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The Four Cardinal Principles of Trading by Bruce Babcock

Archive Page

SIZE 9.1 MB

218 pages

Publisher:McGraw-Hill; 1 edition (March 1, 1996)

Language:English

ISBN-10:0786310103

ISBN-13:978-0786310104

Successful traders utilize a wide variety of approaches to attack the markets. Irrespective of the approach, virtually every top trader abides by four key principles: trade with the trend, cut losses short, let profits run, and manage risk. In this eagerly anticipated book, trading expert Bruce Babcock fully explains each of these principles and shows readers how to implement the four principles in their own trading. Consisting of a series of interviews with top traders, Babcock demonstrates that while there are many ways to trade, only those traders who rigorously apply the four principles will achieve lasting success. Featured traders include Jack Schwager, Larry Williams, and Tom Aspray. All traders, from rank beginners to seasoned veterans, will enjoy and benefit from this important new book.

What is forex?

Quite simply, it’s the global market that allows one to trade two currencies against each other.

If you think one currency will be stronger versus the other, and you end up correct, then you can make a profit.

If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.

Foreign Exchange
You go up to the counter and notice a screen displaying different exchange rates for different currencies.

An exchange rate is the relative price of two currencies from two different countries.

You find “Japanese yen” and think to yourself, “WOW! My one dollar is worth 100 yen?! And I have ten dollars! I’m going to be rich!!!”
When you do this, you’ve essentially participated in the forex market!

You’ve exchanged one currency for another.

Or in forex trading terms, assuming you’re an American visiting Japan, you’ve sold dollars and bought yen.

Currency Exchange

Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over (Tokyo is expensive!) and notice the exchange rates have changed.

It’s these changes in the exchange rates that allow you to make money in the foreign exchange market.

Salepage : The Four Cardinal Principles of Trading by Bruce Babcock

About Author

Bruce Babcock

Bruce Babcock is Professor in the School of Public Policy at the University of California, Riverside. Professor Babcock’s research expertise includes understanding how price and production risk impacts farm production decisions and the impacts of food and agricultural policies on growers, consumers, and taxpayers. Representative recent research projects include understanding how the Renewable Fuel Standard has impacted food prices and land use decisions; how extreme heat impacts crop yields; how prospect theory offers explanations for crop insurance decisions; and consumer demand for high ethanol fuels such as E85. Professor Babcock is a Fellow of the Agricultural and Applied Economics Association and has won numerous awards for his applied policy research. He has published more than 90 journal articles. Before joining the School of Public Policy, he was a Professor of Economics at Iowa State University where he directed the Center for Agricultural and Rural Development from 1998 to 2011 and the Biobased Industry Center from 2012 to 2017. Professor Babcock received his Ph.D. in Agricultural and Resource Economics from UC Berkeley and Masters and Bachelors degrees from UC Davis.