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Trader's First Book on Commodities, A: An Introduction to The World's Fastest Growing Market

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Trader's First Book on Commodities, A: An Introduction to The World's Fastest Growing Market


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Includes critical basic information ignored in other books that helps new traders get properly prepared before they actually begin trading.

  • All the "behind the scenes" knowledge commodity traders need up front: from choosing brokers and data sources to managing margin calls
  • Explains the entire trading process, demystifies the unique language of commodities traders, and shows how to avoid costly mistakes and misunderstandings
  • Also covers market analysis and strategy for when you begin the actual trading process
  • Description

    • Copyright 2010
    • Edition: 1st
    • Book
    • ISBN-10: 0-13-701545-3
    • ISBN-13: 978-0-13-701545-0

    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

    Sample Content

    Online Sample Chapters

    A Crash Course in Commodities

    The Rise and Fall of Commodities: An Introduction

    Sample Pages

    Download the sample pages (includes Introduction, Chapter 1 and Index)

    Table of Contents

    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

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