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    Fx Insider: Investment Bank Chief Foreign Exchange Trader with More Than 20 Years’ Experience as a Marketmaker
    Fx Insider: Investment Bank Chief Foreign Exchange Trader with More Than 20 Years’ Experience as a Marketmaker
    Fx Insider: Investment Bank Chief Foreign Exchange Trader with More Than 20 Years’ Experience as a Marketmaker
    Ebook184 pages2 hours

    Fx Insider: Investment Bank Chief Foreign Exchange Trader with More Than 20 Years’ Experience as a Marketmaker

    By Brad Gilbert

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    About this ebook

    There are plenty of books out there proclaiming to tell all or to reveal the secrets to foreign exchange (or forex) trading. There are plenty of gurus offering advice and suggestions on how to trade the market successfully. But how many of these people have any real industry experience in trading foreign exchange? Not many, I can tell you that right now.

    Im Bradley Gilbert, and I worked on the front line for eighteen years at some of the biggest investment banks in the worldand I made over $70 million in that time. Do I have your attention yet? So, if you really want to make money trading FX, follow me!

    This book has been written to give you, the retail trader, a real and practical guide to trading the forex markets. Based on my own personal experiences, incorporating the same skills and strategies used by commercial interbank traders and hedge funds, I can help you up your game in the markets. Believe me, running with the big dogs is a lot more fun and a lot more rewarding than running against themand understanding this is a key part to your future success.

    Once you have completed the book, youll feel more like youre a part of the market instead of a random speculator. Seeing the market through a new set of eyes will help you to take advantage of the many opportunities the market presents day after day, week after week.

    Good luck and happy trading!

    LanguageEnglish
    PublisherBalboa Press AU
    Release dateAug 21, 2012
    ISBN9781452557199
    Fx Insider: Investment Bank Chief Foreign Exchange Trader with More Than 20 Years’ Experience as a Marketmaker
    Author

    Brad Gilbert

    Brad Gilbert is considered by experts to be among the world’s foremost tennis analysts. A former “Giant Killer” on the ATP Tour, his acute observations are now heard worldwide on ESPN.  Gilbert has coached Andre Agassi, Andy Roddick, and Andy Murray among others. He lives in San Rafael, California, with his wife, Kim, and three children, Zach, Julian, and Zoe. Visit his website at BradGilbertTennis.com.

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    • 4/5
      Books shows the importance of having a good trading strategy and the author shows what the banks actually look for when they trade the markets. Good read didn't give 5 stars because illustrations wern't the best and also the Author has a lot of knowledge that I feel was not shared in this book maybe in other books and courses this will be released.

    Book preview

    Fx Insider - Brad Gilbert

    Copyright © 2012 Bradley Gilbert

    All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews.

    Balboa Press books may be ordered through booksellers or by contacting:

    Balboa Press

    A Division of Hay House

    1663 Liberty Drive

    Bloomington, IN 47403

    www.balboapress.com

    1-(877) 407-4847

    ISBN: 978-1-4525-5718-2 (sc)

    ISBN: 978-1-4525-5719-9 (e)

    Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

    Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

    Certain stock imagery © Thinkstock.

    Balboa Press rev. date: 08/14/2012

    BalboaLogoBCDARK.ai

    Contents

    About the Author

    Acknowledgements

    Disclaimer

    Preface

    Introduction

    Chapter 1

    The World Of Foreign Exchange

    The Evolution of Forex & Professional Trading

    Foreign Exchange Today

    Where Does Retail Forex Fit In?

    Why Do The Currencies Fluctuate?

    What is a Forex Deal and What Does it Involve?

