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A Trader’s First Book on Commodities: An Introduction to the World’s Fastest Growing Market, Second Edition

Book Description

Earn consistent profits trading commodities, even if you're a newcomer to the commodities markets! Carley Garner's A Trader’s First Book on Commodities, Second Edition is today's most practical and realistic introduction to successful commodities trading. More than any other primer, it recognizes that the most important trading decisions are made long before the first trade is executed. Drawing on years of dealing with retail traders from all walks of life, experience levels, and amounts of risk capital, Garner answers the most pressing questions newcomers ask -- and the questions they haven't realized they need to ask. This extensively updated Second Edition reflects major changes in the market over the past three years, including new trading challenges, platforms, tools, data resources, and risks. Garner presents a hard-eyed look at the collapses of MF Global and PFGBEST, their failure to honor the sanctity of “Customer Segregated Funds” accounts, the implications for investors, and techniques for mitigating these new risks. She has added new charts and example trades throughout; new coverage of commodity impacts arising from recent events in Europe; important information about new technological improvements and competitive intraday position margin standards; and much more.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Praise for A Trader’s First Book on Commodities, First Edition
  4. Dedication Page
  5. Contents
  6. Acknowledgments
  7. About the Author
  8. Introduction: The Boom and Bust Cycles of Commodities...and Now Brokerage Firms
    1. What Has Changed?
    2. The Speculator’s Role in Volatility
    3. Commodity Volatility Leads to Fortunes Made and Lost
    4. Commodity Brokers Boom and Bust Too
    5. How to Protect Yourself from Another MF Global or PFGBEST
    6. What Regulators Are Doing to Protect Clients
    7. Conclusion
  9. Chapter 1. A Crash Course in Commodities
    1. How It All Began
    2. The CME Group
    3. Evolution of the Forward Contract into a Futures Contract
    4. Cash Market Versus Futures Market
    5. Contract Expiration
    6. The Mechanics of Futures Contracts
    7. Futures Spreads
    8. A Brief Introduction to Commodity Options
  10. Chapter 2. Hedging Versus Speculating
    1. Commodity Hedgers
    2. Commodity Speculators
  11. Chapter 3. The Organized Chaos of Open Outcry and the Advent of Electronic Trading
    1. The Pit
    2. Electronically Traded Markets
    3. Side by Side
  12. Chapter 4. Account Access, Trading Platforms, and Quote Vendors
    1. Commodity Quotes Can Be Costly, But They Don’t Have to Be
    2. Open Outcry Quote Reporting and Access
    3. Electronic Quote Transmission
    4. Subscribing to Quotes
    5. Charting
    6. Free Trading Platforms and Market Access
    7. Paid Trading Platforms
    8. Auto Approval Versus Manual Approval
    9. Multiple Order-Entry Methods
    10. Popular Premium Trading Platforms
    11. Order Desk (“The Desk”)
    12. Is It Worth Paying Platform Fees or Subscribing to Quotes?
  13. Chapter 5. Choosing a Brokerage Firm
    1. Introducing Brokers, Futures Commission Merchants, and Broker/Dealers
    2. Fill Quality
    3. Behind the Scenes of Transaction Costs
    4. Discount Brokerage or Full-Service Specialization
    5. What You Should Know About Commission Structure: Blanket or Variable Rates?
    6. Market Access
    7. Beyond Your Broker
    8. Conclusion
  14. Chapter 6. Finding a Broker That Fits and Choosing a Service Level
    1. Understand Your Broker’s Business
    2. Get to Know Your Futures Broker
    3. Full-Service Broker or Self-Directed Online?
    4. Why Using a Broker May Be a Good Idea
    5. Conclusion
  15. Chapter 7. Order Types and How to Use Them
    1. Order Types
    2. Placing a Trade with Your Broker
    3. Placing a Trade Online
  16. Chapter 8. Making Cents of Commodity Quotes
    1. Quoting Grain Futures
    2. Not All Grains Are Created Equal
    3. The Meats
    4. Foods and Fiber
    5. Precious Metals Futures
    6. Gold, Platinum, and Palladium Futures
    7. The Other Metal Futures
    8. The Energies
  17. Chapter 9. Figuring in Financial Futures—Stock Indices, Interest Rates, and Currencies
    1. The Boring But Necessary Basics
    2. Stock Index Futures
    3. Dow Jones Industrial Average Futures
    4. NASDAQ 100 Futures
    5. S&P 500 Futures
    6. Russell 2000 Futures
    7. Interest Rate Futures
    8. Treasury Bond and Note Futures
    9. Eurodollar Futures
    10. Currency Futures
    11. Conclusion
  18. Chapter 10. Coping with Margin Calls
    1. What Is Margin?
    2. Day Trading Margin Versus Overnight Margin
    3. What Are Margin Calls?
    4. How to Handle a Margin Call
    5. The Margin Call Countdown
    6. Accepting Margin Calls
  19. Chapter 11. The Only Magic in Trading—Emotional Stability
    1. Three Emotions in Trading: Fear, Greed, Frustration
    2. Vengeful Trading Is Counterproductive
    3. Capital Preservation, a.k.a. Risk Management
  20. Chapter 12. Trading Is a Business—Have a Plan
    1. The Trading Game Plan
    2. A Trading System Alone Isn’t a “Business Plan”
    3. Constructing a Business Plan in Trading
    4. Price Speculation (Ideally, Prediction)
    5. Choosing a Trading Vehicle
    6. Risk Management
  21. Chapter 13. Why You Should Speculate in Futures
    1. Speculating in Futures Versus Speculating in Equities
    2. Risk Capital Only
    3. Conclusion
  22. Chapter 14. Futures Slang and Terminology
    1. Bull Versus Bear
    2. Spread
    3. Contract Month Slang
    4. Red Months
    5. Fill
    6. Blow Out
    7. Blow Up
    8. Keypunch Error
    9. Busted Trade or Moved Trade
    10. Fat Finger Error
    11. Net Liq
    12. Equity
    13. Customer Segregated Funds Account
    14. Beans
    15. Commodity Currency
    16. Dead Cat Bounce
    17. Bottom Fishing
    18. Chasing the Market
    19. Limit Moves
    20. The Tape
    21. Trading Solution and Front-End Platform
    22. Proprietary Trading
    23. Running Stops
    24. Short Squeeze
    25. Babysitting
    26. Scalp
    27. Slippage
    28. Working Order
    29. Unable
    30. Handle
    31. Overbought/Oversold
    32. Debit/Account Debit
    33. Round-Turns
    34. Trading Environment
  23. Index
  24. FT Press