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This currency trading book provides readers with real, practical information on how to trade the foreign exchange market effectively. It begins by covering introductory information on the forex market, including basic trading mechanics and the benefits of forex trading, and then goes on to describe specific currency trading methods and skills in step-by-step detail. This includes highly practical information on technical and fundamental analysis, risk and money management, and powerful forex trading strategies. These strategies have proven extremely effective in helping traders play the forex game to win.
JAMES CHEN, CTA, CMT (Montville, NJ) is Chief Technical Strategist at FX Solutions, a leading foreign exchange broker. An expert on forex trading and technical analysis, he is also a registered Commodity Trading Advisor (CTA) and a Chartered Market Technician (CMT). Mr. Chen writes daily currency analysis, leads forex trading seminars, and has authored numerous articles on currency trading strategy and technical analysis for major financial publications. These include Forbes.com, Futures Magazine, Technical Analysis of Stocks and Commodities Magazine, and Stocks, Futures and Options (SFO) Magazine. more info
{ 16 comments… read them below or add one }
Very Helpful Guide to Trading Forex
Rating:5 out of 5 stars
I’ve been struggling with my Forex trading for more than a year now. I spent 100′s of dollars on a bunch of Forex strategies online, but they never helped me become profitable. This book really helped me understand how I should go about trading this market. IMHO, the information in this book is worth so much more than any off-the-shelf, plug-and-play strategy that I ever bought. This book gives you an intelligent way to formulate your own strategies and really helps you understand how the Forex market works. I keep 5 reference books at my trading station for reference at all times. Besides Marcel Link’s book on high-probability trading, the John Murphy book on technical analysis, Alexander Elder’s Trading for a Living, and Van Tharp’s book on trading systems, this book is the one I go to for all Forex-specific information.
A good beginner book – YOU WILL NEED MORE HELP
Rating:3 out of 5 stars
I read through this book at the request of a friend who is beginning to trade Forex. Since I have been doing it for a long time, I was glad to help.
This book can easily be reviewed in a few lines.
If you are completely new to Forex and basic trading, this will give you a VERY general, basic and at times vague whole picture of trading in the Forex world. After you have read this book, you will be left scratching your head saying – Well, that was dandy…but what do I do now? So, yes, you will need to spend more money on further resources to expand upon what is mention here. The deepest, most important topics average 1 to 3 pages spent on them.
Trading is not something that comes easily or quickly. There is no ONE single source that will cover everything. No one should expect that or complain that they did not get it.
You have 2 options with this book –
You can skip it and utilize the internet. There are great sites and free resources. But how long will it take you to gather all of that up and sort it out? First stop – Google babypips.
If you are more inclined to sit by the fireplace and read, then this is the book for you considering it is only $26 here. It does cover all the important bases to give you the whole, BUT NOT IN DEPTH, picture.
If you have read a beginner’s book, are familiar with Forex or trading…SKIP THIS BOOK. It can offer nothing to you.
Excellent Primer on FX
Rating:4 out of 5 stars
Mr. Chen’s work covers the basics of forex trading quite well and quite thoroughly. Perhaps because of the nature of the book, he does not go into great depth on the specific uses of the various technical tools he defines and does not deal with the difficult specifics of how to set stops or how and where to set targets. I definitely do not consider those to be failings in a book that is clearly designed to acquaint the reader with the basics. In that regard it accomplishes the task admirably in a well written easy to read and easy to understand style.
A decent introduction, but with a few flaws
Rating:3 out of 5 stars
I’m a bit mixed on Essentials of Foreign Exchange Trading. In terms of a basic overview and description of the retail forex market I think it does a pretty good job. Chen covers all the bases from a brief overview of how we got to where we are in terms of market structure, the basics of forex pricing and trading mechanics, and overviews of technical and fundamental analysis. This is something you would certainly expect from someone who works for a broker.
There are also a number of different trading strategies discussed. That ranges from the different timeframes (day, swing, position) to the broad styles of trading (trend, range), and incorporates some of the methodologies (breakouts, chart patterns, Fibonacci, pivot points, Elliott Wave, etc.) as well as discussions of topics like carry and news trading. While some basic strategies are introduced, this is not the type of book which outlines a specific strategy or set of strategies. Instead it provides an overview of the different approaches one could take to trading forex.
I do have a few issues with the book, however, some folks may consider them a bit nitpicky.
