I like David Jones, but lets be clear, he's an analyst and educator, not a trader. Here is my take of the good, bad and ugly of Spread Betting the Forex Markets.
The Good.
A good coverage of general forex knowledge and theory required to trade, delivered with a clear writing style.
His section on the crucially important subject of risk management is very good with an easy to follow simplification of what can be a complex area.
The Bad.
David's non trading background is reflected in the lightweight section on Trading Strategies which is very much at beginner level: it is by no means an expert guide on the subject as suggested by the book's title. That said, as the author explains, many people do like to make this area more complicated than required for effective trading.
There is no section on trading psychology.
No bibliography or further reading to point the interested reader in the right direction if they wish to read further on any subject area.
A questionable style of trade entry which involves waiting for price retracement if the initial risk reward ratio is not acceptable. Remember that all trades which are destined to fail will retrace to an acceptable R:R ratio so using this method will doubtless increase the percentage of losing trades so you'd better have a high R:R ratio to account for this.
The Ugly.
The section on overnight rollover financing of positions is fundamentally flawed which is surprising as David is an educator and should have nailed this subject with ease. The author explains that overnight financing is based on the interest rate of the currency in which you are long plus an overnight financing charge. Whilst different brokers or spread betting companies have different policies, the general concept of overnight spot FX financing involves the interest rate DIFFERENTIAL between the two currencies concerned which is reflected in the rollover debit or credit applied to the trading position. David's explanation is simply incorrect which is quite inexcusable in a book focused entirely on FX trading. It seems he has erroneously applied the financing method of stocks to FX.
On page 122 he shows a trading example in USD/JPY with the decimal place incorrectly placed throughout so rather than a price of 96.90 the author shows 0.9690 - this error is glaringly obvious and should have been picked up. Other USD/JPY examples in the book are correctly priced.
Conclusion.
Overall I can't help but think this book has been published as a quick money spinner in an area of growing interest. With a little more time and content the book could have been so much better. That said, it is certainly worth its money when compared with many of its competitors. The section on risk makes the purchase worthwhile on its own.
I feel we'll see more of David Jones as an author and I'd bet any future offering will be an even more worthwhile read than his generally competent and very readable first offering.
