Adam Kritzer - Forex for Beginners: A Comprehensive Guide to Profiting from the Global Currency Markets

A friend recently asked for my advice; his multinational employer was temporarily relocating him from the United States to the Netherlands. Furthermore, his salary would no longer be paid in US dollars, but in euros. His quandary was such that, while his long-term finances were denominated in dollars, he would still need to maintain a local supply of euros to fund living expenses. What would be the best method, he wondered, for minimizing any foreign exchange losses upon his eventual return to the United States? The answer to this question, I informed him, could easily fill a few hundred pages.

This book is albeit less concerned with personal money management and is really about a type of financial investing. My interest in writing itand certainly, your interest in reading itfollows from the idea that it is possible to actively profit from fluctuations in exchange rates. Nonetheless, the fact of the matter is that foreign exchange is an integral component of the global economy and its influence is felt daily by businesses, governments, and individuals such as you, me, and my perplexed friend. I firmly believe that the principles upon which I will expound in the following pages can be applied not only to forex trading, but to issues as mundane as the foregoing one.

Ill begin by offering an overview of how the forex market has historically operated and explain how it differs from some of the other financial markets, in both positive and negative respects. After a brief discussion of history, I will move directly into the forces that cause exchange rates to fluctuate. There will be an overview of trading strategies and an in-depth discussion of the various analytical tools that investors can use to develop such strategies. I will explain how to choose a broker and open an account, and conclude with some commonsense wisdom on avoiding certain pitfalls and maximizing your odds of success in the forex market. Throughout the entire book, examples are both abundant and topical to make the presented concepts more concrete. Given that this book was written from 2011 to 2012, there will be a special emphasis on the credit crisis, as well as on the years that preceded and followed it.

Before I get into the nuts and bolts of forex, I want to offer a brief caveat: this book should not be filed under the domain of get-rich-quick schemes. There is no undiscovered opportunity and certainly no free lunch in forex. There are no magic formulas, no risk-free trading systems, and no guarantees of instant profits. The global currency market is by far the largest financial market in the world. Participants are savvy, and competition is fierce. To achieve success in forex trading requires the same dedication and hard work that it takes to succeed in ones normal professional life.

That being said, there are many aspects of forexto be explained in great detailthat distinguish it from other asset markets and make it an attractive alternative for jaded stock market investors.

This book is intended to fill a void in existing financial literature. Most forex primers tend to devote tremendous space to technical analysisthe study of charts and price patternsand are almost completely lacking in context. They posit that high-frequency, short-term trading is the only viable method for generating enough profit to sustain oneself as a full-time trader. For a number of reasons, however, the chances of succeeding with this strategy are extraordinarily low, and the majority of such traders tend to fail fast and fail big.