Currency Trading For Dummies is a book by Mark Galant and Brian Dolan that aims to provide a comprehensive introduction to currency trading (also known as forex or foreign exchange trading) for beginners.
What You Get
The book is 360 pages. It is published by John Wiley & Sons in the ‘For Dummies’ series of reference books whose stated aim is to put complex subjects into plain English for beginners. It is clearly written and should help people who want to get started with forex trading but do not have any background knowledge.
As this is a physical book, there are no video tutorials. You are on your own here. This is reflected in the low price.
Level And Coverage
Currency Trading For Dummies is clearly aimed at beginners. With some notable exceptions (see below) this gives a well structured introduction to forex trading.
Special terms and concepts are well introduced and the language is appropriate for people new to currency trading, although some understanding of the financial markets generally is assumed. Some terms are not explained.
The explanations of the workings of the market and the section on currency pairs are excellent. Fundamental analysis is well covered too. The book is weaker on technical analysis and actually setting up trades.
Its strong point is bringing you to an understanding of how the forex market actually works, which many of the more practical, system-based trading books hardly cover at all.
The established forex trader will not find much that is new on the practical level here, although the sections on mindset and attitude are covered well and could be helpful for anybody.
Critical Review
There is quite a lot in this book that is open to criticism. For example, they suggest that you should develop your own trading system and trading plan, which is a worthy goal. However, they do not tell you how to backtest a system, which is a very important step. Testing is vital before you go live with a system.
While you can and should do real time testing on paper or in a demo account, backtesting is much quicker and can rule some possible systems out of court very fast. You cannot realistically test 10 or 20 possible variations of a system live; but you can easily backtest them.
Also, there is not much coverage of certain steps which are essential to the beginner, such as choosing a broker. We have seen it suggested that this is a deliberate omission because the authors are allegedly associated with a market maker which prevents them being objective.
Certainly, if true, it would be a reason for not pointing up any of the possible disadvantages of going with a market maker, which in our view, beginners should be warned about.
They do not give an example of a profitable system that you can use yourself. This is explained on the basis that you should develop your own. While this is undoubtedly the ideal, most beginners will be looking to buy into something that could work for them as a starting point.
Cynics will wonder if the authors really know any profitable trading systems. The book is so much stronger on market information than on practical trading, that it is no surprise to hear that it was authored by people who are on the brokering rather than the trading side of the business.
Summary
This is a useful introduction for beginners interested in forex trading who like to read rather than following video tutorials. It does not set out a trading system to follow, so you will have to look elsewhere for that. It leaves certain things to be desired but on the other hand, it’s not expensive.
Let’s face it, you wouldn’t expect to get the perfect trading system for a few dollars. Overall, good value for the price, but it does not contain all that you need to know.
Currency Trading For Dummies is available from Amazon and other online and high street stores.
