This is a clearly written short introduction to trading FX by a technical analyst who cut his teeth in foreign exchange trading. David Jones is now Chief Market Strategist at IG Index, actively involved in client education, and the relaxed style and ?keep it simple? approach to trading seen in his training sessions is reflected in this book.
The first half (?the basics?) of the book deals with spread betting, the foreign exchange markets, risk management and technical analysis. Risk management ? position sizing and stop losses - are well handled, with a simple trade planning methodology (?the risk reward calculator?) that emphasises the need to get the risk/reward balance right in looking at a trade, so that ?you don?t have to be right all the time? ? which is of course unlikely.
The second half of the book deals with trading strategies, built around support and resistance and trend following, emphasising the importance of deciding what the time frame is in planning a trade and in setting stops. There is an introduction to technical indicators, specifically the RSI oscillator, with the proper warning that this works best in oscillating rather than trending markets (the MACD trend-following indicator is mentioned by name only).
A thesis of the book is that the size of the forex markets makes trends more durable than in other markets, whilst its volatility provides further trading opportunities (and liquidity and competition makes for finer spreads and allows for small bets). It is rumoured that not many spread betting clients make money, and Jones is at pains to stress that technical analysis cannot provide all the answers ? so perhaps understandably from a technical analyst?s perspective, the big topic of what moves forex markets is covered only cursorily. With these provisos, beginners will find this a helpful book.
