Trading in the foreign exchange/currency market (called FOREX) is potentially quite lucrative, but just like all other forms of investing, the FOREX market can also lead to substantial losses. The key is to understand how the market works and use the right trading strategy for the specific market conditions. 7 Winning Strategies for Trading FOREX: Real And Actionable Techniques for Profiting from the Currency Markets is an excellent book that contains a wealth of valuable information about the right way to set about investing in the FOREX market.
Why does the FOREX market matter?
Whether you are a first-time trader in the FOREX market or have been doing it for some time, there are some solid reasons why the FOREX market matters to your personal investment strategy. The primary reason is that the FOREX market is the largest financial market in the world and the most liquid market as well. Because of this, many people choose to trade in this market because it represents a good way to bring some diversity to their portfolio.
The risks associated with the FOREX market can be quite high if you do not understand the way it functions and how to choose your strategy based on specific market conditions. It requires solid technical analysis and attention to the fundamentals of trading, but it also requires paying attention to market sentiment. This is a more difficult analysis to conduct because it incorporates a mix of objective and subjective data, but 7 Winning Strategies for Trading FOREX includes some good discussion of this important type of analysis right alongside the other types of analysis as well.
FOREX: Sensitive and fluctuating
The most important aspect of the FOREX market that all potential investors must understand is that the currency market is extremely sensitive to a variety of factors and thus tends to fluctuate frequently and rapidly. This sensitivity and fluctuation is what creates so much potential for making money, but they also create significant potential for loss of money as well. 7 Winning Strategies for Trading FOREX addresses this volatile combination head on, providing the reader with a solid understanding of the market structure and how it affects market activities.
For instance, the introduction of FOREX trading online literally transformed the types and quantities of investors who participate in the market. The FOREX market used to be primarily populated by large institutional traders, such as corporations, banks, hedge funds, and other large financial institutions. When the internet revolution made it easy for smaller institutions and individual investors to quickly and easily access the FOREX market, it expanded and became another viable option for a wide range of investors to consider.
7 Winning Strategies for Trading FOREX addresses the online aspect of the FOREX market and embraces this “opening up” to new classes of investors as a great opportunity for those who want to participate in it. The book discusses the global nature of the online FOREX marketplace, which allows you to trade in currency markets literally around the clock as the different markets open and close across the globe. It also emphasizes, though, that you must carefully consider your trading strategies and be ready to adapt them as necessary when the market situation changes.
Can you beat the odds?
7 Winning Strategies for Trading FOREX is very realistic about the odds facing traders on the FOREX market, but it also is very realistic about how to set about beating those odds. The author emphasizes that although anybody can trade in this market, not every person will succeed and make money. This is true of any form of investing or market trading, but especially so for the FOREX market.
Now here’s the great news: according to 7 Winning Strategies for Trading FOREX you can be one of the successful and profitable traders if you read and apply the strategies contained in the book. What makes this book different from many others on this same topic is that it backs up this claim with real, solid information about each specific strategy and how to match the right strategy to the specific market conditions.
What’s in the book?
Before launching into the actual strategies and their descriptions, 7 Winning Strategies for Trading FOREX spends some time covering the basics of the FOREX market. This is important because some books do not provide this background information, putting you at a disadvantage right from the start.
The basics covered in the book include:
Beyond the basics of FOREX trading
Now the book gets into the heart of the subject, laying out the seven key strategies that can help you find success trading on FOREX by matching your strategy to the market conditions. The strategies detailed in 7 Winning Strategies for Trading FOREX are the following:
Strategy #1: Market Sentiment – What market sentiment is, the factors that influence it, how to measure it, and how to use it to your trading advantage.
Strategy #2: Trend Riding – Understanding directions of trends, time frames, stages of a trend, measuring trends, and implementing the trend riding strategy.
Strategy #3: Breakout Fading – Understanding the nature of breakouts, why many people choose to trade them, finding and using key opportunities, reading chart patterns, and the best market conditions in which to execute the breakout fading strategy.
Strategy #4: Breakout Trading – Definitions of different types of breakouts, understanding reversal breakout, where to look for breakouts and opportunities, recognizing false breakouts, and how to implement the breakout trading strategy in the real world.
Strategy #5: Decreased Volatility Breakout – Understanding the roller coaster nature of volatility and how to measure it, understanding and identifying triangles, enhancing the breakout trading strategy, and how to implement it successfully.
Strategy #6: Carry Trade – Definition of a carry trade, the factors that support carry trades, the risks associated with carry trades, when to enter into a carry trade, and implementing the carry trade strategy for yourself.
Strategy #7: News Straddling – Understanding why news is important to the FOREX market, when and how the market might respond to the news, identifying the news that is likely to create market changes, which currency pairs are best suited to the news straddling strategy, and executing the strategy successfully.
Final thoughts
This is an excellent book for anyone who wants to better understand and participate in the FOREX market. The content unfolds in a logical way so that if you start at the beginning and work your way through it steadily, you will easily understand the concepts as each one builds on the previous ones. It’s worth noting, though, that this is not a “dumbed down” book; it contains detailed information about every topic it covers, making it an excellent resource for FOREX traders who have previous experience in the FOREX market.
Those new to FOREX trading will also find 7 Winning Strategies for Trading FOREX a very useful resource; however, most beginning traders will get the most benefit from the book if they start at the beginning and read through the book in the order presented. This is because the later information is specific enough and detailed enough to require a basic understanding of the content contained in the early sections of the book.