Академический Документы
Профессиональный Документы
Культура Документы
by Kevin Kerr
Wiley © 2007
233 pages
Focus Take-Aways
Leadership & Mgt. • Trading commodities is exciting and stressful.
Strategy
Sales & Marketing • The commodities markets are going through a boom period.
Finance
Human Resources • It takes self-discipline to be a successful trader.
IT, Production & Logistics
• Keep a tight grip on your emotions and don’t be greedy.
Career Development
Small Business
• Traders fall into two groups: hedgers and speculators.
Economics & Politics
Industries • A good technical charting system can help you predict the future.
Intercultural Mgt.
Concepts & Trends • A technical system is only as good as the trader using it.
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Relevance
Recommendation
If you are looking for a strong point of view that boosts the optimists’ side of commodities
trading, this is it. But Kevin Kerr’s assurance that you can make money by trading
commodities does not take into account the real risks involved, and could mislead potential
traders. The truth is that the odds are stacked strongly against any investor, particularly in
the now nearly-extinct open-outcry pit trading that Kerr discusses at length. However, his
rundown of the basic facts about the commodities markets will give you a start in learning
about this arcane investment science. getAbstract suggests that it may fit in as one among
many texts you might want to study before jumping into the pit.
Abstract
Commodity Markets
Commodity futures provide producers and traders with a method of smoothing out price
“Cycles in movements and a means of capitalizing on market moves. Commodity markets have their
commodities roots in ancient times when futures contracts were made primarily to actually receive or
can be very deliver the underlying commodity – for example, 200 sheep. Now, in only one out of 100
predictable. There
are no CEOs on trades does a delivery settle the contract.
the inside cooking
The world commodity markets are booming now. Demand from China, India and the
the books. There
are no accounting United States for raw materials is pushing markets up. Look out for vulnerable commodities
firms puffing up – those affected by global storm seasons. The hurricanes that hit the U.S. in 2005 created
profit reports.” enormous demand for building materials for reconstruction, sugar and natural gas. Sugar
is a key ingredient in the manufacture of ethanol, and the hurricanes badly affected the
sugar crops in Florida, as well as the supplies of natural gas, used in heating and cooling.
You can make money in commodities. It is not difficult to predict market cycles, and
in many ways commodity trading is less risky than stock market gambles. The most
important commodities traded now include:
• Gold – Gold and other precious metals have been registering record high after record
“The commodities
markets are
high. Gold is, of course, a hedge against inflation. It is also important in jewelry and,
always in flux, and thanks to electronic gold credits, it is re-emerging as a currency.
it’s important to • Silver – Silver recently recorded its highest closing price in more than two decades.
keep up with new
markets and new
An exchange-traded fund in silver has helped drive the market up.
opportunities.” • Heavy metals – Platinum and palladium are important as raw materials for various
electronic instruments. These markets are volatile and margins are steep, but they
offer great opportunities.
• Energy – Oil is the most important commodity in the energy markets, but electricity
and even solar power have potential. Coal prices have been rising, and coal may be
an important part of the solution to the oil crisis.
A Maniac Commodity Trader’s Guide to Making a Fortune © Copyright 2007 getAbstract 2 of 5
• Beef – Beef prices have been climbing with demand. Supplies are tight, but more
“Freemasons
countries are opening their markets to U.S. shipments. However, the market for cattle
would be may be too volatile and illiquid for beginners.
considered a • Tropicals – The commodities of coffee, sugar, cocoa, cotton and orange juice grow
fairly open society
compared with
mostly in the tropics and are also called the “softs.” Ethanol demand is helping push
floor traders... the price of sugar up, and demand is also rising for cocoa and coffee. These markets
The world of the are fast and volatile.
exchanges is
one unto itself.” • Soy – Beans, oil and meal are three distinct markets, each with its own fundamentals.
• Water – The world’s population is growing and demand for water is rising, especially
in China, but the supply of fresh, clean water is shrinking. The Dow Jones U.S. Water
Index lists 23 companies, most of them utilities.
Technical traders have their own jargon to describe various kinds of patterns, and a
variety of theories to explain what the patterns mean. Technical analysis may be most
useful as a guide to timing market moves. However, technical know-how is only part of
what a trader needs.
“Whether you
do it on the floor Fundamental analysis is used to forecast eceonomic conditions, and includes everything
or electronically, from interest rates to crop failures to natural disasters. The underlying fundamentals will
trading is trading.” affect commodity prices; for example, a geopolitical crisis in the Persian Gulf or a blight
in the Midwest may affect the price of oil or corn, respectively. An old saying about
speculation rings true: “Buy on the rumor, sell on the news.” Be careful not to have an
open position on the day that a major report about fundamentals is released. Recognize,
too, that fundamentals are often widely known and already priced into the market.
The traditional “open-outcry” market is giving way to electronic trading, but open-outcry
markets will always be necessary for at least some purposes. However, major exchanges
have been focusing more and more on electronic trading, which, unlike traditional pits,
is open 24 hours a day and can be traded anywhere in the world.
The futures markets are a great place to make money. However, trading successfully
requires an enormous amount of discipline, an ability to think independently, and an iron
grip on your emotions. The five most important trading rules are:
“Every journey
begins with that
1. Understand your market thoroughly.
first step; set aside 2. Know the various types of orders and how to use them.
any fears and
go for it.”
3. Don’t trade beyond your comfort level.
4. Trade with a plan and a strategy.
5. Check your emotions at the door.