index [pbookshop.com] · index 407 arbitrage, 365–370 arbitrage pros and cons, 370–371...
TRANSCRIPT
“A Bust to the Markets” (Archer), 361
“A Conversation with the Gnomes” (Archer and Treuren), 257
Account types, 107, 109Advisory services, 143–144Agent computing, 361Algorithmic trading, 363American style option, 326AnalyzerXL, 141Anti-hedging, 40Anti-hedging regulations, 116.
See also National Futures Association (NFA)
Application program interface (API), 358
Application service providers (ASPs), 359
Archer, Michael Duane, 257, 361, 363
Artificial intelligence (AI), 362Asian session, 8“A Simple Cellular Automata
Model for Predicting FX Prices” (Archer), 363
Ask price, 29, 52ATC brokers, 106AUDUSD example, 255Australian Dollar (AUD), 4Automated order entry, 130Automated trading method, 341Automated trading system, 339, 340Automatic trailing stops, 119
Axis Financial Services (money manager), 353
Baby markets, 355Baby Pips, 133Back-testing, 345–346, 359Backup computers, 112Baht, 333, 334Balance of trade, 178–179Ballooning (pip) spreads, 84, 93,
111, 190, 334Bands, 11Bank lot size, 9Bank lots, 59Banking hours, 319Bar charts, 150–152Barron’s, 95Base currency, 48–49, 67Basic market paradigm (BMP),
234–236, 257, 320Bathtub analysis, 234, 273–274, 280Bear market, 11Bear swings, 316Beginning point (BP), 239, 266Belgian dentist, 256Bernanke, Ben, 19Best FX Trader (money manager), 353Beyond Candlesticks: More Japanese
Charting Techniques Revealed (Nison), 159
Bickford, James L. “Jim,” 10, 83, 85, 88, 169, 183, 191, 225, 234, 314, 363
Index
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406 Index
Bid price, 29, 52Bid-ask spread, 13, 52, 117, 368Biofeedback, 211–213, 218, 293, 320Bland, John, 131, 188Bollinger, John, 167Bollinger Bands, 167–169Bollinger on Bollinger Bands
(Bollinger), 167Bounce 1 swing, 249Bounce 2 swing, 249, 250Bounce 3 swing, 250BoxOption, 329Box-top (order), 121British Pound Sterling (GBP), 4Broker-dealer checklist, 106Broker-dealer reviews, 132–133Brokers, 69Bull market, 11Bull swings, 316Butterfly option strategy, 328Buy (call), 28Buy signal, 153Buyer, 325Buying a call, 330Buying a put, 330
Calls, 325, 327Camtasia (software), 213Canadian Dollar (CAD), 4Cancellation, 243, 244Candlestick bar, 158Candlestick charts, 157–159Capital requirements for retail
FOREX broker-dealer, 41Capital Spreads, 102Carryover, 243, 244Cascino, Anthony, 143Cash market, 28Catastrophe theory, 363Cellular automata (CA), 343, 361,
362, 363Central banks, 7, 11, 19, 177
Central clearinghouse, 16Centralized exchange, 4CFTC. See Commodity Futures
Trading Commission (CFTC)Chaos theory, 363Chart library, 274Chart pattern recognition, 154Chart patterns, 315Chart time frame, 198Charting warnings, 162–163Chicago Mercantile Exchange
(CME), 22, 29Chinese Yuan, 4, 22–23Ching, Derek, 173CME Group, 33Combination orders, 121Commissions, 9Commitment of Traders (COT), 31Commodity Futures Modernization
Act of 2000, 37–38Commodity Futures Trading
Commission (CFTC)about, 36–37brokers, 92currency futures, 29daily limits set by, 15foreign equivalents, 43Reauthorization Act of 2005,
38–39, 41regulations, 35, 41–42, 103, 108,
190, 337in retail FOREX, 25role expansion, 12
Commodity pool operator (CPO), 108, 337
Commodity trading advisers (CTAs), 41, 108, 337
Compass FX (money manager), 353Compensation, 243, 244Computer trading
about, 357agents, 359
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I ndex 407
