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Table Of ContentsRISK DISCLOSURE STATEMENT / DISCLAIMER AGREEMENT......................................... ......... 2 INTRODUCTION TO THE FOREX MARKET .................................................. .................................... 6
THE PLAYERS .................................................. .................................................. ....................................... 8 Customers......................................... .................................................. ................................................ 8Banks............................................. .................................................. .................................................. . 9
Brokers .................................................. .................................................. ..........................................10 DIFFERENT SECTION OF THE FOREX MARKET .................................................. .........................11THE SPOT MARKET............................................ .................................................. ....................................11FORWARDS .................................................. .................................................. ..........................................12S WAPS .................................................. .................................................. .................................................1 3CURRENCY FUTURES .................................................. .................................................. ...........................13C URRENCY OPTIONS........................................... .................................................. ...................................14INTERVENTION...................................... .................................................. .................................................1 4CURRENCY DESIGNATIONS...................................... .................................................. ..............................15 Crosses .................................................. .................................................. ..........................................20Exotics .................................................. .................................................. ...........................................20 MAJOR CURRENCIES TRADED............................................ .................................................. .....................21LEVERAGE .................................................. .................................................. ...........................................21M ARGIN CALL .................................................. .................................................. .....................................24ROLLOVERS .................................................. .................................................. .........................................24W HICH CURRENCY IS YOUR PROFIT/LOSS IN?............................................... ..........................................26REGULATION .................................................. .................................................. .......................................27 FOREX TRADING 101 .................................................. .................................................. ..........................29TECHNICAL ANALYSIS.......................................... .................................................. .................................29THE DOW THEORY .................................................. .................................................. ..............................30TERMINOLOGY’S .................................................. .................................................. .................................32 BULL MARKET............................................ .................................................. ...................................32BEAR MARKET............................................ .................................................. ...................................33
LAMB MARKET............................................ .................................................. ..................................33
VISUAL TRADING........................................... .................................................. ........................................34 The Bar Chart............................................. .................................................. .....................................34Candlesticks Chart .................................................. .................................................. .........................36
Support And Resistance........................................ .................................................. ...........................37
Trend Lines............................................. .................................................. .........................................39
Channels.......................................... .................................................. ................................................40
Time Periods .................................................. .................................................. .................................41
Paper Trading .................................................. .................................................. ...............................42 COMPONENTS OF THE METHOD .................................................. .................................................. ...44Theory Of The Method .................................................. .................................................. ...................44Multiple Time Periods .................................................. .................................................. ....................44
Trend With Moving Averages.......................................... .................................................. .................44
Trend Indictor .................................................. .................................................. ...............................44
Fibonacci......................................... .................................................. ................................................44 Money Management .................................................. .................................................. .......................44
THEORY OF THE METHOD............................................ .................................................. .....................44MULTIPLE TIME FRAMES............................................ .................................................. ...........................45TREND IDENTIFICATION.................................... .................................................. .....................................48T REND INDICTOR.......................................... .................................................. .........................................51SWING POINTS .................................................. .................................................. .....................................51TREND INDICTOR CHANGE .................................................. .................................................. ...................53 FIBONACCI......................................... .................................................. .................................................. ..55FIRST SOME HISTORY OF FIBONACCI .................................................. .................................................. ...55TARGETS........................................... .................................................. .................................................. ...58 MONEY MANAGEMENT........................................ .................................................. ..............................61Dependent events............................................ .................................................. .................................63TRADING AND PROBABILITY....................................... .................................................. .....................65Drawdown .................................................. .................................................. .....................................67Maximum Drawdown .................................................. .................................................. .....................67
Measuring Drawdown Recovery .................................................. .................................................. ....68
Risk Reward Ratio .................................................. .................................................. ..........................71 RISK PROBABILITY CALCULATOR........................................ .................................................. .........72TRADING RULES............................................. .................................................. ......................................75
ADVANCED TECHNIQUES........................................ .................................................. ...........................96
THINGS TO CONSIDER.......................................... .................................................. ............................111 TRADERS RESOURCE.......................................... .................................................. ..............................112
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