Adam Lemon's new e- book, Simple Proven Forex Strategies, recently released on FXAcademy.com, offers unique insight into the use of simple strategies in momentum trading.
Adam has worked in financial markets for over 12 years. His expertise in strategic Forex trading is evident in his lucid presentations of two expedient trading strategies, the Outside Bar and the Pin Bar strategies and in his analysis of the results of these strategies on two different candlestick patterns over several time periods for major currency pairs. His book differs from other such tomes in that he sets out to prove these strategies by back testing them under varying conditions and by justifying the results with statistical evidence derived from the historical data.
Lemon's disclaimer that the use of these theories does not always have the expected results is commendable and comforts the reader with a feeling of honesty and trust as compared to other theorists who claim guaranteed positive outcomes when adhering to certain strategies.
Perhaps more impressive is how the author lays out his theories in a precise manner, outlining the step by step process for each hypothetical currency trade and then explaining the reasoning behind each move. This is followed by common concerns that may arise with each theory and how best to deal with them. The back testing is conducted on three time frames--daily, 4 hour, and 1 hour and the author acknowledges openly when the results prove to be disappointing. The author goes on to judge each strategy by pair and timeframe by applying filters such as trading only during periods of high liquidity or session opens, and discovers that the application of such filters can dramatically improve the results and create tradable strategies for certain currency pairs
The book concludes with a table of historically profitable trades using these two strategies.
Lemon has written a well formulated summary of two common strategies used in momentum trading and the efficacy of their implementation in back testing their results. The author suggests that the book is not for beginner traders but that more experienced or discretionary traders will find the data useful. Considering how candid he is in the rest of his writings, this assessment should be taken literally. However, the FX Academy also offers many lessons and courses for new traders, so if you're not quite sure what momentum trading means, don't worry – start slowly, and with the right courses, you'll figure it out soon enough!