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

“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

The Simple, Practical, 100% Useful How-To Guide for New Commodities Traders

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. That’s where this book comes in. You won’t find boring theory or bewilderingly complex trading strategies here. You will find 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.

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.

Know the players, know the language, know the techniques

Master the basics painlessly and avoid beginner’s mistakes

Choose the right brokerages, services, trading platforms, and tools

Get what you need; don’t pay for what you don’t need

Make sense of confusing commodities quotes

Know what you’re buying, what it costs, the returns you’re earning, and the risk you’re taking

Build a flexible trading plan that works

Predict price, manage risk, and make trades that reflect your analysis

Related Article

My Mission in Writing "A Trader's First Book on Commodities"

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