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The world of foreign exchange (forex) can be daunting even to experienced investors. Fortunately, there are plenty of books on currency trading, ranging from basic introductions to the forex market to advanced strategies that involve fundamental analysis and technical analysis. Here are five of the best that have stood the test of time and the forex market‘s ups and downs.
Key Takeaways
- “Currency Trading for Dummies” by Paul Mladjenovic, Kathleen Brooks, and Brian Dolan
- “Day Trading and Swing Trading the Currency Market” by Kathy Lien
- “Japanese Candlestick Charting Techniques” by Steve Nison
- “How to Make a Living Trading Foreign Exchange” by Courtney D. Smith
- “Forex Trading: The Basics Explained in Simple Terms” by Jim Brown
“Currency Trading for Dummies” by Paul Mladjenovic, Kathleen Brooks, and Brian Dolan
“Currency Trading for Dummies” is one of the best books for beginners. It presents a clear, easy-to-read overview of the forex market and provides instructions on currency trading. In fact, it’s not a bad read even for more seasoned hands who need a quick refresher on the basics.
Originally published in 2011 by Paul Mladjenovic (CEO of Prosperity Network), Kathleen Brooks (director of research at Forex.com), and Brian Dolan (former chief currency strategist at Forex.com), the book is now in its fourth edition. It is regularly cited by the financial media.
“Day Trading and Swing Trading the Currency Market” by Kathy Lien
Kathy Lien is a world-renowned currency analyst, BKForex.com’s Managing Partner, and a frequent guest on Bloomberg, CNBC, and Reuters shows. Now in its third edition, her book employs a two-pronged approach that combines theory and actionable learning with balanced insight into the fundamental and technical forex trading strategies designed to generate consistent profits.
Lien walks readers step-by-step through Forex fundamentals such as the long- and short-term factors affecting currency pairs. She also covers the technical analysis trading strategies that professional forex traders use every day.
“Japanese Candlestick Charting Techniques” by Steve Nison
Steve Nison’s “Japanese Candlestick Charting Techniques” is credited with introducing this versatile technical-analysis tool, now widely used by forex traders, to the Western world. The book provides a lengthy and in-depth education on candlestick charting, which is also used for futures, speculation, hedging, equities, and anywhere else that technical analysis may be applied.
Nison’s work is ideal for traders seeking to up their trading strategies game. As they do, they might want to consult one of the sequels Nison has written: “The Candlestick Course,” “Beyond Candlesticks: New Japanese Charting Techniques Revealed,” and “Strategies for Profiting with Japanese Candlestick Charts.”
“How To Make a Living Trading Foreign Exchange” by Courtney Smith
Courtney Smith begins “How To Make a Living Trading Foreign Exchange” with a brief overview of how the forex market works, but most of this 2010 work is devoted to making money, offering six strategies to earn a steady income from trading.
Smith also provides important risk management techniques and material on the psychology of trading. It includes an explanation of Smith’s unique rejection rule, a strategy designed to double the profit generated from basic channel breakout systems.
“Forex Trading: The Basics Explained in Simple Terms” by Jim Brown
As the title indicates, this book is oriented toward beginners. The author is a self-taught forex trader who became intrigued by currency exchange and its potential profits at a private gathering for stock traders. The text stands out for Brown’s clear, concise language that, without being condescending, never takes the reader’s knowledge for granted. Some of the basics covered are:
- The definitions of forex and forex markets
- Strategies for entrances and exits
- Trading psychology
- The ins and outs of forex pairs
- Places to trade foreign currencies
- Tips for how to choose a broker
Brown also offers up his own trading strategy that a novice can use, or at least be inspired by and use as a guideline for creating a personalized one.
What Is Forex?
Forex or foreign exchange refers to the market where traders and investors trade currencies. The forex market is the largest and most liquid in the world. Trading mainly takes place electronically in the global marketplace and daily trading volume reached $7.5 trillion in April 2022. Traders try to profit from fluctuations in currency exchange rates.
How Large Is the Foreign Exchange Trading Industry?
The foreign exchange trading industry is the largest and most liquid in the world. It facilitates currency conversions and global trade. Trading volume in this market surpasses trading in the stock exchange. According to the Bank for International Settlements, daily trading hit $7.5 trillion in April 2022.
What Is the Most Commonly Traded Currency?
The U.S. dollar is the most commonly traded currency in the world. As of April 2022, it was on one side of 88% of all currency trades. The euro and the Japanese yen (JPY) follow the USD on the list of the world’s most traded currencies.
The Bottom Line
The forex market is not easy to navigate because of the many intricacies involved. The profits can be lucrative but the risks can also be very substantial. If you’re a novice trader, there are many books available to help you enter the market. Be sure to check out the books on our list above to fine-tune your forex strategies and maximize your chance of success.
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