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Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings

Day Trading the Currency Market: Technical and Fundamental Strategies To Profit from Market Swings

Kathy Lien

ISBN: 978-0-471-77402-0 March 2006 256 Pages




Written by Kathy Lien—chief strategist for the number one online currency broker in the world—Day Trading the Currency Market reveals a variety of technical and fundamental profit-making strategies for trading the currency market, and provides a detailed look at how this market actually works. It contains actionable information and strategies, which can help you enter this highly competitive arena with confidence and exit with profits.


Chapter 1: Foreign Exchange—The Fastest-Growing Market of Our Time.

Effects of Currencies on Stocks and Bonds.

Comparing the FX Market with Futures and Equities.

Who Are the Players in the FX Market?

Chapter 2: Historical Events in the FX Market.

Bretton Woods: Anointing the Dollar as the World Currency (1944).

End of Bretton Woods: Free Market Capitalism Is Born (1971).

Plaza Accord—Devaluation of U.S. Dollar (1985).

George Soros—The Man Who Broke the Bank of England.

Asian Financial Crisis (1997–1998).

Introduction of the Euro (1999).

Chapter 3: What Moves the Currency Market in the Long Term?

Fundamental Analysis.

Technical Analysis.

Currency Forecasting—What Bookworms and Economists Look At.

Chapter 4: What Moves the Currency Market in the Short Term?

Relative Importance of Data Changes over Time.

Gross Domestic Product—No Longer a Big Deal.

How Can You Use This to Your Benefit?

A Deeper Look into the FX Market.

Chapter 5: What Are the Best Times to Trade for Individual Currency Pairs?

Asian Session (Tokyo): 7 P.M.–4 A.M. EST.

U.S. Session (New York): 8 A.M.–5 P.M. EST.

European Session (London): 2 A.M.–12 P.M. EST.

U.S.–European Overlap: 8 A.M.–12 P.M. EST.

European–Asian Overlap: 2 A.M.–4 A.M. EST.

Chapter 6: What Are Currency Correlations and How Do Traders Use Them?

Positive/Negative Correlations: What They Mean and How to Use Them.

Important Fact about Correlations: They Change.

Calculating Correlations Yourself.

Chapter 7: Trade Parameters for Different Market Conditions.

Keeping a Trading Journal.

Have a Toolbox—Use What Works for the Current Market Environment.

Step One—Profile Trading Environment.

Step Two—Determine Trading Time Horizon.

Risk Management.

Psychological Outlook.

Chapter 8 Technical Trading Strategies.

Multiple Time Frame Analysis.

Fading the Double Zeros.

Waiting for the Real Deal.

Inside Day Breakout Play.

The Fader.

Filtering False Breakouts.

Channel Strategy.

Perfect Order.

Chapter 9: Fundamental Trading Strategies.

Picking the Strongest Pairing.

Leveraged Carry Trade.

Fundamental Trading Strategy: Staying on Top of Macroeconomic Events.

Commodity Prices as a Leading Indicator.

Using Bond Spreads as a Leading Indicator for FX.

Fundamental Trading Strategy: Risk Reversals.

Using Option Volatilities to Time Market Movements.

Fundamental Trading Strategy: Intervention.

Chapter 10: Profiles and Unique Characteristics of Major Currency Pairs.

Currency Profile: U.S. Dollar (USD).

Currency Profile: Euro (EUR).

Currency Profile: British Pound (GBP).

Currency Profile: Swiss Franc (CHF).

Currency Profile: Japanese Yen (JPY).

Currency Profile: Australian Dollar (AUD).

Currency Profile: New Zealand Dollar (NZD).

Currency Profile: Canadian Dollar (CAD).

About the Author.


"...a leap forward in sophistication..."  (The Technical Analyst, June 2006)

"…well researched ideas…Lien’s expertise really shines through…" (Shares, August 2006)