Kathy Lien’s book I finished reading earlier this month. I found it invaluable. She works in the industry and she was working in FXCM (atleast when the 2nd edition was released).
The author stresses on knowing both Fundamental and Technical Analysis as a key to successfully trading. My key takeaways:
- An outline of fundamental currency forecasting models (Purchase Power Parity, Balance of Payments, etc). A high level view on what they are, how they attempt to forecast prices, their strengths and weaknesses.
- The role of economic news releases on data and how they affect markets in Pips on average for context.
- How specific trading times affect the market (Asian/European overlap, European/American overlap, Frankfurt/UK powerhour) and how to use that to your advantage to trade.
- Actionable Technical setups with well explained graphs and very clear and concise trading rules.
Above points were what affected me the most, but Kathy explains a lot more and everyone who reads the book will see things differently. It was also interesting to observe how much stress she puts on protecting capital. In most of her trading strategies she splits half her position at 1:2 Risk/Reward to lock capital and let’s the other half run (trailing stops mostly). It’s also her #1 rule in the 10 rules she’s put in her book.