First, Chen discusses “stop loss” and “profit limit” orders in a way which suggests they are somehow different than stop and limit orders, which they aren’t. This could confuse some new traders.
Second, the subject of margin isn’t covered quite as fully as I’d like to have seen. Margin call is explained, but the actual margin requirement (initial and maintenance) are not well defined. Given how frequently this confuses new traders, it would have been good for there to have been a more thorough discussion of the subject.
Third, Chen actually talks about “hedging” in a way which suggests it can be a useful strategy. The book was written prior to the NFA’s rules in opposition to this practice, but that is only for US brokers. Those in other countries can still employ “hedging”, which is a strategy that”s at best something which has no bottom line impact on one’s account and at worst actually costs the trader money for no net advantage being provided.
I’m also not that keen on the way the author categorizes news trading as being a fundamental approach. It really isn’t. News traders are merely trying to profit from the market’s reaction to data releases. They don’t really care about the meaning of the release in the wider fundamental picture, just how it compares to market expectations. Call it basically a play on market psychology.
I do like the way Chen includes sidebar type boxes introducing and explaning important people and topics in forex trading (or just trading in general). One of them even covers one of my favorite set-ups, the narrow Bollinger Band one he calls a “squeeze”.
I also think the author does a fairly good job of talking (at least in brief) about important subjects related to developing a strategy and implementing a trading plan, and the pitfalls traders can fall into. I don’t care for his discussion of risk/reward, because it presents an overly one-sided view of trader performance, but otherwise I think Chen has done a reasonable job of hitting the major high points.
Overall, I found Essentials of Foreign Exchange Trading a pretty quick, easy read.
Good for Beginner
Rating:2 out of 5 stars
The book is a solid base for an introduction to forex trading but thats where it stops. There are no real good foundations for solid strategy trading which is what most novice traders look for, after all we just want to make some good returns! If you are looking for good detailed strategies this is not the book for you.
Forex Essentials
Rating:5 out of 5 stars
I ordered this book from Amazon shortly after it came out last year along with a couple other books on trading. Since then, I’ve also sent it as a gift to some of my friends who were struggling with the often frustrating currency markets. I never got around to writing a review on this book until now, but after having read through it at least twice in its entirety I can say that it has helped me tremendously in understanding how forex works and has made me more comfortable with allocating some of my money to trading forex. While most of my money is still in futures and commodities, most notably gold, my activity in currencies has increased a lot. This book has been a great help in getting me comfortable with the forex market and its trading methods.
Excellent service
Rating:5 out of 5 stars
I am very pleased with the service. My book came very promptly and to my expectations. Thank you for a hassle free transaction!
Helpful and practical book
Rating:5 out of 5 stars
I got this book as a present and I love it. I had been thinking of changing careers from systems analyst and business unit manager at a top “global” bank to self-employed forex trader. This book has been a tremendous help in getting me going. Before this I felt I was dabbling, but this book helped put structure around how I trade. It is a fine introduction to the field, but what was best was the practical advice on how to think about forex strategies. Thanks in part to this book, I am up and running with a few trading programs, and it’s early, but so far so good. I feel confident enough to add a few of my own ideas to some of the trading frameworks in the book. The book is a terrific shortcut to get going quickly trading forex.
Chen Hits Major Points
Rating:4 out of 5 stars
In his book, “Essentials of Foreign Exchange Trading”, James Chen hits all the major technical and fundamental points necessary to become a successful Forex trader. This is a must read for both the novice and professional trader.
James A. Hyerczyk
Author: Pattern, Price & Time, Using Gann Theory in Technical Analysis
Total disappointment
Rating:1 out of 5 stars
I have to assume that all the 5 star reviews are either from Mr. Chen’s friends or from total newbies to trading. I was shocked at how extremely basic the concepts in this book were. If I was totally new to forex and spent about 2 hours going through free forex sites I could write a book more comprehensive than this. Mr. Chen has to have more knowledge than this about trading(I certainly hope he does!). Not only can you get all of the information in this book for free on the internet, even the most newbiefied and basic free sites have more advanced concepts than this book. If I were Mr. Chen I would be embarrassed in front of the trading world for putting out this book. Makes him look like a newbie himself or at least totally lazy copout that just wanted to crank out something to sell. Maybe he should have titled it “Forex for Toddlers” because anyone over 4 years old would throw this into the trash can labeled “superficial”. Total disappointment. Since I have to rate this at least 1 star, that 1 star is for 0-4 year olds.
