A Trader's First Book on Commodities
An Introduction to The World's Fastest Growing Market
Published on 11. February 2010
Book
Hardback
256 pages
978-0-13-701545-0 (ISBN)
Description
You can make large profits by trading commodities--but you'll need significant practical knowledge of the associated risks and market characteristics before you start. A Trader's First Book on Commodities is a simple, practical and useful guide for new commodities traders. Author Carley Garner provides specific guidance on accessing commodity markets cost-effectively, avoiding common beginners' mistakes, and improving the odds of successful, profitable trades.
Drawing on her extensive experience teaching traders, Garner shows how to calculate profit, loss, and risk in commodities, and choose the best brokerage firm, service level, data sources, and market access for your needs. She'll help you:
? Master the basics of trading commodities painlessly, avoiding beginners mistakes
? Get what you need, and prevent paying for what you don't need
? Know what you're buying, what it costs, the returns you're earning and the risk you're taking
? Predict price, manage risk, and make trades that reflect your analysis
Garner demystifies the industry's colorful language, helps you clearly understand what you're buying and selling, and walks you through the entire trading process. She concludes with a refreshingly new look at topics such as trading plans, handling margin calls, and even maintaining emotional stability as a trader.
"This book provides the type of information every trader needs to know and the type of information too many traders had to learn the hard and expensive way. Carley offers practical need-to-know, real-world trading tips that are lacking in many books on futures. It will help not only the novice trader, but seasoned veterans as well. This book will serve as a must-have reference in every trader's library."
--Phil Flynn, Vice President and Senior Market analyst at PFGBest Research, and a Fox Business Network contributor
"Refreshing-It's nice to see a broker who has actually been exposed to the professional side of trading and who bridges that chasm between exchange floor trading and customer service. Carley takes the time to explain verbiage, not just throw buzz words around. A good educational read in my opinion."
--Don Bright, Director, Bright Trading, LLC
"This book has the perfect name, the perfect message, and the necessary information for any beginning trader. Take this book home!"
--Glen Larson, President, Genesis Financial Technologies, Inc.
"As a 35-year veteran of the CME/CBOT trading floor, I can tell you...those who think they can begin trading commodities without knowing the less talked about topics that Carley discusses in A Trader's First Book on Commodities are sadly mistaken. Anyone who trades their own account, or would like to, should read this book."
--Danny Riley, DT Trading
Drawing on her extensive experience teaching traders, Garner shows how to calculate profit, loss, and risk in commodities, and choose the best brokerage firm, service level, data sources, and market access for your needs. She'll help you:
? Master the basics of trading commodities painlessly, avoiding beginners mistakes
? Get what you need, and prevent paying for what you don't need
? Know what you're buying, what it costs, the returns you're earning and the risk you're taking
? Predict price, manage risk, and make trades that reflect your analysis
Garner demystifies the industry's colorful language, helps you clearly understand what you're buying and selling, and walks you through the entire trading process. She concludes with a refreshingly new look at topics such as trading plans, handling margin calls, and even maintaining emotional stability as a trader.
"This book provides the type of information every trader needs to know and the type of information too many traders had to learn the hard and expensive way. Carley offers practical need-to-know, real-world trading tips that are lacking in many books on futures. It will help not only the novice trader, but seasoned veterans as well. This book will serve as a must-have reference in every trader's library."
--Phil Flynn, Vice President and Senior Market analyst at PFGBest Research, and a Fox Business Network contributor
"Refreshing-It's nice to see a broker who has actually been exposed to the professional side of trading and who bridges that chasm between exchange floor trading and customer service. Carley takes the time to explain verbiage, not just throw buzz words around. A good educational read in my opinion."
--Don Bright, Director, Bright Trading, LLC
"This book has the perfect name, the perfect message, and the necessary information for any beginning trader. Take this book home!"
--Glen Larson, President, Genesis Financial Technologies, Inc.
"As a 35-year veteran of the CME/CBOT trading floor, I can tell you...those who think they can begin trading commodities without knowing the less talked about topics that Carley discusses in A Trader's First Book on Commodities are sadly mistaken. Anyone who trades their own account, or would like to, should read this book."
--Danny Riley, DT Trading
More details
Language
English
Place of publication
Upper Saddle River
United States
Publishing group
Pearson Education (US)
Target group
Professional and scholarly
Dimensions
Height: 186 mm
Width: 236 mm
Thickness: 24 mm
Weight
580 gr
ISBN-13
978-0-13-701545-0 (9780137015450)
Copyright in bibliographic data is held by Nielsen Book Services Limited or its licensors: all rights reserved.
