Essentials of Foreign Exchange Trading

Preface

Acknowledgments

Chapter 1. Introduction to Foreign Exchange Trading

Trading Money to Make Money

Striking Gold

Buying and Selling at Retail

Big and Liquid, Like the Ocean

Open 24/5

Playing in the Majors

Leveraged to the Hilt

The Players

What Moves the Forex Markets?

What to Expect from This Book

Chapter Summary

Chapter 2. Basic Foreign Exchange Trading Mechanics

Anatomy of a Currency Pair

Going Long and Selling Short

Market Orders - On the Spot

Entry Orders - Waiting until the Price is Right

Stopping Losses with Stop Losses and Trailing Stops

Profit Limits - When You're in the Money

Exit with Caution

Trade Size - Lots and Lots of Lots

Leveraging Margin and Leverage

Margin Call - Insufficient Funds

Pips - The Currency of Currency Trading

Spreading the Wealth - Spreads or Commissions?

Interest - Giving and Receiving

Hedging - Two Sides of the Same Coin

Chapter Summary

Chapter 3. Technical Analysis - Tools for Trading Foreign Exchange

Introduction to Technical Analysis - Interpreting Price Action

Basics of Bars and Candlesticks

Keeping Time with Chart Timeframes

Support for Resistance (and Support)

The Trend Will Set You Free

How Trendy - Lines and Channels

The Magic of Moving Averages

Seeing Patterns in the Candles

Currency Charts Take Shape

Indicators of Change

Pointing the Way with Pivot Points

Fibonacci's Magic Numbers

Riding the Elliott Wave

Getting to the Point & Figure

Chapter Summary

Chapter 4. Fundamental Analysis - What Drives the Foreign Exchange Markets

Introduction to Fundamental Analysis - Basic Economics

A Healthy Interest in Global Bank Rates

Carried Away with Trading

Indication of Things to Come - Economic Indicators

No News is Bad News for News Traders

Chapter Summary

Chapter 5. Foreign Exchange Trading Methods and Strategies

Rules to Trade By

Position Trading - Settling in for the

"Many customers say Essentials is an "excellent" forex trading resource." ( TradersPressWeekly.com , 8/18/10) "...is a concise, easily digested snapshot of the currency market. It is a solid introduction to a trading specialty and probably a better fit for investors already well versed in stocks or futures and looking for a new market opportunity. Chen's edition is a Forex 101, a helpful base that is likely to encourage investors to pursue further study." ( SFO Magazine , June 2009) "...has written this guide to trading in the foreign exchange (forex) market for both novices and experienced professionals. The author explains the fundamental mechanics of the forex markets before launching into the various strategies and insights that have been proven successful in the field." ( Book News , May 2009) "The book is very well suited to the novice trader. The primer on technical analysis offers a great review for CMT candidates. More experienced traders in stocks, bonds, or commodities will benefit from the book's comprehensive explanation of the mechanics in the market. ( mta.org (market technician's association), April 28th, 2009) "Chen's book is the perfect source of knowledge for those who haven't ever traded currencies. Clearly explained, Chen's easy to read style show that he knows what professional currency trading is, focusing on the important aspects that every trader should know. The book covers all important Forex trading related topics." ( fxstreet.com , March 11, 2009)