arbitrage, 365–370arbitrage pros and cons, 370–371automated trading system, 359bots, 359cloud computing, 359–360expert advisor (EA), 358–359FOREX future, 362–363Grid programs, 364high and ultra high-frequency
trading, 360–362Pac Man programs, 364technical analysis, 357–358trend machine, 363summary, 371
Computer-assisted traders, 339Computer-assisted trading
method, 341Condor option strategy, 328Consumer price index (CPI),
181, 189Continuation charts, 216Continuation patterns, 155–157Contract, 28Contract specifications, 29–30Contraction, 314Contrary opinion reports, 355Correlation, 54–55, 312Costs and fees. See also Transaction
costsFOREX broker selection, 87–89FOREX manager fees, 351–353lot fees, 13trading costs, 13–14weekend transaction costs, 318
Counter order, 86Counterparties to trades, 86Counterparty FCM, 41Covered writer, 327Cross rate, 369Crosses, 5Crossing the bridge, 258–259Cross-platform hedge, 190
Crowd psychology, 7Currency Bulletin (Pecival), 144Currency College, 133Currency futures, 29Currency options, 28, 33Currency pairs, 3, 11, 292Currency prices, 6Currency Trader, 144Currency trading history
ancient times, 17–18Bretton Woods Agreement of
1944, 21Commodity Futures Trading
Commission (CFTC), 25Euro arrival, 23, 25Federal Reserve System (the Fed),
18–20floating exchange rate, 21–22foreign exchange timeline, 24future of, 22–23gold standard, 18international money market, 22National Futures Association
(NFA), 25Securities and Exchange
Commission (SEC), 20–21Currency trading volume, 30Currency transactions, 16Currenex (trading platform), 80Current Bulletin (Percival), 188Curve-fit data, 169–170Curve-fitting, 229Cycle analysis, 172
Dagger entryprinciple, 258technique, 256–258
Data services, 142Day traders, 14, 202, 248, 286Dealer intervention, 15, 87Declining memory effect, 354Deficit, 178
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408 Index
Delta (option term), 328Demo account
opening, 124trading functions, 107
Denver (magazine), 257Depth of markets (DOM), 87Diagnostics process, 284, 290–293Digital reading, 363DiNapoli, Joe, 173DiNapoli Levels, 173Dines Letter, 143Directional movement (DM), 347Discretionary traders, 339Discretionary trading method, 341Disk Trading, 142Divergence, 314Divine Ratio, 172Dobson, Ed, 145, 146Dodd-Frank Wall Street Reform
and Consumer Protection Act, 25, 33
Dorsey, Thomas J., 162Dow, Charles, 159Downtrend market, 234Drummond, Charles, 173Due Diligence Form, 339Due diligence process, 338
account access, 349contract, 349money path, 349–350red flags, 350–351references, 348registration and regulation, 348transparency, 349website, 348–349summary, 356
Dukascopy, 101Durable goods, 182
ECNs. See Electronic communications networks (ECNs)
Economic indicators, 176, 184–186Edge Capital markets, 143Educational resources, 133–135Electronic communications
networks (ECNs), 9, 13, 53, 84, 334
Elliot Wave Theory (EWT), 172, 173, 236
Elliott, Ralph N., 172Elliott, T. S., 147Emerging markets or currencies, 355Emerging pairs, 332Emotions, 211Employment index, 182Ending point (EP), 239, 241, 266Entry library, 292eSignal, 106, 140, 142Euro Dollar (EUR), 4, 22, 25Euro Money, 145European Monetary Union
(EMU), 22European session, 8European style option, 326Eurozone countries, 23EURUSD Trader, 143Everything (software), 274Evolutionary changes, 290Execution of trading plan
entering the trade, 215exiting the trade, 216monitoring the trade, 216reality check, 215
Exotic option, 326Exotics
described, 4–5, 324pairs, 332–333trading, 333–334summary, 334–335
