If you are interested in books about forex themselves – scroll to the end of the article. But I advise you to carefully read this article in its entirety.
There are a lot of books about the forex market. It is perfectly clear the desire of traders who are starting their way on the foreign exchange market, learn as much as possible and study as much literature as possible.
I myself went this way and read almost all available literature until at some point I realized the absolute meaninglessness of this path. It’s just that there are no answers to the most important questions.
One of them, the most important thing, for the sake of which we are engaged in trading, is how to earn stably in the forex market. And it is clear why there are no answers. Trading in the foreign exchange market is reduced to the adoption at the moment of a trading decision with the probability of profit in the future. Losses you get immediately as soon as you open a deal – this is a broker’s commission. And what will be in the future is not known to anyone. There is not a single expert, authority or predictor in the world who could say what will happen to the price in a year, month, hour or even 5 minutes. Just get used to this idea and do not look for an answer to this question.
Therefore, no one can write about how to make these decisions correctly. You will not find this in any book. And if you suddenly find, beware, most likely this is either deception or extreme incompetence. Moreover, the author having his own experience of real Forex trading knows perfectly well how risky and unpredictable this very future is in the currency market and will not knowingly write about it. Therefore, all the books on forex are similar to each other. And you do not get new knowledge and skills from every new book. Moreover, it can only be worse for you. We are all used to trust literature and the names of authors. We treat them as experts. Maybe in other types of activities this is so, but not on Forex. Here is a very simple and understandable criterion – profitability. And you can get under the influence of someone else’s opinion or technique and it will take a lot of time and money until you realize that it is either already obsolete or does not work, or this style, the trading technique is not for you.
Therefore, I fully agree with Lance Beggs – the author of one of the trading techniques, of which I will write below, that the best book on forex is the one that you write yourself. The uniqueness of the foreign exchange market lies in the fact that it trades a huge number of people (and robots), each of which not only has its own methodology for analyzing and making trading decisions, but also its personal and psychological characteristics, as well as temporary and other external conditions . Its cockroaches in my head. Multiply this all by countless analytical tools, advisers, indicators and analysis methods. Add to this specific methods of inter-market and fundamental analysis, correlations, various sources of analytics and information, and just time zones. And now imagine that all this mess in the head of an individual trader is corrected every minute under the influence of incoming new information, economic data, the Bloomberg channel and external events. There is a joke about lawyers – “where are two lawyers, there are three opinions.” In the foreign exchange market, too, there are no two identical traders.
And your path is exactly the same, you have to become an individual with your own technique, which suits you according to psychological emotional and other external circumstances. For example, a very common question – which timeframe is better to trade. Stupid in its essence the question. And the answer is very simple – on what you can earn, on this and trade. And do not listen to anyone for the reasons outlined above, including cockroaches in the head of a particular authoritative trader or author of another book.
Therefore, the earlier you start writing your own book, the faster you will master the necessary skills and understand with yourself. Which style suits you, can you sit for a long time or in five minutes you start emotionally suffer, how quickly you make decisions, how often you are mistaken, whether you can sleep peacefully with an open position, how careful you are, and just how long you are ready to give it. Of course, I do not call you to write a collection of works.
Start with very simple things. This is a trade journal. Record each of your transactions indicating the parameters that interest you. Also it is not necessary to complicate. Information is needed that will be useful to you in the future analysis. The most important thing that you have to indicate there is your personal opinion and your evaluation of the transaction, your feelings and emotions. On the basis of what you decided to open a deal, to close, how to calculate the level of stop and take profit, what thoughts you had, what fears and fears and stuff. Be honest with yourself – you do not show it to anyone, but for you it is extremely important. Note how much the price has still passed after you closed down, which influenced your decisions, etc. After you start to keep a journal – you will understand what information is especially important for you to reflect in it. In fact, the journal can consist of three columns. The transaction number, transaction parameters (profit, loss, currency pair, etc.) and the third most important are your transaction comments and its analysis.
Further. I recommend printing charts with your trade transactions and writing directly to them, make notes, levels, models, situations. It is to print, not save as a file. If you really decided to become a millionaire, having earned money in the foreign exchange market, buy yourself a color printer, they are now quite affordable for money. When you start printing and analyzing charts, after a while you will have a system for classifying charts, taking into account the specifics of your trading style. Just get yourself a file folder or several. You can always find your schedule if necessary, look at your notes, remember this deal and compare it with the current situation on the market.
And if you still really want to read something, then I will recommend several books from personal experience. If you are just starting to learn the basics of forex – find any not too thick book from the series “forex for beginners” or “what is the forex”. The main criteria in my opinion – this should be a relatively fresh time-based book, and not the seventh re-release of the book written 40 years ago. And the second criterion – the author must have his own proven experience in this market. Therefore, choose not the book, but the author. I deliberately do not recommend any particular book for beginners only. Time flows very quickly and appear as new authors, and new books are published. The market is very volatile and fast. The fact that it worked 10 or 5 years ago, will no longer work now.
Therefore, I am critical of the so-called “classics” of market analysis. They all wrote a long time and usually on the basis of stock market analysis. Yes, very much in common, but why should you read about what happened in the distant past. The Internet now has almost everything about the forex market, including a lot on this site. And if you need to find something specific (description of indicator, method of analysis, technical technique) use google – it will be much faster and for free. Scroll through the book carefully, pay attention to the dates of the charts and the time periods that are given as examples in the book. It happens that the book is reprinted or slightly changed the name, and examples there from before the computer era, almost tic-tac-toe. The book about the forex market is not a classic artistic or philosophical literature. Information from past centuries will not help you, but will only steal your time.
