Book: SUCCESSFUL FOREIGN EXCHANGE DEALING

STUDY BOOK FOR SUCCESSFUL FOREIGN EXCHANGE
DEALING

Contnent Of Book

1.Common knowledge about the trading on Forex
1.1. Forex as a aart af the global financial market
Brief data about the Forex rise and development.
The factors caused Foreign Exchange Volume Growth on Forex (Exchange Rate Volatility,
Business Internationalization, Increasing of Traders’ Sophistication, Developments in
Telecommunications, Computer And Programming Development).
The role of the U.S. Federal Reserve System and central banks of other G-7 countries on
Forex.
1.2. Risks by the trading on Forex
1.3. Forex sectors
Spot Market
Forward Market
Futures Market
Currency Options
2. Major currencies and trade systems
2.1. Major currencies
The U.S. Dollar
The Euro
The Japanese Yen
The British Pound
The Swiss Franc
2.2. Trade systems on Forex
Trading with brokers
Direct dealing
3. Fundamental analysis by trading on Forex
3.1 Theories of exchange rate determination
Purchasing Power Parity
Theory of Elasticities
Modern monetary theories on exchange rate volatility
3.2. Indicators for the fundamental analysis
Economic indicators
The Gross National Product
The Gross Domestic Product
Consumption Spending
Investment Spending
Government Spending
Net Trading
Industrial sector indicators

3
Industrial Production
Capacity Utilization
Factory Orders
Durable Goods Orders
Business Inventories
Construction Data
Inflation Indicators
Producer Price Index
Consumer Price Index
Gross National Product Implicit Deflator
Gross Domestic Product Implicit Deflator
Commodity Research Bureau’s Futures Index
The Journal of Commerce Industrial Price
Balance of Payments
Merchandise Trade Balance
The U.S. – Japan Merchandise Trade Balance
Employment Indicators
Employment Cost Index
Consumer Spending Indicators
Retail Sales
Consumer Sentiment
Auto Sales
Leading Indicators
Personal Income
3.3. Forex dependence on financial and sociopolitical factors
The Role of Financial Factors
Political Crises Influence
4. Technical analysis
4.1. The destination and fundamentals of technical analysis
Theory of Dow
Percent measures of prices reverse
4.2. Charts for the technical analysis
Kinds of prices and time units
Kinds of charts
Line Chart
Bar Chart
Candlestick Chart
4.3. Trends, Support and Resistance lines
Trend Line and Trade Channel
Lines of Support and Resistance
4.4. Trend Reversal patterns

4
Head-and-Shoulders
Inverted Head-and-Shoulders
Double Top
Double Bottom
Triple Top
Triple Bottom
Round Top, Round Bottom, Saucer, Inverted Saucer
4.5. Trend Continuation patterns
Flags
Pennants
Triangles
Wedges
Rectangles
4.6. Gaps
Common Gaps
Breakaway Gaps
Runaway Gaps
Exhaustion Gaps
4.7. Mathematical trading methods ( Technical indicators)
Moving Averages
Envelops
Ballinger Bands
Average True Range
Median Price
Oscillators
Commodity Channel Index
Directional Movement Index
Stochastics
Moving Average Convergence-Divergence (MACD)
Momentum
The Relative Strength Index (RSI)
Rate of Change (ROC)
Larry Williams’s %R
Indicators combination
Ichimoku Indicator
5. Fibonacci constants and Elliott waves theory
5.1. Fibonacci constants
5.2. Elliott wave theory
References

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book: The Six Forces of Forex

The Six Forces of Forex

date: 2004

By Scott Owens

Few traders ever stop to consider the context that defines the foreign exchange marketplace, but all of them should. As forex matures in its role as a retail investment environment the rules – and the stakes – will only multiply.
ANALYSIS
• Who: The faces of forex that shape market action
• Why: Understand the nature of forex, and its inherent opportunity
• Where: Matching your objectives to the optimal dealer
• What: Choosing a trading vehicle based on your investment premise
• When: Time your trades for maximum efficiency
• How: Select a toolkit that actually improves your trading ability
ACTION
• Take an inventory of your personal trading plan
• Find solutions that can help you execute your plan, step by step
WHAT IT MEANS
• Bad News: Successful trading is more work than you thought
• Good News: Everything you need to win is right at your fingertips
RELATED MATERIAL
Test-drive FX Engines for free online at www.fxengines.com to see the power of system building, system testing, and system automation.
ABOUT THIS REPORT
The Forex Report is a periodic publication that investigates advanced strategies for superior trading performance in the foreign exchange markets. These reports utilize advanced statistical and econometric modeling techniques to create new insight into the trading strategy of the average trader. This report, The Six Forces of Forex, is a more general report intended for all audiences, including those new to the forex market.