Expansion, 314Expert advisor (EA), 221Expert advisor (EA) vs. expert
system, 359
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Fear and greed, 320–321Feder, Jens, 354Federal Open Market Committee
(FOMC), 19Federal Reserve Board (FRB),
19–20, 180Federal Reserve System (Fed),
18–20Fee calculation, 349Fibonacci number series, 17250 percent rule, 237Filters, 226Financial information, 109Financial Markets Association
(FMA), 38–39Financial Services Authority
(FSA), 43FinSpreads, 102First in first out (FIFO), 39, 40, 124“Five Digit Pricing,” 52Flash crash, 362Flash executions, 360Floating, 250Ford, Henry, 20Forecasting models, 184Foreign economic indicators, 187Foreign exchange market (FOREX,
FX). See also Trading platformsabout, 3–4base currency, 48–49cross currency, 48currency pairs, 47described, 3vs. equities, 14exotic currency, 48vs. futures, 14–15major currency, 48minor currency, 48pips, 56–57terms used in, 47–55
Foreign regulation, 43Foreign regulatory agencies, 39
FOREX (FX) basicsabout, 57–58base currency, 67bid-ask spread, 62–63calculations, 67leverage, 62lot sizes, 59margin, 80–81profit and loss, 59–60profit threshold, 63–66quote currency, 67summary, 66–67
FOREX (FX) marketsFOREX futures, 27forwards FOREX, 27options trading, 27spot (cash) market, 27summary, 15–16
FOREX (FX) money managers registration, 41
FOREX accountsabout, 105–106demo account, 106–107live account, 107–111live account steps, 109–111redundancy, 111–112summary, 113
FOREX broker selectionaccount options, 92–93ATC brokers, 94Big Four broker dealers, 100–101broker-dealer checklist, 103broker-dealer due diligence,
84–85broker-dealers, 93–98complaints and resolution, 92costs, 87–89customer service, 90–91demo accounts, 85–86electronic communications
networks (ECNs), 86–87financial stability, 91–92
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410 Index
FOREX broker selection (continued)FOREX.com, 97–98frauds and scams, 102–103games played by brokers, 93Interactive Brokers, 96issues, 83–84liquidity provider, 89market-maker brokers, 86–87MB trading, 94–96off exchange, 102–103PFG Best, 98popular choices, 98–100for professional and non-U.S.
traders, 101–102spread betting, 102trading pair palette, 91summary, 103
FOREX calendar, 135FOREX currency symbols, 5Forex Factory, 188Forex Journal, 144FOREX Magazine, 144FOREX marketplace
about, 129–130advisory services, 143–144broker-dealer reviews, 132–133data services, 142educational resources, 133–135fun stuff, 146management tools, 136–138news and calendars, 135–136portals and forums, 130–132programming services, 142–143references, periodicals and books,
144–146system development tools,
138–142summary, 147
FOREX News Calendar Indicator, 193
Forex Online Learning, 133FOREX options, 324
Forex Patterns and Probabilities (Ponsi), 169
Forex Peace Army, 84, 93, 132, 356FOREX Shockwave Analysis
(Bickford), 191FOREX spot account, 108Forex Trading Education, 134FOREX trading funds, 108FOREX trading plan, 207–218FOREX TSD (forum), 106ForexTester, 140Forwards FOREX, 4Forwards trading, 33“Four Digit Pricing,” 52Fractals (Feder), 354Fraud, 12, 44, 341, 356Fundamental analysis, 175,
193–194, 340Fundamental factors
balance of trade, 178–179consumer price index (CPI), 181durable goods, 182employment index, 182gross domestic product
(GDP), 180housing starts, 182–183industrial production (IP), 181interest rates, 177intervention, 180parity and purchasing power
