By John L. Person
John Wiley & Sons Inc.
291 pages, $90
The introductory chapter, “The Business of Trading Money,” reviews the forex market in general and looks at how it is affected by monetary and fiscal policy, Federal Reserve changes, employment and economic reports and the Commitments of Traders report. Understanding the information in this chapter is a necessary foundation for any forex trader.
Person also offers traders a unique approach to trading forex using pivot points. Instead of using the standard moving averages of closing prices, Person calculates moving averages of key pivot points. He uses a three-period moving average coupled with daily, weekly and monthly time frames in his analysis. He also uses a two moving average crossover system to pinpoint buy and sell signals based on an up or down cross. A useful CD is included with the book providing both pivot point and Fibonacci calculators.
Basic technical analysis indicators are covered and another chapter covers the basics of MACD and Stochastics. These last two chapters both contain standard information that is available in many other books and Internet sites, and unfortunately add nothing new to the subject. Additionally, in one chapter, the author explains the use of Fibonacci price extensions, projections and retracements, coupled with the use of pivot points. A chapter on Elliott Wave Theory is also included.
The most enlightening chapters for traders are those on trading systems combining pivot points and indicators (MACD, Stochastics and pivot point moving averages), selecting trading timeframes, and risk and trade management. These three chapters clearly demonstrate the author’s knowledge and trading acumen, as he provides specific rules for entries and exits and reviews money management using the Kelly formula and Sharpe ratio.
This book would benefit individuals looking for a perspective on forex trading and a few exceptional analysis techniques using candles, pivot point, moving averages and additional technical indicators.
Leslie N. Masonson is the author of All About Market Timing and Day Trading on the Edge. E-mail him at lesmasonson@yahoo.com
