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Book Review: Beat the Forex Dealer (Agustin Silvani)

November 13, 2012 by

Beat the Forex Dealer by Agustin SilvaniBeat the Forex Dealer: An insider’s look into trading today’s foreign exchange market is a rather unusual Forex book. Unlike most of the others, that either introduce you to the currency market or teach you to some trading techniques, this book is mostly a warning. Despite having a little bit of both of those aspects, Silvani’s main message is a forewarning of a significantly unfair game played in the industry.

There is little to say about Agustin Silvani himself, except that Beat the Forex Dealer is his only published book as of now and that he is a head of trading at MIGFX Inc. It is evident that Agustin knows all the ins and outs of the industry and is not shy to share them in his book. While he is right on many occasions and offers some firsthand knowledge, I will abstain from recommending this book to anyone. Yes, back in 2008, it would be an excellent and extremely useful read. But now, with the first half of the book pretty outdated and its main premise being quite inadequate (I will explain that later), there is simply no reason to waste your money (the book is rather expensive) or your time (the good thing it is not too long) on this.

So what will you learn from this book? Not much if you have some positive live trading experience in Forex. A good deal if you are new to the market. Here’s the list of book’s chapters with brief description of each:

  1. Through the Eyes of a Trader describes the financial markets, foreign exchange market, its participants, brokers, dealers, traders, turnover, etc. It would be a good deal if it had not been based mainly on 2007 BIS Triennial Survey. Since then, the 2010 BIS survey has been released and a new report will be made public by the Bank of International Settlements next year. A lot has changed since 2007. Also, this chapter will try to instill some fear and paranoia in you.
  2. The Retail Side of Things explains how the retail traders (you and me) trade via modern online Forex brokers. It’s mainly about how the things are done in the USA and is also outdated since the Dodd-Frank Act Reform has made the industry closer to the state of being over-regulated rather than under-regulated there.
  3. Joining the 10% shares some insights of how to make a good trader out of yourself. Overall, not bad, if not for the recommendations to use scaling in/out and money management stop-losses. Also, uses a “straw man” argument against the automated trading and analytical forecasting models. No trading strategy is shared in this chapter.
  4. FX Trading Tips talks about different market sessions and how to use their timing to trader’s advantage. Some more trading techniques are shared, including a subsection on using the stop-loss without risking being hit by stop-hunters. Some particular trading strategies are shared in this chapter. Although they are not precisely defined, the reader will be able to use them for own good right after finishing the chapter. Agustin Silvani also uses the chapter’s final subsection to criticize the Forex market analysts.
  5. Dealer Trades shares techniques and methods of detecting the market movements driven by FX dealers and trading accordingly to that knowledge. Three strategies based on anti-dealer techniques are described.
  6. The Future concludes the book by suggesting that the online Forex market will soon become a place where an average trader will not be able to earn much. The amount of regulation will increase because its current state is too good to last long.

There is also an Appendix with some good (and bad) advice including a subsection on how to deal with a bad trade gone really bad.

It is not difficult to notice the disadvantages of this book as I have already pointed out several. Here is the full list of the book’s cons:

  • It is out-of-date. A new edition would fix this drawback, but in its current state Beat the Forex Dealer cannot be classified as a great book on FX trading.
  • Answering the wrong question. You do not need to beat the dishonest dealers — you have to stay away from them! If they are so crooked that they hunt your stop-loss, add extra slippage and deny your trades, what is the guarantee that they will not just block your deposit?
  • Bad trading habits. Money management stop-loss is a bad idea (explained thoroughly by Van K. Tharp), gradually entering and exiting positions is a bad idea (unless there is some liquidity problem), fiddling with the position deep in red instead of closing it right away will make you no good either.
  • Analysts. Agustin hates them. Big time. Whatever your experience with them is, it is always good to remember that analysts just analyze. It is up to you whether to use their analysis or discard it.
  • No statistics to back up trading techniques and other claims. When the author uses controversial claims, it is better to have at least some statistics at hand to verify them. None is offered here.

Of course, there were some good points to this book:

  • Insights on dealers’ practices. Although its importance may look overstated in the book, the warning you get can be useful.
  • Good trading ideas. Even without statistical proof, they are worth checking out. If you are struggling to find a Forex system for yourself, you can try getting one here.
  • The Appendix. It can be quite helpful with all those how-tos, glossary and trading related quotes.

Overall, this book has left a rather negative impression on me. On the other hand, the book is mostly praised by reviewers on Amazon. There are no 1-star ratings and out of 50 reviews as of today, only 2 reviewers gave 2-star rating. Their main argument is the same as mine: why strain yourself at something as unfair as trying to beat a dealer when there are much better alternatives — either trading via a pure ECN broker or going even farther and trading FX via an exchange (for example, ICE)?

If you have any questions, comments or opinions about Beat the Forex Dealer by Agustin Silvani, please feel free to post them using the commentary form below.

4 Responses to “Book Review: Beat the Forex Dealer (Agustin Silvani)”

  1. Eric D

    Great review, honesty uncommon to see, specially by telling readers not to buy it really, of course there is always something for somebody as you pointed out, most books seem to be for the beginner or aspiring trader I feel, and I have never used a strategy out of some one’s else publication exactly as told by the author but that might just be me, thank you for the article.

    Reply

  2. Ron H

    Thanks for the review, but I dont really understand. Out of 50 people that reviewed the book 48 highly recommend it and 2 dont? Would seem like an obvious choice.

    Reply

    admin Reply:

    I wouldn’t count people who gave 3-star reviews as those who “highly recommended” this book :). But you are right, judging solely by the number of positive/negative reviews, it is a book that should be read. Though, in my opinion, it is not a good way to assess the worthwhileness of books, especially those on trading.

    Reply

  3. alan

    ive read over a dozen or two trading books and this is the only one that im re reading over and over. opened my eyes and thoughts to not being got at by brokers and dealers. yes it has helped my trading alot more than anything else ive read sofar. two thumbs up from me. good stuff

    Reply

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