(PPP), 179–180producer price index (PPI), 181purchasing managers index, 181retail sales, 182
Futures Commission Merchants (FCMs), 36, 38, 43, 84, 341, 348, 350, 351
Futures contract, 28Futures FOREX, 4Futures Magazine, 145Futures traders, 66FX AlgoTrader, 146
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FX All (trading platform), 80FX Options Trade Board, 329FX Week, 145FXPro, 101, 334
Gain Capital, 97, 334Game theory, 361Gamma (option term), 328Gann, William D., 172Getting Started in Currency Trading,
90, 293Getting Started in Currency Trading,
1st ed. (Archer and Bickford), 10, 83, 85, 88, 169, 183, 191, 314
Getting Started in Currency Trading, 2nd ed. (Archer), 35
Getting Started in Currency Trading, 3rd ed. (Archer), 33, 35, 102, 357, 360
Getting Started in Currency Trading, 4th ed. (Archer), 70, 98
Getting Started in Futures (Lofton), 31
GFT FOREX, 334Ghost trading, 279–280Global View (Bland forum), 131,
188, 194Global Viewpoint Inc. (GVI)
forums, 131Go Forex, 133Going against the crowd, 315Gold standard, 22Goodman, Charles B., 147, 162,
204, 216, 221, 226, 233–234, 256, 297, 304, 371
Goodman Method, 214, 217Goodman setups, 253Goodman swing count system
(GSCS), 241, 316Goodman vs. Elliott,
240–241
Goodman Waltzbreaking even, 264fire starter, 265–266PTS template, 261–262Samba, 265steps, 259–260stop-loss order, 263taking profits, 264–265trading the line, 266–269
Goodman wave, 240Goodman Wave Theory (GWT)
1-2-3 axiom, 236–2373C principle, 243–244about, 233–234Basic Market Paradigm, 234–236basic setup, 245vs. Elliott Wave Theory, 172Goodman vs. Elliott, 240–241ideal matrix, 237–239intersection principle, 241–243matrix in, 239under and over counts, 244propagation principle, 239–240summary, 246
Goodman Works, 134Goodman Works FX Bullish
Consensus, 314Goodmanisms, 297–301Goodman’s law of trading systems,
229–230Gordago, 140Gould, Bruce, 283Governmental regulation, 12.
See also National Futures Association (NFA)
Great Depression, 20Grid systems, 116Gronfelt, Arne, 310Gross domestic product (GDP), 180Gross price movement, 304Grubstake, 284, 285Guerilla trader, 64, 201, 248
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412 Index
Harmonization issue, 42Harry Schultz Letter, 143Harvesting stops, 119Hawaii Forex (Ching), 134, 173Hedges, 6Hedging activity, 5, 39, 190Hicks, Abraham, 213High leverage, 10High-frequency trading (HFT), 6,
360, 361Hill, Napoleon, 213Holt Advisory, 143Homma, Munehisa, 157Homogratus, Felix, 135HotSpotFX (trading platform),
80, 101Housing starts, 182–183Hunter, Lew, 303Hypothesis testing, 273–274
IB Times, 95ICE FX, 33Ideal matrix, 237–239IFTI (money manager), 353IG Index, 102In the money, 325Indicator battery, 221Indicator warnings, 169–170Indicators
comparison of, 173–174and oscillators, 163
Individual account, 341Industrial production (IP), 181Inside swings, 316Insider trading, 12Institutional trading, 6Intel4x (money manager), 354Interbank market, 11Interbank system, 35Interest rates, 177International Money Market
(IMM), 22, 29, 33
Internet connections, 111Intersection principle, 241–243Intersections, 242Intervention, 180Intrinsic value, 325Introducing Broker (IB), 41, 84Invest2 Forex (money manager), 354Investopedia, 144Inward look, 245
Japanese Candlestick Charting Techniques (Nison), 159
Japanese Yen ( JPY), 4Jonathan’s Wave, 362Jumbo swing, 249
Keene, James R., 159Keynes, John Maynard, 175King Kong syndrome, 320
