I was given the opportunity a little while back to pick up a copy of Currency Trading for Dummies, written by Brian Dolan. I’m always on the look out for good books to help introduce trading, either generally or in terms of specific concepts. I thought this book might make for a good resource I could recommend when asked about “a good forex trading book”. With that in mind, here’s my review.
Overall, I’m mixed on Currency Trading for Dummies. The book could have been structured much better to my mind and there are parts where I don’t care for the way the author has talked about things. There are, though, also some pretty good, useful parts.
The discussion of forex trading mechanics could perhaps have been done better. I think the author too closely associates it with the likes of stock trading in terms of buying and selling. It makes the general point, but could leave some readers with the wrong impression of how things work in retail forex in that it may imply to readers there’s actual currency ownership involved, which isn’t the case.
I also found the section on order types rather clunky. It takes up much more space than is necessary to talks about stop and limit orders, even accounting for the different ways they are referred to in some cases.
The author takes a very thorough look at interest rates, monetary policy, and currency policy in his discussion of drivers of exchange rates. Dolan goes into sources and types of information and the major economic and other data elements that go into forex market analysis. This includes a listing of the key reports for each of the major economies, though I would suggest that these things tend to change in importance over time.
The section of the book I think a lot of readers will find most valuable is the one which goes through the major currency pairs and talks about their individual characteristics. This isn’t something I’ve seen done in such detail in other books. This includes both technical and fundamental considerations for those pairs.
There’s also a good section on risk. It does a nice job of explaining leverage, margin and position-sizing, as well as addressing other elements of position and general trading risk.
The latter part of the book gets into subjects having to do with trading strategy and touches on subjects which aren’t strictly forex related, but will be of value to many readers.
My inclination is to compare this book to Essentials of Forex Trading. I think the latter book is a tighter look at the basics of foreign exchange trading. Currency Trading for Dummies is a more expansive text, going beyond the basics to take a more comprehensive view. Each has its strengths and weaknesses. I think maybe the two together provide a good comprehensive job of explaining forex trading to someone new to the market.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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- Book Review: Currency Trading in the Forex and Futures Markets