Index

Appel, George, 87 Arithmetic scaling, 155-157 Ascending triangle, 128,

130-131 Aspray, Thomas, 87 AUD/JPY pair, 37, 38-39 AUD/USD pair, 35, 36 Average Directional Index

(ADX)/Directional Movement Index (DMI), 71-72

Bar charts, 41-43 Base currency, 7 Bear flags, 123-127 Bearish candles chart, 44

Bearish engulfing patterns,

45-46 Bid/ask spread, 8-10 Bollinger bands, 72-77 scalping to trend with,

172-173 trend detection/exhaustion with, 162-164 trend trading with, 164-167,

170-172 volatility stop with, 167-170

Breakout patterns, in candlestick charts, 45-46 Buffett, Warren, 35 Bull flags, 123-128 Bullish candle chart, 44 Bullish engulfing patterns, 45-46

CAD/JPY pair, 37 Candlestick charts, 43-58 breakout patterns, 45-46 indecision patterns, 46-49 reversal patterns, 50-56 Carry trades, 13-15 Central banks, as FX traders, 5-6

CHF/JPY pair, 39 Cohen, Steve, 158 Commodity Channel Index (CCI), 91-96

Commodity currencies, 35-36 Confidence, in trading, 184 Corporations, as FX traders, 5

Countercurrency, 7 Crosses, 37-38 Currencies: commodity, 35-36 major, 32-35

Dark Cloud Cover pattern, 49-50 Data display, 41-58 bar charts, 41-43 candlestick charts, 43-58 line charts, 41, 42 Dealer intervention, 9 Decentralization, of FX markets, 6-7

Demonstration trading accounts, evaluating of, 19-24 Dennis, Richard, 153 Descending triangle, 131-132 Diamond patterns, 135-137 Doji candles, 46-48 Double top and double bottom patterns, 114-117. See also Triple top and bottom patterns Dragonfly doji candle, 48

Economic growth, as trading fundamental, 17 Economic news, as trading fundamental, 15-19 EUR/CHF pair, 37-39 EUR/GBP pair, 37 EUR/JPY pair, 37, 39 EUR/USD pair, 32, 33-35 Evening star/morning star candlestick, 53-54, 55 Exponential moving average (EMA), 65-66

Falling wedge, 132, 133, 134

Fibonacci sequence, 99-112 background, 99-102 pros and cons of, 102-108 trading with, 108-112 Flag and pennant patterns, 123-128

Foreign exchange markets, see FX

markets FX markets. See also Trade management bid-ask spread and dealer-based market, 8-10 decentralization and, 6-7 demonstration trading accounts, 19-24 fundamentals of trading and,

15-19 leverage and, 10-15 market structure and, 4-6 quotation conventions, 7-8 rules and regulations of, 3-4 traders on, 5 trading volume on, 1-2

Gallacher, William, 64 Gartman, Dennis, 106, 153 GBP/CHF pair, 39 GBP/JPY pair, 37, 39 GBP/USD pair, 32 Geometric scaling, 156-157 Ghost patterns, in CCI, 94-95 Gravestone doji candle, 47

Hammer/hanging man candlestick, 51-53 Harami candlestick, 50-51, 52

Head and shoulder patterns,

137-138 Hedge funds, as FX traders,

Indecision patterns, in candlestick charts, 46-49 "Inside day," 50

Interest on account, debits and credits for, 15, 20 Interest rates: carry trades and, 13-15 range trading and, 38-40 as trading fundamental, 17-18

Japan, regulation in, 3

Kovner, Bruce, 16

Lambert, Donald, 91 Lane, Dr. George C., 79-81 Leverage, 10-11 carry trades and, 13-15 margin calls and, 11-13 Line charts, 41, 42 Long-legged doji candle, 47

Lucas, Edouardo, 100 Lucas sequence, 100 Lukeman, John, 110, 112

Major currencies, 32-35 Margin, on stock trades, 10

Margin call, in FX market, 11-13

Market Maker's Edge, The

(Lukeman), 110, 112 Market Wizards (Schwager), 16, 143

Morning star/evening star candlestick, 53-54, 55 Moving average convergence/divergence (MACD), 87-91 in setup example, 173-176 Moving averages, 64-71 exponential moving average,

65-66

moving average crossover,

66-69

simple moving average (SMA), 64-65

three SMA filter, 69-71

National Futures Association

Observation, randomness theory and, 25-27 Oscillators, 79-97 Commodity Channel Index (CCI), 91-96

Oscillators (Continued) moving average convergence/divergence (MACD), 87-91, 173-176 Relative Strength Index (RSI),

82-86, 176-179 stochastics, 79-81

Patterns and antipatterns, 113-141 diamonds, 135-137 double tops and double bottoms, 114-117 flags and pennants, 123-128 head and shoulders, 137-138 reverse head and shoulders,

138-141 triangles, 128-132 triple tops and bottoms and the antipattern, 117-123 wedges, 132-135 %D, 80 %K, 80

Percentage in point (pip), 7-8 "Phi," 100, 102. See also Fibonacci sequence Pickers, 9

Pip (percentage in point), 7-8 Political stability, as trading fundamental, 18-19 Pressing the trade, 152-155 Price channels, trend lines and, 60-63

Price data, randomness of, 25-27

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