for Market Analysis
    Performing Multiple-Time-Frame Technical Analysis
    Identifying Support and Resistance Levels
    Trend lines
    Highs and lows
    Congestion zones
    Fibonacci retracements
    Ichimoku levels
    Looking for Symmetry with Channels
    Drawing price channels
    Listening to Momentum
    Factoring momentum analysis into your routine
    Looking at momentum in multiple time frames
    Trading on divergences between price and momentum
    Using momentum for timing entry and exit
    Trading on Candlestick Patterns
    Building a Trade Strategy from Start to Finish

    Chapter 13:

    Risk-Management Considerations
    Managing Risk Is More Than Avoiding Losses
    Leverage amplifies gains and losses — and expectations
    Knowing your margin requirements
    Market liquidity, volatility, and gap risk
    We have a winner here! Protecting your profits
    Placing your orders effectively
    Applying Risk Management to the Trade
    Analyzing the trade setup to determine position size
    Doing the math to put the risk in cash terms
    Devising the trading plan in terms of risk
    Choosing Your Trading Broker
    Different business models of brokers
    Financial risks of brokers
    Technology Issues and Contingency Planning


    Part IV: Executing a Trading Plan

    Chapter 14:

    Pulling the Trigger
    Getting into the Position
    Buying and selling at the current market
    Averaging into a position
    Trading breakouts
    Making the Trade Correctly
    Buying and selling online
    Placing your orders

    Chapter 15:

    Managing the Trade
    Monitoring the Market while Your Trade Is Active
    Following the market with rate alerts
    Staying alert for news and data developments
    Keeping an eye on other financial markets
    Updating Your Trade Plan as Time Marches On
    Trend lines move over time
    Impending events may require trade plan adjustments
    Updating Order Levels as Prices Progress
    Increasing take-profit targets
    Tightening stop-loss orders to protect profits

    Chapter 16:

    Closing the Position and Evaluating Your Results
    Closing Out the Trade
    Taking profit and stopping out
    Setting it and forgetting it: Letting the market trigger your order
    Squaring up after events have happened
    Exiting at the right time
    Getting out when the price is right
    Assessing Your Trading Strategy
    Identifying what you did right and wrong
    Updating your trading record


    Part V: The Part of Tens

    Chapter 17:

    Ten Habits of Successful Currency Traders
    Trading with a Plan
    Anticipating Event Outcomes
    Staying Flexible
    Being Prepared for Trading
    Keeping Technically Alert
    Going with the Flow/Trading the Range
    Focusing on a Few Pairs
    Protecting Profits
    Trading with Stop Losses
    Watching Other Markets

    Chapter 18:

    Ten Rules of Risk Management
    Trade with Stop-Loss Orders
    Leverage to a Minimum
    Trade with a Plan
    Stay on Top of the Market
    Trade with an Edge
    Step Back from the Market
    Take Profit Regularly
    Understand Currency-Pair Selection
    Double-Check for Accuracy
    Take Money out of Your Trading Account

    Chapter 19:

    Ten Great Resources
    Technical Analysis of the Financial Markets
    Japanese Candlestick Charting Techniques
    Elliott Wave Principle
    Technical Analysis For Dummies
    The Book of Five Rings
    Market Wizards: Interviews with Top Traders
    Come into My Trading Room
    Zero Hedge
    BabyPips.com
    Forex Factory


    Appendix:

    Trading Strategies
    What’s Your Sign? Determining Your Trader Type
    Looking at Trading Strategies Based on Trader Type
    Strategies for the scalper
    Strategies for the swing trader
    Strategies for the position trader
     
    #11     Apr 9, 2023
  2. Well the way I look at it is if I get one good idea out of it it was time well spent.

    And considering how unpopular indicators are at the moment, maybe the time, when they will regain their former glory is coming in a couple of years! And I imagine there are new indicators being built and tested every day - and in understanding those, knowing the logic behind the traditional indicators will surely help :)
     
    #12     Apr 10, 2023
    expiated likes this.
  3. maxinger

    maxinger

    There is a strong demand for indicators from charting software, brokers ....
    So there will be supply.

    I used to have hundreds of indicators in the chart.
    Now I have zero.

    Happy Indicator Hunting.
     
    #13     Apr 10, 2023
  4. expiated

    expiated

    The indicator I omitted from Post #10 is what I call my "instantaneous" moving average. I created it when I found the Hull Moving Average (HMA) and the Zero Lag Moving Average to be unsatisfactory in their supposed roles of dealing with the problem of lag. My personal moving average was DEFINITELY coded base on the logic behind at least one traditional indicator.

    As you can see from the image below, my instantaneous moving average (the bold black line) does a much better job of closely tracking price action, with the thin black HMA moving a bit bizarrely in that it often exhibits swings which overshoot the candlesticks, and the purple zero lag moving average doing an even worse job of closely tracking price action...

    upload_2023-4-10_5-4-23.png

    One of the keys to my "success" was in learning to code my own proprietary indicators. But, I did so only AFTER becoming relatively familiar with the standard fare already publicly available.
     
    #14     Apr 10, 2023