FX contrast
ERM
ETF
EUR/other statistics
EURCHF
EURGBP
EURJPY
European Union, ERM
euros
EURUSD
fading news
statistics
stops
thin markets
trading the FED
exchange rate risk, definition
exchange-traded securities
Exodus
‘experts’
extensions, Friday to Sunday price extension
fade tactics
falling knives
FCMs
see also brokers
Big Figure Trade
fraud
profits
trust
FDIC
fears
Federal Open Market Committee (FOMC)
Fibonacci levels
fightback methods
see also trading tips
Big Figure Trade
CME alternative
concepts
flexibility needs
Friday to Sunday price extension
money management rules
multiple lots
official actions
overleveraging dangers
price feeds
record-keeping needs
self awareness
small trades
trading habits
trading to your strengths
flags
flexibility needs, fightback methods
flow information, concepts
focus needs
FOMC see Federal Open Market Committee
food chain, players
Forbes Magazine
foreign exchange see FX markets
‘forex trading contests’
forward contracts, definition
forward rates, definition
forward/swap dealers see also dealers
four-hour charts
Frankfurt
fraud, brokers
Friday to Sunday price extension concepts
keys to the trade
friends, enemies
front running
FSA
FTSE
fundamental analysis
future prospects
futures
FX markets see also currency markets concepts
FX Solutions
FX transactions, definition
FXAll
FXCM
Gain Capital
gambling, traders
gaps
GBPCHF
GBPDM
GBPJPY
GBPUSD
see also United Kingdom
crosses
flow information
statistics
stops
GDP
GE
Geneva
Germany
GFT
globalisation effects
glossary
‘go with the flow’ trading mentalities
gold
Goldman Sachs
Google
government bonds
great traders see also winning traders average traders
greed
Gross, Bill
gut reactions
Hamanaka, Yasui
hammers
hanging man
‘head fake’ tactic
hedge funds
see also speculators
concepts
‘hedging’ capability
highs, pivot points
Hong Kong
background
market share statistics
‘hot money’ moves
HSBC
‘hunting’ models
IBM
identifying the setup
Ikebe, Yukiko
IMM
imperfect markets
industry contracts
inefficient markets
inflation
information
see also news releases
dealers
insider trading
institutional investors
insurance companies
interbank market
see also banks
concepts
turnover statistics
interbank rates, definition
interest rates
Internet
brokers
‘experts’
stocks
iPods
IPOs
irrational markets
Japan
CHFJPY
EURJPY
GBPJPY
market share statistics
USDJPY
jargon
Jones, Paul Tudor
JPMorgan Chase
jumps
knee-jerk reactions, currency markets
Krieger, Andrew
Lasker, Ed
last minute positioning, important times of the day
learning curves, retail traders
Leeson, Nick
Lehman Bros
‘let your winners run, cut losers short’
LIBOR
liquidity
future prospects
news releases
thin markets
Livermore, Jesse
‘locals’
London money center see also United Kingdom
Long Term Capital Management
long-term players
loonie see also USDCAD
losing positions
loss leaders, dealers
lows, pivot points
M&As
macro funds
macroeconomic events
Malkiel, Burton
manipulations, important times of the day
margin deposits
market makers see also dealers
concepts
order book information
market theory, concepts
marketing machines, brokers
markets
see also currency . . .
