Currency Trading for Dummies (Kathleen Brooks and Brian Dolan, 2015)

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Who trades forex

  • Flow traders: execution traders.
  • Proprietary traders: speculative.
  • Forward traders: beyond spot rates.
  • Options traders: bank's portfolio.
  • Sales staffs: intermediary.
Fundamental data

  • United States
    • Non-farm payroll (NFP)
    • Unemployment rate
    • Change in manufacturing payrolls
    • Average hourly earnings
    • Average weekly hours
    • Consumer confidence index
    • University of Michigan consumer sentiment index
    • ABC consumer confidence
    • Institute for supply management (ISM) employment indices
    • Regional federal reserve indices
    • Existing-home sales
    • New-home sales
    • Housing starts
    • Building permits
    • Chicago purchasing manager index (PMI)
    • ISM manufacturing report
    • ISM nonmanufacturing report
    • Philadelphia Fex index
    • New York Empire State index
    • Richmond Fed manufacturing index
    • Consumer price index (CPI)
    • Producer price index (PPI)
    • Peresonal consumption expenditure (PCE)
    • Institute for Supply Management (ISM) prices paid index
    • Gross domestic product (GDP)
    • Trade balance
    • Current account balance
    • Budget and deficit forecasts
    • Government bond yields, spreads, and CDS (credit default swapss)
    • Government debt auctions
    • Soverign credit ratings
  • Eurozone
    • Zew survey
    • IFO and GfK surveys
    • Purchasing Manager Indexes (PMIs)
    • Eurozone confidence
  • Japan
    • Tankan index
    • Trade balance
    • All-industry and tertiary industry (services) indices
  • United Kingdom
    • Bank of England (BOE) minutes
    • BOE quarterly inflation report
    • Purchasing manager indexes (PMIs)
    • GfK consumer confidence and Nationwide consumer confidence
    • CBI distributive trades sruvey and industrial trends survey
    • British retail consortium (BRC) retail sales monitor and shop price index
  • Canada
    • International securities transactions
    • Ivey purchasing manager index
  • Australia
    • RBA rate decisions and RBA minutes
    • Westpac consumer confidence and National Austrial Bank (NAB) business confidence
  • New Zealand
    • NZ card spending
    • ANZ consumer confidence
Types of trading
  • Short-term: high-frequency day trading
  • Medium-term: directional trading
  • Long-term: macroeconomic trading

Technical analysis

  • Market are made of human and their psychology have not been changing.
  • Types
    • Chart analysis
    • Pattern recognition
    • Momentum and trend analysis
    • Support and resistence
      • They are made to be broken
      • The longer the time frame of the price point, the greater its significance.
      • Trend-line strength is also a function of time frame and durability.
      • The strength of support or resistance levels during a retracement depends on the strength of the support or resistance during the prior directional move.
Successful habits
  1. Trading with a plan.
  2. Anticipating event outcomes.
  3. Staying flexible.
  4. Being prepared for trading.
  5. Keeping technically alert.
  6. Going wit hthe flow/trading the range.
  7. Focusing on a few pairs.
  8. Protecting profits.
  9. Trading with stop loss.
  10. Watching other markets.
Risk management

  1. Trade with stop-loss orders.
  2. Leverage to a minimum.
  3. Trade with a plan.
  4. Stay on top of the market.
  5. Trade with an edge.
  6. Step back from the market.
  7. Take profit regularly.
  8. Understand currency-pair selection.
  9. Double-check accuracy.
  10. Take money out of your trading account.
Resources

  1. Technical analysis of the financial markets.
  2. Japanese candlestick charting techniques.
  3. Elliott wave principle.
  4. Technical analysis for dummies.
  5. The book of five rings.
  6. Market wizards: interviews with top traders.
  7. Come into my trading room.
  8. https://www.zerohedge.com/
  9. https://www.babypips.com/
  10. https://www.forexfactory.com/

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