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Forex Patterns and Probabilities: Trading Strategies for Trending and Range-Bound Markets

Book Description

While most books on trading deal with general concepts and shy away from specifics, Forex Patterns and Probabilities provides you with real-world strategies and a rare sense of clarity about the specific mechanics of currency trading. Leading trading educator Ed Ponsi will explain the driving forces in the currency markets and will provide strategies to enter, exit, and manage successful trades. Dozens of chart examples and explanations will guide you each step of the way and allow the reader to "look over the shoulder" of a professional trader hard at work at his craft.

This book provides traders with step-by-step methodologies that are based on real market tendencies. The strategies in this book are presented clearly and in detail, so that anyone who wishes to can learn how to trade like a professional. It is written in a style that is easy to understand, so that the reader can quickly learn and use the techniques provided.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Dedication
  4. Preface
  5. Acknowledgments
  6. About the Author
  7. PART I - The World’s Most Dynamic Trading Market
    1. CHAPTER 1 - Getting Started in Forex
      1. FROM STOCKS TO FOREX
      2. GETTING TO WALL STREET
      3. WELCOME TO THE JUNGLE
      4. FOOTBALL AND FOREX
      5. STOCK MARKET HEADACHES
      6. WELCOME TO FOREX
      7. A NEW BEGINNING
    2. CHAPTER 2 - All About Forex
      1. THE CANADIAN DOLLAR AND THE U.S. DOLLAR
      2. THE EURO AND THE U.S. DOLLAR
      3. TRADING TERMINOLOGY
      4. AN EASY WAY TO UNDERSTAND THE EXCHANGE RATE
    3. CHAPTER 3 - Questions and Answers
      1. WHY DOES THE BIG MONEY TRADE FOREX?
      2. WHY IS FOREX SUDDENLY SO POPULAR?
      3. HOW DO TRADERS MAKE MONEY IN THE FOREX MARKET?
      4. WHY DO CURRENCIES TRADE IN PAIRS?
      5. HOW CAN I TRADE TWO CURRENCIES AT ONE TIME?
      6. HOW IS 24-HOUR-PER-DAY TRADING POSSIBLE?
      7. HOW IS THE TRADING DAY STRUCTURED?
      8. GREENWICH MEAN TIME
    4. CHAPTER 4 - Technical Analysis and the Forex Market
      1. THE THEORY BEHIND TECHNICAL ANALYSIS
      2. STATISTICAL SURVEY
      3. FEAR OF THE UNKNOWN
      4. TRADING PATTERNS AND TECHNICAL INDICATORS
      5. THE PSYCHOLOGY BEHIND THE MARKET
      6. MOVING BEYOND TECHNICAL ANALYSIS
      7. TRENDS
      8. PROPER ORDER
      9. FIBONACCI TECHNIQUES
    5. CHAPTER 5 - Things You Need to Know Before Trading Forex
      1. THE “TRIPLE THREAT” TRADER
      2. GAINING EXPERIENCE
      3. WHICH PAIR TO TRADE?
      4. COMMODITY CURRENCIES
      5. DON’T LIMIT YOURSELF
      6. TRADING AND KARMA
  8. PART II - Trading Strategies for Trending Markets
    1. CHAPTER 6 - Understanding Trends and Tendencies
      1. TRADING CONDITIONS
      2. THE IMPORTANCE OF MAINTAINING OBJECTIVITY
      3. BEGIN WITH A TENDENCY
      4. PUTTING THE TREND TO WORK
      5. SELF-FULFILLING PROPHECY
      6. TAKE ME TO THE RIVER
      7. HOW TO DETERMINE IF THE MARKET IS TRENDING
    2. CHAPTER 7 - The Anatomy of a Trend
      1. WHY TRENDS FORM
      2. DON’T FIGHT THE TREND
    3. CHAPTER 8 - Forex Multiple Time Frame Strategy
      1. WHY DOES IT WORK?
      2. COMBINING FIBONACCI AND TREND
      3. OVERBOUGHT DOES NOT EQUAL “SELL”
      4. PICKING TOPS AND BOTTOMS
      5. THE ENTRY SIGNAL
      6. PLACING THE STOP
      7. GETTING OUT
      8. WELCOME TO THE REAL WORLD
      9. TWEAKING THE EXITS
      10. EXECUTING THE PLAN
      11. SECOND-GUESSING
      12. BRINGING IT HOME
      13. THE DEVIL’S ADVOCATE
      14. WHEN TO STAY OUT
      15. RELOADING THE TRADE
      16. FANTASY VERSUS REALITY
      17. PHANTOM SIGNAL
      18. TEMPORARY SUCCESS AND FAILURE