Schweitzer Classification
Other editions
New editions
Carley Garner
A Trader's First Book on Commodities
An Introduction to the World's Fastest Growing Market
Book
01/2016
2nd Edition
Financial TImes Prentice Hall
€39.60
Article is exhausted; no reprint
Carley Garner
A Trader's First Book on Commodities
An Introduction to the World's Fastest Growing Market
Book
01/2013
2nd Edition
Financial TImes Prentice Hall
€32.18
Article is exhausted; no reprint
Person
Carley Garner is Senior Market Analyst and Broker with DeCarley Trading and a columnist for Stocks & Commodities. The author of Commodity Options, Garner writes two widely distributed e-newsletters, The Stock Index Report and The Bond Bulletin.
Her work has been featured in Stocks & Commodities, Futures, Active Trader, Option Trader, Your Trading Edge, and PitNews Magazine. She has been quoted in media ranging from Reuters to Investor's Business Daily and The Wall Street Journal. Garner provides free trading education to investors at www.decarleyrading.com.
Her work has been featured in Stocks & Commodities, Futures, Active Trader, Option Trader, Your Trading Edge, and PitNews Magazine. She has been quoted in media ranging from Reuters to Investor's Business Daily and The Wall Street Journal. Garner provides free trading education to investors at www.decarleyrading.com.
Content
Introduction The Rise and Fall of Commodities 1
A Commodity Rally for the History Books 1
A Day of Reckoning 7
The Speculators' Role 8
Fortunes Made and Lost 10
Conclusion 13
Chapter 1: A Crash Course in Commodities 15
How It All Began 15
The CME Group 17
Evolution of the Forward Contract into a Futures Contract 18
Cash Market Versus Futures Market 21
Contract Expiration 23
The Mechanics of Futures Contracts 25
Futures Spreads 32
A Brief Introduction to Commodity Options 33
Chapter 2: Hedging Versus Speculating 37
Commodity Hedgers 37
Commodity Speculators 42
Chapter 3: The Organized Chaos of Open Outcry and the Advent of Electronic Trading 45
The Pit 46
Electronically Traded Markets 47
"Side by Side" 48
Costly Commodity Quotes 54
Open Outcry Quote Reporting and Access 54
Electronic Quote Transmission 56
Subscribing to Quotes 57
Charting 58
Free Trading Platforms and Market Access 58
Paid Trading Platforms 59
Auto Approval Versus Manual Approval 60
Order Desk ("The Desk") 62
Is It Worth Paying Platform Fees or Subscribing to Quotes? 63
Chapter 5: Choosing a Brokerage Firm 65
Introducing Brokers, Futures Commission Merchants, and Broker/Dealers 66
Fill Quality 69
Behind the Scenes of Transaction Costs 70
Discount Brokerage or Full-Service Specialization 71
What You Should Know About Commission Structure: Blanket or Variable Rates? 72
Market Access 75
Beyond Your Broker 77
Conclusion 79
Chapter 6: Finding a Broker That "Fits" and Choosing a Service Level 81
Understand Your Broker's Business 83
Get to Know Your Futures Broker 84
Full Service Broker or Self Directed Online? 88
Why Using a Broker May Be a Good Idea 90
Conclusion 93
Chapter 7: Order Types and How to Use Them 95
Order Types 95
Placing a Trade with Your Broker 108
Placing a Trade Online 111
Chapter 8: Making Cents of Commodity Quotes 113
Quoting Grain Futures 115
Not All Grains Are Created Equal 119
The Meats 122
Foods and Fiber 125
Precious Metals Futures 130
Gold, Platinum, and Palladium Futures 131
The Other Metal Futures 133
Chapter 9: Figuring in Financial Futures-Stock Indices, Interest Rates, and Currencies 137
The Boring but Necessary Basics 137
Stock Index Futures 138
Dow Jones Industrial Average Futures 141
NASDAQ 100 Futures 143
S&P 500 Futures 146
Russell 2000 Futures 151
Interest Rate Futures 151
Treasury Bond and Note Futures 153
Eurodollar Futures 164
Currency Futures 167
Conclusion 170
Chapter 10: Coping with Margin Calls 171
What Is Margin? 171
Day Trading Margin Versus Overnight Margin 172
How to Handle a Margin Call 173
The Margin Call Countdown 175
Accepting Margin Calls 177
Chapter 11: The Only Magic in Trading-Emotional Stability 179
Three Emotions in Trading: Fear, Greed, Frustration 181
Revengeful Trading Is Counterproductive 187
Capital Preservation aka Risk Management 188
Chapter 12: Trading Is a Business-Have a Plan 189
The Trading Game Plan 190
A Trading System Alone Isn't a "Business Plan" 191
Constructing a Business Plan in Trading 195
Price Speculation (Ideally Prediction) 196
Choosing a Trading Vehicle 198
Risk Management 199
Chapter 13: Why You Should Speculate in Futures 207