behavioural psychology
concepts
emotions
irrational markets
mental toughness, great traders
mentoring services
Merrill Lynch
MIGFX
minimum net capital requirements, brokers
mistakes
‘money attracts sharks’
money centers, concepts
money management rules
Morgan Grenfell
moving averages (MAs)
mp3 players
multi-viewpoint perceptions -
multiple lots, flexibility needs
multiplication effects, turnover statistics
‘must do’ flows, important times of the day
mutual funds
NASDAQ
National Futures Association (NFA)
background
BASIC
official actions
natural gas
neural networks
‘never trust the first price’
New York money center see also United States
New York Times
New Zealand
news releases
see also information
fading news
FOMC
liquidity effects
reversals
stops
thin markets
trading the FED
Newton, Sir Isaac
NFA see National Futures Association
NFP see Non-Farms Payroll
Nightly Business Report
Nikkei
Niv, Drew
‘no dealing desk’ policies
‘no touch’ digital options
Non-Farms Payroll (NFP)
notes
notional funds
NYMEX
NYSE
O/B readings
Oanda
off-balance sheet earnings, bank aims
‘off-the-books’ profits
official actions, fightback methods
‘one touch’ digital options
‘open season’ events
opponents, great traders
opportunity costs
options
OTC see over-the-counter markets
outlawed operations, brokers
outsiders
outsourcing, third-party services
over-the-counter markets (OTC)
overleveraging dangers
overseas bank accounts
P/Ls
Paris
patterns
pawn shops
pennants
pension funds
perceptions multi-viewpoint perceptions risks
perfect markets
performance measures, traders
personalities, retail traders
‘piggy back’ practices, dealers
PIMCO
pip, definition
pivot points
concepts
definition
players
see also banks; brokers; corporate accounts; dealers; retail . . .; traders
food chain
types
point, definition
poker analogy, traders
political events, currency markets
portfolio selections
positions
building a position
definition
pressure valves, crosses
price action
see also discretionary trading
concepts
price quotes, ‘who’s who’ factor
price ranges, entry considerations
prices
brokers
demand and supply
feeds
shading
slippage
volatility
probabilities
Procter & Gamble
profitable trading strategies
prop desks
see also banks; speculators
concepts
psychological battles, retail traders
psychology of markets
‘pure’ aspects, currency markets
random price movements
random walks
rare breeds, traders
rational markets
RBS
real-money driven moves
record-keeping needs, fightback methods
REFCO
regulations CFTC
change needs
currency markets
minimum net capital requirements
NFA
self-regulatory agencies
research benefits, currency markets
resistance levels
retail spot dealers see also dealers
retail traders
see also traders
card stacking
CME alternative
concepts
discretionary trading
fightbacks
flexibility needs
food chain
‘forex trading contests’
future prospects
great traders
historical background
learning curves
losing positions
mistakes
money management rules
multiple lots
overleveraging dangers
performance measures
personalities
picking the right approach
price action
price feeds
profitable trading strategies
psychological battles
record-keeping needs
self awareness
small trades
stopped-out experiences
strengths utilisation
survival rates
systematic trading
technical analysis
third-party services
time management needs
trading against dealers
trading habits
trading tips
Reuters
reversals
important times of the day
news releases
trend example
risks
concepts
models
perceptions
tolerance levels
uncertainty
Robertson, Julian
rolling pivot points, concepts
Rothschild family
round numbers, stops
rumors
runaway market dangers, dealers
runaway trades
Rusnak, John
Salomon
SARs
scaling considerations
scams
scenario planning
screen shots, record-keeping needs
seasonal factors, thin markets
a select club
self awareness, retail traders
self-fulfilling price moves
self-regulatory agencies
‘sell’ signals
set your orders, Big Figure Trade
SFA
Shanghai
sharp moves, moving averages
‘shifting points’
shooting stars
short-term moves, great traders
shorting tactics
sigma-nine events
Singapore
background
market share statistics
slippage
slow feeds
small speculators
see also speculators
price action
roles
small trades, flexibility needs
Smith, Adam
Societe Generale in Tokyo
solicitors
Soros, George
speculators
see also CTAs; hedge funds; prop desks; traders
COMs
concepts
food chain
small speculators
types
spikes
spot dealers see also dealers
spread-betting shops
spreads
squeezes
stair-case patterns
statistics, currency markets
sterling see GBP . . .
‘sticking it to your dealer’
stock market crashes 1929
‘Black Monday’October 1987
stopped-out experiences
stops
concepts
levels
news releases
round numbers
thin markets
trading the FED
strategies see also trading tips
strengths utilisation, retail traders
subjective viewpoints, great traders
subscriptions, third-party services
Sumitomo Corp.
Sun-Tzu
support levels
swaps
SWIFT
Swissy, definition
Switzerland
market share statistics
USDCHF
Sydney
systematic trading, concepts
tactics see also trading tips
‘take back’ the trade
‘talking their book’ dangers, third-party services
technical analysis
benefits
concepts
critique
definition
discretionary trading
retail traders
technological developments
terminology
terrorist attacks
thin markets
concepts
definition
news releases
seasonal factors
stops
trading tips
third-party services
throwing in the towel stage
trading the FED
trend example
tick, definition
time management needs
times of the day
currency markets
thin markets
Tokyo see also Japan
tolerance levels, risks
tops
traders
see also retail . . .
