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ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 207 Index A Breakout patterns, in candlestick charts, 45–46 Appel, George, 87 Buffett, Warren, 35 Arithmetic scaling, 155–157 Bull flags, 123–128 Ascending triangle, 128, Bullish candle chart, 44 130–131 Bullish engulfing patterns, Aspray, Thomas, 87 45–46 AUD/JPY pair, 37, 38–39 AUD/USD pair, 35, 36 Average Directional Index C (ADX)/Directional Movement Index (DMI), 71–72 CAD/JPY pair, 37 Candlestick charts, 43–58 breakout patterns, 45–46 B indecision patterns, 46–49 reversal patterns, 50–56 Bar charts, 41–43 Carry trades, 13–15 Base currency, 7 Central banks, as FX traders, Bear flags, 123–127 5–6 Bearish candles chart, CHF/JPY pair, 39 44 Cohen, Steve, 158 Bearish engulfing patterns, Commodity Channel Index (CCI), 45–46 91–96 Bid/ask spread, 8–10 Commodity currencies, 35–36 Bollinger bands,COPYRIGHTED 72–77 Confidence, MATERIAL in trading, 184 scalping to trend with, Corporations, as FX traders, 172–173 5 trend detection/exhaustion Countercurrency, 7 with, 162–164 Crosses, 37–38 trend trading with, 164–167, Currencies: 170–172 commodity, 35–36 volatility stop with, 167–170 major, 32–35 207 ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 208 208 INDEX D Fibonacci sequence, 99–112 background, 99–102 Dark Cloud Cover pattern, 49–50 pros and cons of, 102–108 Data display, 41–58 trading with, 108–112 bar charts, 41–43 Flag and pennant patterns, candlestick charts, 43–58 123–128 line charts, 41, 42 Foreign exchange markets, see FX Dealer intervention, 9 markets Decentralization, of FX markets, FX markets. See also Trade 6–7 management Demonstration trading accounts, bid-ask spread and dealer-based evaluating of, 19–24 market, 8–10 Dennis, Richard, 153 decentralization and, 6–7 Descending triangle, 131–132 demonstration trading Diamond patterns, 135–137 accounts, 19–24 Doji candles, 46–48 fundamentals of trading and, Double top and double bottom 15–19 patterns, 114–117. See also leverage and, 10–15 Triple top and bottom market structure and, 4–6 patterns quotation conventions, 7–8 Dragonfly doji candle, 48 rules and regulations of, 3–4 traders on, 5 trading volume on, 1–2 E Economic growth, as trading G fundamental, 17 Economic news, as trading Gallacher, William, 64 fundamental, 15–19 Gartman, Dennis, 106, 153 EUR/CHF pair, 37–39 GBP/CHF pair, 39 EUR/GBP pair, 37 GBP/JPY pair, 37, 39 EUR/JPY pair, 37, 39 GBP/USD pair, 32 EUR/USD pair, 32, 33–35 Geometric scaling, 156–157 Evening star/morning star Ghost patterns, in CCI, 94–95 candlestick, 53–54, 55 Gravestone doji candle, 47 Exponential moving average (EMA), 65–66 H F Hammer/hanging man candlestick, 51–53 Falling wedge, 132, 133, Harami candlestick, 50–51, 134 52 ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 209 Index 209 Head and shoulder patterns, M 137–138 Hedge funds, as FX traders, Major currencies, 32–35 5 Margin, on stock trades, 10 Margin call, in FX market, I 11–13 Market Maker’s Edge, The Indecision patterns, in (Lukeman), 110, 112 candlestick charts, 46–49 Market Wizards (Schwager), 16, “Inside day,” 50 143 Interest on account, debits and Morning star/evening star credits for, 15, 20 candlestick, 53–54, 55 Interest rates: Moving average carry trades and, 13–15 convergence/divergence range trading and, 38–40 (MACD), 87–91 as trading fundamental, in setup example, 17–18 173–176 Moving averages, 64–71 exponential moving average, J 65–66 moving average crossover, Japan, regulation in, 3 66–69 simple moving average (SMA), 64–65 K three SMA filter, 69–71 Kovner, Bruce, 16 N L National Futures Association (NFA), 3–4 Lambert, Donald, 91 Nisson, Steve, 43 Lane, Dr. George C., 79–81 NZD/USD pair, 