TABLE OF CONTENTS
Introduction
Part I How does the forex market work
Part II Trading on the forex yourself
Part III Understanding and Predicting Price Movements
Part IV Forex Trading Strategies
Part V How to become a successful forex trader
Part VI Forex Quiz
PART I HOW THE FOREX MARKET WORKS
CHAPTER 1 A SHORT HISTORY OF THE FOREIGN EXCHANGE MARKET
Barter and the beginnings of international trade
The Gold Standard
Bretton Woods
Birth of the modern currency market
The man who broke the bank of England
The future of the forex
CHAPTER 2 PRACTICAL INFORMATION ABOUT THE FOREX
What is forex exactly?
Opening Hours
(rock) Around the clock
The busy hours
Who is active on the forex
Banks
multinationals
Governments
Individual traders
Regulations
CHAPTER 3 HOW CURRENCY RATES ARE DETERMINED
Currency pairs
Opening a position
CHAPTER 4 THE DIFFERENCE BETWEEN FOREX AND STOCKS
Not an investment market but a speculative market
Not based on physical ownership
Trading stocks is more expensive
Similarities
Why recessions don't matter to the forex trader
No uptick rule
CHAPTER 5 INDIVIDUAL TRADERS ON THE FOREX
Online trading platforms
Start with a small trading capital
CHAPTER 6 SHORT FOREX LEXICON
Opening a position
Long or Short
Stop loss
Take profit
Bulls & Bears
Bid and Ask
Spread
Base currency and quote currency
Cross Currencies
Candlestick Chart
Leverage
Standard Lot
Pip
Resistance and Support
PART II TRADING ON THE FOREX YOURSELF
CHAPTER 7 YOUR FIRST FOREX ACCOUNT
Required trading capital
Chosing the right forex broker
Demo account or real account?
Opening your first position
Money Management
Rule number 1: Survive
Example
What is a realistic return on investment
Automated trading yes or no?
Your own expert advisor
Buying an existing expert advisor / forex bot
5 Tips that will save you money
1. Money management
2. Always use a stop loss
3. Be realistic
4. Interact with other traders
5. Keep your emotions under control
PART III UNDERSTANDING AND PREDICTING PRICE MOVEMENTS
CHAPTER 8 THE FOUR MOST IMPORTANT CURRENCIES ON THE FOREX - AND THE YUAN
What makes the US Dollar so important
The Federal Reserve
Where is the Chinese Yuan?
The Euro
European Central Bank
EUR/USD
Things you should know about the EUR/USD
Trading opportunities for the EUR/USD
The Japanese Yen
Ministery of Finance and the Bank of Japan
USD/JPY
What should you pay attention to when trading the USD/JPY
The British Pound
Bank of England
GBP/USD
What influences the Cable
The GBP/USD in relation to other currency pairs
Trading opportunities for the GBP/USD
CHAPTER 10 FUNDAMENTAL ANALYSIS
Why economic news is important
Fundamental analysis at work
The four fundamental themes influencing the forex
Economic growth
Interest rates
Trade balance
Political stability
CHAPTER 11 TECHNICAL ANALYSIS
Charting and judging price developments
Different ways of looking at price developments
Candlestick charts
Some examples of candlesticks and candlestick patterns
The Doji
Three white soldiers
The Hammer
CHAPTER 12 CHART PATTERNS
Head-and-Shoulders
Double Top / Double Bottom
Triangle Pattern
Symmetrical triangle
Rising triangle
Falling triangle
CHAPTER 13 SUPPORT AND RESISTANCE
Causes of support and resistance levels
How to use support and resistance
Some tips for using support and resistance
CHAPTER 14 THE MOST IMPORTANT TECHNICAL INDICATORS
Moving Averages
SMA derivative indicators, methods
Exponential Moving Average (EMA)
Moving Averages crossover systems
3 SMA filter
Tight to Wide 3 SMA Trade
Bollinger Bands
Using Bollinger Bands to open and close positions
Trend detection -- when can we say a trend is emerging?
Entry point -- when to open a position?
Exit point -- when is the trend considered to have run its course?
Relative Strength Index
How the RSI works
How to use the Relative Strength Index
Divergence
Stochastics
Range trading tool
Stochastics explained
Stochastics at its best: divergence
Fibonacci
So, Finally, What is the Fibonacci sequence
How the Fibonacci sequence works in trading
Fibonacci support levels in an uptrend
Fibonacci extension ratios
Why Fibonacci is important in FX trading
PART IV FOREX TRADING STRATEGIES
CHAPTER 15 TREND TRADING
What is a trend
Trend trading strategy
CHAPTER 16 RANGE TRADING
The nuts and bolts of range trading
How to recognize a possible range trade
How do you set up a range trading strategy
Identify the range
Identify the entry point for the trade (a.k.a. the trigger)
Set a stop loss and profit target
Don't chase the breakout when your stop loss is triggered
CHAPTER 17 SCALPING
Not a good strategy for beginners
How scalping works
Is scalping the holy grail?
CHAPTER 18 BREAKOUT TRADING
Example of a breakout strategy
Different kinds of breakouts
Testing a breakout
CHAPTER 19 FADING THE BREAKOUT
Example of breakout fading
Short term trading strategy
CHAPTER 20 THE CARRY TRADE
How the carry trade works
Carry Trade Example
How to spot a good carry trade
Summary of the Carry Trade
CHAPTER 21 TRADING THE NEWS
How to trade the news
5 minute charts
Difference between actual and expected figures
Which direction is not important
Clear direction IS important
Tight stops
Trailing stops
Summary
PART V HOW TO BECOME A SUCCESSFUL FOREX TRADER
CHAPTER 22 WHAT KIND OF TRADING IS RIGHT FOR YOU
Goals
Time
Study
Money
Why most traders lose money
Self Assessment
Trader X
CHAPTER 23 SET-UPS
Set-up example 1: Bollinger Bands Breakout
Set-up example 2: SMA breakout
Why use a set-up
A good set-up is important for the following reasons
CHAPTER 24 EXIT STRATEGY
Infamous examples of the lack of an exit strategy
Example 1 World vs. Credit Crisis
Example 2 the U.S. vs. the Rest
Example 3 Oil price vs. Hedgefunds
Exit strategy to limit losses: the stop loss
Exit strategy to secure and maximize profits
Scaling Exit Points
CHAPTER 25 MONEY MANAGEMENT
Position Sizing
The most important goals of position sizing
Protecting your trading capital
Expected Value (EV) and calculating your EVP
Conclusion
CHAPTER 26 SYSTEM EVALUATION
The Numbers
Expected Value expressed in position size (EVP)
Trading capital growth/decline
Percentage Total Winning Trades
What to evaluate and how often
Evaluation of your trading system in numbers
Evaluating different parts of your trading system
Trading Log
Example of a trading log
CHAPTER 27 THE PSYCHOLOGY OF TRADING
When you should not trade
When you shouldn't trade a little while longer
Worst case scenario strategy
Worst case scenario examples
Situation 1: Dramatic losses
Situation 2: Girlfriend/Boyfriend part I
Situation 3: No more forex
Situation 4: Big Bad Government
Situation 5: Uptick yourself
Situation 6: Girlfriend/Boyfriend Part II
Worst case scenario tip for beginning traders
The end of the beginning
PART VI FOREX QUIZ
ANSWERS QUIZ
EXPLANATION ANSWERS FOREX QUIZ
EXPLANATION QUIZ SCORES
NOTES
SHORT FOREX LEXICON
BIBLIOGRAPHY
