Kathy Lien is a famous Forex author, analyst and blogger. Although she is better known for her 2005 title Day Trading the Currency Market, her newer work definitely deserves a review — The Little Book of Currency Trading: How to Make Big Profits in the World of Forex. It was released in late December 2010 and soon became quite a popular book on FX trading.
What this book is about
The Little Book of Currency Trading is a part of "Little Book, Big Profits" series by John Wiley & Sons. If you are acquainted with some other "little books", you will quickly recognize the style — short reading, many small chapters, a little bit about everything told, shallow subject coverage, and little fulfillment in the end. It will not teach you "how to make big profits" but it will definitely get you started on the way that may lead to big profits.
By reading this book you will learn the following things:
- The currency market is a world full of potential opportunities, where money can be made even during crises.
- Currency trading is closer than you might be thinking as exports/imports and travel currency exchange form part of almost everyone's life nowadays.
- How to get started in online retail Forex trading.
- What drives currency rates.
- There are two main approaches to the Forex market: investing and day trading.
- How to trade using Double Bollinger Bands technique.
- How to trade using news headlines.
- What high probability
set-ups are and how to use them. - Top 10 mistakes that newbie traders often commit.
- There are many scams in Forex and how to avoid them.
- The traits of successful traders.
- How a trading journal can help you become a better trader.
Disadvantages
While the book is definitely not a bad one, it has one major disadvantage and some minor ones:
- The biggest disadvantage is that the book is very shallow. If you are a rather experienced trader, you shouldn't expect to learn a lot of new things from a book intended for complete beginners. Moreover, even a new trader might find it to be a bit less instructive than it should be. Unfortunately, it also fails to direct the reader to sources of further education.
- Promotion of partial profit taking (scaling out). It is proven to decrease trade expectancy. It looks like in Kathy's opinion, psychological benefits outweigh that drawback.
- Kathy does not reveal the exact parameters to be used with Double Bollinger Bands. She does not even discuss how different periods affect it.
- The author of the book is a fan of flat numbers in her trading. Rather than basing the SL/TP levels on volatility, spreads, ATR, etc., she just gets some number out of her head and tells us that it is a good value. Doesn't look very professional, honestly.
- Some minor flaws, like laying out a rather complex calculation of a pip value for currency pairs quoted in dollar. It is always $10 per standard lot — there is no need to calculate it!
Advantages
But do not let such a number of disadvantages mentioned here fool you! The Little Book of Currency Trading is not the worst starting book. If you are new to Forex, you will definitely enjoy its advantages:
- You will get acquainted with almost all the important concepts and terms related to Forex trading.
- Kathy pays a lot of attention to really important things, like trade log-keeping, cutting losses short, setting realistic goals, fitting your trading style to your personality, etc.
- It shares at least one trading strategy that you can start using almost immediately.
- Kathy's book does a great job explaining the real meaning behind the foreign exchange market — how various companies use it to hedge risks and how currency exchange rates are influencing our everyday life.
- Low price and few pages. It will not waste your time and will cost you about $10-$15 depending on which version and where you buy.
Conclusion
If you don't know much about Forex and have not read any books about currency trading yet, then The Little Book of Currency Trading by Kathy Lien may be a good
If you have any questions, comments, or opinion about The Little Book of Currency Trading by Kathy Lien, feel free to share them on our Forex forum.