Lagging indicators, 188Latency, 371Laydowns, 272Leading indicators, 187–188Level of interdeterminacy, 243Leverage, 9, 25, 33, 44, 51Leverage regulations, 324, 333Limit on close (LOC) order, 121Limit on open (LOO) order, 121Limit orders, 116, 117Lindsay, Charles, 237Line (profit maximization
technique), 256Liquidity, 6, 10, 12, 15, 48, 333, 334Liquidity provider, 87Live accounts, 106Lofton, Todd, 31Long position, 6, 28, 48, 49Long vs. short, 292Looking inward, 275–276Looking outward, 275–276Lot fees, 88
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Lot sizes, 9, 59, 104Low margin, 10
Magnum Program, 354Major currency, 4Major pairs, 5, 42–43, 48, 332Managed FOREX, 337–356
about, 337–338costs and fees, 351–353managed account types, 341manager spotlights, 353–355manager types, 339–340Panholzer, Peter, 354–355performance analysis, 344–346pros and cons, 338–339reasons for, 338research and resources, 356trading methods, 341–344summary, 356
Managed Forex (money manager), 354
Management fees, 352–353Management pools, 350Management tools, 136–138Manager checklist, 340Margin account, 50–51Margin requirements, 20, 42–43,
335, 370Marginal products, 176Margins, 6, 44Market environments (ME), 221,
291–292Market flows, 355Market hours, 10Market makers, 9Market orders, 115, 116, 117, 334Market price cornering, 11Market Traders, 133Market-maker brokers (dealers), 13,
53, 84Matrix, 237, 239Maximum leverage, 36, 40
Meditation, 320Meisler, Jay, 131Mercury charts, 31–32MetaTrader, 106, 111, 123, 124,
146, 163, 188, 193, 208, 209, 210, 213, 217, 224, 264, 314, 358, 360
Method stop-loss, 226Mexican Peso, 333Micro lot size, 9Micro-accounts, 13, 93, 124Micro-lots, 59Middlemen, 9Mini-accounts, 93Mini-lots, 9, 59Minor currency, 4Minors, 5Mixed fees, 353Molanis Strategy Builder, 146Momentum analysis, 165–166Money management, 174,
255–269, 358Money managers, 108Money supply, 20Months, 30Moore’s Law, 358Moving average, 225Moving average convergence
divergence (MACD), 166Moving averages, 166–167Moxham, Steve, 131, 133MQL4 Code Base, 146, 358MQL5, 358Multiple 3-C counts, 278Myer’s Energy and Finance, 143
Naked writer, 327National bankruptcy, 23National Futures Association (NFA)
about, 37broker registration, 36, 92, 102currency futures, 29
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414 Index
National Futures Association (NFA) (continued)
currency manager, 337foreign equivalents, 35“Know-Thy-Customer” Rules, 38,
42, 110leverage regulated, 24margins, 51in retail FOREX, 25role expansion, 12Rule 2–43, 25, 39, 40–43, 86, 93,
116, 190, 333, 342summary, 44
Navigation, 113NeoTicker, 80Nest, 276Net price change, 304Neural networks, 343NEVER rules, 120New Concepts in Technical Trading
Systems (Wilder), 343New Impact, 191New York Board of Trade, 30, 33New Zealand Dollar (NZD), 4News and calendars, 135–136News Squawk, 136News traders, 7, 98News trading, 175–195
about, 175–176FOREX news, 188fundamental analysis, 176fundamental discussion, 183–188fundamental factors, 177–183fundamental problems, 176–177key news releases, 188reality vs. expectations, 189shockwave analysis, 191strategy, 191, 193tactics, 191, 192–193traders response to, 189–190summary, 193–194
NextChart, 146
NFA (National Futures Association). See National Futures Association (NFA)
Nibbling, 260Ninja Trader, 106, 138, 139–140,
163, 209, 358Nison, Steven, 157, 159Nixon, Richard M., 22No dealing desk (NDD), 53, 86Nofri, Eugene, 311Nonfarm payroll report (NFP), 182,
186, 188, 189Nonlinear methods, 363, 371Norlin, George, 17North American Session, 8
