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Trading Commodities and Financial Futures: A Step-by-Step Guide to Mastering the Markets, Fourth Edition

Book Description

As an asset class, commodities are now as important as stocks and bonds – and with rapid growth in demand, profit opportunities in commodities are larger than ever. But today’s computer-driven markets are volatile and chaotic. Fortunately, you can profit consistently – and this tutorial will show you how. Building on more than 30 years of market success, George Kleinman introduces powerful trend-based techniques for consistently trading in your “sweet spot” for profits.

Kleinman reveals exactly how the commodities markets have changed – and how you can use consistent discipline to avoid “shark-infested waters” and manage the market’s most dangerous risks. Ideal for every beginning-to-intermediate level trader, speculator, and investor, this guide begins with the absolute basics, and takes you all the way to highly-sophisticated strategies.

You’ll discover how futures and options trading work today, how trading psychology impacts commodity markets even in an age of high-frequency computer trading, and how to avoid the latest pitfalls. Kleinman offers extensively updated coverage of electronic trading, today’s contracts, and advanced trading techniques – including his exclusive, powerful Pivot Indicator approach.

Three previous editions of this tutorial have become international best-sellers. But the game has changed. Win it the way it’s played right now, with Trading Commodities and Financial Futures, Fourth Edition.

Table of Contents

  1. Title Page
  2. Copyright Page
  3. Praise for Trading Commodities and Financial Futures, Third Edition
  4. Dedication Page
  5. Contents
  6. Important Risk Disclosures
  7. Acknowledgments
  8. About the Author
  9. Introduction
  10. 1. The Four Essentials
    1. Do you have what it takes?
    2. Patience
    3. Knowledge
    4. Guts
    5. Health and rest
  11. 2. How to Become a Successful Trader
  12. 3. A Diabolical Story
  13. 4. The Futures Primer
    1. Futures markets and the futures contract
    2. It is as easy to sell “short” as to buy “long”
    3. Margin and leverage
    4. Delivery months
    5. Brokers and commissions
    6. The players
    7. Basis risk
    8. The short hedge
    9. The long hedge
    10. The basis
    11. Speculators versus hedgers
    12. How is the price determined?
    13. Order placement
    14. Another true story
  14. 5. The Options Course
    1. An options primer
    2. An option for what?
    3. Advantages and disadvantages of options
    4. Types of options
    5. Strike prices
    6. Styles of options
    7. How are option prices quoted?
    8. Buy ’em and sell ’em
    9. Advantages and disadvantages of selling options
    10. How options work
    11. How are option prices determined?
    12. How changes in the price of the underlying commodity change an option’s premium
    13. Exercising profitable options
    14. Should you ever exercise an option?
    15. If selling options puts the odds in my favor, why not do it?
    16. Options as a hedging tool
    17. Stock index options
    18. Advanced option strategies
    19. Straddles and strangles
    20. Ratios
    21. Eight winning option trading rules
  15. 6. The Intermediate Trading Course (Or Just Enough Knowledge to Be Dangerous!)
    1. Fundamental analysis
    2. Technical analysis
    3. Which is best: fundamental or technical analysis?
    4. The 4 futures groupings
    5. Financial futures
    6. Energies
    7. Agriculturals
    8. Metals
    9. Continuing your commodity trading education
    10. Contrary opinion theory
    11. Spreads
  16. 7. Algorithms Eliminating People
    1. Open outcry is dead
    2. Rogue algos
    3. Exploding volatility
    4. Speeds accelerating
    5. Melding the old with the new
    6. Panics, manias, and bubbles
    7. Explosive commodity demand
  17. 8. The Advanced Trading Course
    1. Fundamentals versus technicals
    2. Does technical analysis really work?
    3. The trend is your friend
    4. Basic chart analysis
    5. The trendline
    6. Trend channels
    7. Support and resistance
    8. Breakouts from consolidation
    9. Additional classic chart patterns
    10. Volume
    11. Open interest
    12. RSI
    13. Stochastics
    14. Elliot wave analysis
    15. Point and figure charts
    16. Japanese candlestick charts
    17. Spreads—a valuable forecasting tool
    18. Head and shoulders
    19. GK’s significant news indicator
    20. Breaking par
  18. 9. The Moving Averages Primer
    1. Bottom pickers versus trend followers
    2. A moving picture
    3. The simple moving average
    4. How many days should you use in your moving average?
    5. Alternatives to the SMA
    6. Exponential and weighted moving averages
    7. Natural numbers
  19. 10. GK’s Pivot Indicator
    1. Generating the buy signal
    2. Generating the sell signal
    3. The pivot indicator method in practice
    4. Diversification
  20. 11. And Finally
    1. Determining your motive
    2. Overcoming the six hurdles to trading success
    3. Developing the winning touch
    4. If you don’t feel right, you won’t trade right
    5. Jesse’s secret
    6. Comments or questions?
  21. Appendix. 25 Trading Secrets of the Pros
    1. Secret 1: The trend is your friend!
    2. Secret 2: When a market is cheap or a market is expensive, there probably is a good reason
    3. Secret 3: The best trades are the hardest to do
    4. Secret 4: Have a plan before you trade and then work it
    5. Secret 5: Be aggressive
    6. Secret 6: No regrets
    7. Secret 7: Money management is the key
    8. Secret 8: Success comes easier when you specialize
    9. Secret 9: Patience pays
    10. Secret 10: Guts are as important as patience and more important than money
    11. Secret 11: The “tape” (quotes) will trick you
    12. Secret 12: Be skeptical
    13. Secret 13: Be time cognizant
    14. Secret 14: Watch the reaction to “the news”
    15. Secret 15: Never trade when you’re sick, worried, or tired
    16. Secret 16: Overtrading: your greatest enemy
    17. Secret 17: Keep a cool head during blow-offs
    18. Secret 18: Never let a good profit turn into a loss
    19. Secret 19: When in doubt, get out
    20. Secret 20: Spread your risks by diversification
    21. Secret 21: Pyramid the correct way
    22. Secret 22: Watch for breakouts from consolidation
    23. Secret 23: Go with the relative strength
    24. Secret 24: Limit moves are important indicators of support and resistance
    25. Secret 25: Never average a loss
  22. Index
  23. Financial Times Press