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Short data about the origin and development of the currency exchange market

Currency trading has a long history and can be traced back to the ancient Middle East and Middle Ages when foreign exchange started to take shape after the international merchant bankers devised bills of exchange, which were transferable third-party payments that allowed flexibility and growth in foreign exchange dealings.

The modern foreign exchange market characterized by periods of high volatility (that is a frequency and an amplitude of a price alteration) and relative stability formed itself in the twentieth century. By the mid-1930s the British capital London became to be the leading center for foreign exchange and the British pound served as the currency to trade and to keep as a reserve currency. Because in the old times foreign exchange was traded on the telex machines, or cable, the pound has generally the nickname “cable”.

After the World War II, where the British economy was destroyed and the United States was the only country unscarred by war, U.S. dollar, in accordance with the Breton Woods Accord between the USA, Great Britain and France (1944) became the reserve currency for all the capitalist countries and all currencies were pegged to the American dollar (through the constitution of currencies ranges maintained by central banks of relevant countries by means of the interventions or currency purchases). In turn, the U.S. dollar was pegged to gold at $35 per ounce. Thus, the U.S. dollar became the world's reserve currency. In accordance with the same agreement was organized the International Monetary Fund (IMF) rendering now a significant financial support to the developing and former socialist countries effecting economical transformation.

To execute these goals the IMF uses such instruments as Reserve trenches, which allows a member to draw on its own reserve asset quota at the time of payment, Credit trenches drawings and stand-by arrangements. The letters are the standard form of IMF loans unlike of those as the compensatory financing facility extends financial help to countries with temporary problems generated by reductions in export revenues, the buffer stock financing facility which is geared toward assisting the stocking up on primary commodities in order to ensure price stability in a specific commodity and the extended facility designed to assist members with financial problems in amounts or for periods exceeding the scope of the other facilities.

At the end of the 70-s the free-floating of currencies was officially mandated that became the most important landmark in the history of financial markets in the XX century lead to the formation of Forex in the contemporary understanding. That is the currency may be traded by anybody and its value is a function of the current supply and demand forces in the market, and there are no specific intervention points that have to be observed. Foreign exchange has experienced spectacular growth in volume ever since currencies were allowed to float freely against each other. While the daily turnover in 1977 was U.S. $5 billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion mark in September 1992, and stabilized at around $1.5 trillion by the year 2000.

Main factors influences on this spectacular growth in volume are mentioned below. A significant role belonged to the increased volatility of currencies rates, growing mutual influence of different economies on bank-rates established by central banks, which affect essentially currencies exchange rates, more intense competition on goods markets and, at the same time, amalgamation of the corporations of different countries, technological revolution in the sphere of the currencies trading. The latter exposed in the development of automated dealing systems and the transition to the currency trading by means of the Internet. In addition to the dealing systems, matching systems simultaneously connect all traders around the world, electronically duplicating the brokers' market.

Advances in technology, computer software, and telecommunications and increased experience have increased the level of traders' sophistication, their ability to both generate profits and properly handle the exchange risks. Therefore, trading sophistication led toward volume increase.

Online Currency Trading requires Patience

When the going gets tough, the tough get going. This adage often brings back the memories of my past days when I was trading initially in the currency exchange market. Indeed, there's nothing more hurtful than losing your invested money in the FX market. But, online currency trading is like life where you're got to learn from your wrong moves and keep moving on. Learning the basic skills of online forex trading could be easy but, practically, one needs to acquire the advanced skills to play safe through thick and thin of FX trading.

I have traded in forex for many years and, if you count on me, I must tell you that the secret of successful trading lies largely on the hunch and intuition of an trader. Technically expressed, you should have the accurate forex alerts and forex signals to be able to make the right moves in the currency market. However, this is easier said than done as the skills of the Currency Trading Signal takes a long time to master. This is why while a few people are able to boost their forex pips in a short span of time, the others take a long time to achieve the same or maybe, some of them get frustrated and just give it up! The reality is that not many people are ready to be entirely devoted to the perilous process of online forex trading.

Having said this, I still wonder why some people choose to be a dare-devil and risk their money instead of simply following an established and renowned Account Forex Online Trading. I began trading in 1997 and there is one important thing I have learnt in my trading career so far, i.e., you have to got to be patient to learn the tricks of making right moves at the right times and profit from your trading.

Since I have led quite a successful career in forex trading, I have been sharing the tips and tricks of online currency trading with many traders around the world through my G7 Forex Trading System which as you know has remained pretty successful for many traders so far. My G7 Forex Trading System is an easy-to-follow, step-by-step trading manual offering in-depth online forex trading review.

If you visit my site (www.forex-science.com) you will find many of my existing customers are pretty satisfied with the performance of their investments and in fact, most of them have been able to increase their forex pips drastically. You would be surprised to know quite a few of them haven't traded for a long time! Now, this is what we call success in the forex trading, eh?