agree with Ed Ponsi the author of some good Forex dvd’s when he said “This book is a refreshingly honest work that contains no hype or promises of easy money. Instead, Marilyn covers all of the bases in a truthful manner and gets right to the core issues that determine success or failure in the Forex market. This manual will serve as a much needed eye opener for those who have been ‘blinded by the hype. I am happy with what I got out of it.
David Silverman
Book Review
by: By Laura Sether, books editor for W&A Publishing.
FOREX SIMPLIFIED: Behind the Scenes of Currency Trading
Forex markets are some of the most challenging trading markets in the world. The Wall Street Journal recently quoted the CEO of a major forex brokerage firm as saying, “If 15 percent of day traders are profitable, I’d be surprised.”
Yet forex is also the most popular market in the world. The foreign exchange market dwarfs every other financial market in the world, with an average daily turnover of more than $3 trillion (more than 10 times the size of the combined daily turnover on all the world’s equity markets). Retail traders are a small but growing fraction of this exploding market that has more than doubled in volume since 2001.
So why is this challenging market so popular? Possibly because forex is one of the most exciting markets to trade, with 24-hour worldwide availability, volatility all over the map and the potential to leverage enormous gains. However many traders start to trade forex without understanding what they are really getting into. For that reason alone, Marilyn McDonald’s new book, Forex Simplified: Behind the Scenes of Currency Trading, is well worth a read for beginning forex traders.
Clear and Concise Forex Simplified is a short and sweet, easy-to-understand, yet thorough introduction to one of the most complex areas of trading. McDonald tells it like it is, without any kind of sales pitch for a product, broker or particular trading strategy. She starts by explaining her reasons for trading forex: a diversified portfolio, 24-hour market availability (especially important for the trader with a full-time job), along with high levels of flexibility, volatility and liquidity. She systematically outlines the major currency pairs traded at the present, along with information on how they have historically moved in relation to each other and in relation to critical commodities such as gold and oil.
Fundamental and technical analysis and their relation to forex are covered in a solid manner. The technical analysis section includes introductory details such as charts, trendlines, support and resistance, indicators, as well as more advanced topics including retracements and Fibonacci numbers. The author provides practical advice for applying fundamental analysis to forex trading, sharing the types of data to seek for each currency, such as specific government reports, macroeconomic indicators and commodity prices.
Any trading book worth its salt should speak to the value of planning and mentally preparing to trade, and this one is no exception. McDonald discusses the importance of setting goals and following one’s progress, as well as keeping emotions out of decision making. She guides traders through the planning process, with a blueprint for creating a forex trading strategy, along with buying and selling tactics and risk management tips.
Trader BEWARE Retail forex traders are especially vulnerable to scams and other shenanigans, due to the highly technical nature of the industry, the over-the-counter market and its relatively loose regulations. McDonald devotes nearly an entire chapter to outlining the types of fraudulent schemes of which traders should be aware, providing the basics with a refreshing lack of bull. There are also several worksheets throughout the book that are easily duplicated to help organize critical information.
The book concludes with a collection of appendices, which define common market indicators, discuss pattern identification and outline common fundamental indicators, such as government and industrial reports.
McDonald has written a short book, but it contains all the introductory information a trader would need for a first foray into the forex markets. This is probably not the book for more advanced forex traders, unless one wanted to brush up on the basics. But for beginners, this is one of the best places to start his or her education on forex trading.
I bought this book on a whim because I was frustrated. Incredibly, I couldn’t find any information on how to figure out the swap rate. I have 3 big forex books on my shelf and they wax eleoquent about technical analysis, the Bretton Woods agreement, how to make a fortune, and etc. – but do not explain something as fundamental as figuring the swap rate – or even why there is such a thing! I tried Googling for it, and got tired of trying to sort through the deluge of irrelevant and mostly commercial results. So when I read “swap rate” in the book description here at Amazon.com – I bought it immediately with expedited shipping!
When I recieved the book, I quickly found the answer. The author made it easy to understand. Then I got curious about the rest of the book, and sat down and read it in one day. I really like the author’s no B.S. style of writing. She covers the really important stuff in a concise, easy to understand way. She includes personal anecdotes from her own trading experience which made it fun to read. She does not try to tell you how you can beat the market every time and get rich overnight by using her secret trading system – (like so many other books and web sites). I find it refreshing to read a book like this that takes little of my precious time, yet gives me the essential tools I need to help me find my own way to success.
James Booth
9/1/2008
By Reviewer Christine Birkner
A market expert doesn’t often illustrate the possible pitfalls of forex trading with analogies about shoe shopping as Marilyn McDonald does in Forex Simplified,” but that is part of this book’s charm. It is both entertaining and educational, with a conversational tone and genuine enthusiasm for trading not always found in similar tomes.
The book is geared towards beginning forex traders, offering basic definitions and outlining common traps for novice traders. She advises avoiding companies that promise little or no risk and firms that pressure you into trading immediately. She explains the importance of researching a company’s track record before trading, and the book emphasizes throughout that trading involves risk and requires discipline.
The book includes a chapter on the benefits and components of both fundamental and technical analysis as they apply to forex. She explains macroeconomic indicators, asset markets and politics as well as the finer points of technical analysis including trends and types of indicators.
Another chapter offers advice on economic news and how it affects the market. McDonald says that beginning traders especially shouldn’t trade the news, because, just like in the movie Fight Club, there are two rules in Trade Club: 1) The market doesn’t make any sense, and 2) Even when it seems like it is making sense, the market doesn’t make any sense.
There is a section on automated trading and how to write and test automated strategies, as well as a chapter on the role that emotions can play in trading. McDonald encourages traders to stay focused and set goals and stick to them. She says you will get emotional when you trade, but don’t let your emotions get in the way of making rational decisions. The book also offers steps for developing a trading plan that includes strategies for buying, selling and holding, and advice on the best times to trade. McDonald notes that while a lot of forex traders say the best time to trade is at 2 a.m., the best time to trade is really any time there’s more than one market open (i.e., when there’s higher volume and higher liquidity). The book is breezy in tone, but by no means short on valuable information. Its appendices offer further research and graphs on common indicators, chart patterns and a guide to reading candlestick patterns, as well as more information on specific economic reports and a glossary of common forex terms. “Forex Simplified” is a great resource for the beginning forex trader and an interesting read.