Inevitably, the developments in futures trading and in computerized market analysis using trading software began to come together, and it became obvious that the magazine needed to devote a lot more space to this subject. The problem was finding authors with actual trading experience who could explain the value of using this new computer technology for market analysis to readers without an academic background in computer science.
This was new information to traders, and Lou’s pioneering work was instrumental in incorporating the personal computer into the trading mainstream, particularly with the release in 1983 of his ProfitTaker software program. This was the first trading software program available for personal computers that performed strategy back testing.
ProfitTaker laid the foundation for much of the technical analysis software development that has evolved over the past twenty-five years.
THIS BOOK EXPLORES the application of intermarket analysis to the foreign exchange market, the world’s largest and most widely traded financial market. Intermarket analysis helps traders identify and anticipate changes in trend direction and prices due to influences of other related markets as financial markets have become interconnected and interdependent in today’s global economy.
These markets include forex futures and options as well as major cash forex pairs, which are affected not only by other currencies but by related markets such the S&P 500 Index, gold, crude oil, and interest rates. As the world economy of the twenty-first century continues to grow and as new advances in information technologies continue to be introduced, financial markets will become even more globalized and sophisticated than they are today, increasing the central role that the forex markets play in the global economy.
FOREWORD IX
PREFACE XV
INTRODUCTION XIX
Chapter 1
WHAT IS FOREX? 1
If you have traveled internationally, you may already know something about the forex market, today’s hottest marketplace. Discover
why you might want to trade forex.
Chapter 2
THE FOREX MARKETPLACE 11
The forex market is the world’s largest marketplace, dwarfing all other markets combined. See how forex grew so large and how you can participate.
Chapter 3
FUNDAMENTALS AND FOREX 21
Forex traders can get plenty of information, sometimes so much that it can be hard to sift through it all. Here are some reports a forex trader needs to consider.
Chapter 4
APPLYING TECHNICAL ANALYSIS TO FOREX 35
With fundamental information overwhelming, many forex traders analyze price action in charts. Chart patterns and indicators have shortcomings, but see how predictive moving averages can help with market forecasting.
Chapter 5
INTERMARKET ANALYSIS OF FOREX MARKETS 49
What happens in one market is influenced by what happens in a
number of related markets. Discover why single-market analysis
should give way to intermarket analysis in today’s global marketplace, especially in forex markets, which are ideally suited for this type of analysis.
Chapter 6
USING NEURAL NETWORKS TO ANALYZE FOREX 63
With so many fundamentals and so much influence from related markets, it’s hard to see all the patterns and relationships in the forex
market. Find out how neural networks can uncover hidden patterns
in data and select the best to make short-term market forecasts.
Chapter 7
TECHNICAL TACTICS FOR TRADING FOREX 71
Once you understand how the forex market works and the basics of technical analysis, you are ready to put theory into practice. Here are a few more practical tips and chart examples to help you apply your knowledge to actual trading.
Chapter 8
WAVE OF THE FUTURE: SYNERGISTIC MARKET ANALYSIS 87
Using only one approach to trade no longer works in today’s global markets. Successful trading requires the synthesis of technical, intermarket and fundamental approaches.
TRADING RESOURCE GUIDE 93
ABOUT THE AUTHOR AND MARKET TECHNOLOGIES, LLC 105
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