From this first book, the most important thing for you is to learn the basic concepts, descriptions of the market as a whole, the relationship with other markets and decide for yourself – it is in principle interesting to you or not. Do you have a desire to continue learning and understand this topic deeper. If so, you can proceed to the following books.
Greg Michalowski – “Attacking Currency Trends. How to anticipate and trade big moves in the forex market”.
Greg Mihailowski has been FXDD’s main currency and trading analyst for 13 years. His career previously included six years at Citibank NY, where he was deputy vice president and trader in government bonds; four years as vice president and trader for derivatives at Citibank in London; five years in Credit Suisse First Boston NY as vice president and trader in the bank financing department; and two years with Tradition NA, where he helped lead the technology projects for a global interbank brokerage firm.
I think this is the most modern and one of the most interesting books about practical work in the forex market. Currently, Greg Michalowski is the director of training clients and foreign exchange analysts in the online project ForexLive.com. He constantly spreads the analyst on the foreign exchange market, prepared in accordance with his methods, set out in his books. I hope that he also trades in accordance with the same methods.
You can buy this book for example on Amazon – “Attacking Currency Trends“.
Lance Beggs. He did not write the book, but is the author of the trading methodology – YTC Price Action Trader.
It’s an intraday swing trading for the Forex, FX Futures and Emini Futures Markets. He’s a technical, discretionary trader and operate within a framework of higher timeframe support and resistance, aiming to identify and fade weakness within the market, in particular at areas of S/R or pullbacks within a trend. He works on 30M and 5M timeframes for higher timeframe context, 1 min for the trading timeframe, and a combination of 15 sec and 2-range for lower timeframe fine-tuning.Here’s what he writes about his approach to trading. “My intent is to provide quality trading education at www.YourTradingCoach.com with a focus on short timeframe discretionary price action analysis. Taking you way beyond the usual “setups” that most educators try to pass off as price action analysis, I aim to take you to a deeper level of understanding as you learn to examine price from several new perspectives. Analysis of the internal strength and weakness within price movement. Analysis of trader decisions and the way that they drive orderflow. Analysis of market traps and how they allow us to profit from the losses of the trapped traders. Actually – See here for a whole lot more of “What makes YTC different to other trading educators!“. On the Internet there is a course of Lance Begs’s lectures on the Price Action, if you use Google, you can get acquainted with its trading methodology.
Daniel Kahneman – “Thinking, Fast and Slow“.
The best-selling book of 2011 according to the New York Times. The author is a psychologist, a professor at Princeton University (USA), winner of the 2002 Nobel Prize in Economics for “applying psychological methods in economic science, especially when studying the formation of judgments and decision-making under uncertainty.” Daniel Kahneman conducted numerous scientific psychological experiments and identified two systems of human thinking: slow (reasonable) and fast (automatic). This book is about how these systems interact with each other, determining the behavior of a person. Trading in the forex market is, above all, analysis and decision making. This book will explain to you how your brain works and why you do not make the right decisions. It is quite difficult for the reader without an appropriate humanitarian education, but it is worthwhile to make an effort and study this book. It is to study, not read.
You can buy this book by this link – Daniel Kahneman – “Thinking, Fast and Slow”.
John Bollinger – “Bollinger on Bollinger Bands”.
This time, the classic work of the creator of one of the most popular technical tools in the financial markets.
John Bollinger is president and founder of the investment management company – BoUinger Capital Management. It provides financial management services based on technical analysis to private investors, corporations, trusts and pension funds. Bollinger publishes Capital Growth Letter and weekly comments and analysis on CNBC. He often writes and acts as an expert in various periodicals, including The Wall Street Journal, Investors Business Daily, Barrons, Technical Analysis of Stocks and Commodities, The New York Times, Los Angeles Times and USA Today. In his book, he talks about the history of creating his own trading tool – Bollinger Bands, which became one of the most famous and popular analytical tools included in all trading terminals. Bollinger Bands are a technical trading tool created by John Bollinger in the early 1980s. They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time. Bollinger Bands can be applied in all the financial markets including equities, forex, commodities, and futures. Bollinger Bands can be used in most time frames, from very short-term periods, to hourly, daily, weekly or monthly. Bollinger Bands answer a question: Are prices high or low on a relative basis? By definition price is high at the upper band and price is low at the lower band. That bit of information is incredibly valuable. It is even more powerful if combined with other tools such as other indicators for confirmation.
For more information on its methodology or purchase a book, please visit the author’s website at www.bollingerbands.com.
You can also buy a book on Amazon – “Bollinger on bollinger bands”.
Jonas S.R. Blickle – “Trading Price: the power of supply and demand” (2012).
His method is based on following the trend and the ratio of supply and demand in the foreign exchange market. Jonas is a follower of Sam Seyden’s theory of trading on supply and demand levels. Read more about Sam Seyden’s theory in the article “Forex Trading from Supply and Demand Zones”. The Jonas S.R. Blickle e-book is illustrated by a large number of examples based on real price charts.
You can download this e-book in PDF format absolutely free of charge at the link – Jonas S.R. Blickle – “Trading Price: the power of supply and demand”.
And do not forget to leave your comments regarding the books your read. Write how useful they were for your experience in your trading in financial markets. Or, at least, say “Thank’s” for the downloaded books.
Good luck and wish you a stable profits.