Foreign currency trading or simply forex has become one of the most talked-about frontiers for people to make good money. Unfortunately, forex is also dogged with the plethora of plagues that devil many hot commodities that have given people a bit of wealth. Many people are masquerading as forex gurus out there who quite simply do not have as much of a grasp on the subject as they purport to have. One of the best things you can do to prevent yourself from falling prey to such characters is learning to understand the forex market for yourself. Here are 5 great books that can be understood by absolute beginners in forex that can help you.
Currency Trading for Dummies, by Brian Dolan
The “For Dummies” series of books is a great starting point for beginners. The books are always well researched and give a complete background that covers all the fundamentals. I wouldn’t quite recommend using the book as a textbook but more as a dictionary as you would simply find yourself overwhelmed with the information especially if you are not yet practising. Rather use it the same way as you would a dictionary, as a reference text for acquainting yourself with specific concepts as and when you need to.
Day Trading and Swing Trading the Currency Market, by Kathy Lien
For those who aren’t in the know day trading refers to the act of sitting at your computer hours on end and trying to spot trade opportunities. Swing trading is much the same thing and is based on early spotting of major movements, commonly referred to as signals, in their infancy and taking advantage of them. This book will give you a good guide to understanding these two types of trading and how to make money in them. Again the book is best used by those already practising.
Currency Forecasting: A Guide to Fundamental and Technical Models of Exchange Rate Determination, by Michael R. Rosenberg
In forex, fundamental analysis refers to looking at the real-world factors behind the prices of currency such as the balance of trade, purchasing power parity, interest rates, fiscal policy and monetary policy to divine likely exchange rate direction. Technical analysis refers to looking at the mathematical indicators which are dipped in behavioural finance theory and practice to divine the direction of currency movement. Didn’t like business or mathematics in school? Don’t worry this is a real-world, applied and much easier to assimilate.
Japanese Candlestick Charting Techniques, by Steve Nison
Candlestick charts are visual-based charts that give us a lot of information on the meaning of currency price movements. They capture all market activity and not just the latest price. They are very useful for technical analysis and as a backup to fundamental analysis. Now if you have a fear of mathematics, candlesticks are not as daunting as they sound and this book makes them easy to understand.
How to Make a Living Trading Foreign Exchange, by Courtney D. Smith
Forex trading is, of course, more than just understanding the principals behind it, it’s about putting them to work and you need a system to do so. This book offers six different systems you can employ in your journey as a forex trader. While mastering one system will make sense understanding all the systems will be your best bet. The book also contains some great teachings on how to understand when to enter and exit positions and most importantly of all risk management which really deserves its own book.
Forex Trading: The Basics Explained in Simple Terms, by Jim Brown
This book is great for you if you’ve been considering forex, have skipped the other 5 books in the list and just don’t know where to begin. There’s a lot of information out on the internet and from the aforementioned gurus, and it is very easy to get lost or misled. Jim also offers his system and offers a lot of experienced insights in a way that beginners can grasp and appreciate.
These six books will certainly put any forex beginner on the right path to understanding the game. Forex is a game of skill and these books are all about teaching, practising and fortifying skill.