7 Best Forex Trading Books
Foreign exchange (forex) trading is the process of trading currencies of various countries. Trillions of dollars are traded daily on the forex marketplace, which is the largest market in the world and also the most liquid market in the world. The forex marketplace is not a market in a centralized location but is instead an electronic network.
The marketplace is based around more than just meeting currency needs. It also offers the opportunity to speculate on how various pairs of currency will move in comparison to each other. Forex trading can be fairly complex, and even those with extensive experience would likely benefit from reading more on the subject. No matter if you’re brand new to the topic or have years of experience, you’re sure to find one of the following forex books helpful.
The Little Book of Currency Trading
New forex traders will find a lot of value from Kathy Lien’s beginner currency trading book. Don’t be fooled by the title. Although the Little Book may sound like a short overview, this book is packed with depth and detail.
Kathy Lien walks readers through the basic factors that drive currency markets in general as well as specific tactics and strategies to advantage of opportunities.
New investors will appreciate full coverage of basic principals including:
- How to find the best investing approach for your personal style,
- Common investor mistakes,
- Avoiding scams and other pitfalls.
More experienced investors may do better with more advanced options, but newer traders will have a hard time finding a more accessible overview of the currency market dynamics.
The Foreign Exchange Matrix
Many new investors find the foreign currency markets challenging to navigate and understand. Barbara Rockefeller and Vicki Schmelzer utilize their combined 50 years of market knowledge and experience to walk investors through the most important concepts and dynamics of this massive market.
The importance of the foreign currency market can’t be over stated as over $4 trillion of trading takes place on a daily basis. This massive amount of trading volume dwarfs the trading size of the US stock market.
The book covers a range of topics including what drives trends in the market and how the foreign currency market impacts trends in other markets. The authors use a matrix concept to weave together various themes and topics discussed in the book.
This book will be very helpful to new investors and intermediate investors. Readers will benefit from an in depth treatment of market dynamics and guidance for how to interpret events as they occur in the market.
However professional traders should keep in mind that this book isn’t heavy specific tactical trading ideas or advice. The intention is to give readers a big picture of how the market operates and provide context to help you become a more effective investor in the market.
The Art of Currency Trading
This comprehensive guide aims to teach you how to profitably trade currencies in real market conditions. The author has over 20 years of experience trading currencies. New traders will benefit from specific strategies and tactics that the author utilized during his trading career.
We really like the balanced approach to the content in the book. Readers receive a balanced mix of overall market fundamentals as well as specific, actionable trading strategies and techniques.
This is also not a book you will read over a weekend. The content covers over 400 pages of material. Rather than cover a single trading strategy or philosophy, Donnelly takes readers through a wide range of different trading philosophies and approaches. That means you will be exposed to technical analysis, fundamental analysis, macro fundamentals, behavioral finance and how those disciplines intersect within the currency markets.
New traders will find plenty of content and will likely rely on the material in the future as a comprehensive reference for making decisions in the forex markets.
Currency Trading for Dummies
Brian Dolan’s book provides a great roadmap for beginner investors to understand the trading dynamics of the forex market. Dolan uses his 20 years of experience to teach readers what to expect when trading foreign currencies. The book presents the material for the benefit of understanding how to benefit as an active trader in the market.
Readers will benefit from the author’s ability to take complex elements of the foreign currency market and translate the material into simple and digestible bits of information. A helpful part of this book is its explanation of some key aspects of the forex market including some of the economic factors influencing the values of currency and how to interpret certain data and events.
Key topics covered include understanding currency pairs, managing risk and reward, and factors that drive larger currency market movements and trends. Readers will also learn about the dynamics and pitfalls involved in trading including required tools, technology, and terminology.
Forex Trading: The Basics Explained in Simple Terms
Jim Brown is one of the more well known authors in the currency trading industry. Brown authored a number of forex market books that range from introductory level material to more advanced titles focused on complex trading and market dynamics. Forex Trading is the first book in a multi book series and is targeted to new investors interested in trading the forex market.
New traders will benefit from the information in the book as well as bonus access to Jim’s Facebook group and one of his Trading Systems. Readers appreciated the short, concise and practical advice provided in the book.
If you are interested in trading the forex market and want practical, actionable advice, Brown’s book delivers. You will get a full picture of the technical analysis, fundamental analysis, and trading psychology required to be a successful trader.
The author gives you just enough information to get you excited about trading as well as the necessary tools to make your first trades. You’ll know pretty quickly if you have the stomach for trading the forex market and if so, the author gives you a roadmap to navigate more advanced trading topics in his next books which we discuss below.
MT4/MT5 High Probability Forex Trading Method
Readers that have a basic foundation in the forex market will benefit from the High Probability Forex Trading Method. Professional foreign currency investors utilize a range of trading systems to help them make the right decisions. The challenge is that there are many different trading systems available making it very hard to discern the right choice for you.
This book will give reader’s access to the MT4 MetaTrader platform and access to Brown’s Facebook group to discuss daily trading issues in the forex market. Keep in mind this book is primarily focused on utilizing a specific trading system and applying that system to forex trading.
The benefit of using this system is that access is free and the program allows you to make demo trades without risking any money. That means you can test out the system under real market conditions and analyze your performance on a hypothetical basis. When you feel comfortable, it’s easy to utilize the trading system to make real trades with the broker of your choice.
Keep in mind there are many trading systems and philosophies available. No system will be perfect and not every system will appeal to your personal trading psychology. The best approach is to keep an open mind, try a few systems and see which option fits best with your personal trading style.
We like that Brown offers readers a detailed explanation of the strategy with access to the software and a Facebook community with other traders. If you already have a solid understanding of the market fundamentals and desire information about a specific trading strategy, this book makes a great choice.
Trading Forex with Divergence on MT4/MT5
Active currency traders interested in more actionable trading advice may want to consider another Jim Brown book that focuses on trading divergence. Keep in mind this is a more advanced concept that utilizes technical analysis to make trading decisions.
Essentially, divergence is when a market price and the underlying price indicator give conflicting signals. Divergence indicates something is changing, but it is up to traders to recognize how to react to that change. The challenge is both recognizing the change and correctly responding to it.
This book offers a specific trading strategy to take advantage of divergence conditions in the forex market. Readers will have access to Brown’s Facebook group where Jim calls his trades live and shares his results and weekly trading analysis. The book also includes access to custom indicators utilized to make trading decisions.
Other readers noted that even though this is an advanced trading topic, the book does an excellent job with explaining the principles in understandable terms. Keep in mind this is an advanced topic and should only be considered by experienced traders.