arrogance/self-confidence contrasts
Big Figure Trade
concepts
dealers
edge
fightback methods
food chain
Friday to Sunday price extension
future prospects
gambling
great traders
learning curves
‘let your winners run, cut losers short’
losing positions
macroeconomic events
mental toughness
performance measures
poker analogy
rare breeds
self-confidence
short-term moves
speculators
‘sticking it to your dealer’
survival rates
time management needs
tricks
a typical day
unfair playing fields
‘walk the walk and talk the talk’
winning traders
trading against the clients, brokers
trading habits, fightback methods
trading how to’s
trading journals
trading maxims
trading platforms, price feeds
trading techniques
trading tips
see also fightback methods
analysts
Big Figure Trade
building a position
crosses
fading news
FOMC
Friday to Sunday price extension
losing positions
money centers
stops
thin markets
trading the FED
trends
trading to your strengths, fightback methods
transparency shortfalls brokers
currency markets
trending markets
trends
accumulation stage
concepts
corrections/consolidations
example
hot money stage
public realizations
reversal stage
slow starts
throwing in the towel stage
trust
brokers
third-party services
Tudor Investment
turnover statistics
currency markets
multiplication effects
a typical day, traders
UBS
UK see United Kingdom
uncertainty concepts
unfair playing fields
United Kingdom
‘Black Wednesday’ (1992)
EURGBP
GBPCHF
GBPDM
GBPJPY
GBPUSD
London money center
market share statistics
United States
AUDUSD
EURUSD
FOMC
future prospects
futures exchanges
GBPUSD
market power
market share statistics
New York money center
NFP
USDCAD
USDCHF
USDJPY
USD Index (USDX)
USD/other statistics
USDCAD
USDCHF
crosses
statistics
thin markets
USDJPY
crash of 1998
crosses
statistics
trend example
value creation
Verne, Jules
voice brokers
volatility
‘walk the walk and talk the talk’
Wall Street
Wall Street Journal
whipsaw, definition
‘who’s who’ factor, price quotes
winning traders see also great traders
working day, definition
yard, definition
yen see Japan
Young, Peter
zero-sum games
Index compiled by Terry Halliday
1
To fade a move is to trade against the prevailing direction. Fading a move
higher would mean selling short into the rally.
2
Part of the University of Virginia hedgies, started Tudor Investment in
1985. Never a down year, the worst performance was in 2000, when Tudor
BVI Global Portfolio fund delivered 11.6 %. Of note, he managed to time
the October 1987 market crash and turn it into a 210 % gain.
3
Nine standard deviations away from the mean, or basically a statistically
impossible event.
4
At constant exchange rates, the turnover increase is around 35 %.
5
BIS Triennial Survey 2007. Visit www.bis.org for the full report.
6
Borrowing a low-yielding instrument and trading it for a higher yielding
one in an effort to make money from the yield difference. For example, you
take a loan from the bank at 5 % and buy bonds yielding 7 %, in effect
keeping the 2 % difference.
7
Fittingly, these operations fall under the umbrella of the UK’s gambling
laws.
8
Commodity Futures Trading Commission.
9
Hence the term over-the-counter (OTC) for nonexchange transactions.
10
Commonly known as the “greatest trader of all time” for his tape-reading
ability and his correct timing of the stock market crash of 1929. After a
series of ups and downs Livermore ended up taking his own life in a NYC
hotel room in 1940, helping solidify the notion that great traders often make
for miserable individuals.
11
Currency Markets Draw Speculation, Fraud. Wall St Journal , 26 July 2005.
12
You can check your broker instantly using NFA BASIC
(http://www.nfa.futures.org/basic).
13
A full version is available online:
http://www.cftc.gov/marketreports/financialdataforfcms/index.htm.
14
Hedge fund managers have long made fun of the quant models, and often
joke “This is terrible! Today I just had a loss that’s a nine sigma event!
That’s the third time this year!” (even though it should only happen once in
ten thousand years or more).
15
A common option structure in the FX market is the “one touch” or “no
touch” digital options, where a player bets that the price will (or will not)
trade at a certain level before expiry (London or NY options cut). Thus, if
the option buyer is betting on a certain level being hit, if they are large
enough they will usually pro-actively gun for that level, while the option
writer (typically a bank) will try to protect it until expiry so that they do not
pay out.
16
I personally do not like to use the USD Index (USDX) to gage the USD’s
broad strength/weakness, since the basket is heavily euro-weighted and
essentially makes the index a mirror of the EURUSD.
17
Usually 5 pm NY time, when overnight positions are “rolled over” and
interest is credited/debited.
18
All indicators are readily available in most charting packages. Use default
settings or tweak them according to your timeframe.
19
The sterling/dollar nickname comes from the trans-Atlantic cable that was
used for a long time to transmit prices, and the USDCAD nickname actually
comes from the Canadian Loon (a bird) pictured on the side of the one-
dollar Canadian coin.