James Sharpe has been involved in the financial markets since the late 1970s. He has a degree in economics and a Masters in finance. His early career was geared towards financial analysis and wholesale lending but from 1980 his role has been treasury based. Unlike many who write financial books he is still writing out deal tickets and advising clients. James' range of experience is extraordinary and is unlikely to be repeated. He has worked in the US and the Middle East where he was responsible for the region and interbank/central bank relationships. He has combined positions of trader and foreign exchange sales but it is in the latter area that Jim has focused and where he has run a number of desks.He has worked for a range of institutions around the world, including in the US, Japan, Scandinavia and the UK. He has dealt with an array of counterparties including banks, corporates, central banks, funds and multinationals. In recent years he has completed 'the hand' and deals with high net worth individuals and corporate customers at a leading private bank.

If foreign exchange were taught as an A level subject this book would be a shoo-in as the title of choice used by teachers everywhere to explain the subject. Equally, if you are about to start foreign exchange trading for the first time, or even if you have some experience already, there will undoubtedly be things that you can learn from this book.

• Preface 1. Exchange Rate Systems: From Fixed to Floating, and Chaos - Fixed exchange rates - Floating exchange rates - Conclusion - Foreign exchange and the UK - 1960 to the 2000s 2. Central Banks and Foreign Exchange Intervention - What is foreign exchange intervention? - Intervention and monetary policy - The efficacy of intervention - Conclusion 3. The Basics of Foreign Exchange - A definition of foreign exchange - The foreign exchange market 4. The Theory of Foreign Exchange: How Exchange Rates are Determined - Exchange rates and supply and demand - The effect of exchange rates on an economy - Interest rate parity (IRP) - Purchasing power parity (PPP) - Currencies overshooting their expected levels - Rudiger Dornbusch 5. Foreign Exchange in Practice - Price quotations - How dealers cover their exposure - Orders - How to calculate trading profits and losses - Recording a trade - Rules when making foreign exchange transactions 6. Types of Foreign Exchange Transactions 1. Spot 2. Forward outright 3. Broken date contracts 4. Non-deliverable forward (NDF) 5. Swap 6. Forward/forwards 7. Algorithmic trading 8. Options 7. Predicting the Future: Technical Analysis and FX Forecasting - Technical analysis and the foreign exchange markets - Forecasting the foreign exchange markets 8. Psychology and Foreign Exchange - Group behaviour - Overconfidence - Overreaction - Attitude to risk - Attitude to rules 9. Influences on Foreign Exchange Markets - Economic data - Impact of central bank intervention - Breach of technical levels - Seasonal price analysis - Dramatic events - Market intelligence 10. A Blueprint for Trading - Before, during and after the trade - Managing losses - Investment vs. Speculation 11. Liquidity - Assessing liquidity - When liquidity disappears - The carry trade and Torschlusspanik (door shut panic) 12. Hedging Currency Exposure - Overview of hedging - Sources of exposure - The hedging process - Impact of hedging - Currency overlay - Conclusion 13. The Management of Dealing - Risks - Dealing limits at banks - Monitoring forward foreign exchange exposure 14. Dealing with Banks and Financial Institutions - The provider should be financially strong - The provider should be operationally strong - Check the bank can supply the product and service you require - Dealing mandate - Foreign exchange limits - Understanding what is on offer - Agreements - Banks dealing with customers Afterword Appendices Appendix 1. Foreign exchange solutions in brief Appendix 2. A simple guide to technical analysis Glossary Bibliography Index

James Sharpe has been involved in the financial markets since the late 1970s. He has a degree in economics and a Masters in finance. His early career was geared towards financial analysis and wholesale lending but from 1980 his role has been treasury based. Unlike many who write financial books he is still writing out deal tickets and advising clients. James' range of experience is extraordinary and is unlikely to be repeated. He has worked in the US and the Middle East where he was responsible for the region and interbank/central bank relationships. He has combined positions of trader and foreign exchange sales but it is in the latter area that Jim has focused and where he has run a number of desks.He has worked for a range of institutions around the world, including in the US, Japan, Scandinavia and the UK. He has dealt with an array of counterparties including banks, corporates, central banks, funds and multinationals. In recent years he has completed 'the hand' and deals with high net worth individuals and corporate customers at a leading private bank.

If foreign exchange were taught as an A level subject this book would be a shoo-in as the title of choice used by teachers everywhere to explain the subject. Equally, if you are about to start foreign exchange trading for the first time, or even if you have some experience already, there will undoubtedly be things that you can learn from this book.

• Preface 1. Exchange Rate Systems: From Fixed to Floating, and Chaos - Fixed exchange rates - Floating exchange rates - Conclusion - Foreign exchange and the UK - 1960 to the 2000s 2. Central Banks and Foreign Exchange Intervention - What is foreign exchange intervention? - Intervention and monetary policy - The efficacy of intervention - Conclusion 3. The Basics of Foreign Exchange - A definition of foreign exchange - The foreign exchange market 4. The Theory of Foreign Exchange: How Exchange Rates are Determined - Exchange rates and supply and demand - The effect of exchange rates on an economy - Interest rate parity (IRP) - Purchasing power parity (PPP) - Currencies overshooting their expected levels - Rudiger Dornbusch 5. Foreign Exchange in Practice - Price quotations - How dealers cover their exposure - Orders - How to calculate trading profits and losses - Recording a trade - Rules when making foreign exchange transactions 6. Types of Foreign Exchange Transactions 1. Spot 2. Forward outright 3. Broken date contracts 4. Non-deliverable forward (NDF) 5. Swap 6. Forward/forwards 7. Algorithmic trading 8. Options 7. Predicting the Future: Technical Analysis and FX Forecasting - Technical analysis and the foreign exchange markets - Forecasting the foreign exchange markets 8. Psychology and Foreign Exchange - Group behaviour - Overconfidence - Overreaction - Attitude to risk - Attitude to rules 9. Influences on Foreign Exchange Markets - Economic data - Impact of central bank intervention - Breach of technical levels - Seasonal price analysis - Dramatic events - Market intelligence 10. A Blueprint for Trading - Before, during and after the trade - Managing losses - Investment vs. Speculation 11. Liquidity - Assessing liquidity - When liquidity disappears - The carry trade and Torschlusspanik (door shut panic) 12. Hedging Currency Exposure - Overview of hedging - Sources of exposure - The hedging process - Impact of hedging - Currency overlay - Conclusion 13. The Management of Dealing - Risks - Dealing limits at banks - Monitoring forward foreign exchange exposure 14. Dealing with Banks and Financial Institutions - The provider should be financially strong - The provider should be operationally strong - Check the bank can supply the product and service you require - Dealing mandate - Foreign exchange limits - Understanding what is on offer - Agreements - Banks dealing with customers Afterword Appendices Appendix 1. Foreign exchange solutions in brief Appendix 2. A simple guide to technical analysis Glossary Bibliography Index