Oanda (web site), 313One cancels the other order
(OCO), 1211-2-3 axiom, 236–237Online trading, 12Open orders, 123–124OpenQuant, 80Options, 28
about, 323–324advanced option strategies, 328basic options strategies, 327described, 324Greeks, 328hedging with, 323options primer, 324–325options pros and cons, 326options terms, 325–326options vs. spot FOREX, 330purchase vs. writing, 327–328retail FOREX options, 329risk management with, 330–331summary, 334–335
Options pricing, 325, 326Options trading, 4Order confirmation, 123Order execution, 122
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Order placement, 39, 121–122Orders, 115–117. See also TradingOut of the money, 325Outside swings, 316Outward look, 245Overlap, 55Overlays, 245, 275Overnight charges, 89Over-the-counter (OTC) FOREX
options, 329Over-the-counter (OTC)
market, 11
Pac Man programs, 342, 344, 347–348
Pain thresholds, 203–204Pairs, 5PAMM account, 341Paragon FX, 101Parity and purchasing power (PPP),
179–180Parlane, Graham, 143Patriot Act, 38Pending execution, 115Percentage of retracement, 172Percival, John, 144, 188Performance analysis
assets under management (AUM), 345
equity cycle and drawdowns, 344–345
equity exposure, 345reward and risk, 344track record, 345–346weaknesses, 346
Performance analysis methodsmarket environments (ME),
347–348Sharpe ratio, 346
Performance fees, 352Performance-only fees, 353Perry Wysong’s Insider, 143
Personal information, 109Pip currency, 49Pip spreads, 10, 48, 87Pips, 10, 49, 352Pips values, 13–14Platform checklists, 106Point & Line Method
(Drummond), 173Point and Figure Charting
(Dorsey), 162Point and figure charts,
159–162, 316Points, 49Ponsi, Ed, 169Pooled accounts, 341Portability, 360Portals and forums, 130–132Position sizing, 13Position traders, 202, 248Positioning changes, 355Premium, 325Price adjustments, 40–41Price fields, 150Price memory, 149, 173, 354Primary brokers, 111Pro Trader Plus (trading
platform), 80Proactive trading
about, 271bathtub analysis, 273–274chart library, 274ghost trading, 279–280laydowns, 272looking inward, 275–276looking outward, 275–276multiple 3-C counts, 278propagation, 274–275sitting on your hands
(SOYH), 280stations, 278summary, 281
Producer price index (PPI), 181, 186
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416 Index
Profiles, 209Profit-loss ratio, 64, 287–288, 291Programming services, 142–143Prolific Investments (money
manager), 354Propagation, 274–275Propagation 2 Swing, 250Propagation 3 swing, 253Propagation principle, 239–240Propagation trade setup (PTS), 245
about, 247AUDUSD example, 249–253time frames, 248–249summary, 253
Psychology of traders, 174Pugh, Burton, 151–152, 234Purchasing managers index, 181Purchasing power parity (PPP), 180Pure Logik Trading, 143Puts, 325, 327
Quote conversion, 52Quote currency, 49, 67
Range, 364Recordkeeping, 84, 109, 111Red Paladin, 360Rednor, Peter, 320References, periodicals and books,
144–146Registration of FOREX
manager, 348Regulation. See also National Futures
Association (NFA)in FOREX market, 35–45future of, 43–44history of, 36–39present, 39–43
Relative strength indicators (RSI), 163–164, 169, 220, 343
Repropagation, 251Requoting, 15, 84, 87, 93, 111, 334
Reserve currency, 21Retail FOREX, 5, 6Retail FOREX brokers, 323Retail FOREX options
Oanda, 329PFG Best, 329SaxoBank, 329
Retail sales, 182Return point, 241Return setups, 245, 247, 253Return zone, 241, 251Reversal patterns, 154Review Pips, 133Rho (option term), 328Risk-avoidance, 256Risk-avoidance approach, 286Rockefeller, John D., 256Rollover charges, 89Rollovers, 14, 54Round-turn, 53
