price trough.
Right brain 66, 113-5 . The pattern-recognising and intuitive function of the mind takes place in the right hemisphere of the brain, often called “right brain” for short.
Rogers , james 86 . Brilliant long-term investor and one-time partner of George Soros in the $3bn Quantum Fund. Author of “Investment Biker.”
Schwager, jack 68, 82 . Admirable author of the 1989 classic, Market Wizards (see book list) – and other investment books, including A Complete Guide to the Futures Market.
Sentimen t 5 0 . Arguably the prime determinant of price change in financial markets; surely the most useful area of analysis for anticipating price change.
Sentiment gauges 50 . CB’s checklist of 4 indicators of sentiment as applicable to currency analysis.
Seykota , ed 83, 87-8, 102, 117-19 . Prodigiously successful American futures investor and sage.
Set-up conditions 29 . The specific set of circumstances which precede major price moves. Most of these circumstances are to do with the emotional condition of market participants.
Short. having sold what was not previously held, with the obligation to repurchase. The idea is to sell (forward) at a high price and buy back lower, at a profit. Of course with currencies you have to sell a currency in order to buy one; so every forward currency purchase involves a short sale.Opposite of long .
Soros , george 68, 91 . Legendary investor, author of The Alchemy of Finance, and founder of theQuantum Fund which rose 500- fold from inception
in 1969 to Spring 1991.
Spot 39 Cash currency, as opposed to forward or future. From ‘cash-on-the-spot’.
Spread (s) 17 . The difference between buying and selling (offer and bid) prices. Equals the market-maker’s turn.
Steidlmayer, peter 74,86-7, 118 . Very successful futures trader and well-known market analyst, who invented a new theory of market mechanics incorporating a price and volume recording system which goes under the name of Market Profile. PS bequeathed the system to the Chicago Board of Trade which runs a widely used Market Profile database. Author of 3 best-selling books, the latest of which is New Market Discoveries. The heart of Steidlmayer’s theory is that value is determined by volume, and price – just as the value of real estate, for example, or used cars, is generally determined at any time by the number of sales recorded at “x” price. Thus the price at which volume is highest represents correct value at any given time.
Stop (s) (order) 65, 74-6,96 , A stop is an order left with a broker or dealer which is executed automatically at a given price. Most frequently used to close an existing position, and most frequently to limit a loss on said position – but not necessarily.
The IMM exchange rules ensure that a trader’s stop, if left “with the market”, will be executed in the IMM if the price moves through the stop level. In the interbank market there is no such assurance. If you wish an order to be executed in the event a price is touched, even if not exceeded, you can give a “market-if-touched” (MIT) order – normally for a profit-target rather than a loss limit.
– Crawling stop. some traders like to move their stops along in the direct of the price movement – to lock in the profit or minimisedrawdown.
– Stop buy. an order to purchase in the event the price rises to a specific level. An order to purchase in the event a price falls to a specific level is usually called a ‘limit buy ’ order.
– Stop-loss. an order to buy or sell in the event of an adverse price movement to a specific level.Trailing stop 103. same as crawling stop.
Strike (price) 96 , or “exercise price”. The price at which an option can be exercised. A favourable price move beyond the exercise price puts the option ‘in the money’. At that point it has intrinsic value: before that point, when it has no intrinsic value, it is said to be ‘out of the money ’. See also At-the-money.
Tao 49 . The core notion of the ancient Chinese philosophy referred to as Taoism, which developed alongside Buddhism, meaning “The Way” – i.e. the way things are. The original test-book of Taoism, the Tao Te Ching by Lao-Tzu exists in hundreds of translation – all very different.
Light and dark, and up and down, and left and right, and good and bad are all polarities invented by the human mind. They are thought of as separate opposites whereas they are really complementary poles of unities. They may be helpful distinctions and then again.
In financial markets some of the opposites we see turn out to be circular. For example an extreme of bullishness is obviously the most bearish possible moment. From a top, prices can only fall. And in the currencies there is an extra twist in the fact that any currency parity is a two sided coin: e.g. a top for the dollar is a bottom for the D-mark.
The so-called yin and yang symbol of the Tao (the T’ai-chi T’u) has been modified to serve as a logo for Currency Bulletin. You will find it at the top of the back page of CB – and on the front of this book. In the logo, the interface between light and dark sides of the yin-yang symbol is made by a dollar sign – noting that the tail of each tadpole interfaces with the head of the other. Such is ‘the way’ of the dollar.
“The yang returns full circle to its beginning; the yin attains its maximum and gives place to the yang” – Kuei Ku Tzu, 4th century BC.
Taoist 1 1 4 , one who practices the Tao (see Tao). The Tao, incidentally, is central to Zen buddhism and to the practice of such Japanese crafts as Bushido swordplay, judo, archery and the tea ceremony. The essence of all these crafts lies in the abolition of the ‘I’: the consciousness of the participant is absorbed by the action.
Technical 60 Opposite of fundamental. “technical” data are all those