      19. THE STOP RUN
    4. CHAPTER 9 - The FX-Ed Trend Technique
      1. TRENDS ARE SELF-SUSTAINING
      2. DIFFERENCE OF OPINION
      3. BIG MONEY AT WORK
      4. THE COMMON DENOMINATOR
      5. LONG OR SHORT
      6. IDENTIFYING THE TREND
      7. FILTERING THE TREND
      8. THE CATALYST
      9. PLACING THE STOP
      10. VOLATILITY STOP
      11. COMPARING APPLES TO APPLES
      12. ATR CALCULATION
      13. THE ENTRY
      14. THE STOP
      15. THE TRADE
      16. DON’T FISH FOR MINNOWS
      17. BACK TO THE TRADE
      18. DENOUEMENT
      19. THE NEWS VERSUS THE TREND
      20. APPEARANCES CAN BE DECEIVING
      21. MORE THAN ONE CHANCE
      22. PARTIAL EXIT EXERCISE
      23. DISCRETIONARY AND STRATEGIC EXITS
      24. FAULTY WIRING
      25. PARTIAL EXIT TECHNIQUE
      26. RELOADING
      27. IMPORTANT POINTS TO CONSIDER
      28. FINAL THOUGHTS
  9. PART III - Nontrending Trading Techniques
    1. CHAPTER 10 - The Ultimate Indicator
      1. THE PRICE IS THE KEY
      2. WHY SUPPORT BECOMES RESISTANCE
      3. THE PLEASURE PRINCIPLE AND TRADING
      4. PRICE ACTION
      5. DON’T STAND IN FRONT OF A FREIGHT TRAIN
    2. CHAPTER 11 - Keys to Intraday Breakouts
      1. ASCENDING AND DESCENDING TRIANGLES
      2. TREND FILTER
      3. TIME-OF-DAY FILTER
      4. SUMMARY
    3. CHAPTER 12 - Flags and Pennants
      1. PENNANTS
      2. FLAGS
      3. FILTERING ENTRIES
      4. SUMMARY
    4. CHAPTER 13 - The Squeeze Play
      1. THE CYCLE OF VOLATILITY
      2. PERCEPTION MOVES THE MARKET
      3. VOLATILITY BREAKOUT STRATEGY
    5. CHAPTER 14 - The Round Trip
      1. WHY ROUND NUMBERS CAPTURE OUR ATTENTION
      2. WHY ROUND NUMBERS ARE EFFECTIVE
      3. ROUND NUMBERS AND FOREX
      4. THE FIRST BOUNCE IS THE BEST BOUNCE
      5. USING THE MOVING AVERAGE
      6. THE STRATEGY IN ACTION
    6. CHAPTER 15 - The Interest Rate Edge
      1. THINK LIKE THE BIG BOYS
      2. INTEREST RATE DIFFERENTIALS
      3. HERE’S HOW IT WORKS
      4. CHANGING DIFFERENTIALS
      5. WHAT’S THE BIG DEAL?
      6. COLLECTING INTEREST
      7. U.S. DOLLAR/JAPANESE YEN
      8. LONG-TERM PLAY
      9. LOOKING AHEAD
    7. CHAPTER 16 - The Boomerang
      1. FADING FALSE BREAKOUTS
      2. THE STRATEGY
      3. SETTING THE PARAMETERS
      4. ENTERING THE TRADE
      5. SIMPLE BUT EFFECTIVE
  10. PART IV - Take Control of Your Trading Destiny
    1. CHAPTER 17 - How to Achieve Spectacular Gains
      1. KEEP YOUR EYES ON THE ROAD
      2. PROPER GOAL SETTING
      3. BREAKING DOWN YOUR GOALS
      4. CONSISTENCY IS THE KEY
      5. WHAT HAPPENS WHEN I REACH MY GOAL?
    2. CHAPTER 18 - The Forex Playing Field
      1. EVENING THE ODDS
      2. THE HOUSE HAS THE EDGE
      3. MAKE THE PLAYING FIELD BIGGER
      4. BUT THE OTHER TRADING INSTRUCTOR SAID...
      5. LET’S DO THE MATH
      6. CHANGING THE EQUATION
      7. WHY DOESN’T EVERYONE DO IT?
      8. HUGE GAINS WITH MINIMAL EFFORT!
      9. WHAT WE CAN LEARN FROM THE “SMART MONEY”
      10. NOW GET OUT THERE AND WIN
    3. CHAPTER 19 - Trading Lessons from Life
      1. PANIC AT THE BEACH
      2. THE ENDLESS TOURNAMENT
      3. SUMMARY
    4. CHAPTER 20 - What You Don’t know Can Hurt You
      1. SARCASM ALERT!
      2. KNOW WHEN TO RETREAT
      3. THE “95 PERCENT WINNERS STRATEGY”
      4. BEWARE THE BACK TESTER
      5. HYPOTHETICALLY SPEAKING
    5. CHAPTER 21 - A Tale of Two Traders
      1. INDIVIDUALS VERSUS INSTITUTIONS
      2. THE DIFFERENCE BETWEEN AMATEURS AND PROFESSIONALS
    6. CHAPTER 22 - Some Final Thoughts
      1. A GOOD TRADE IS NOT THE SAME THING AS A WINNING TRADE
      2. PROPER EXECUTION IS CRITICAL
      3. TAKE RESPONSIBILITY FOR YOUR ACTIONS
      4. KEEP IT SIMPLE
      5. PHYSICAL VERSUS MENTAL
      6. IN CLOSING
  11. Glossary
  12. Index