How Currency Markets Work: An Insider's Guide to a System Driven by Geopolitics and Trader Psychology - Hardcover

by Andrew Nissenbaum (Author), Patrick Cullen (Author)

An insider's original take on how global currency markets operate in the real world

In How Currency Markets Work, a veteran currency trader and a geopolitical risk analyst deliver a comprehensive and street-smart guide for understanding currency markets. The authors combine insights from the worlds of trading, economics, and geopolitics to create an eye-opening and original new take on how currency prices are determined.

This book bridges the gap between how currency markets are taught and how they actually trade, using character-driven narratives built on real-world market events and data to explain currency trading successes and failures in intuitive and practical ways.

Inside the book:

• Actionable tools and tested strategies for currency trading you can apply immediately to improve your returns and your portfolio's risk profile
• Clear real-world examples of how geopolitical events, wars, and political shifts impact currency values
• Profiles of the speculators, corporate hedgers, and central banks whose interplay shapes exchange rates
• Advanced strategies for options, volatility trading, and exploiting mathematical relationships in currency markets

A deeply insightful and accessible exploration of a much-discussed topic, How Currency Markets Work is a powerful new resource for academics, researchers, hedge fund managers, bank traders, policymakers, and practicing and aspiring forex traders.

Front Jacket

In a world where economists look at currency from one point of view, and traders from another, How Currency Markets Work takes the contemporary approach to understanding the mechanics, influences, and significance of currency markets from both perspectives. Combining insights from the worlds of trading, economics, and geopolitics to provide a multidisciplinary approach, this reliable resource covers everything from the basics of how currency prices are determined to the complex interplay between geopolitics, economic policies, and market dynamics.

Chapters include illustrative case studies, from Black Wednesday to Brexit, to help give readers actionable tools for navigating market volatility and managing risk. Readers will also find key insights on:

• How central banks, speculators, hedgers, and corporations drive currency markets
• Use of leverage and the role of currency options and risk reversals in speculative trading
• The impact of international events, wars, and political shifts on currency values
• How emerging events and geopolitical shocks shape the future of forex markets
• Trading psychology and the behavioral patterns that create market edge

How Currency Markets Work serves as an accessible resource on the subject for aspiring forex traders, academics, financial professionals, and policymakers, with the depth and complexity needed to provide a valuable perspective for advanced readers.

Back Jacket

Praise for How Currency Markets Work

"This book gives a budding trader a true sense of how challenging trading currencies can be with detailed descriptions of trading strategies. It is written by two leading figures in the trading/hedge fund world. It would have been a terrific read for my international finance students at Wharton. Not surprising since Andy Nissenbaum was one of my star students."
-- Richard C. Marston, Professor of Finance, Emeritus, Wharton School, University of Pennsylvania

"From his time as a young trading prodigy a quarter century ago, Andy Nissenbaum has been thinking deeply about currency markets. In his new book, he draws on deep institutional knowledge of market trading conventions which often remain hidden from standard textbooks. Andy has worked alongside some of the greats, and it is wonderful that he is able to share his accumulated wisdom with new readers."
--James Sweeney, Head of Economics for Global Fixed Income, BlackRock

"Soros Fund Management took the extraordinary step of hiring Andrew Nissenbaum at the age of 22 because he possesses a knowledge of markets and trading flair unparalleled at his age to my knowledge."
--Stanley F. Druckenmiller, Founder, Duquesne Capital Management

"Pattern recognition is the basis on which all important decisions are made in life and markets. In markets, the study of patterns is the study of money flow. And money flow, in the institutional arena, is order flow, plain and simple. Andy and Patrick articulate perfectly the importance of 'order flow intelligence' and that market reactions to events follow patterns. Anyone who seeks to trade and profit from market-moving news and events must study not the news itself but the repeating patterns of the reactions."
--Carter Braxton Worth, CNBC Chart Master, CEO and Founder of Worth Charting

"This fast-paced, beautifully written book takes you on an insider-guided tour of the vast global currency market, presented as a 'battlefield' in which traders win bets that gain them millions or lose bets and their jobs. Investors, would-be investors, and anyone who follows economic events and trends will enjoy this book."
--David Denslow, Professor of Economics, Emeritus, University of Florida

Author Biography

ANDREW NISSENBAUM is the Founder and CEO of Macrofund and a seasoned interbank currency trader. He served as Head of Macro Research at Soros Fund Management's Quantum Fund and ran the top-ranked Hypothesis Macro Fund LTD at the age of 22.

PATRICK CULLEN is a -Geopolitical Risk Analyst with a PhD from the London School of Economics and Political Science. His work in the intelligence sector includes strategic foresight and horizon scanning. He is a though leader in early warning and detection of hybrid threats.