John L. Person : Forex Conquered™ √PDF √eBook Download

303 Pages·2016·6.96 MB·English

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Forex
Conquered
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Forex
Conquered
High Probability Systems
and Strategies for
Active Traders
JOHN L. PERSON

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To Mary, my partner, best friend, and wife of twenty years;
time has gone by, but it seems like it has been a short
yet not so strange trip with you at my side.
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Contents
Preface ix
Acknowledgments xi
Disclaimer xii
CHAPTER 1 The Business of Trading Money 1
CHAPTER 2 Pivot Point Analysis, Filtering Methods,
and Moving Averages 65
CHAPTER 3 Candlestick Charting 107
CHAPTER 4 Traditional Chart Patterns 133
CHAPTER 5 Indicators and Oscillators:
Stochastics and MACD 151
CHAPTER 6 Fibonacci Combined with Pivot Points 169
CHAPTER 7 Elliott Wave Theory 181
CHAPTER 8 Trading Systems: Combining
Pivots with Indicators 199
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viii CONTENTS
CHAPTER 9 Selecting Your Trading Window Frames 225
CHAPTER 10 Risk and Trade Management:
Stop Selection, Scaling Out, and
Setting Profit Targets 233
CHAPTER 11 Game Psychology: Techniques
to Master Your Emotions 249
Postscript 257
Glossary 258
About the CD-ROM 275
Index 279
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Preface
F
or the most part, day and swing traders use all forms of market analy-
sis to identify opportunities from specific chart patterns that demon-
strate frequent reoccurring results. They need to trade in active time
periods, using trend lines and moving averages, both of which are a form of
trend line analysis; these will help in certain market conditions. We will go
over a different set of moving averages than what is normally written about;
this will help identify conditional changes in the market, thereby giving
forex traders a better edge. We will also incorporate and show you how to
calculate support and resistance levels from such mathematically based
models as pivot point analysis and other means, such as Fibonacci correc-
tions and extensions, to identify opportunities and drive trading decisions.
These are the methods I will be covering in this book to help you form
a trading plan based on specific rules and conditions for trading the forex
market. This trading book should help you learn the methodology of the
best and most effective trading techniques to harness and capture consis-
tent results in the forex market. Consider this like market analysis on
steroids. This book combined with the compact disc (CD) should help you
learn in the most effective fashion. By rereading and continually studying
this material, these study tools will help you change the way you trade and
leave you with a specific set of rules on when to enter a position; how to
identify a trade setup, a trigger, or entry execution order; and how to effec-
tively place a stop and know when to exit a trade without hesitation. Most
successful traders live by the adage, Buy low and sell high; really great
traders also know when to buy high and sell even higher.
The best traders in the world also take advantage of short selling,
which is one aspect that draws so many skilled traders to the forex market;
they can sell short at extreme price highs and buy back at lower prices.
Whatever your method is, the results need to be profitable or your ca-
reer as a trader will be cut short. Whether you are a position trader, a swing
trader, or the more popular day trader, the key to profits is to try to capture
a portion of a price move in order to generate a positive cash flow (make
money). A trader’s search for discovering a method that generates con-
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x PREFACE
sistency in positive results is the primary goal and should be a continuous
learning event. There is one common feature among successful traders,
and that is that many of them are prepared before trading and have a
formulated game plan.
The techniques in this book can be applied to other markets, but this
specifically targets the forex market. I will teach you a trading system so
that you develop your own personal program and then follow that plan.
Using these techniques should help you to effectively anticipate a potential
resistance or support level that will give you an edge in the market for both
entering and exiting positions. Blending the strengths and characteristics of
candlestick chart pattern recognition with pivot point analysis is what I
have been teaching private investors, professional traders, and other lead-
ing educators. Many new methods have been introduced to traders, but the
one constant is human emotional behavior. In order to master trading, peo-
ple need to control their emotions. After all, the markets are simply a re-
flection of these emotions. Fear of losing money causes market prices to
head lower as people sell; and fear of missing an opportunity causes mar-
ket prices to move up as greedy people buy, trying to catch a free ride. As a
forex trader, you are looking at technical analysis to help capture profits
from a movement in price. Therefore, it is imperative that you understand
how and when a market moves and what signals or patterns give you a clue
for a directional price move. There are consistently recurring patterns and
these are what I plan to share with you in this book. I will also discuss
methodologies on trade management and risk management to help you
when an inevitable trading loss occurs.
I will disclose how to use time-tested tools such as the Elliott wave the-
ory to help you determine where prices are in a given cycle. We will go over
a system based on pivot point analysis and disclose how to effectively use
Fibonacci analysis, which is a system based on the theory that prices rise or
fall by specific percentages after reaching a high or a low. I will also discuss
two very popular indicators, stochastics and the moving average conver-
gence/divergence (MACD), to demonstrate which one interacts best with
pivot point support and resistance levels that can produce maximized re-
turns for an automated trading system. I will not only teach the system and
include the code but also share the results with you. I believe that a trader
who possesses knowledge of the key concepts in technical analysis will
have superior advantage over a trader who is simply depending on com-
puter- or software-driven trading signals. My goal in writing this book is to
give you an edge from the most powerful trading tools I have come across
in my 26 years as a trader.
JOHNL. PERSON
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Acknowledgments
I
want to thank Pamela van Giessen and Jennifer MacDonald of John
Wiley & Sons, who helped me get this book project off the ground and
published. Another individual who deserves a big round of applause is
Mary Daniello, also from John Wiley & Sons. Thank you for going over the
top in making sure the production schedule was pushed back so I could get
this book completed in time.
I would also like to thank Glen Larson and Pete Kilman from Genesis
Software for testing my theories and helping me develop my trading library
on their software; a big thumbs up to TradeStation and, in particular, Stan-
ley Dash. With these two charting software companies, traders will be set
in the best possible direction for seeking success in their trading careers.
And many thanks to my wife Mary who worked hard on programming the
pivot point and Fibonacci calculators—your work did not go unnoticed.
J. L. P.
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