Over the last ten to fifteen years, the foreign exchange currency market has changed tremendously due in large part to the rapid changes in technology. Despite these changes, however, the market is still driven by and fluctuates according to a huge array of factors. If you want to understand both the comprehensive workings of the foreign currency exchange market as well as the significant impact technology changes have had on the market, then Mastering Foreign Exchange and Currency Options: A Practical Guide to the New Marketplace should be an important addition to your collection of books and resources.
A unique collection of information and contributors
There are any number of excellent books covering all aspects of the foreign currency exchange market, but Mastering Foreign Exchange and Currency Options is one of the very best because it contains a unique collection of information from an excellent group of contributors. Unlike books written by a single author, this book takes the terrific information and expertise offered by the primary author and combines it with other information and expertise offered by a wide range of other experts in the foreign currency exchange market.
The author, Francesca Taylor, is a principal in Taylor Associates and widely recognized as a leading expert in trading on the foreign currency exchange market. Her insights and expertise are substantial and thorough. She takes the unique additional step of including a number of excellent contributions from other experts in the FOREX market. Key contributors include:
It should be noted that the most current edition of Mastering Foreign Exchange and Currency Options was published in 2003, so the contributors above are listed with their respective employment associations as of that publishing date.
Comprehensive and extensive information
One of the things that makes Mastering Foreign Exchange and Currency Options stand out from other books on the topic of the foreign currency exchange market is the comprehensive and extensive nature of the information it contains. From the historical background of the FOREX market right through to the significant technological changes that have transformed the market, it’s all here in this book.
Here’s a sample list of the topics and areas of discussion contained in Mastering Foreign Exchange and Currency Options:
History, background, and development – Humans have been trading currency in one form or another for hundreds if not thousands of years, but it is only in the last 120 years or so that the market has become a structured and organized endeavour. Beginning in 1880 and continuing through the Bretton Woods Accord and its collapse, to the European Monetary Union and the advent of Continuous Linked Settlement (CLS), the book traces the information necessary to establish a foundation of understanding.
The market role and currency classifications – The foreign currency exchange market plays a critical role in the world economy, having a significant effect on its growth and behaviour. To understand this role and the effects it has, it is also helpful to understand the role of central banks and different types of trading participants in the market. Currency classifications are fundamental, as they dictate the major currencies, minor currencies, cross currencies, and emerging market currencies that create profit-making opportunities through their various movements and fluctuations.
The foreign exchange’s economics – The economics of the foreign currency exchange market dictates the changing of rates and the potential for profit. You must first understand why buying and selling currency is a viable financial strategy, and then move on to dissecting exchange rates and the factors that influence them. Mastering Foreign Exchange and Currency Options offers some very good information about these factors, such as politics, market sentiment, economic statistics, economic news, and the like.
A broker’s view of the FOREX market – Perhaps some of the greatest changes are those that affect the brokers who work in the foreign currency exchange market. The book looks at the market from the broker’s viewpoint, including topics such as forwards, options, FRAs, STIRs, and exchanges versus OTC. It also examines the changing face of central banks, trading portals, and what the future may or may not hold.
The impact of technology – Most experts agree that technology and e-commerce have had perhaps the largest transformational impact on the FOREX market ever seen. With the embrace of technology came easy and convenient access for individual traders as well as better and faster ways to collect and use market data. Data is in fact one of the most powerful tools in a trader’s tool kit, and technology’s impact on its accessibility and usefulness has been significant.
Exchange market mechanics – The mechanics of the foreign currency exchange market are vital to understand thoroughly and completely. These include the mechanics of the emerging market foreign exchange, the spot foreign exchange, and the forward foreign exchange. Each of these parts of the FOREX market has specific practices and procedures that you must master to be successful. Mastering Foreign Exchange and Currency Options includes details and specifics about all three, offering extensive explanation and guidance along the way.
Individual traders and the FOREX market – The foreign currency exchange market used to be exclusively the realm of large banks, corporations, and the like, but technology has allowed individual traders to actively participate as well. The FOREX market is different from traditional financial markets that most individuals understand the best, so before diving into the foreign currency exchange market you need to understand topics such as spread betting, contract for difference (CFD), and the like.
Risk management – All investors must understand and apply solid risk management practices, but this is especially critical in the foreign currency exchange market. This market is so volatile and risky if you don’t have the right knowledge that nobody should enter it without first thoroughly comprehending currency risk management. Issues related to risk management include guidelines for hedging, gauging company attitudes toward levels of risk, comparing OTC options with FOREX forwards, establishing rules for making risk decisions, and the like.
A longer list of useful topics
The above list might seem to be pretty comprehensive, but Mastering Foreign Exchange and Currency Options offers an even longer list of useful topics. These include:
As you can see, Mastering Foreign Exchange and Currency Options is a very robust resource of information and guidance for trading in the foreign currency exchange market. The range of information is substantial, and is made even more useful by the range of expertise and experience of the contributors who provide it. As stated earlier, the unique combination of the author’s writing and the writings of expert contributors make this book especially useful to beginning traders and experienced traders alike.
Final thoughts
Trading in the foreign currency exchange market is not for the faint of heart, but it is not necessarily something to fear either. With the right information and knowledge you can be successful and make money in the FOREX market, and Mastering Foreign Exchange and Currency Options is a wealth of the kind of information you need. There is no need to learn foreign currency exchange market trading all on your own, especially when there are excellent resources such as this, filled with expert knowledge and advice.