    Additional Trading Terminology

    Chapter 2

    Currencies: The Inside Story

    Forex Currency Symbols

    Major Currency Pairings

    Cross Rates

    Currency Correlations

    The Importance of the Numbers

    Risk Currencies

    Volatility for Each Currency Pair is Unique

    Profit & Loss (P & L)

    Chapter 3

    Know Your Markets

    Understanding the Trading Sessions

    Forex Time Zone Activity

    The Hidden Danger Zones

    Chapter 4

    Capital: Risk Management

    The Fundamental Importance of Risk Management

    Capital Management

    Risk Reward Ratio

    Trading Plan

    Chapter 5

    Technical Analysis

    The Principles

    The Truth about Technical Analysis

    Types of Charts

    Types of Trends

    Trendlines—Support & Resistance

    Retracement

    Momentum Trading Indicators

    The Final Say

    Chapter 6

    Fundamental Analysis

    What is Fundamental Analysis?

    Global Economic Indicators

    Important Country Indicators

    Central Banks—Interest Rate Announcements

    Pros & Cons of Fundamental Analysis

    Chapter 7

    Trading Strategies

    Why Use Different Strategies?

    Entering / Exiting Trades

    Trading Strategies the Professionals Use

    Trend Trading

    Range Trading

    Break Trading

    False Break Trading

    Trading Economic Data Releases

    Trailing Stops

    The Carry Trade

    The Truth about Scalping

    Chapter 8

    Order Types & Putting Them On

    Main Types of Orders

    Market

    Limit Order (Pending)

    Stop Loss

    Take Profit

    Stop Entry

    One Cancels the Other (OCO)

    If Done OCO

    Trailing Stop Loss

    Good Till Cancelled

    Chapter 9

    Developing & Planning Trades

    Develop a Trade Plan

    Plan Your Day/Week

    Planning Fundamental Release Trades

    Planning Technical Trades

    The Perfect Trading Strategy

    Chapter 10

    Managing Positions Once they’re Live

    The Market is Not Always the Same

    Chapter 11

    Trading Psychology

    Patience, Discipline & Control

    Impatience & Hesitation

    Performance Anxiety—This is where the wheels fall off!

    Remedy: Control Your Emotions & Stick to the Plan

    Successful Trading Principles

    Chapter 12

    How to Set Up your Trade Station

    Pricing Platform

    News & Economic Calendar

    Technical Analysis

    Chapter 13

    Choosing a Trading Platform

    Order Functionality

    Spreads & Variety of Currencies

    Various Access Points

    Conclusion

    Glossary

    About the Author

    Brad Gilbert has been a professional Forex Trader since 1990, having worked for Citibank, Commonwealth Bank of Australia and Toronto Dominion Securities for a combined total of 18 years. He graduated from Sydney University with a degree in Economics and after starting as a Forex trainee trader, he worked his way up through the ranks to be an FX Trading Team Leader and member of the Australian Foreign Exchange Committee. He has lived in Sydney, London, and New York and traded in every major financial centre.

    Brad is the founder of Traders 4 Traders, a professional Forex training company with offices in Sydney, New York and London. He is also a regular contributor to a number of financial magazines and online publications. His clients include banks, corporations and private investors.

    Brad is also the Managing Director of Forex Capital Management, an investment company that offers foreign exchange managed discretionary accounts for private investors and financial institutions.

    Acknowledgements

    My thanks go to FXASIA (www.fxasia.com) for the use of various screen shots throughout this book. They’re my Forex broker of choice, and I can’t recommend them highly enough. I would also like to thank Market Analyst (www.market-analyst.com) for allowing me to publish their screen shots. It is by far the most advanced technical analysis software I have ever used.

    This book would have been impossible without the guidance and mentoring of many of my old colleagues. From the very beginning, when I was a ‘green behind the ears’ junior to a ‘know it all’ Chief Dealer, the trading was always top shelf, the practical jokes never ceased to surprise, and the good times . . . well, those memories will live on forever.

    Finally, thanks my gorgeous wife Amanda and my three loving daughters Bella, Ivy and Andie. You are an inspiration to me and this book would not have been possible without your support. You definitely keep me grounded!

