The Art of Currency Trading: A Professional’s Guide to the Foreign Exchange Market by Brent Donnelly

CHAPTER 1
Introduction: This Book Will Make You a
Better Trader
Throughout my career, I have been disappointed with the shortage
of quality currency trading books authored by real market
professionals. The foreign exchange category is mostly crowded
with two types of books:
1. Theoretical textbooks on international finance, the mechanics
of the foreign exchange market, and/or the principles of long‐
term currency valuation.
2. How‐to books written by nonprofessionals, usually with the
word “forex” in the title. These books tend to rely on a one‐
dimensional overemphasis of simple, short‐term technical
patterns while ignoring fundamentals, psychology,
positioning, and proper risk management.
I have written this book to fill the void, so you can learn FX
trading from a real professional. The Art of Currency Trading is a
synthesis of everything I have learned in more than twenty years
as a professional trader and interbank market maker in FX. This
book will give you:
An insider's deep understanding of what drives currency price
movements
A clear explanation of how to use a fusion of technical
analysis, macro fundamentals, behavioral finance, and expert
risk management to trade FX successfully
Specific techniques and setups I use to make money trading
foreign exchange
Specific steps you can take to become a better trader
Trading, like baseball, poker, golf, or any other highly skilled
pursuit, can be a game not of inches but of millimeters. Small
improvements in your decision‐making process can yield large
improvements in profitability. This book will give you the insights
you need to break through and achieve a higher level of success.
Currency trading is like playing the piano. The mechanics are very
simple (just press a few keys!) but mastery takes a lifetime.
The book builds in intensity and depth one topic at a time with the
goal of enlightening and educating the most experienced, expert
FX trader without leaving beginners in the dust. If you are early in
your FX trading career, you should find all the building blocks for
success here. If you are already an experienced FX trader, you
should find a ton of new ideas and inspiration to take your game
to the next level.
Most trading books tend to focus on one school of trading thought,
whether it's technical analysis, macro fundamentals, behavioral
finance, psychology, or risk management. That approach is too
one‐dimensional. To succeed in FX, you need to master the fusion
approach and use multiple types of analysis to reach stronger
conclusions and then understand your own psychology and risk
management to trade with higher confidence. When every branch
of analysis points in the same direction, you have found an
extremely high‐probability setup: a Five‐Star trade.
I have experience trading interest rates, equities, and
commodities, so this book will frequently refer to these products.
Experienced traders from outside the world of FX will learn a
great deal from this book because entire sections (e.g., risk
management, trading psychology, the Seven Deadly Setups) apply
to trading in any asset class. Please note, however, that my main
objective is to increase your expertise specifically in the foreign
exchange market.
This book will present a variety of unique approaches and specific
trading techniques that I hope will open some new doors in your
mind. Every trading book and every hour spent behind the screens
is part of an overall trading education. I don't claim to have the
holy grail or a simple, foolproof strategy for guaranteed profits in
forex. There is no such thing. Trading is a lifelong pursuit and this
book should be one step in your ongoing education. Absorb what
resonates with you and ignore what does not. Develop your own
style. Learn as much as you can from this book, but do not copy
my approach or anyone else's. Be an independent thinker.
Why I Wrote This Book

The Art of Currency Trading: A Professional’s Guide to the Foreign Exchange Market by Brent Donnelly