commodities for newbies

I've been trading stocks for a while and want to learn about commodities. Looking for basic info: margins, holding overnight, how to roll over contract, etc. Anybody can recommend a book for basic stuff like that?

 

With this day in technology and change... wouldn't it be a brilliant idea to just go on the CME/CBOT or any other exchange website and look at it that way?

Things are always changing.

 

Trading Commodities and Financial Futures: A Step by Step Guide to Mastering the Markets, Third Edition by George Kleinman (Hardcover - Oct 18, 2004)-This book gives a great basic understanding of basic commodities. A lot of other people have said great things about it as well, very easy to read. I personally don't use any of the technical strategies though.

The Complete Idiot's Guide to Options and Futures by Scott Barrie and Scott Barrie (Paperback - Sep 14, 2001)

Futures & Options For Dummies (For Dummies (Business & Personal Finance)) by Joe M.D. Duarte (Paperback - April 10, 2006)


Hot Commodities : How Anyone Can Invest Profitably in the World's Best Market by Jim Rogers (Paperback - Dec 28, 2004)
This is a great book that I have used to model parts of my strategy. All about fundamental analysis, no technical stuff.

 

Good point I agree. However I looked a their sites and found it a bit confusing: too much information.

By the way do commodities still get "locked limit-up" or "limit-down"?

 

Not all of them. Afterall, some markets have no daily limits at all.

 

Very rarely, lumber does a few times a month (like today for instance).

 

Wich commodities have enought liquidity for trading, I'm thinking about position trading.

 

Personally, I don't trade pit contracts, especially cattle futures, look at the chart a few years ago, limit up and down I believe, right around Christmas. The Pit=Shit. Bad fills and slippage, watch them grind your money away. Focus on electronic.

Secondly, and I am not affiliated with either, I would look at commonsensecommodities.com, David Duty, or supportandresistance.com. Both cost money, I have purchased, used both and I believe they are good value. I would highly recommend finding a teacher or mentor that you can watch atleast some of the time. Tom and Erich that run supportandresistance.com have a Wednesday night webinar and spend a couple hours going through their set ups. It was a good starting place for me. Good luck,

Dan

 

Thanks guys.

How important to follow fundamentals for position trading in futures based on your experience?

 

Aloha Radolym,

So you are coming over from stocks..?

The real basics of the game is revealed in something like Reminiscences of a Stock Operator Illustrated

Most of what you learned trading stocks will carry over. So, it depends pretty much on where you are at and where you want to go.
The best place for ever-changing margin information is your hired research company. Other than that your broker.. Exchange sites are very hard to use and there search engines suck!

If you are a long-term trader, then you will be holding over night. Rolling over is just a case of covering the expiring contracts and doing the opposite with something further out simultaneously. Spread orders may work but MOC (market on close), may be the surest bet.

Books again depends what you know. Authors like Angell, Darvis, and Joe Ross explain things simply. When it gets technical, Wells Wilder.

Exchange web sites are not for beginners, or traders for that matter. Don’t waste your time trying to get anything useful out of them. You need a web site by traders not someone who earns their livelihood off of traders. See if you can find the word slippage in a brokers or exchanges website.

Boring, Dummies & Idiot’s!

Keep it simple. Try your local library.

The idea here is if some contract goes ballistic it is probably because of some factors unknown to the general public. They shut down trading until the “news,” has time to make the rounds. You can protect yourself by spreading off on something correlated that is not locked limit (that is unless you are on the right side of it).

Bookmark this link Open Interest Updated daily you can compare the volume and liquidity between various possibilities.

It is important to use futures to trade the larger fundamental picture.

Jakes “Seasonality : Systems, Strategies, and Signals,” is a good place for a recent explanation. The original is from Livermore.

In conclusion you may want to approach these questions to a great trading teacher like Joe Ross. You can search the Chat Archives and come up with some new insites.