Making Money in Forex : Trade Like a Pro without Giving Up Your

Contents Preface xi Author’s Note xv Acknowledgments xvii CHAPTER 1 Exploring the Currency Market 1 What Is Forex? Forex Roots Forex Participants 3 Forex versus Exchange Markets 7 Trade Mechanics 11 Order Types 15 Margin and Leverage 18 Earning Interest 21 Selecting a Currency Dealer 23 Closing Bell CHAPTER 2 26 Principles of a Bargain Hunter 27 Live Your Life Learn to Read Price Action 29 Never Pay Full Price 33 Manage Your Risk 37 Manage Your Profit 38 Closing Bell 39 28 1 2 vii viii CONTENTS CHAPTER 3 Reading Price Action 41 Understanding Supply and Demand 41 Identifying Support and Resistance 54 Trading Price Action 62 Closing Bell 69 CHAPTER 4 Managing Risk 71 Always Use a Stop Order 71 Beware of Overtrading 74 Reducing Your Transaction Costs 75 Stop Thinking about Losses in Pips 76 Managing Risk through Position Size 77 Manage Risk Consistently 80 Be Conservative with Trailing Stops 81 Is Losing 70 Percent of Your Trades Bad? 83 Know When to Take a Break 86 Closing Bell 87 CHAPTER 5 Managing Profit 89 Common Profit Management Techniques That Increase Volatility 90 Identifying Profit Targets 94 Identifying Profit Targets with Fibonacci Ratios 97 Using Trailing Stops 103 Automating Profit with Limit Orders 104 Closing Bell 107 CHAPTER 6 Bargain Hunting Along the Edge 109 Determining Trends 110 Identifying a Bargain Day 110 Locating a Support and Resistance Zone 113 Managing Risk 114 Managing Profit 114 Contents ix Example Trades 116 Closing Bell 126 CHAPTER 7 Bargain Hunting with Price Action 127 Identifying a Bargain Day with Price Action 127 Managing Risk 134 Managing Profit 135 Example Trades 136 Closing Bell 147 CHAPTER 8 Bargain Hunting with the Commodities Channel Index 149 The Traditional CCI Trade 150 The Bargain Hunter’s CCI Trade 152 Managing Risk 154 Managing Profit 156 Example Trades 156 Closing Bell 167 CHAPTER 9 Bargain Hunting with Fundamental Data 169 Why Trade News? 170 What News Is Worth Trading? 170 Which Currency Pair Should You Trade 174 Understanding Market Reactions 175 Trading a Fundamental Event 179 Closing Bell 188 CHAPTER 10 Achieving Consistency: Simple Steps Every Trader Can Take 191 Stop Searching for the Holy Grail 191 Fix Yourself First 193 Are You Really Going to Earn 100 Percent a Month? 201 Consider Long-Term Trading 202 x CONTENTS Specialize 203 Develop a Written Trading Plan 204 Keep a Trading Journal 208 Demo Trade Properly 209 Closing Bell 210 Afterword: The Final Closing Bell 213 About the Author 215 Index 217

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