The Art of Currency Trading

Synopsis

Now you can master the art of foreign exchange trading

While most currency trading and foreign exchange books focus on international finance theory or simplistic chart-based strategies, The Art of Currency Trading is a comprehensive guide that will teach you how to profitably trade currencies in the real world. Author Brent Donnelly has been a successful interbank FX trader for more than 20 years and in this book, he shares the specific strategies and tactics he has used to profit in the forex marketplace.

The book helps investors understand and master foreign exchange trading in order to achieve sustainable long-term financial success. The book builds in intensity and depth one topic at a time, starting with the basics and moving on to intermediate then advanced setups and strategies. Whether you are new to currency trading or have years of experience, The Art of Currency Trading provides the information you need to learn to trade like an expert. This much-needed guide provides:

• an insider's view of what drives currency price movements;
• a clear explanation of how to combine macro fundamentals, technical analysis, behavioral finance and diligent risk management to trade successfully;
• specific techniques and setups you can use to make money trading foreign exchange; and
• steps you can take to better understand yourself and improve your trading psychology and discipline.

Written for currency traders of all skill levels, international stock and bond investors, corporate treasurers, commodity traders, and asset managers, The Art of Currency Trading offers a comprehensive guide to foreign exchange trading written by a noted expert in the field.

Summary

Chapter 1: The Nature of Currency Trading

* Summary: Introduces the basics of currency trading, including the different types of currencies traded, the major currency pairs, and the risks and rewards involved.
* Example: The EUR/USD currency pair, representing the exchange rate between the Euro and the US Dollar, is the most commonly traded currency pair in the world.

Chapter 2: Understanding Currency Markets

* Summary: Explores the key participants in currency markets, including central banks, commercial banks, and retail traders, and discusses the factors that influence currency prices.
* Example: The US Federal Reserve's interest rate decisions can have a significant impact on the value of the US Dollar against other currencies.

Chapter 3: Technical Analysis for Currency Trading

* Summary: Introduces technical analysis, a method of predicting price movements based on historical data, and discusses various technical indicators and chart patterns used in currency trading.
* Example: A moving average is a technical indicator that smooths out price fluctuations to identify trends. A bullish trend can be indicated by a rising moving average.

Chapter 4: Fundamental Analysis for Currency Trading

* Summary: Explains fundamental analysis, a method of predicting price movements based on economic data and global events, and discusses the key economic indicators used in currency trading.
* Example: The gross domestic product (GDP) of a country is a key economic indicator that can affect the value of its currency. A strong GDP growth rate can strengthen the currency.

Chapter 5: Risk Management in Currency Trading

* Summary: Emphasizes the importance of risk management in currency trading and discusses various risk management techniques, such as stop-loss orders, position sizing, and diversification.
* Example: A stop-loss order automatically closes a trade if the price falls to a predetermined level, limiting potential losses.

Chapter 6: Currency Trading Strategies

* Summary: Presents a variety of currency trading strategies, including scalping, day trading, and swing trading, and discusses the pros and cons of each strategy.
* Example: A day trading strategy involves opening and closing positions within the same trading day to capitalize on short-term price fluctuations.

Chapter 7: Psychology of Currency Trading

* Summary: Explores the psychological aspects of currency trading and discusses the importance of controlling emotions and avoiding common trading pitfalls.
* Example: The fear of missing out (FOMO) can lead traders to make impulsive decisions and enter trades without proper analysis.

Chapter 8: Trading Plan and Execution

* Summary: Stresses the need for a trading plan and provides guidance on developing and executing a trading strategy consistently.
* Example: A trading plan should include specific entry and exit criteria, risk management parameters, and a plan for evaluating and adjusting the strategy.

Chapter 9: The Art of Currency Trading

* Summary: Concludes the book with insights on the challenges and rewards of currency trading and offers tips for success in the long run.
* Example: Patience, discipline, and a continuous learning mindset are essential for success in currency trading.