As I am writing this, I don't remember where I first heard about this book. What I do know is that it has been on my Amazon Wishlist for a long time.
A really long time.
The reason that I didn't pick it up right away was a combination of three things:
- Having my hands full with testing other trading methods.
- Let's face it, $50+ for a book (especially the Kindle version) doesn't put it at the top of most people's reading lists.
- An ever present fear that it might be another crappy trading book that will consume two hours of my life, that I will never get back.
But I have recently become better at automating things in my life and that has freed up some time. So I started looking for some new trading ideas one day.
As I scrolled through my Wishlist, there weren't any books that really jumped out at me…until I hit the last book on the list. This book had been there for so long that I completely forgot about it.
So I downloaded it and I was pleasantly surprised. Books like Forex Patterns and Probabilities by Ed Ponsi are my favorite Forex trading books.
More on that in a bit. But first, I'll share with you what I didn't read in this book.
What I Skipped
The beginning of the book was the standard introduction to currency trading. I did skim a couple of the sections and this book does a good job of explaining the fundamental concepts in a clear and well-structured way. If you are a beginner, then I certainly recommend reading this introductory information to get up to speed.
I also skipped his section on Fibonacci retracements. It does work for some traders, but I find Fibos a little too arbitrary for my taste. Maybe I will learn to appreciate them one day, but for now, I ignore them.
There are also a couple of short-term trading strategies that I skipped over because they don't fit my personality. But other than that, I actually read through many sections several times and took notes in Evernote.
What I Read…And Reread
Karma is a bitch. That was one of my favorite trading lessons in the psychology section of this book.
He tells a story of two coworkers that were rooting against him after a winning streak. They were really happy when the hot streak came to an end and Ed started losing.
When it was all said and done however, the joke was on them. They ended up working in a restaurant and teaching high school, while Ed is still trading.
So while there might not actually be such a thing as karma, having negative thoughts about others ultimately contaminates your own psychology and leads you to make major mistakes. But if you are trading full-time and you really do want to teach high school, then this is something you should try.
I know that I'm a much better swing trader than a day trader. So I only concentrated on the swing strategies in this book. Luckily, they are a few to choose from.
About Ed's Trading Methods
Now we come to the big question…are his trading strategies any good?
Remember that a trading system alone does not make a good trader. Ed emphasizes this in the book. You could have the best trading system in the world and still lose money. Also avoid the Trading Silodrome and don't jump to a new trading system just because you want to try something different.
With that PSA out of the way, if you do have room in your trading quiver for a new strategy, then there are two reasons why you should read this book and start testing his strategies.
First, the systems that he gives you in this book are complete systems. He doesn't hold anything back.
Some books are simply lead generators to upsell a more expensive course. That is not the case with this book, you get the complete systems.
Second, the methods are simple and explained very clearly. This may seem like it is easy to do, but you will be surprised how much some authors can complicate even the simplest trading system.
The method that appealed to me the most was the Fx-Ed Trend Technique and that is what I'm currently testing. Before I move on to another system in this book, I'm going to get comfortable with this method first though.
So to come back to the question at the beginning of this section, these methods are only going to be as good as you make them. Ed lays out everything you need to get started. He uses standard indicators and measuring tools. It is up to you learn them, test them and figure out if they work with your personality.
Rockstars Make Good Traders (and authors)
One interesting thing that I learned about Ed from this book is that he used to be a rockstar…literally. I don't know why that caught me off guard, but it did. Maybe it was because every picture that I've seen of him shows him in a suit and schoolboy haircut.
But once I learned that fact, things started to make sense. It may have even contributed to making me like the book more. His humor and his more conversational tone was refreshing, compared to other trading books that I read.
Conclusion
Forex Patterns and Probabilities is one of those books that you will probably keep in your library for a long time. I know that this will be the case for me. If you are looking for a well written, actionable book that will teach you exactly what you need to know, then I recommend picking up this book.
What is your favorite recent read? Share your pick in the comments below…
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