Forex Chartist Companion, A Visual Approach to Technical Analysis

Trading in the foreign exchange (forex) currency markets has recently exceeded $2 trillion a day and this figure is expected to double within the next five years. The reason for this astonishing surge in trading popularity is quite simple: no commissions, low transaction costs, easy access to online currency markets, no middlemen, no fixed lot order sizes, high liquidity, low margin with high leverage, and limited regulations. These factors have already attracted the attention of both neophyte traders and veteran speculators in other financial markets. ABOUT THIS BOOK Immediately following the publication of Getting Started in Currency Trading, the authors received an overwhelming number of inquiries and requests for more detailed information on the mechanics of currency day trading, market entry timing, and which positions to initiate in forex markets. The authors hope to fill that void with the publication of the current volume. We have concentrated our primary focus on the most lethal weapons in the technical analysis arsenal: the traders? charts, pristine in their concept and dynamic in their visual presentation of both raw and processed data. Numerous groundbreaking and innovative additions to charting theory have been included here. Also several well-known classical charting types have been updated and modified to scrutinize the unique characteristics of forex data. HOW THIS BOOK IS ORGANIZED Part I: Forex-Specific Charting Techniques Much of the material in this section originally appeared in a collection of technical currency studies called Forex Charting Companion: Innovative Charting Techniques for Currency Traders by the same co-authors. Many of the charts along with the corresponding data have been revised to reflect the current personality of the spot currency market. Part II: Point and Figure Charting Point and figure (P&F) charting was invented in the 1890s and has since evolved into a highly respectable technical analysis tool for detecting market entry signals. Although P&F was originally designed for use on the stock exchange, all the examples in Part II focus directly on the spot currency markets (with some startling results). This section is actually a revised update of The Point & Figure Chartist?s:Companion: The Computer-Side Reference for Currency Traders and Analysts, also by the co-authors. Part III: Forex Swing Charting Like their sibling P&F charts, swing charts are also members of that genre of charts normally referred to as reversal charts. Their shared advantage is their ability to filter out minor price fluctuations and highlight the critical inflection points in a price chart. This section is also an update of an earlier work entitled The Swing Trader?s Companion: The Computer-Side Reference for Swing Traders and Analysts. Part IV: Other Reversal Charts Both Western and Japanese reversal charts are examined in detail in this section. Knowledge of unusual and exotic charting techniques can only benefit the currency day trader since this knowledge assists in scrutinizing the same data through a different perspective. Part V: Goodman Swing Count System In this section, the authors examine the actual trading system of veteran trading guru Charles B. Goodman. His unique theories and hypermodern principles are accompanied by numerous practical studies and examples.