SaxoBank, 334Scalpers, 64, 201–202, 286The Science and Secrets of Wheat
Trading (Pugh), 234, 237Scripting languages, 358Secondary brokers, 111Securities Act of 1933, 20Securities and Exchange
Commission (SEC), 29, 360Securities Exchange Act of 1934, 20Sell (put), 28Sell signal, 153Sell the bid and buy the ask, 52Sentiment analysis, 355Session carryover charges, 89Session Lines, 213Sessions, 292Sharpe, William F., 346Sharpe ratio, 345, 346Short position, 49Sideways market, 234
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Signal services, 130, 314Simple system
about, 219–220general principles, 220–221KIS toolbox, 221–222momentum index, 226–227moving average crossover,
223–226not so simple, 229–230pairs to trade, 229–230stop-loss and take-profit
rules, 228trading rules, 227–228summary, 230
Sitting on your hands (SOYH), 211, 216, 280
Smithsonian Agreement, 22SMW principle, 272Snagit (software), 84, 217SnapDragon, 142Sortino Ratio, 346Specialty orders, 121Speculative hedges, 324Speculators, 5, 6Speed, 364Spice Cap (money manager), 354Spike Charts, 146Spot (cash) markets, 4, 14Spot currency trading, 14Spot FOREX, 28Spot FOREX futures, 33Spot FOREX open interest, 32Spot gold trading, 33, 36Spot silver trading, 33, 36Spot trading in gold and silver,
25, 40Spread betting, 4, 28, 33Spreads, 88Standard accounts, 93Standard lot size, 9Standard lots, 59Standard setups, 245
Stations, 278Stock markets, 10–11Stop harvesting, 84, 93, 111Stop orders, 116, 118–121Stop-loss orders, 63, 119, 120, 122,
153, 215, 216, 293Strike price, 325Success to Commodities: The Congestion
Phase System (Nofri), 311Suitability/know-your-customer
requirement, 42Support and resistance levels, 153Swing, 238Swing analysis, 171Swing charts, 152, 316Swing traders, 171Swiss Franc (CHF), 4System development tools, 138–142
Take-point order, 63Take-profit order, 122, 153, 215,
216, 244, 293Technical analysis
about, 149bar charts, 150–152Bollinger Bands, 167–169candlestick charts, 157–159chart pattern recognition, 154charting warnings, 162–163continuation patterns, 155–157curve-fit data, 169–170cycle analysis, 172indicator warnings, 169–170indicators and oscillators, 163momentum analysis, 165–166moving averages, 166–167point and figure charts, 159–162references on, 230relative strength indicators (RSI),
163–164reversal patterns, 154support and resistance levels, 153
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418 Index
Technical analysis (continued)technician’s beliefs, 173technician’s warning, 173–174trading strategy, 175, 194, 340trading systems, 173trendlines, 153wave and swing analysis, 171–172summary, 174
Technical factors, 7Technician’s beliefs, 173Technician’s warning, 173–174Techniques tools for trading
bullish consensus, 314–315contrary opinions, 314–315correlation and transitivity,
312–314directional movement (DM),
304–305market environments (ME), 304market environments (ME)
applications, 308–309market environments (ME)
temperatures, 308Nofri congestion phases, 311–312price rhythm, 305–308Pugh charts, 315–316range finder, 310–311three chart system, 309–310time rhythm, 305–308volatility (V), 304–305
TechSmith, 217Templates, 209, 242Theta (option term), 328Think and Grow Rich (Hill), 213Third party products and services, 1330-trade campaign program
about, 283capital allocation, 284–288characteristics of successful
