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Getting Started in Commodities

Book Description

Get this handy roadmap to making money in the commodities market.

Getting Started in Commodities shows you how to successfully invest in the commodities market in futures, stocks, stock indices, and options. The book explains how the commodities market works as well as how investors can identify and track commodity opportunities -- using fundamental factors such as supply and demand and technical analysis tools. Fontanills, a seasoned trader and educator, also explains the basis of money management, teaches you how to find the best broker, and how to read seasonal chart patterns. Finally, he explores how to build a winning system and test and adjust it for success. Helpful appendices of contract specifications and additional readings are also included.

Table of Contents

  1. Cover Page
  2. Series Page
  3. Title Page
  4. Copyright
  5. Dedication
  6. Contents
  7. Foreword
  8. Acknowledgments
  9. About the Author
  10. Chapter 1: What Is a Commodity
    1. What Is a Commodity Market?
    2. What Is the Difference between a Commodity and a Futures Contract?
    3. Back to Commodities
    4. How Can a Stock Trader Use This Information for Financial Gain?
    5. Summary
  11. Chapter 2: How the Commodities Markets Work
    1. The Need for a Commodities Market
    2. Fundamental versus Technical Analysis
    3. Options Spreads
    4. U.S. Commodity Exchanges
    5. It's the Pits
    6. Electronic Trading
    7. Exchange Ownership and Membership
    8. Clearinghouses
    9. Margin
    10. Orders
    11. Deliveries
    12. Volume and Open Interest
    13. Popular Commodity Contracts
    14. Chicago Mercantile Exchange (CME)
    15. Summary
  12. Chapter 3: Commodity Trading in the Stock Market
    1. Metals
    2. Gold
    3. Silver
    4. Copper
    5. Aluminum
    6. Palladium
    7. Energy
    8. Lumber
    9. Sugar
    10. Soybean Products
    11. Cotton
    12. The Value of Commodity Stocks
    13. Mutual Funds
    14. Precious Metals ETFs
    15. Oil ETF
    16. Summary
  13. Chapter 4: Commodity Trading in the Index Markets
    1. The Case for Indexing
    2. Commodities as an Asset Class
    3. Broad-Based Commodity Indexes
    4. Commodity Research Bureau Index
    5. Goldman Sachs Commodity Index
    6. Dow Jones-AIG Commodity Index
    7. Rogers International Commodity Index
    8. Deutsche Bank Liquid Commodity Index
    9. Index Performance
    10. Components of Return
    11. Broad-Based Index Futures
    12. Narrow-Based Index Futures
    13. Taxes on Futures
    14. Commodity Index Mutual Funds
    15. Exchange-Traded Index Funds (ETFs)
    16. Mutual Fund Purchase/Sale Model
    17. Broad-Based ETFs
    18. Narrow-Based ETFs
    19. HOLDRs
    20. Exchange-Traded Notes (ETNs)
    21. iPath ETNs
    22. TRAKRs
    23. Summary
  14. Chapter 5: Fundamental Analysis of the Commodities Markets
    1. Supply
    2. Demand
    3. Equilibrium
    4. Sources of Fundamental Data
    5. Summary
  15. Chapter 6: Technical Analysis of the Commodity Markets
    1. Types of Indicators: Leading, Turning Point, and Lagging
    2. Classic Technical Analysis Tools
    3. Moving Average Trading Applications
    4. Moving Average Convergence/Divergence (MACD) Indicator
    5. MACD Trading Applications
    6. Stochastics
    7. Relative Strength Index (RSI)
    8. Average Directional Index (ADX)
    9. Bollinger Bands
    10. Support and Resistance Trading
    11. Summary
  16. Chapter 7: Elliott Wave Trading for Commodities
    1. Introduction
    2. The Wave Principles
    3. Fibonacci Ratios
    4. Fibonacci Time Ratios
    5. Elliott Wave Trades
    6. Trading with the Trend
    7. Trend Reversal Trades
    8. Summary
  17. Chapter 8: Options Trading in the Commodity Markets
    1. What Is an Option?
    2. The Basics of Options
    3. Understanding Option Pricing Models and Theoretical Value
    4. Implied Volatility
    5. Understanding the Greeks
    6. Delta
    7. Gamma
    8. Vega
    9. Theta
    10. Rights and Obligations of Option Buyers and Writers
    11. Underlying Price and Position Profit/Loss
    12. Time Decay
    13. Breakeven Points
    14. Maximum Profit and Maximum Risk
    15. The Primary Uses of Options
    16. Option Trading Strategies
    17. Summary
  18. Chapter 9: Money Management: Staying in the Game
    1. Understanding the Money Game
    2. Understanding the Risks Involved in a Commodity Trade
    3. Dealing with Risk
    4. Slippage and Running of Stops
    5. Fast Markets
    6. Money Management from the Top Down
    7. How Much Money Do You Have Available to Commit?
    8. The Role of a Mechanical System
    9. Tools for Controlling Risk and Maximizing Profits
    10. Determining How Many Contracts to Buy
    11. Other Considerations in Setting Stops
    12. Summary
  19. Chapter 10: Psychology 101: Winning the Mind Game
    1. The First Step toward Trading Success: Setting Realistic Expectations
    2. How the Commodity Markets Can Fool You
    3. Cut Your Losses
    4. Risk Management
    5. Winning and Losing Streaks
    6. The Three Great Obstacles to Trading Success
    7. The Importance of Having a Trading Plan
    8. The Key Elements of the Trading Plan
    9. Periodic Checkups
    10. Applying Proper Account Sizing
    11. Trader's Enemy #1: A Lack of Discipline
    12. The Trader's Paradox
    13. Summary
  20. Chapter 11: Trading Commodity-Related Growth Stocks
    1. Defining Growth
    2. Growth Factors
    3. Commodity-Related Areas and Current Growth
    4. Growth Technicals
    5. Nuts and Bolts
    6. Summary
  21. Chapter 12: Seasonal Commodity Patterns
    1. What Is a Seasonal Pattern?
    2. How Are Seasonal Patterns Identified?
    3. Three Steps to Success
    4. My Favorite Patterns
    5. Summary
  22. Chapter 13: Brokers and the Online Revolution
    1. Ask Your Friends
    2. Assess Your Needs
    3. Understanding Margin
    4. The Online Trading Revolution
    5. Electronic Trading at the CME and Globex
    6. What Is Globex?
    7. Electronic Trading at the New York Mercantile Exchange
    8. Other Products
    9. Selecting a Broker to Trade Electronically
    10. Noncomputerized Commodities and the Future
    11. Summary
  23. Chapter 14: Putting It All Together
    1. Chapter Review
    2. The Three Steps to Trading Success
    3. Specialization
    4. Final Summary
  24. Appendix
    1. Strategy Reviews
    2. Additional Reading List
  25. Glossary
  26. Index