7 Winning Strategies For Trading Forex: Real and actionable techniques for profiting from the currency markets

by Grace Cheng

Overview

Many traders go around searching for that one perfect trading strategy that works all the time in the global FOREX (foreign exchange/currency) market. Frequently, they will complain that a strategy doesn't work. Few people understand that successful trading of the FOREX market entails the application of the right strategy for the right market condition.

7 Winning Strategies For Trading Forex covers:

- Why people should be paying attention to the FOREX market, which is the world's largest and most liquid financial market

- How understanding the structure of this market can be beneficial to the independent trader

- How to overcome the odds and become a successful trader

- How you can select high-probability trades with good entries and exits.

Grace Cheng highlights seven trading strategies, each of which is to be applied in a unique way and is designed for differing market conditions. She shows how traders can use the various market conditions to their advantage by tailoring the strategy to suit each one.

This revealing book also sheds light on how the FOREX market works, how you can incorporate sentiment analysis into your trading, and how trading in the direction of institutional activity can give you a competitive edge in the trading arena.

This invaluable book is ideal for new and current traders wanting to improve their trading performance.

Filled with practical advice, this book is a must-read for traders who want to know exactly how they can make money in the FOREX market.

Product Details

ISBN-13:	9780857190901
Publisher:	Harriman House
Publication date:	03/28/2011
Pages:	260
Product dimensions:	6.10(w) x 9.10(h) x 0.60(d)

About the Author

Grace Cheng is an investor and FOREX trader, and is the co-founder and chief editor of DailyMarkets.com - a financial community weblog dedicated to 24/7 breaking news and market opinions from traders, money managers and investors. Inspired by veteran investor Jim Rogers' adventurous spirit of traveling around the world, in 2007 and 2008, she fulfilled her dream of travelling around the globe from the US, South America, Europe to Africa to Asia for a year, without missing a day of work, proving that in this day and age, one can achieve financial independence without being tied to an office chair. Grace is a contributor to major print, radio and television media including Technical Analysis of Stocks & Commodities, Your Trading Edge and Investopedia. She has also been featured in the media in the US, UK and Asia and quoted on Reuters and Dow Jones. Her popular online PowerFX Course has taught thousands of traders worldwide. Visit: www.DailyMarkets.com

Table of Contents

About The Author

Preface

Introduction

PART I - TRADING FOREX

1. Getting started

Unique Characteristics of the Forex Market

Investing vs Trading

Trading Time Frames

Warming Up

- Opening an account

- Currency codes

- Currencies are traded in pairs

- Trade size

- Pips

- Reading forex rates

- Understanding rollover

- What sort of leverage can I get?

- Trading

- Volatility

- Common types of order

How to Choose a Broker

Forex Trading Is A Serious Business

A Day in the Life of a Full-Time Forex Trader

2. Spot Forex Market Structure

Market Players

- Banks

- Large companies

- Central banks

- Institutional investors/speculators

- Forex brokers

How the OTC Structure Affects Self-Directed Traders

Summary

3. How To Overcome The Odds Of Trading Forex

Mind

- Do You Have the Mental Strength?

- Fear and Greed

- Face And Control Your Fears

- Focus On the Big Picture

Money

- Preserve Your Capital

- Be Well-Capitalized

- Cap Your Losses and Get Your Profits

Method

- The old question: technicals or fundamentals?

- Method is malleable

Summary

4. The Ten Rules of Trading Forex

PART II - STRATEGIES

Strategy 1 - Market Sentiment

What Is Market Sentiment?

What Factors Influence Market Sentiment?

- Interest rates

- Economic growth

- Geopolitical risks

Ways of Measuring Market Sentiment

1. Commitment Of Traders (COT) report

2. Market's reactions to news

Summary

Strategy 2 - Trend Riding

Time Frames of Trends

Trend Directions

Stages of a Trend

Using Currency Price Charts

- Trendlines

- Measuring trend strength

Technical Execution Of The Strategy

Summary

Strategy 3 - Breakout Fading

The Crowd Likes to Trade Breakouts

Why Most Breakouts Fail

Tricks of Institutional Dealers and Traders

- Lack of fresh blood

Identifying The Opportunities

- Where potential fakeouts occur

- Chart patterns

- Best market condition to fade breakouts

Summary

Strategy 4 - Breakout Trading

Types of Breakouts

Measuring Reversal Breakouts

Identifying the Opportunities

- Where potential breakouts occur

- Chart patterns

Filtering False Breakouts

Summary

Strategy 5 - Decreased Volatility Breakout

The Volatility Rollercoaster

Ways of Measuring Volatility

1. Moving average

2. Bollinger bands

Triangles

- Identifying the particular type of triangle

- Technical execution of the strategy

- Further strategy enhancement

Summary

Strategy 6 - Carry Trade

What Is A Carry Trade?

More Money Will Follow The Money

Factors Supportive Of Carry Trades

Risks Involved In Carry Trade

Points of Entry

Summary

Strategy 7 - News Straddling

The Importance of News

Market's Reaction to News

Identifying the Opportunities

Single out market-moving news

Note the schedule of news releases

Which currency pair to trade for this strategy?

Technical considerations

Summary

Appendices

Forex Glossary

Currency Codes

Major Regulatory Agencies