WIXLIB

Business/Investingg Easier!Making Everythin 2nd Edition2nd EditionForex markets can be one of the fastest and most volatilefinancial markets to trade. Money can be lost or made in amatter of seconds, and forex markets are always moving. Sohow do you keep up? This hands-on, friendly guide showsyou how the forex market really works, what moves it, andhow you can actively trade in it — without losing your head! All the world’s a stage — get an easy-to-follow introduction to theglobal forex market and understand its size, scope, and players Show me the money — take a look at the major fundamental andeconomic drivers that influence currency values and get the knowhow to interpret data and events like a pro Prepare for battle — discover different types of trading styles andmake a concrete strategy and game plan before you act on anything Pull the trigger — establish a position in the market, manage thetrade while it’s open, and close out on the most advantageous termsOpen the book and find: Currency trading conventionsand tools Key characteristics ofsuccessful traders Trading pitfalls to avoid and riskmanagement rules to live by How major currenciestypically trade Why it’s important to be organizedand prepared The 411 on buying and sellingsimultaneously Tips for understanding rolloversand interest ratesCurrency TradingYour plain-Englishguide to currency tradinggnidarTycnerruCLearn to: Grasp currency quotesGo to Dummies.com for videos, step-by-step examples,how-to articles, or to shop! Capitalize on the foreignexchange market Manage risk and reward Use the forces that drivecurrency movements 24.99 US / 29.99 CN / 16.99 UKBrian Dolan has worked for more than 20 years in the forex market as acurrency trader and analyst. As the Chief Currency Strategist at FOREX.com,Brian oversees fundamental and technical analysis and is a frequent resourcefor the financial media on currency developments. Identify key traits ofindividual currency pairsISBN 978-1-118-01851-4Brian DolanDolanFOREX.com

Get More and Do More at Dummies.com Start with FREE Cheat SheetsCheat Sheets include Checklists Charts Common Instructions And Other Good Stuff!To access the Cheat Sheet created specifically for this book, go iMobGet Smart at Dummies.comDummies.com makes your life easier with 1,000sof answers on everything from removing wallpaperto using the latest version of Windows.Check out our Videos Illustrated Articles Step-by-Step InstructionsPlus, each month you can win valuable prizes by enteringour Dummies.com sweepstakes. *Want a weekly dose of Dummies? Sign up for Newsletters on Digital Photography Microsoft Windows & Office Personal Finance & Investing Health & Wellness Computing, iPods & Cell Phones eBay Internet Food, Home & GardenFind out “HOW” at Dummies.com*Sweepstakes not currently available in all countries; visit Dummies.com for official rules.There’s a Dummies App for This and ThatWith more than 200 million books in print and over 1,600 uniquetitles, Dummies is a global leader in how-to information. Nowyou can get the same great Dummies information in an App. Withtopics such as Wine, Spanish, Digital Photography, Certification,and more, you’ll have instant access to the topics you need toknow in a format you can trust.To get information on all our Dummies apps, visit the following:www.Dummies.com/go/mobile from your computer.www.Dummies.com/go/iphone/apps from your phone.

CurrencyTradingFORDUMmIES‰2NDEDITION

CurrencyTradingFORDUMmIES‰2NDby Brian DolanEDITION

Currency Trading For Dummies, 2nd EditionPublished byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.comCopyright 2011 by Wiley Publishing, Inc., Indianapolis, IndianaPublished by Wiley Publishing, Inc., Indianapolis, IndianaPublished simultaneously in CanadaNo part of this publication may be reproduced, stored in a retrieval system or transmitted in any form orby any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior writtenpermission of the Publisher, or authorization through payment of the appropriate per-copy fee to theCopyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600.Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley& Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at http://www.wiley.com/go/permissions.Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for theRest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way, Dummies.com, Making EverythingEasier, and related trade dress are trademarks or registered trademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be used without written permission.All other trademarks are the property of their respective owners. Wiley Publishing, Inc., is not associatedwith any product or vendor mentioned in this book.LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NOREPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OFTHE CONTENTS OF THIS WORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BECREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIESCONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITH THEUNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, ACCOUNTING, OROTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE IS REQUIRED, THE SERVICES OFA COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT. NEITHER THE PUBLISHER NOR THEAUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK AS A CITATION AND/OR A POTENTIAL SOURCEOF FURTHER INFORMATION DOES NOT MEAN THAT THE AUTHOR OR THE PUBLISHER ENDORSESTHE INFORMATION THE ORGANIZATION OR WEBSITE MAY PROVIDE OR RECOMMENDATIONS ITMAY MAKE. FURTHER, READERS SHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THISWORK MAY HAVE CHANGED OR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN ANDWHEN IT IS READ.For general information on our other products and services, please contact our Customer CareDepartment within the U.S. at 877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.For technical support, please visit www.wiley.com/techsupport.Wiley also publishes its books in a variety of electronic formats. Some content that appears in print maynot be available in electronic books.Library of Congress Control Number: 2011930128ISBN: 978-1-118-01851-4Manufactured in the United States of America10 9 8 7 6 5 4 3 2 1