Excellent book on currency trading
Rating:5 out of 5 stars
I have spent 20 years researching and trading stocks and bonds, and was interested in currency trading. I purchased a number of books on foreign exchange. I read this book first, Essentials of Foreign Exchange Trading, and I found it an excellent choice. It has also been a good companion to my experimentation and trading on one of the major FX trading websites.
It starts off with a good introduction to the principles of currency trading and includes a discussion of a wide range of trading approaches to help understand which best fit your personality and style. The chapters that dive in on technical analysis (using candlesticks, moving averages, fibonacci/pivot point, elliott wave) are especially good; it is obviously the author’s specialty. That was good for me since my background is in fundamental analysis and the author’s treatment of technical analysis was comprehensive and helpful. The sections on fundamental analyses were good too, although I went through them quickly given my familiarity. My primary focus was to “expand the toolbox” with technical analyses and this book served that goal. Also, importantly, the book is written in an entertaining and fluid style. It was easy to read and absorb.
Overall, I found the book excellent and recommend it.
First-rate forex book, worth its weight in any currency!
Rating:5 out of 5 stars
I’ve either read or skimmed through pretty much all of the books available on forex and technical analysis. I rank this book among the best because it provides all of the most practical information on trading forex that someone needs without holding anything back. And it doesn’t contain a bunch of hype like many other books on trading do. It’s also very clearly written. I’ve already taken a bunch of ideas from this book that are helping me become a much better forex trader.
well written, concise yet informative
Rating:5 out of 5 stars
The author has a very clear and cogent writing style that makes this book an enjoyable read while giving the reader a thorough insight into the sometimes murky field of technical analysis. As the title implies, this book is THE primer that one needs to embark on an extended study of this topic. It was very thorough, as it covered all the most important areas of forex trading. I think he did an especially good job of covering technical analysis as it applies specifically to the forex market. Since I tend to lean more towards fundamental analysis, his book gave me some good insight into how technicals work in helping to point out logical entries and exits.I would highly recommend it!!
A Big Help!
Rating:5 out of 5 stars
Got into currency trading a few months ago and just finished reading this book. Its been a big help in getting me up and running. Has pretty much all you need to understand the forex market and become more comfortable trading. I highly recommend it.
Great read – definitely recommend it
Rating:5 out of 5 stars
I traded forex a couple of years ago and I’ve just gotten back into it recently. Got this book right when it came out because I’ve been following the author’s daily currencies analysis and attended a few of the webinars he gives. From the title of the book I was thinking that it might be a bit basic for me since I’ve traded forex pretty extensively before. But it’s turning out to be extremely helpful because it has a lot of really useful strategies and techniques. The book pretty much goes all the way from beginner to advanced and explains everything really thoroughly and clearly. I have two other books on forex trading that I bought in the past, but this one is by far the most complete and useful one. For me, chapter 5 on forex trading methods and strategies was one of the most comprehensive descriptions of trading strategies that I’ve seen. Also really liked the technical analysis chapter. Definitely recommend this book.
A Treatise full of Clarity and Substance
Rating:5 out of 5 stars
Mr. Chen has done a superior job here concerning a Task that is certainly more than meets the proverbial Eye…
Transitioning my own Trading Work from Equities in the late 1990′s, I, like most, found the Foreign Exchange Markets to have distinct advantages that were somewhat seamless to transition to… but how about the New Trader?
The early part of the Decade the Industry was lacking in qualitative Resources for the newer Trader looking to learn about these Markets.
James has presented a Resource that is full of Institutional Perspectives that are clearly those of an Institutionally-Seasoned Trader.
The Text and Cohesion of the Chapters are concise enough to be comfortable reading for the Novice, while at the same time providing comprehensive and useful information that can be applied in a progressive fashion.
Having known James for a while in a Professional Climate simply reinforced my View of the Quality of Work seen here, and my thoughts certainly will not detract from the Content in any manner whatsoever.
The Work speaks for Itself, and I recommend the Book to anyone interested in learning about the true Mechanics of Foreign Exchange Work
with the utmost Sincerity.
Do not take my Word for it… See for Yourself.
Tim Salem ( CVJ )
UltraMax Group