    Disclaimer

    The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances, and it should not be relied on as the basis for any decision to take action or not take action on any matter that it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and the publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based upon the information in this publication.

    Preface

    There are many books out there proclaiming to ‘tell all’ or to ‘reveal the secrets’ to foreign exchange trading, and there are even more gurus offering advice and suggestions on how to trade the market successfully. But do any of these people have any real industry experience in trading foreign exchange? The answer is invariably NO.

    I worked on the front line for 18 years at some of the biggest investment banks in the world and made over $70 million. If you want to make money trading FX, then follow me!

    Unlike a lot of people out there who dreamed of dealing rooms and a trading career, I didn’t know anything about the foreign exchange market until after I graduated from Economics at University. Sure, I loved to punt, but the horses and sport were as far as it went. I never owned shares and never really had an interest in the stock market for that matter. I just so happened to be playing rugby with a few guys who were in the ‘game’. After a chat about what they did (which all went over my head), they convinced me that I had all the attributes to become a successful Forex trader: confident, good with numbers, a team player, a risk taker and an ability to handle pressure situations with ease. So I applied for a graduate trading position at Citibank. Two months, one hundred-sixty applicants and five interviews later, I had landed the job. This was a huge turning point in my life.

    I was a sponge for the first few years, learning all the rules, the ins and outs of the market, the terminology, and how to transact in the wholesale market. Within three years, I was making more money than the senior traders who had been around for years. By 1995 I had outgrown the Sydney trading desk and was promoted to senior dealer status and transferred to London.

    This was a great move, although it didn’t seem like it at first. The market is bigger and louder and the traders are far more aggressive. Being the only foreigner on a fifty-man trading team, I was quickly put in my place. I sat in the shadows of the top dogs for a good six months, quietly going about my business and observing their every move. I was looking for an opportunity to show my wares and it came out of the blue when one of the senior guys was off sick. I got the chance to quote the USD/YEN book for the day, which turned out to be a defining moment in my career.

    I was thirty minutes into the day when the Japanese Minister of Finance Eisuke Sakakibara (Mr. Yen) came out with some outrageous comments about the level of the Yen. I was caught long US dollars and the currency had dropped over 100 points in seconds. I was down well over 300K. There was a small group of senior traders laughing and I heard one of them say, ‘This will put him in his place.’ It was all the motivation I needed. It was now or never! After the dust had settled some eight hours later, I walked out of the dealing room to a standing ovation. I had turned my initial losses into a half a million pound profit. I had officially arrived in the big leagues.

    Over the next thirteen years I worked in New York, Tokyo, Singapore, Hong Kong and finally back in Sydney. I learnt to become resourceful, and my trading became more dynamic as I endeavoured to stay ahead of the pack and on top of the game. The one key factor that stands out for me is that all the traders I met and worked with incorporated the same basic trading methodology. Successful traders don’t use any secret strategies; they use the same simple strategies as everyone else. They are just quicker to modify and adapt them as the market conditions and driving forces change, keeping them ahead of the market.

    I realised there are three major components to successful trading. First, you have to understand the market, the participants in it and how it all works. In today’s market, 95% of traders are speculators; hence it’s no surprise that 95% of traders new to the market lose their money. It’s the wholesale market, the remaining 5%, who control the entire market. If you don’t know how they trade, then you’re more than likely going to end up a part of these statistics. Second, it’s the traders themselves. Self-sabotage is one of the major reasons traders never realise their full potential. Patience, discipline and control of your emotional state are imperative if you want to be successful. Third, a trader needs a structured trading methodology, incorporating stringent capital management and a precise trade plan. Having a precise trade plan should remove the emotions of fear and greed and set you up for continued growth in the market.

    My twenty years of experience has taught me that knowing when to trade and when not to is integral to success. Staying out of the markets in illiquid volatile conditions, during inexplicable events and in particular when the currencies are in uncharted territory can

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