35 Leverage, 10–11 carry trades and, 13–15 margin calls and, 11–13 O Line charts, 41, 42 Long-legged doji candle, Observation, randomness theory 47 and, 25–27 Lucas, Edouardo, 100 Oscillators, 79–97 Lucas sequence, 100 Commodity Channel Index Lukeman, John, 110, 112 (CCI), 91–96 ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 210 210 INDEX Oscillators (Continued) R moving average convergence/divergence Randomness, 25–27 (MACD), 87–91, 173–176 Range trading, 30–32, 79–97 Relative Strength Index (RSI), Commodity Channel Index 82–86, 176–179 (CCI), 91–96 stochastics, 79–81 crosses and, 37–38 interest rates and, 38–40 moving average P convergence/divergence (MACD), 87–91, Patterns and antipatterns, 173–176 113–141 Relative Strength Index (RSI), diamonds, 135–137 82–86, 176–179 double tops and double stochastics, 79–81 bottoms, 114–117 Relative Strength Index (RSI), flags and pennants, 123–128 82–86 head and shoulders, 137–138 in setup example, 176–179 reverse head and shoulders, Reversal patterns, in candlestick 138–141 charts, 50–56 triangles, 128–132 Reverse head and shoulders triple tops and bottoms and the patterns, 138–141 antipattern, 117–123 Rising wedge, 133–135 wedges, 132–135 Rosen, Adam, 83 %D, 80 %K, 80 Percentage in point (pip), 7–8 S “Phi,” 100, 102. See also Fibonacci sequence Sarnoff, Tom, 183 Pickers, 9 Scaling, 155–157 Pip (percentage in point), 7–8 Scalping, 9 Political stability, as trading Scalping to trend, in setup fundamental, 18–19 example, 172–173 Pressing the trade, 152–155 Schwager, Jack D., 16, 143, Price channels, trend lines and, 158 60–63 Science Askew (Simanek), Price data, randomness of, 100–102 25–27 Self-knowledge evaluation, 143–150 Setup examples, 161–184 Q MACD turn, 173–176 Relative Strength Index, Quotation conventions, 7–8 176–179 ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 211 Index 211 scalping to trend, Trade management, 143–160. See 172–173 also FX markets; Setup trading pure trend with examples Bollinger bands, 170–172 arithmetic scaling, trend detection/exhaustion 155–157 with Bollinger bands, pressing the trade, 162–164 152–155 trend detection with three self-knowledge and, simple moving averages, 143–150 180–181, 182 success factors and, trend trading with Bollinger 181–184 bands, 164–167 10 percent solution, volatility stop, 167–170 157–159 Shooting star/reverse hammer 2:1 reward/risk ratio, candlestick, 51–53 150–152 Simanek, Donald, 100–102 Trading houses, as FX traders, Simple moving average (SMA), 5 64–65. See also Three Trend line break patterns, in CCI, simple moving average 95 (SMA) filter Trend trading, 29–30, 59–78 STC Capital, 158 Average Directional Stochastics, 79–81 Index/Directional Stock Market Wizards Movement Index, (Schwager), 158 71–72 Swiss franc, 32, 33 basic questions of, 74–76 Symmetrical triangle, Bollinger bands, 72–77 128–129 Bollinger bands, in setup examples, 164–167, 170–172 T currencies for, 32–36 moving averages, 64–71 10 percent solution, trend lines, 60–64 157–159 Triangle patterns, 128–132 Three Advancing White Triple top and bottom patterns, Soldiers candlestick, 117–123 54–56 2:1 reward/risk ratio, 150–152 Three Black Crows candlestick, 54–56, 57 Three simple moving average U (SMA) filter, 33–35, 69–71 in setup example, 180–181, 182 United Kingdom: Trade balance, as trading pound of, 32–33 fundamental, 18 regulation in, 3 ccc_techanal_ind_207-212.qxd 2/28/06 8:28 AM Page 212 212 INDEX United States, regulation W in, 3 USD/CAD pair, 35, 36 Wedge patterns, 132–135 USD/CHF pair, 32 Wilder, J. Welles, 71, 82 USD/JPY pair, 32, 39 Winner Take All (Gallacher), 64 Wood, Ken, 91, 93–95 V Z Volatility stop, in setup example, Zero line reject patterns, in CCI, 167–170 95–96.