Trading_For_A_Living_In_The_Forex_Market.pdf

Contents

1. Common knowledge about the trading on Forex

1.1. Forex as a part of the global financial market

A brief history about the rise and development of Forex.

The factors that caused Foreign Exchange Volume Growth on Forex (Exchange

Rate Volatility, Business Internationalization, Increasing of Traders’

Sophistication, Developments in Telecommunications, Computer and

Programming Development). The role of the U.S. Federal Reserve System and

central banks of other G-7 countries on Forex.

1.2. Risks by the trading on Forex

1.3. Forex sectors

Spot Market

Forward Market

Futures Market

Currency Options

2. Major currencies and trade systems

2.1. Major currencies

The U.S. Dollar

The Euro

The Japanese Yen

The British Pound

The Swiss Franc

2.2. Trade systems on Forex

Trading with brokers

Direct dealing

3. Fundamental analysis by trading on Forex

3.1 Theories of exchange rate determination

Purchasing Power Parity

Theory of Elasticities

Modern monetary theories on exchange rate volatility

3.2. Indicators for the fundamental analysis

Economic indicators

The Gross National Product

The Gross Domestic Product

Consumption Spending

Investment Spending

Government Spending

Net Trading

All training material found in this manual and provided by Trading Intl. L.L.C. are held proprietary to Trading Intl. and Any

duplication or reproduction is strictly prohibited and must be surrendered on demand.

Trading International LLC Direct 801-794-3021 Fax 801-794-2446 Email support@tradingintl.com

Industrial sector indicators

Industrial Production

Capacity Utilization

Factory Orders

Durable Goods Orders

Business Inventories

Construction Data

Inflation Indicators

Producer Price Index

Consumer Price Index

Gross National Product Implicit Deflator

Gross Domestic Product Implicit Deflator

Commodity Research Bureau’s Futures Index

The Journal of Commerce Industrial Price

Balance of Payments

Merchandise Trade Balance

The U.S. – Japan Merchandise Trade Balance

Employment Indicators

Employment Cost Index

Consumer Spending Indicators

Retail Sales

Consumer Sentiment

Auto Sales

Leading Indicators

Personal Income

3.3. Forex dependence on financial and sociopolitical factors

The Role of Financial Factors

Political Crises Influence

4. Technical analysis

4.1. The destination and fundamentals of technical analysis

Theory of Dow

Percent measures of prices reverse

4.2. Charts for the technical analysis

Kinds of prices and time units

Kinds of charts

Line Chart

Bar Chart

Candlestick Chart

4.3. Trends, Support and Resistance lines

Trend Line and Trade Channel

Lines of Support and Resistance

4.4. Trend Reversal patterns

Head-and-Shoulders

Inverted Head-and-Shoulders

Double Top

Double Bottom

Triple Top

All training material found in this manual and provided by Trading Intl. L.L.C. are held proprietary to Trading Intl. and Any

duplication or reproduction is strictly prohibited and must be surrendered on demand.

Trading International LLC Direct 801-794-3021 Fax 801-794-2446 Email support@tradingintl.com

Triple Bottom

Round Top, Round Bottom, Saucer, Inverted Saucer

4.5. Trend Continuation patterns

Flags

Pennants

Triangles

Wedges

Rectangles

4.6. Gaps

Common Gaps

Breakaway Gaps

Runaway Gaps

Exhaustion Gaps

4.7. Mathematical trading methods (Technical indicators)

Moving Averages

Envelops

Ballinger Bands

Average True Range

Median Price

Oscillators

Commodity Channel Index

Directional Movement Index

Stochastics

Moving Average Convergence-Divergence (MACD)

Momentum

The Relative Strength Index (RSI)

Rate of Change (ROC)

Larry Williams’s %R

Indicators combination

Ichimoku Indicator

5. Fibonacci constants and Elliott wave theory

5.1. Fibonacci constants

5.2. Elliott wave theory

All training material found in this manual and provided by Trading Intl. L.L.C. are held proprietary to Trading Intl. and Any

duplication or reproduction is strictly prohibited and must be surrendered on demand.

Trading International LLC Direct 801-794-3021 Fax 801-794-2446 Email support@tradingintl.com

1. Common knowledge about the trading on Forex

1.1. Foreign exchange as a part of the world financial market

Forex – What is it? The international currency market Forex is a special kind of the world

financial market. Trader’s purpose on the Forex to get profit as the result of foreign currencies

purchase and sale. The exchange rates of all currencies being in the market turnover are

permanently changing under the action of the demand and supply alteration. The latter is a strong

subject to the influence of any important for the human society event in the sphere of economy,

politics and nature. Consequently current prices of foreign currencies, evaluated for instance in

US dollars, fluctuate towards its higher and lower meanings.

Using these fluctuations in accordance with a known principle “buy cheaper – sell higher” traders

obtain gains. Forex is different in compare to all other sectors of the world financial system

thanks to his heightened sensibility to a large and continuously changing number of factors,

accessibility to all individual and corporative traders, exclusively high trade turnover which

creates an ensured liquidity of traded currencies and the round – the clock business hours which

enable traders to deal after normal hours or during national holidays in their country finding

markets abroad open. Just as on any other market the trading on Forex, along with an exclusively

high potential profitability, is essentially risk - bearing one. It is possible to gain a success on it

only after a certain training including a familiarization with the structure and kinds of Forex, the

principles of currencies price formation, the factors affecting prices alterations and trading risks

levels, sources of the information necessary to account all those factors, techniques of the analysis

and prediction of the market movements as well as with the trading tools and rules.

An important role in the process of the preparation for trading Forex belongs to the demo-trading

(that is to trade using a demo-account with some virtual money), which allows to testify all the

theoretical knowledge and to obtain a required minimum of the trade experience not being

subjected to a material damage.

A short history about the origin and development of the currency exchange market. Currency

trading has a long history and can be traced back to the ancient Middle East and Middle Ages

when foreign exchange started to take shape after the international merchant bankers devised bills

of exchange, which were transferable third-party payments that allowed flexibility and growth in

foreign exchange dealings.

The modern foreign exchange market characterized by periods of high volatility (that is a

frequency and amplitude of price alteration) and relative stability formed itself in the twentieth

century. By the mid-1930s London became the leading center for foreign exchange and the

British pound served as the currency to trade and to keep as a reserve currency. Because in the

old times foreign exchange was traded on the telex machines, or cable, the pound has generally

the nickname “cable”. After the World War II, where the British economy was destroyed and the

United States was the only country unscarred by war, U.S. dollar, in accordance with the Breton

Woods Accord between the USA, Great Britain and France (1944) became the reserve currency

for all the capitalist countries and all currencies were pegged to the American dollar (through the

constitution of currency ranges maintained by central banks of relevant countries by means of

interventions or currency purchases).

All training material found in this manual and provided by Trading Intl. L.L.C. are held proprietary to Trading Intl. and Any

duplication or reproduction is strictly prohibited and must be surrendered on demand.

Trading International LLC Direct 801-794-3021 Fax 801-794-2446 Email support@tradingintl.com

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