The Ed Ponsi Forex Playbook: Strategies and Trade Set-Ups

243 Pages·2010·4.7 MB·English

by  Ed Ponsi

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The Ed Ponsi
Forex Playbook
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The Ed Ponsi
Forex Playbook
StrategiesandTradeSet-Ups
ED PONSI
JohnWiley&Sons,Inc.
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Copyright(cid:1)C 2010byEdPonsi.Allrightsreserved.
PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey.
PublishedsimultaneouslyinCanada.
Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorby
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LibraryofCongressCataloging-in-PublicationData:
Ponsi,Ed,1961–
TheEdPonsiForexplaybook:strategiesandtradeset-ups/EdPonsi.
p.cm.
Includesindex.
ISBN978-0-470-50998-2(pbk.)
1.Foreignexchangemarket. 2.Speculation. I.Title.
HG3851.P6482010
332.4(cid:2)5–dc22
2010004715
PrintedintheUnitedStatesofAmerica.
10 9 8 7 6 5 4 3 2 1
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Thisbookisdedicatedtothetwolovesofmylife,RenataandRenee
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Contents
Preface xv
PART I Training Camp 1
CHAPTER 1 We Practice Like We Play 3
ASeriesofHabits 4
RulestoLiveBy 5
FromtheMinorstotheMajors 5
MoneyonMyMind 7
CHAPTER 2 The Playing Field 9
TwoofaKind 9
TheManager 11
UnderMyThumb 11
TheCoachingStaff 12
ATeamwithoutaManager 13
OtherNotableCurrencies 13
CommonlyTradedCurrencyPairs 13
OtherNotableCurrencyPairs 13
WhoDecides? 13
MethodtotheMadness 15
SpotandFuturesMarkets 16
Let’sGetPhysical 16
ContinualLinkedSettlement 16
CHAPTER 3 Calculations and Standardizations 19
LotSize 19
PipValue 20
PipCalculation 21
FirstCurrency=1 21
vii
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viii CONTENTS
Position:Long,Short,orFlat 22
LongOne,ShorttheOther 23
TheChartTrackstheBaseCurrency 24
MarginRequirements 25
Leverage 26
CHAPTER 4 Follow the Money 29
HotStocks 29
SmallScale 30
LargeScale 30
HotCommodities 31
HotRealEstate 32
DifferentialsMaketheDifference 32
“Mrs.Watanabe” 33
PART II Scoring Points 35
CHAPTER 5 Using the U.S. Dollar Index 37
OriginandHistory 38
MakingMoney 39
Confirmation 39
Contradiction 42
CHAPTER 6 Contrarian Indicators and the COT Report 47
TheSuckerattheTable 47
SiftingThroughtheNewbies 48
CommitmentofTradersReport 48
Commercials,Noncommercials,andSmallSpeculators 49
Reportablevs.NonreportablePositions 49
CommercialMotivations 50
Noncommercialsvs.SmallSpeculators 51
Surprise! 51
AgainsttheDollar 52
ARelentlessPounding 54
CHAPTER 7 The Power of Observation 59
ExplainingTrigtoa6-Year-Old 59
BadNews,GoodReaction 60
RunningforCover 62