Foreign Exchange: The Complete Deal – Book Review

We don?t often do book reviews at FX-MM but last week we were sent a copy of ?Foreign Exchange: The Complete Deal? by James Sharpe (Harriman House £34.99) and decided that we?d take a look at it.

The book, which is part of the Harriman House ?Applied Essentials? series, sets out to be a comprehensive guide to the foreign exchange market and does a pretty good job of it in its 300 or so pages. It examines the history of the market, the basics and some of the theory around foreign exchange before going on to focus on key elements of foreign exchange in practice. The author has more than 30 years? experience in the industry and it shows in both the deep understanding of the subject matter and the clarity with which topics are explained.

As one gets deeper into the book there is a fascinating look at the psychology of the markets and the arcane subject of liquidity is addressed. This includes some insights into the Carry Trade and something called ?Torschlusspanik?. I was intrigued by this Germanic-sounding word but searched in vain in the chapter about it for an explanation of how it entered the foreign exchange trading vernacular.

The topic of currency hedging is well covered in the book and the final chapter on Dealing with Banks and Financial Institutions offers some sound advice for both individuals and companies on what to look for when choosing a counterparty.

The author?s writing style is clear and simple, which is helpful when dealing with a topic such as this which can sometimes appear to have a frightening level of complexity to those who are not involved in it. If foreign exchange were taught as an A level subject this book would be a shoo-in as the title of choice used by teachers everywhere to explain the subject. Equally, if you are about to start foreign exchange trading for the first time, or even if you have some experience already, there will undoubtedly be things that you can learn from this book.