Forex Revolution: An Insider's Guide to the Real World of Foreign Exchange Trading (paperback)

Forex Revolution: An Insider's Guide to the Real World of Foreign Exchange Trading (paperback)

by Peter Rosenstreich

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Overview

Forex Revolution: An Insider's Guide to the Real World of Foreign Exchange Trading (paperback) by Peter Rosenstreich

"For many investors, an intense, 24-hour-a-day, $1.5 trillion roller-coaster of a market spells "danger"; for readers of Forex Revolution , the word is "opportunity."

—Michael J. Panzner, vice president, Rabo Securities USA, Inc., and author of The New Laws of the Stock Market Jungle

"The author possesses an uncommon ability to describe a difficult and rapidly changing marketplace as if seen through a beginner's eyes. A most useful book for anyone that might not have been paying attention these past five years as the market reinvented itself."

—Brentin C. Elam, director, Northcoast Asset Management, LLC

Foreign currency exchange—"Forex"—is today's #1 new investment opportunity. Revolutions in technology, regulation, and globalization have made Forex trading accessible to every active investor. Only one thing has been missing: An objective, clear "user's guide" to Forex trading. Now it's here—and it's in your hands.

Simply and clearly, Forex Revolution reveals everything you need to know to trade Forex hands-on—from fundamental and technical trading strategies to the unyielding discipline that's essential to success.

In this book, Peter Rosenstreich brings together insider techniques from all over the industry: Traders, banks, Forex firms, even the National Futures Association. You'll find expert guidance on everything from handling 24/7 markets to profiting from the emergence of China.

Unlike other books, Forex Revolution doesn't require you to subscribe to costly services or purchase expensive tools. Whether you're an individual investor or a money manager new to Forex, this book gives you all you need: Facts, techniques, resources and—above all—the insider's edge.

  • Why Forex has become your #1 profit opportunity
    How the currency markets became indispensable to the active investor
  • Meet the players, markets, tools, portals, and platforms
    Everything you should know before you get started
  • Choose the right FX investments
    Understand currency futures, options, swaps, and more
  • Master both fundamental and technical trading strategies
    and discover why you need to know both
  • Gut check: What it takes to win in the Forex markets
    Develop the discipline you need to succeed

Foreign Exchange Trading: Today's #1 Opportunity for Explosive Profits!

  • The practical, hands-on Forex trading guide for individual investors
  • No costly subscriptions or expensive tools needed
  • Delivers unbiased, up-to-the-minute techniques you can start profiting from today
  • Covers everything from trading rules to fundamental and technical strategies
  • Realistically assesses risks and pitfalls—and shows how to avoid or mitigate them

Forex Isn't Just the World's Biggest Market—It's Your #1 Profit Opportunity!

Every day, more than $1.5 trillion in currency trades are executed. That dwarfs the daily volume of the NYSE, NASDAQ, FTSE, DAX, and Tokyo Nikkei—combined! Today's growing currency volatility has made Forex the place to earn huge profits. Think Forex is just for secretive financiers and central bankers? Not any more! The rules have changed, and this book shows you exactly how to get in on the action.

No other book offers as much unbiased, practical, how-to guidance for trading from Forex. Peter Rosenstreich doesn't just present his own techniques—he reveals never-before-published tips and techniques from traders throughout the industry. Above all, Mr. Rosenstreich tells you the whole truth: How currency markets work, how to trade, what the risks are, what to do about them...and what it really takes to win.

© Copyright Pearson Education. All rights reserved.

Product Details

ISBN-13: 9780132693479
Publisher: FT Press
Publication date: 06/16/2005
Pages: 300
Product dimensions: 6.00(w) x 9.00(h) x 0.80(d)

About the Author

Peter Rosenstreich is a principle and foreign exchange trader for Rose Stevons & Company, a boutique New York alternative investment firm specializing in providing retail clients with innovative, structured products. Mr. Rosenstreich has extensive experience in the retail Forex sector. He is licensed with a series 3, 7, and 63, and is registered with the NASD and National Futures Association as a Commodity Trading Advisor (CTA). Mr. Rosenstreich holds a BA in History from Clark University and an MBA from the City University of New York, Zicklin School of Business.

© Copyright Pearson Education. All rights reserved.

Read an Excerpt

PrefacePreface

I love this market and it never stops amazing me. The foreign exchange market is the ultimate gauge of reality. In a world where it is impossible to quantify the actual significance of an event, the Forex market tries. In my view, just as in chaos theory, the Forex market is always moving from order into chaos and back to order again—and trading on the edge of chaos is the only place I want to be.

What makes foreign exchange trading existing are the underlying themes that drive the market. On the fundamental side, there are geopolitics, governments, societies, macroeconomics, and the behavior of the numerous market participants who vary greatly in objectives and approach. On the technical side, there is a market that seems to move in patterns and with endless liquidity. Life can become repetitive and slow, with some people even saying things like, "There is nothing new," or, "I've seen it all before." And I think, "Yeah, just you wait." As a Forex trader, you have a front-row seat to a world that never stops to amaze and produce the completely unexpected.

I wrote this book as an introduction to Forex trading in a simple and understandable format. It was not produced in response to some slick marketer screaming, "Make money in your sleep," or some academic with a mathematical model so complex that only four people in the world understand it. My intent is to provide a non-biased overview that will let the individual decide which approach to the market suits him or her best. With this knowledge, they can then choose their own advanced education and trading directions. I hope I can inspire aspiring Forexquants and instant traders alike.

