The New Commodity Trading Guide Breakthrough Strategies for Capturing Market Profits

by Kleinman, George

• ISBN13: 9780137145294
• ISBN10: 0137145292
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-03-10
• Publisher: Ft Pr

Summary

While providing traders with strategies for today's electronic, global commodity markets, commodities expert Kleinman uncovers new trading techniques and new approaches designed for today's faster-moving futures markets. In this work, he reveals the new practical realities and specific strategies for capitalizing on today's radically different markets.

Author Biography

George Kleinman is President of the successful futures advisory, brokerage, and trading firm, Commodity Resource Corp (CRC). George founded CRC in 1983 from the floor of the Minneapolis Grain Exchange to offer a more personalized level of service to commodity traders.

 

He entered the business with Merrill Lynch Commodities (1978-1983). At Merrill he attained the honor of “Golden Circle”--one of Merrill’s top ten commodity brokers internationally. For more than 25 years, George was a member of various commodity exchanges. He is the author of three previous books on commodities and futures trading.

 

He has developed his own proprietary trading techniques and is Executive Editor of the commodity trading advisory service Futures Market Forecaster. In 1995, George relocated to northern Nevada and today trades from his office overlooking beautiful Lake Tahoe.

Table of Contents

Going the Way of the Dodo	p. 1
It's Different This Time?	p. 2
Eliminating People	p. 11
Capturing a 5,000% Return	p. 21
Two Chart Patterns That Work!	p. 29
The Breakout from Consolidation	p. 31
False Breakouts	p. 36
Six Rules for Trading Breakouts from Consolidation	p. 37
The Head and Shoulders (H&S)	p. 38
Ten Rules for Successfully Trading the Head and Shoulders	p. 43
The Voice from the Tomb (Super Seasonal #1)	p. 47
The Soy Secret (Super Seasonal #2)	p. 53
The Significant News Indicator	p. 59
Six News Rules	p. 60
SNI Rules	p. 63
Breaking Par	p. 71
A "Par" Case Study	p. 74
The Trend Is Your Friend	p. 79
The Natural Number Method: A Breakthrough Strategy for Capturing Market Profits	p. 85
The Natural Number Method (N#M)	p. 93
How to Generate a Trade Signal	p. 93
The Buy Signal	p. 93
The Sell Signal	p. 95
The Corn Campaign	p. 99
Diversification	p. 126
The 50-Day EMA	p. 132
The RSI	p. 132
Open Interest (OI)	p. 134
Summary	p. 139
How the Entry and Exit Prices and Return-Per-Contract Results Are Determined	p. 144
Additional Trading Points for N#M	p. 145
Determining the Time Interval	p. 145
Time Interval Guide	p. 145
Natural Number Break Points	p. 148
Improvements-Should Judgment Ever Be Used?	p. 150
Entering or Exiting Early When Close to the Natural Number	p. 151
Final Thoughts	p. 152
Trading Chaos	p. 153
Moving Average Primer, an Open Interest Primer, and the Advanced Open Interest Course	p. 157
A Moving Average Primer	p. 157
Bottom Pickers Versus Trend Followers	p. 158
A Moving Picture	p. 159
The Simple Moving Average	p. 161
How Many Days Should You Use in Your MA?	p. 164
Disadvantages of the SMA	p. 164
Alternatives to the SMA	p. 165
Exponential and Weighted Moving Averages (EMA and WMA)	p. 165
Summary	p. 168
Open Interest	p. 168
The Open Interest Primer	p. 168
The Advanced OI Course	p. 169
Six Profit Rules for Analyzing OI	p. 170
Index	p. 173
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Going the Way of the Dodo Going the Way of the Dodo "Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." Charles Mackay, 1841, Memoirs of Extraordinary Popular Delusions and the Madness of CrowdsThe dodo, a flightless bird, has been extinct since the 17th century.According to Wikipedia, the verb phrase to "go the way of the dodo" means to become obsolete, to fall out of common usage, or to become a thing of the past. The dodo is considered the poster child for an extinct species because its demise was directly attributable to human activity. (They were good to eat and easy to catch.)Have you ever wondered whether the last dodo bird was aware of being the very last one?On the first trading day of 2008, the price of crude oil easily exceeded $99 per barrel, due to a Nigerian rebel attack on oil-producing facilities. The rumor circulating trading desks globally was that this would be the daythe first day in history that oil prices would trade at that psychological stratospheric barrier of $100 per barrel.I was watching the oil market that day and saw it approach $100, but it never quite reached it. The market traded at a new all-time high of approximately $99.80 but then ran out of steam and rolled over. Oil prices continued trading lower just as I received a "Breaking News" e-mail from Marketwatch that read: "Oil trades at $100 for the first time ever." I turned to my assistant and asked her what she showed as the high crude oil price. "It's $99.81," Nancy told me. "Last print, $99.50." So I looked at the other delivery months, but they were all trading at a discountnot even close to $100. I thought to myself, they just got it wrong this time.That night, I was watching the evening news on NBC and the anchor reported: "Oil in New York traded today, for the first time ever, at $100 per barrel." "How could they all get this so wrong?" I thought. Then it dawned on me. Like most traders, I was watching the electronic oil market where more than 99% of all trades take place. I didn't think to check the pit market that hardly anyone traded on or looked at anymore. Sure enough, "the pit" had recorded a different high than "the screen"exactly $100 per barrel. The wire services had picked up on this feat and reported it as headline news around the world. Of course, this raised the question, why would anyone pay more than the market when they could have easily bought at the screen price? The pit trade is fast disappearing because it's slower than electronic trading. Was this merely an aberration?The next day, the full story came out. On January 2, 2008, 747,748 one-thousand-barrel contracts changed hands, with 99% of them trading on the screen and just one of those contracts trading at the price of $100. This lone contract changed hands (as we had already discovered) in the pit. I really wouldn't call this a "legitimate" trade, even though an exchange spokesman called it just that in a press release the following day. The man behind this rec