Forex DeMYSTiFieD A Self-Teaching Guide

ntroduction to Forex 1 How Is Money Made on a Forex Trade? 2 What It Means to Trade Currencies 4 Using Leverage and Gearing While Trading Forex 7 Higher Leverage Amounts than Stock Trading 8 The History of Forex 11 A Quick Background of Economic and Financial Policy 14 Today’s Economic Climate 15 Quiz 18 Chapter 2 Getting Ready to Trade 21 Learning to Deal with the Emotions of Trading 22 The Time Commitment to Forex Trading 23 Risk Tolerance 24 Available Funds 25 Can You Work Alone? 26 Like-Minded Traders and Other Support Groups 28 Backup Plan 31 Listening to the Market 32 The Emotional Market 36 Economic News Days 39 Quiz 41 00_Borman_FM.indd ix 0_Borman_FM.indd ix 11/19/13 8:13:20 PM 1/19/13 8:13:20 PM x CONTENTS Chapter 3 How to Navigate the Online World of Forex Trading 43 Short- and Long-Term Perspectives 44 Trading Software 45 Building a Position by Pyramiding 52 Quiz 54 Chapter 4 Currency Trading and Overall Investing: Will FX Fit My Investing Goals? 57 Meeting Your Objectives with Different Trading Styles 58 The Right FX Account for Your Style 59 The Elements of FX Risk 59 Forex Trading and Your Overall Portfolio of Assets 62 FX Trading: Profit or Income 65 High-Risk/High-Return Forex Trading 76 Aggressive Forex Trading 80 Developing Countries/Exotic Currencies 83 Building Up Forex Trading Confidence 88 Quiz 92 Chapter 5 More Tips on Forex Trading 95 Diversification Is Critical 96 Dismantling a Profitable Trade 98 Keeping the Profits Rolling 100 Buying into Long-Term Trends 103 Playing the Interest Rate Differentials 104 When the Market Corrects 106 Automated Forex Trading Systems 107 Quiz 111 Chapter 6 Using Research for Better Forex Trading 113 Fundamental Research 101 114 Interest Rates and Forex Trading 118 Technical Analysis 123 The Basics of Technical Indicators 124 Timing Trades with Moving Averages 134 Support/Resistance Indicators 137 Quiz 141 Chapter 7 How to Make Trading Ideas Work 143 Enhance Your Existing Income with FX 144 Conservative Investing and T-Bills 145 00_Borman_FM.indd x 0_Borman_FM.indd x 11/19/13 8:13:21 PM 1/19/13 8:13:21 PM CONTENTS xi Taking the Demo Account Out for a FX Test Drive 148 Living the FX Trading Lifestyle 149 Paying the IRS 152 Working Solution for Your Currency Trading Program 152 Forex and Financial Independence 159 Quiz 162 Chapter 8 How to Look for Good Forex Setups 165 Diverse News Determines Different FX Pairs 166 A Scenario for Evolving News 167 The Market Always Reacts 169 Use a Trading Calendar 171 Trade with the News 173 FX and the Herd Instinct 183 Putting Everything Together and In Order 186 Quiz 196 Chapter 9 Forex in the Corporate Environment 199 Using Forex Futures 200 Foreign Exchange Risk Hedges Made with Options 205 Quiz 208 Final Exam 211 Answers to Quizzes and Final Exam 227 Glossary 229 Index 235