About the AuthorBrian Dolan is the chief currency strategist at GAIN Capital Group, anda 20-plus year veteran of the interbank currency market. Brian providesresearch and market analysis to trading clients of GAIN Capital and FOREX.com, the retail division of GAIN Capital Group.Brian analyzes the G10 currency markets with a blend of fundamental andtechnical analysis to provide actionable trading strategies.A frequent commentator on currency-market developments and outlooks formajor news media including the Wall Street Journal, Reuters, Bloomberg, DowJones, CNN Money, and MarketWatch.com, Brian has also appeared regularlyas a currency analyst on financial TV networks CNBC, Bloomberg Television,Fox Business News and BNN in Canada.In addition, he has written numerous articles on currency trading, risk management, and technical analysis for trading and investment journals such asCurrency Trader, Active Trader, SFO Magazine, Technical Analysis of Stocks &Commodities, and Futures.Prior to joining GAIN Capital, Brian was a vice president at Bank Julius Bär,where he advised hedge funds and high-net-worth individuals on currencies. He spent the first 12 years of his FX career trading major currency pairsin the interbank market in New York at some of the world’s largest banks,including Credit Suisse, Dai-Ichi Kangyo Bank, and American Express Bank,as well as two years in Bermuda as a proprietary trader at Butterfield Bank.Brian is a graduate of Dartmouth College.

DedicationTo Brigid, for her love and for hanging in there through the ups and downs;and to Frank and Catherine, for inspiring me to create a work for the future,just as you are. In memoriam to my mother Peg, father Chuck, and sadlymissed brother Tim, who taught me that life is not a dress rehearsal.AcknowledgmentsMy efforts to translate a career’s worth of currency trading experience intoa book would be extremely thin were it not for the many lessons I garneredfrom colleagues in the market over the years. Readers of this book will benefit from the experience I’ve gained from many of you. Thanks to Mark Galant,for founding GAIN Capital and offering me the opportunity to write this book.To the trading team at GAIN: Tim O’Sullivan, Anthony Piccolo, Paul Spirgel,Rob Voorhees, Mike Goret, Damon Gallo, and Alan Viola — it’s an honor andpleasure to work with some of the best in the business. To Glenn Stevens andSamantha Roady, for setting the whole process in motion and encouragingme to go the full distance. To Christa Conte and Henry Feintuch of FeintuchCommunications, for getting the word out to the media and then some. Tomy research team for picking up the slack while I wrote: Eric Viloria, CMT;Chris Tevere, CMT; Kathleen Brooks; and Dan Hwang. To Susan Hobbs for herfine editing assistance that made me get to the point, clearly. To McLean D.Giles for his technical review. And to the editors and staff at Wiley Publishing,especially Stacy Kennedy, for organizing the book in the first place.

Publisher’s AcknowledgmentsWe’re proud of this book; please send us your comments at http://dummies.custhelp.com.For other comments, please contact our Customer Care Department within the U.S. at877-762-2974, outside the U.S. at 317-572-3993, or fax 317-572-4002.Some of the people who helped bring this book to market include the following:Acquisitions, Editorial, andMedia DevelopmentComposition ServicesProject Coordinator: Patrick RedmondProject Editor: Susan HobbsLayout and Graphics: Corrie SocolovitchAcquisitions Editor: Stacy KennedyProofreaders: Cara L. Buitron, Melissa CossellCopy Editor: Susan HobbsIndexer: Steve RathAssistant Editor: Erin Calligan MooneyEditorial Program Coordinator: Joe NiesenTechnical Editor: McLean D. GilesEditorial Manager: Jennifer EhrlichEditorial Supervisor and Reprint Editor:Carmen KrikorianEditorial Assistants: David Lutton,Jennette ElNaggarArt Coordinator: Alicia B. SouthCartoons: Rich Tennant(www.the5thwave.com)Publishing and Editorial for Consumer DummiesDiane Graves Steele, Vice President and Publisher, Consumer DummiesKristin Ferguson-Wagstaffe, Product Development Director, Consumer DummiesEnsley Eikenburg, Associate Publisher, TravelKelly Regan, Editorial Director, TravelPublishing for Technology DummiesAndy Cummings, Vice President and Publisher, Dummies Technology/General UserComposition ServicesDebbie Stailey, Director of Composition Services