A Complete Guide to the Futures Market

Auteur

JACK D. SCHWAGER is a co-founder of FundSeeder, a web-based technology and investment business designed to connect undiscovered trading talent with sources of investment capital. He is the author of numerous acclaimed financial books, including the Market Wizards series and Market Sense and Nonsense. MARK ETZKORN is founder of FinCom Media. He was formerly Editor-in-Chief of Active Trader magazine, editor at Futures magazine, and a member of the Chicago Mercantile Exchange. He has authored, edited, and contributed to more than 10 books on the financial markets.

Texte du rabat

"Jack Schwager strikes again with yet another bullseye. A Complete Guide to the Futures Market will quickly become, and remain for many years, the definitive textbook for information on the futures market. The book covers the gamut of futures markets from technical and fundamental analysis to systematic trading to spreads and options. This book is a must-read for any trader in the futures markets."
?Peter Brandt, Trader & publisher of the Factor Report THE ESSENTIAL FUTURES REFERENCE GUIDE A Complete Guide to the Futures Market is an indispensable reference for futures traders and analysts of all skill levels. Spanning every topic from technical analysis, trading systems, and fundamental analysis to options, spreads, and practical trading principles, this definitive guide is required reading for any trader or investor who wants to understand and successfully navigate the futures market. This fully revised and updated second edition provides a solid foundation in futures market basics, details key analysis and forecasting techniques, explores advanced trading concepts, and illustrates the practical application of these ideas with hundreds of market examples. A Complete Guide to the Futures Market:

• Details different trading and analytical approaches, including chart analysis, technical indicators and trading systems, regression analysis, and fundamental market models
• Separates misleading market myths from trading realities
• Gives step-by-step instruction for developing and testing original trading ideas and systems
• Illustrates a wide range of option and spread strategies, and explains the trading implications of each
• Details a wealth of practical trading guidelines and market insights from a recognized trading authority Trading the futures market without a firm grasp of its realities and nuances is a recipe for losing money. A Complete Guide to the Futures Market provides serious traders and investors with the tools to keep themselves on the right side of the ledger.

Résumé
For Amazon customers: The new version of the book, printed on higher quality paper, is now available to purchase. The essential futures market reference guide A Complete Guide to the Futures Market is the comprehensive resource for futures traders and analysts.

Contenu

About the Authors xv

Part I Preliminaries

Chapter 1 For Beginners Only 3

Purpose of This Chapter 3

The Nature of Futures Markets 3

Delivery 4

Contract Specifications 5

Volume and Open Interest 9

Hedging 11

Trading 15

Types of Orders 16

Commissions and Margins 19

Tax Considerations 19

Chapter 2 The Great Fundamental versus Technical Analysis Debate 21

Part II Chart Analysis and Technical Indicators

Chapter 3 Charts: Forecasting Tool or Folklore? 27

Chapter 4 Types of Charts 35

Bar Charts 35

Linked Contract Series: Nearest Futures versus Continuous Futures 39

Close-Only ("Line") Charts 40

Point-and-Figure Charts 42

Candlestick Charts 43

Chapter 5 Linking Contracts for Long-Term Chart Analysis: Nearest versus Continuous Futures 45

The Necessity of Linked-Contract Charts 45

Methods of Creating Linked-Contract Charts 46

Nearest versus Continuous Futures in Chart Analysis 48

Conclusion 51

Chapter 6 Trends 57

Defining Trends by Highs and Lows 57

TD Lines 66

Internal Trend Lines 73

Moving Averages 78

Chapter 7 Trading Ranges 83

Trading Ranges: Trading Considerations 83

Trading Range Breakouts 86

Chapter 8 Support and Resistance 91

Nearest Futures or Continuous Futures? 91

Trading Ranges 92

Prior Major Highs and Lows 94

Concentrations of Relative Highs and Relative Lows 101

Trend Lines, Channels, and Internal Trend Lines 106

Price Envelope Bands 107

Chapter 9 Chart Patterns 109

One-Day Patterns 109

Continuation Patterns 122

Top and Bottom Formations 134

Chapter 10 Is Chart Analysis Still Valid? 149

Chapter 11 Technical Indicators 155

What Is an Indicator? 155

The Basic Indicator Calculations 157

Comparing Indicators 157

Moving Average Types 165

Oscillators and Trading Signals 167

Indicator Myths 170

Indicator "Types" 172

Conclusion 173

Part III Applying Chart Analysis to Trading

Chapter 12 Midtrend Entry and Pyramiding 177

Chapter 13 Choosing Stop-Loss Points 183

Chapter 14 Setting Objectives and Other Position Exit Criteria 189

Chart-Based Objectives 189

Measured Move 190

Rule of Seven 194

Support and Resistance Levels 196

Overbought/Oversold Indicators 198

DeMark Sequential 199

Contrary Opinion 203

Trailing Stops 204

Change of Market Opinion 204

Chapter 15 The Most Important Rule in Chart Analysis 205

Failed Signals 205

Bull and Bear Traps 205

False Trend Line Breakouts 211

Return to Spike Extremes 213

Return to Wide-Ranging Day Extremes 216

Counter-to-Anticipated Breakout of Flag or Pennant 219

Opposite Direction Breakout of Flag or Pennant Following a Normal Breakout 222

Penetration of Top and Bottom Formations 225

Breaking of Curvature 229

The Future Reliability of Failed Signals 229

Conclusion 231

Part IV Trading Systems and Performance Measurement

Chapter 16 Technical Trading Systems: Structure and Design 235

The Benefits of a Mechanical Trading System 236

Three Basic Types of Systems 236

Trend-Following Systems 237

Ten Common Problems with Standard Trend-Following Systems 244

Possible Modifications for Basic Trend-Following Systems 247

Countertrend Systems 254

Diversification 256

Ten Common Problems with Trend-Following Systems Revisited 259

Chapter 17 Examples of Original Trading Systems 261

Wide-Ranging-Day System 261

Run-Day Breakout System 268

Run-Day Consecutive Count System 273

Conclusion 278

Chapter 18 Selecting the Best Futures Price Series for System Testing 279

Actual Contract Series 279

Nearest Futures 280

Constant-Forward ("Perpetual") Series 281

Continuous (Spread-Adjusted) Price Series 282

Comparing the Series 285

Conclusion 287

Chapter 19 Testing and Optimizing Trading Systems 289

The Well-Chosen Example 289

Basic Concepts and Definitions 291

Choosing the Price Series 293

Choosing the Time Period 293

Realistic Assumptions 295

Optimizing Systems 297

The Optimization Myth 298

Testing versus Fitting 310

The Truth about Simulated Results 312

Multimarket System Testing 313

Negative Results 314

Ten Steps in Constructing and Testing a Trading System 315

Observations about Trading Systems 316

Chapter 20 How to Evaluate Past Performance 319

Why Return Alone Is Meaningless 319

Risk-Adjusted Return Measures 323

Visual Performance Evaluation 335

Investment Insights 343

Part V Fundamental Analysis

Chapter 21 Fourteen Popular Fallacies, or What Not to Do Wrong 347

Five Short Scenes 347

The Fourteen Fallacies 349

Chapter 22 Supply-Demand Analysis: Basic Economic Theory 359

Supply and Demand Defined 359

The Problem of Quantifying Demand 362

Understanding the Difference between Consumption and Demand 363

The Need to Incorporate Dema…