To explain Forex trading, I use a blend of real trading experiences, definitions, and methodologies because you need all three to become a successful trader in any market. Trading is never about memorizing how someone else trades; one's strategy must be developed by the individual. Hopefully, with this book, you can take all of this information and begin crafting your own trading models. Good luck trading!

© Copyright Pearson Education. All rights reserved.

Table of Contents

1. The Truly Modern Market.

A Market for the 21st Century

Opportunity Is Knocking

Everybody’s Talking About It

Endnotes

2. The Currency of Trading in Everyday Life.

A Fact of Life

Keeping Up with the Rates

The Sun Never Sets on Forex

Noodles in the Morning

Laos for Lunch

Odessa at Dusk

Back in a 9-to-5 Market

3. The History of Forex (and Why You Should Care).

The Beautiful Market

Lessons of History

The Roots of Modern Currency

The Clash Between Governments and Markets

Trends That Rocked the Forex World

The Rise and Fall of the Modern Gold Standard

The Rise of the Euro

The Internet Trade Revolution: Banks Hated It, Speculators Loved It, and the Market Demanded It

Seeing the World Through Forex

Endnotes

4. The Basics of Foreign Exchange.

Spot

Quotes

Majors

Cross Rates

Pips

Bid/Ask

Lot

Mini Lot

Basic Tools of Training

Positions

Market Order

Limit Order

Stop Order

Order Cancels Other

Stop-Limit Order

Rollovers

Interest Rate Differentials, or Rollover Charge

Leverage

Controlling Leverage

Initial Margin

Margin Call

Commissions

Graphic: Calculations for the Spot Market

Forex Regulators

SFBC

IDAC

SFC

FSA

ASIC

CFTC and NFA

NFA

Forex Designations

Forex Dealer Members

Futures Commission Merchants

Introductory Brokers

Commodity Trading Advisers

Brokers

Managed Accounts

5. Forex Trading Vehicles.

Forwards and Futures

Options

Swaps

Derivatives and the Forex Market

The Interbank Market

Endnotes

6. Tools and Strategies to Get Started.

Gut Check: What It Takes to Be a Forex Investor

What Are My Investment Goals, and Are They Realistic?

What Is My Capacity for Risk?

Time Investment

Before You Trade

Doing a Test Run

Strategy: Creating an Approach Model

7. Forex from the Inside.

8. Inside a Forex Platform.

Searching for the Right Platform

Doing Your Homework

Retail Platforms

Trading Mechanisms

Hub and Spoke Trading

Request for Quote (RFQ)

Click and Deal

News

Charts

Research

Things to Look Out For

Requotes

Network Connection

Getting the Best Price

Safety

My Trading Room

Information Sources

Important Numbers

Forex Retail Platforms

Protecting Yourself

Avoiding Fraud

The Firm Promises a Free Lunch

The Trader Uses Terminology You Don’t Fully - Understand

The Firm Claims To Trade in the “Interbank Market”

The Firm is Using the Hard Sell via the Internet

The Firm is Vague and Little Information is Available

9. Trading Inside the 24-Hour Storm.

Working Around the Clock

Defining Your Trading Strategy

Contingency Plans

Cut Losers

Pigs Get Slaughtered

Overleveraging and Overtrading

Watch the Markets

Don’t Walk Away

Review the Market

Market Manipulation

Just Because You’re Not Paranoid Doesn’t Mean They Aren’t Out to Get You

Flatline Your Emotions

Trade with Your Personality

Filter Information

Avoid Bias

10. What Moves the Markets: Basic Fundamental and Technical Trading Strategies.

Watch Your Fundamentals

Old Versus Fresh News

Market Movers

Governments

Important Currencies

The U.S. Dollar

The Euro

The Yen

The British Pound

The Swiss Franc

Other Currencies

The Yuan

The Won

The Real

The Rand

The G7

Central Banks

The U.S. Federal Reserve

The European Central Bank

The Bank of England

The Bank of Japan

The International Monetary Fund

Private Financial Institutions

Corporations

Speculators

Monetary Policy and Interest Rates

Inflation

Gross Domestic Product

(Un)Employment

The Beige Book

Government Spending and Taxes

Government Attitude

Equilibrium: “Parity”

Trade Balance

Political and Social Environment

Currency Board or Peg

Subjectivity

Technical Analysis

Determing the Trend

Support and Resistance

Chart Patterns

Fibonacci Pattern

Elliot Wave Theory

Gann Angles

Andrews Pitchfork

Indicators 101

Moving Average

Moving Average Convergence/Divergence (MACD)

Relative Strength Index (RSI)

Stochastic Oscillator

Bollinger Bands (BB)

Parabolic Stop and Reversal (SAR)

Average Directional Index (ADX)

Starter Technical Model

Scalping

Technical or Fundamental?

Endnotes

11. Black Swans and Rogue Traders.

The Inherent Instability in the Forex Market

The Tequila Crisis

The Asian Crisis

Breaking the Bank of England

Interventions

Scams and Rogue Traders

Russia Devalues the Ruble

12. Trends and the Yuan.

Forex Will Not Just Get Bigger; It Will Get More Respect

Globalization and the War on Terror

The Chinese Dragon and the Indian Tiger

ASEAN

The Euro: Can It Hold?

The Growth of Free-Trade Blocks

The U.S. Dollar

Endnotes

Appendix.

Index.

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