traders, 293–294diagnostics process, 290–293formula, 287
golden FOREX ratios, 287–288pre-trade checklist, 288tracking trades, 288trade lot sizing, 286two-day trader worksheet,
285–286worksheet, 284summary, 295
3-C principle, 243–244, 2643-D setup, 247, 253Tick symbols, 30Ticks, 49–50Time frames, 12Time hash, 266Time series analysis, 173Time studies
day of week, 319flyers, 319–320Goodman price-time swing
chart, 317market closing, 319market opening, 318–319time filters, 316, 318time of day, 319
Time zones, 319Tipping point (TP), 239Tools for trading, 13
about, 303–304fear and greed, 320–321techniques, 304–316time studies, 316–320summary, 321
Traders, characteristics of successful, 293–294
Traders Press, 145Trading, 115–124
combination orders, 121costs, 13–14limit orders, 117market orders, 117open orders, 123–124opening demo account, 124
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order confirmation, 123order execution, 122order placement, 121–122orders, 115–117specialty orders, 121stop orders, 118–121summary, 124
Trading against the box, 342Trading against yourself, 55Trading day, 8Trading indicators, 169Trading market hours, 8Trading markets, 225Trading methods for managed
FOREXartificial intelligence (AI), 343breakout, 343divergence, 343due diligence process,
348–351grids and Pac Man systems, 342hedges, 342nonlinear algorithms, 343–344quality of market, 342trend following, 342
Trading plan, 207–218about, 207–208components of, 208–209elements of, 209–211execution of, 215–216post-trade plan, 216–218pre-trade plans, 211–214summary, 218
Trading platformsabout, 69–70checklist for, 80–82eSignal, 76–78features of, 71–74MetaTrader, 74–75MultiCharts, 78–79Ninja Trader, 75–76other selections, 79–80
professional, 80proprietary, 69
Trading profiles, 205day traders, 202guerilla trader, 201position traders, 202scalpers, 201–202selection of, 203–204
Trading psychology, 174Trading questions, 289The Trading Rule That Can
Make You Rich (Dobson), 146, 237–238
Trading spaceabout, 197charts and bars, 198–200market as a process, 204–205trading profiles, 201–202summary, 205
Trading styles, 339Trading systems, 173, 354, 358Trading Tables, 56Trading transactions, 8–9Trading vs. trending markets, 220Trailing stops, 119Transaction costs, 10, 53–54, 318,
368, 370Transaction speed, 10Transitivity, 313, 314Transitivity arbitrage, 370Transitivity pair, 55“The trend is your friend”
(axiom), 236Trend Machine, 362Trend reversal, 343Trending indicators, 169Trending markets, 225Trendlines, 153Treuren, R. David, 257Triangular arbitrage, 366, 370Trident (Lindsay), 23724 hour market, 10
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420 Index
Ultra-high-frequency trading (UHFT), 6, 360, 361
Under and over counts, 244Under-over propagation, 264Uptrend market, 234U.S. dollar index,
30–31U.S. dollar (USD), 4U.S. Treasury, 19
Vanilla option, 326Vega (option term), 328Very short term trading, 340Virtual private server
(VPS), 360Volatility (V), 347
described, 304vs. liquidity, 12
Volume and open interest, 31–32
Volume of trading, 27
Waltz (trade-in-progress technique), 256
Watch list, 214Watch profile, 210Wave analysis, 171Wave and swing analysis, 171–172Wealth Lab, 141Weekend transaction costs, 318Whipsawing, 171, 342Wilder, Welles, 343Winners-to-losers ratio, 63–64, 65,
286, 287, 291Writer, 325Writing a call, 327Writing a put, 327
Young, Joseph, 144YouTube, 106Yuan, 4, 22–23
Zloty, 333
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