Speculating in Futures Versus Speculating in Equities 208
Risk Capital Only 214
Conclusion 215
Chapter 14: Futures Slang and Terminology 217
Bull Versus Bear 217
Spread 219
Contract Month Slang 220
Red Months 220
Fill 221
Blow Out 222
Blow Up 222
Keypunch Error 222
Busted Trade or Moved Trade 223
Net Liq 224
Equity 224
Beans 225
Commodity Currency 226
Dead Cat Bounce 226
Bottom Fishing 227
Chasing the Market 227
Limit Moves 228
The Tape 228
Trading Solution and Front-End Platform 229
Proprietary Trading 229
Running Stops 229
Short Squeeze 230
Babysitting 230
Scalp 231
Slippage 231
Working Order 232
Unable 232
Handle 232
Overbought/Oversold 233
Debit/Account Debit 233
Round Turns 233
Trading Environment 234
Index 235
A Commodity Rally for the History Books 1
A Day of Reckoning 7
The Speculators' Role 8
Fortunes Made and Lost 10
Conclusion 13
Chapter 1: A Crash Course in Commodities 15
How It All Began 15
The CME Group 17
Evolution of the Forward Contract into a Futures Contract 18
Cash Market Versus Futures Market 21
Contract Expiration 23
The Mechanics of Futures Contracts 25
Futures Spreads 32
A Brief Introduction to Commodity Options 33
Chapter 2: Hedging Versus Speculating 37
Commodity Hedgers 37
Commodity Speculators 42
Chapter 3: The Organized Chaos of Open Outcry and the Advent of Electronic Trading 45
The Pit 46
Electronically Traded Markets 47
"Side by Side" 48
Costly Commodity Quotes 54
Open Outcry Quote Reporting and Access 54
Electronic Quote Transmission 56
Subscribing to Quotes 57
Charting 58
Free Trading Platforms and Market Access 58
Paid Trading Platforms 59
Auto Approval Versus Manual Approval 60
Order Desk ("The Desk") 62
Is It Worth Paying Platform Fees or Subscribing to Quotes? 63
Chapter 5: Choosing a Brokerage Firm 65
Introducing Brokers, Futures Commission Merchants, and Broker/Dealers 66
Fill Quality 69
Behind the Scenes of Transaction Costs 70
Discount Brokerage or Full-Service Specialization 71
What You Should Know About Commission Structure: Blanket or Variable Rates? 72
Market Access 75
Beyond Your Broker 77
Conclusion 79
Chapter 6: Finding a Broker That "Fits" and Choosing a Service Level 81
Understand Your Broker's Business 83
Get to Know Your Futures Broker 84
Full Service Broker or Self Directed Online? 88
Why Using a Broker May Be a Good Idea 90
Conclusion 93
Chapter 7: Order Types and How to Use Them 95
Order Types 95
Placing a Trade with Your Broker 108
Placing a Trade Online 111
Chapter 8: Making Cents of Commodity Quotes 113
Quoting Grain Futures 115
Not All Grains Are Created Equal 119
The Meats 122
Foods and Fiber 125
Precious Metals Futures 130
Gold, Platinum, and Palladium Futures 131
The Other Metal Futures 133
Chapter 9: Figuring in Financial Futures-Stock Indices, Interest Rates, and Currencies 137
The Boring but Necessary Basics 137
Stock Index Futures 138
Dow Jones Industrial Average Futures 141
NASDAQ 100 Futures 143
S&P 500 Futures 146
Russell 2000 Futures 151
Interest Rate Futures 151
Treasury Bond and Note Futures 153
Eurodollar Futures 164
Currency Futures 167
Conclusion 170
Chapter 10: Coping with Margin Calls 171
What Is Margin? 171
Day Trading Margin Versus Overnight Margin 172
How to Handle a Margin Call 173
The Margin Call Countdown 175
Accepting Margin Calls 177
Chapter 11: The Only Magic in Trading-Emotional Stability 179
Three Emotions in Trading: Fear, Greed, Frustration 181
Revengeful Trading Is Counterproductive 187
Capital Preservation aka Risk Management 188
Chapter 12: Trading Is a Business-Have a Plan 189
The Trading Game Plan 190
A Trading System Alone Isn't a "Business Plan" 191
Constructing a Business Plan in Trading 195
Price Speculation (Ideally Prediction) 196
Choosing a Trading Vehicle 198
Risk Management 199
Chapter 13: Why You Should Speculate in Futures 207
Speculating in Futures Versus Speculating in Equities 208
Risk Capital Only 214
Conclusion 215
Chapter 14: Futures Slang and Terminology 217
Bull Versus Bear 217
Spread 219
Contract Month Slang 220
Red Months 220
Fill 221
Blow Out 222
Blow Up 222
Keypunch Error 222
Busted Trade or Moved Trade 223
Net Liq 224
Equity 224
Beans 225
Commodity Currency 226
Dead Cat Bounce 226
Bottom Fishing 227
Chasing the Market 227
Limit Moves 228
The Tape 228
Trading Solution and Front-End Platform 229
Proprietary Trading 229
Running Stops 229
Short Squeeze 230
Babysitting 230
Scalp 231
Slippage 231
Working Order 232
Unable 232
Handle 232
Overbought/Oversold 233
Debit/Account Debit 233
Round Turns 233
Trading Environment 234
Index 235