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The Complete Guide to Futures Trading: What You Need to Know about the Risks and Rewards

Book Description

PRAISE FORThe Complete Guide to FUTURES TRADING

"It does a good job of conveying, in a style that is clear to the layman, how the futures world works and what is required to succeed as a trader."

Financial Engineering News

"This landmark book makes futures trading accessible to mainstream individual investors. As chief executive officer of the largest financial exchange in the world for trading futures and options, I can wholeheartedly recommend this volume for the reader who wants to learn the fundamentals of investing in futures."

—From the Foreword by Craig S. Donohue, Chief Executive Officer, Chicago Mercantile Exchange

"The Complete Guide to Futures Trading is the ultimate 'getting started' guide. The book leads you through an informative yet concise course with an A-to-Z explanation of how to trade futures successfully. eSignal has partnered with Lind-Waldock for more than a decade to provide futures traders with reliable, accurate, and actionable data. This is a much-needed and well-written resource for the new futures trader."

—Chuck Thompson, President, eSignal

"My hat is off to the authors of this extremely well-written and timely book about futures trading. If the experts are right that the next bull market will be in commodities, this guide will find a large audience among investors interested in diversifying beyond stocks and bonds. This guide does a terrific job of explaining the practical aspects of futures trading and will be of great use to anyone interested in using these instruments to participate in market trends."

—John Damgard, President, Futures Industry Association

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Contents
  5. Foreword
  6. Preface
  7. About the Contributors
  8. CHAPTER 1: Futures
    1. HISTORICAL ROOTS
    2. WHAT FUTURES ARE
    3. WHAT FUTURES ARE NOT
    4. WHO TRADES FUTURES?
    5. MAKING YOUR CHOICE
  9. CHAPTER 2: Becoming a Futures Trader
    1. TRADING DECISION ISSUES
    2. FUNDAMENTAL ANALYSIS HIGHLIGHTS
    3. TECHNICAL ANALYSIS HIGHLIGHTS
    4. PUTTING IT ALL TOGETHER
  10. CHAPTER 3: Trading with a Broker as a Partner
    1. WHAT A BROKER CAN OFFER
    2. OPTIONS VERSUS FUTURES
    3. MARKET SHOULD FIT STRATEGY
    4. PAPER TRADING, BACK-TESTING
  11. CHAPTER 4: Letting the Pros Trade Your Account
    1. WHY MANAGED FUTURES?
    2. WHERE DO YOU START?
    3. EVALUATING TRADING PROGRAMS
    4. INVESTING IN MANAGED FUTURES
  12. CHAPTER 5: Using an Auto-Executing Trading System
    1. WHY AN AUTO-EXECUTING TRADING SYSTEM?
    2. LOOK AT YOURSELF FIRST
    3. WHAT TO LOOK FOR IN A TRADING SYSTEM
    4. WHY “SUCCESSFUL” SYSTEMS MAY FAIL
    5. SUMMING UP SYSTEMS
  13. CHAPTER 6: Resources for the Self-Directed Trader
    1. BROKERAGE FIRM CHOICE
    2. TRADING PLATFORM
    3. TRADING SUPPORT TOOLS
    4. MATCH RESOURCES TO YOUR NEEDS
  14. CHAPTER 7: Knowing Your Margins and Marching Orders
    1. TRADING ON MARGIN
    2. ORDER TYPES
    3. PLACING ORDERS
    4. TIPS ABOUT TRADING MECHANICS
    5. CONNECTIVITY ISSUES AND QUESTIONS
  15. CHAPTER 8: Futures
    1. EQUITY-BASED FUTURES
    2. FINANCIAL INSTRUMENTS
    3. COMMODITIES
  16. CHAPTER 9: Options on Futures
    1. ISSUES TO CONSIDER WHEN INVESTING IN FUTURES OPTIONS
    2. MECHANICS OF FUTURES OPTIONS
    3. BASIC FUTURES OPTIONS STRATEGIES
  17. CHAPTER 10: Forex
    1. WHAT IS THE FOREX MARKET?
    2. EXCHANGE RATES AND CENTRAL BANKS
    3. THE TRADING INSTRUMENT
    4. SPOT MARKET VERSUS FUTURES MARKET
    5. ELECTRONIC TRADING
    6. COSTS OF TRADING
  18. CHAPTER 11: Deciding to Trade
    1. THE MONEY FACTOR
    2. TIME FOR TRADING
    3. KNOWING THE MARKET
    4. WHO ARE YOU?
    5. YOUR TRADING PLAN
    6. PICKING A BROKERAGE FIRM
  19. CHAPTER 12: Opening an Account
    1. OPENING ACCOUNT INFORMATION
    2. RISK DISCLOSURES
    3. TYPE OF ACCOUNT
    4. POWER OF ATTORNEY
    5. CUSTOMER IDENTIFICATION (PATRIOT ACT REQUIREMENTS)
    6. SINGLE-STOCK FUTURES
    7. ACCOUNT FUNDING REQUIREMENTS
    8. MARGIN CALLS
    9. RESOLVING DISPUTES
  20. CHAPTER 13: The Tax Factor for Traders
    1. SECTION 1256 CONTRACTS
    2. HOW TO REPORT GAINS OR LOSSES
    3. SPECIAL CONSIDERATIONS
  21. CHAPTER 14: The Business of Futures
    1. REGULATORY STRUCTURE
    2. FUTURES EXCHANGES
    3. CLEARINGHOUSES
    4. FUTURES INDUSTRY PROFESSIONALS
  22. APPENDIX A: Domestic and International Futures Contract Volume
  23. APPENDIX B: Futures Contract Specifications
  24. Appendix C: Speculative Margins
  25. Glossary
  26. Index