The Art of Currency Trading A Professional's Guide to the Foreign Exchange Market

Now you can master the art of foreign exchange trading

While most currency trading and foreign exchange books focus on international finance theory or simplistic chart-based strategies, The Art of Currency Trading is a comprehensive guide that will teach you how to profitably trade currencies in the real world. Author Brent Donnelly has been a successful interbank FX trader for more than 20 years and in this book, he shares the specific strategies and tactics he has used to profit in the forex marketplace.

The book helps investors understand and master foreign exchange trading in order to achieve sustainable long-term financial success. The book builds in intensity and depth one topic at a time, starting with the basics and moving on to intermediate then advanced setups and strategies. Whether you are new to currency trading or have years of experience, The Art of Currency Trading provides the information you need to learn to trade like an expert. This much-needed guide provides:

• an insider’s view of what drives currency price movements;
• a clear explanation of how to combine macro fundamentals, technical analysis, behavioral finance and diligent risk management to trade successfully;
• specific techniques and setups you can use to make money trading foreign exchange; and
• steps you can take to better understand yourself and improve your trading psychology and discipline.

Written for currency traders of all skill levels, international stock and bond investors, corporate treasurers, commodity traders, and asset managers, The Art of Currency Trading offers a comprehensive guide to foreign exchange trading written by a noted expert in the field.

BRENT DONNELLY has been trading currencies since 1995 and is currently a senior FX trader at HSBC New York. A respected macroeconomic and currency analyst, Brent writes AM/FX, the widely-read macro and FX daily. His work has been quoted by The Economist, The Wall Street Journal, Financial Times, Bloomberg, and other influential media outlets. Over the course of his career he has been a market maker, trader, and senior manager at industry-leading foreign exchange banks such as Citi and Nomura and at a major hedge fund in Connecticut.

Foreword ix

Acknowledgments xiii

Chapter 1 Introduction 1

Part I Understand the Foreign Exchange Market (FX 101) 7

Chapter 2 A Very Brief History of FX 9

Chapter 3 Currency Trading Basics 17

Chapter 4 Understand Market Structure 37

Part II Trade the Foreign Exchange Market 71

Chapter 5 Understand Fundamental Analysis 73

Chapter 6 Understand Technical Analysis I 107

Chapter 7 Understand Technical Analysis II (The Seven Deadly Setups) 155

Chapter 8 Understand Correlation and Intermarket Relationships 179

Chapter 9 Understand Behavioral Finance 221

Chapter 10 Trading the News 255

Part III Understand Risk Management 293

Chapter 11 Understand Free Capital 295

Chapter 12 Understand Position Sizing 321

Part IV Understand Yourself 351

Chapter 13 Characteristics of a Successful Trader 353

Chapter 14 Common Weaknesses in Trading 361

Chapter 15 The Voice of Experience 369

Chapter 16 Conclusion 379

Brent Donnelly’s 25 Rules of FX Trading 381

About the Author 383

Index 385

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.