FX Trading: A Guide to Trading Foreign Exchange is not one of the most popular books about currency trading and, honestly, one should wonder what is the reason. The book contains all the basic information and terminology a beginner must know to get started. Furthermore, the authors included topics that often are not covered in other books, for example, the history and evolution of currency trading, its roots and a good study of fundamental analysis. This is an ideal book if you are approaching Forex trading for the first time and you are looking for the fundamentals.
Title: FX Trading: A Guide to Trading Foreign Exchange
Published: April 2012
Authors: Alex Douglas, Larry Lovrencic, Peter Pontikis
Suitable for:
- Absolute beginner traders
Main topics:
- Currency trading history
- Forex terminology
- Forex fundamentals
- Fundamental analysis
- Technical analysis
- Forex tools
Content
FX Trading is a book tailored for beginners and people with low or absolutely no knowledge of currency trading, it covers everything you need to know to get started in the world of Forex.
The book starts with an introduction about Forex: what it is, why it happens, and the evolution over the years. The included historical information and the extended explanation of players in the Forex market are very interesting. These details are usually omitted in many Forex books but it is actually very important for a beginner to know the reasons of currency trading, why and how it developed, and who is causing the rate movements.
A significant part of FX Trading is then dedicated to technical analysis and fundamental analysis. Here the authors show to the reader how the price moves, explaining the main concepts and technical indicators: charts, candlesticks, Open/High/Low/Close prices, support and resistance, trend lines, moving average, Bollinger bands, popular oscillators, and some more. The chapters about fundamental analysis instead teach the root causes of price movements, how the economic situation of the countries influences the exchange rate of two currencies, what are the impacts of political, natural and other important events and how traders react to the release of economic reports. It is crucial for a beginner trader to understand these notions because they are the main drivers of price changes.
Going towards the end, the authors give an overview of the types of trading strategies: trend following strategies, range trading strategies, breakout strategies, and mean reversion strategies. They continue explaining how the trading scene has changed over the years as a consequence of the evolution of technology and the expansion of algorithmic trading. The authors also dedicate a chapter to money management so that a beginner trader could understand how important it is to manage the risk involved in trading. The book closes with some quick recommendation about wealth management.
The only critique is that being published in 2012 some of the statistics provided may be out of date, also trading psychology is not mentioned at all, but considering this is an "introductory" book these are not a big problem.
Writing style
Since the purpose of the book is being an introduction to currency trading, the authors keep a simple and plain language. They want the reader to easily understand the explained concepts and it looks like they succeed in it. In fact, the reader does not need any previous knowledge of the subject. The pace and interest are well sustained considering some of the topics are quite descriptive (Forex history and market participants).
Value
Anyone aiming to become a Forex trader will surely benefit from this reading. The content included and the way it is presented allow a total beginner to understand the main concepts of currency trading. Do not expect this book to be a complete guide to Forex, nor to be able to develop complex trading systems when you finish the book. However, this is an excellent introduction so that you can understand the terminology, charts, and reasons of certain price movements.
Conclusion
FX Trading is a book well suited for absolute beginners, the authors introduce you to the world of currency trading with a very plain language, giving you all the information you need to know to move the first steps in the Forex jungle. The volume covers: Forex introduction, history, terminology, big players, fundamental analysis, technical analysis, Forex tools, money management, and recent evolution. If you are approaching foreign exchange for the first time you probably want to read this book.
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