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WARNING: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all Investors. Before deciding to trade foreign exchange, you should carefully consider your monetary objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your deposited funds, and therefore you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an Independent advisor If you have any doubts. Past returns are not Indicative of future results.

Currency Trader Q&A

Catching up with Richard Olsen 37

A brief conversation with Olsen Group founder Richard Olsen. By Currency Trader Staff

Currency Strategies

Trading around the clock, part I

What are the best times to trade different currency pairs? By Kathy Lien

Currency System Analysis

Dual timeframe stochastics.

Currency Futures 45

News and trading statistics from the currency futures world.

Currency Basics 46

Comparing moving averages

A comparison of different types of moving averages. By Thom Hartle

Global Economic Calendar 50

Events 51

International Market Summary . . .52

Global News Briefs 54

Forex Trade Journal 55

Key Concepts and Definitions . . . .56

Have a question about something you've seen in

Currency Trader?

Submit your editorial queries or comments to [email protected].

Looking for an advertiser?

Consult the list below and click on the company name for a direct link to the ad in this month's issue of Currency Trader.

Index of Advertisers

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A publication of Active Trader®

For all subscriber services:

Editor-in-chief: Mark Etzkorn [email protected]

Managing editor: Molly Flynn [email protected]

Associate editor: David Bukey [email protected]

Contributing editors: Jeff Ponczak [email protected],

Contributing writer: Carlise Peterson

Editorial assistant and Webmaster: Kesha Green [email protected]

Art director: Laura Coyle [email protected]

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Publisher, Ad sales East Coast and Midwest:

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Volume 2, Issue 11. Currency Trader is published monthly by Techlnfo, Inc., 150 S. Wacker Drive, Suite 880, Chicago, IL 60606. Copyright © 2005 Techlnfo, Inc. All rights reserved. Information in this publication may not be stored or reproduced in any form without written permission from the publisher.

The information in Currency Trader magazine is intended for educational purposes only. It is not meant to recommend, promote or in any way imply the effectiveness of any trading system, strategy or approach. Traders are advised to do their own research and testing to determine the validity of a trading idea. Trading and investing carry a high level of risk. Past performance does not guarantee future results.

T Barbara Rockefeller ( is an international economist with a focus on foreign exchange. She has worked as a forecaster, trader, and consultant at Citibank and other financial institutions, and currently publishes two daily reports on foreign exchange. Rockefeller is the author of Technical Analysis for Dummies (2004), 24/7 Trading Around the Clock, Around the World (John Wiley & Sons, 2000), The Global Trader (John Wiley & Sons, 2001), and How to Invest Internationally, published in Japan in 1999. A book tentatively titled How to Trade FX is in the works.

T Thom Hartle is a private trader and president of Market Analytics Inc. ( In a career spanning more than 20 years, Hartle has been a commodity account executive for Merrill Lynch, vice president of financial futures for Drexel Burnham Lambert, trader for the Federal Home Loan Bank of Seattle, and editor for nine years of Technical Analysis of Stocks & Commodities magazine.

T Marc Chandler is the head of global foreign exchange strategies at Brown Brothers Harriman and an associate professor at New York's School of Continuing and Professional Studies. From May 2001 through Oct. 1, 2004, he was chief currency strategist at HSBC Bank USA. Prior to HSBC, he was the chief currency strategist at Mellon Financial, a senior currency strategist at Deutsche Bank, and the director of research at EZA Associates.

T Michael J. Woolfolk is senior currency strategist and vice president in the Global Markets Division at The Bank of New York. He is responsible for North American currency research at the Bank of New York and is the chief architect and product manager for the highly acclaimed interactive Portfolio Monitor (iPFM), which tracks the cross-border investment trends of the Bank's $10 trillion custody business. As the sole press contact for the New York dealing room, he appears regularly on television and radio, and is frequently cited in the financial press. Before joining the Bank of New York, he worked at Credit Suisse First Boston as a currency analyst in their London and New York offices. Woolfolk is currently an adjunct faculty member of New York University and teaches a course on international political economics.

T José Cruset ([email protected]) is a private trader, software engineer, and trading system researcher. He holds an MBA and a NASD-Series 3 certificate and has worked many years in the banking industry.

T Kathy Lien is a chief strategist at FXCM, where she is responsible for research and analysis for, including technical and fundamental research reports, market commentaries, and trading strategies. She was an associate at JPMorgan Chase, where she worked for more than three years in credit derivatives, cross markets, and foreign exchange trading. Lien's experience encompasses trading both in and out of the forex market, including interest rate derivatives, bonds, equities, and futures. She has written for various industry publications and news outlets, including CBS MarketWatch, and she is frequently quoted on Bloomberg and Reuters. She is also author of the new book Day Trading The Currency Market (John Wiley & Sons).

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Spot vs. futures

The Euro FX trade shown in the September issue refers to the September contract, but the chart shown is for continuous futures. Why? Is it better to do one's analysis on continuous futures charts as opposed to spot forex charts?

Thank you for your suggestions.

In this case, using the continuous futures chart was simply a matter of convenience. Whenever the contract you are trading or analyzing is the "front month" contract (the one closest to expiration), the continuous futures data will be the same as the front-month data. At the time this trade was entered (early August), the September Euro FX contract was the front-month contract, which means the prices on the continuous futures chart were identical to the September contract price.

For longer-term historical analysis or system testing, continuous futures are necessary because of the price jumps that occur from one contract month to the next. Also, you won't be able to reference historical highs and lows if you simply use the current front month. In terms of futures, it's a good idea to look at both continuous and individual contract month price data.

The major difference between spot forex data and currency futures data (on a daily basis) is the location of the closing price.

Spot forex prices don't have an official "close" because the trading session keeps moving to different market centers around the globe. In most cases, though, the New York session closing price is often used as the closing price on daily bars.

When it comes to actually buying and selling, it's important to reference the instrument you'll be trading — futures or spot. You can gain important insights analyzing both price series, however.

The differences between spot and futures data is sometimes misrepresented. The December issue of Currency Trader will feature an article comparing spot forex and currency futures data.

Back issues and articles

How do I acquire all of the past issues?

- Christian

Individual Currency Trader (and Options Trader) articles are now available for download through the Active Trader store (

Also, in the near future, we will be offering compilations of back issues on CD. Check our Web sites for updates.

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