Jack D. Schwager - A Complete Guide to the Futures Market: Technical Analysis, Trading Systems, Fundamental Analysis, Options, Spreads, and Trading Principles

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SECOND EDITION

Jack D. Schwager

Mark Etzkorn

Cover images: Stock Chart Adam Kazmierski/iStockphoto; Abstract Background Olga Altunina/ iStockphoto

Cover design: Wiley

Copyright 2017 by Jack D. Schwager. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

The first edition of A Complete Guide to the Futures Market was published by John Wiley & Sons in 1984.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Names: Schwager, Jack D., 1948- author.

Title: A complete guide to the futures market : fundamental analysis, technical analysis, trading, spreads and options / Jack D. Schwager.

Description: Second edition. | Hoboken, New Jersey : John Wiley & Sons, Inc., [2017] | Series: Wiley trading series | Includes index.

Identifiers: LCCN 2016034802 (print) | LCCN 2016047999 (ebook) | ISBN 9781118853757 (pbk.) | ISBN 9781118859599 (pdf) | ISBN 9781118859544 (epub)

Subjects: LCSH: Futures market. | Commodity exchanges. | Hedging (Finance)

Classification: LCC HG6046 .S39 2017 (print) | LCC HG6046 (ebook) | DDC 332.64/52-dc23

LC record available at https://lccn.loc.gov/2016034802

In memory of Stephen Chronowitz, my mentor and friend.

Jack Schwager is a co-founder and Chief Research Officer of FundSeeder, a firm that seeks to find undiscovered trading talent worldwide via its trader platform (FundSeeder.com), and a co-founder of FundSeeder Investments (FundSeederinvest.com), which seeks to connect properly regulated traders with sources of investment capital. Mr. Schwager is a recognized industry expert in futures and hedge funds and the author of a number of widely acclaimed financial books. Previously, Mr. Schwager was a partner in the Fortune Group (20012010), a London-based hedge fund advisory firm. His prior experience also includes 22 years as Director of Futures research for some of Wall Streets leading firms, most recently Prudential Securities.

Mr. Schwager has written extensively on the futures industry and great traders in all financial markets. He is perhaps best known for his best-selling series of interviews with the greatest hedge fund managers of the last three decades: Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001), Hedge Fund Market Wizards (2012), and The Little Book of Market Wizards (2014). His other books include Market Sense and Nonsense (2012), a compendium of investment misconceptions, and the three-volume series Schwager on Futures, consisting of Fundamental Analysis (1995), Technical Analysis (1996), and Managed Trading (1996). He is also the author of Getting Started in Technical Analysis (1999), part of Wileys popular Getting Started series.

Mr. Schwager is a frequent seminar speaker and has lectured on a range of analytical topics including the characteristics of great traders, investment fallacies, hedge fund portfolios, managed accounts, technical analysis, and trading system evaluation. He holds a BA in Economics from Brooklyn College (1970) and an MA in Economics from Brown University (1971).

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.

If a little knowledge is dangerous, where is the man who has so much as to be out of danger?

Thomas Henry Huxley

The focus of this book is on analysis and trading. Although these subjects are explored in far greater depth than in most general commodity texts, the presentation in the following chapters does not assume any prior knowledge except for a familiarity with the basic concepts of futures markets. This chapter is intended to provide a sketch of the background information necessary to make this book accessible to the novice reader. The title of this chapter should be taken literally. Traders who are already familiar with futures markets should proceed directly to Chapter 2.