Commodity FUTURES Trading

Home Study Course

A Complete Education that will show you

How to Trade Commodity Futures More Successfully.
Commodity FUTURES Trading Homestudy Course Table of Content
Updated: March 13, 2003

1. Introduction
A. Objectives of this commodity futures trading course .................................... 1-1
B. Why trade commodities? ............................................................................. 1-2
C. Commodity vs. stocks .................................................................................. 1-2
D. Notices ........................................................................................................ 1-3

2. Basic Futures Terms and Information

A. Types of futures contract orders ................................................................... 2-3
B. The purpose of futures trading ..................................................................... 2-6

3. Commodity Futures Contract Specifications

4. Analyzing Commodity Price Chart Patterns

A. Support and resistance ................................................................................. 4-2
B. Price chart patterns ....................................................................................... 4-3
C. Common price patterns ................................................................................. 4-3
D. 1-2-3 Top / 1-2-3 Bottom ............................................................................ 4-4
E. How to calculate a 50 percent retracement objective .................................... 4-6
F. How to calculate (and quantify) risk vs. reward ........................................... 4-6
G. Trading range .............................................................................................. 4-8
H. Gaps ............................................................................................................ 4-9
I. Head and shoulders top / Head and shoulders bottom .................................. 4-10
J. Triangles ..................................................................................................... 4-11

5. Selection Tools
A. Commercials ................................................................................................ 5-2
B. Market sentiment ......................................................................................... 5-5
C. Open interest ............................................................................................... 5-8
D. Premium market .......................................................................................... 5-10

6. Confirming Tools
A. 10-week moving average ............................................................................. 6-2
B. 14-day Relative Strength Index (RSI) .......................................................... 6-3
C. Stochastics .................................................................................................. 6-4
D. 14-day ADX (Average Directional Movement Index) .................................. 6-6
E. 7-bar ADX (Average Directional Movement Index) ..................................... 6-6
F. Volume ........................................................................................................ 6-7
G. Moving averages (4-day, 9-day, 18-day, 40-day) ......................................... 6-9
H. Gaps and limit moves ................................................................................... 6-10
I. Seasonal tendency ........................................................................................ 6-11

http://www.Learn-Futures.com i 8 1999-2003 Thomas Wnorowski

7. Timing Tools
A. %R .............................................................................................................. 7-1
B. Accumulation/Distribution Index ................................................................. 7-2
C. 25-day momentum index .............................................................................. 7-3
D. Cash Basis ................................................................................................... 7-3
E. Cycles ......................................................................................................... 7-4
F. Entry techniques .......................................................................................... 7-6
G. Distribution days ......................................................................................... 7-7
G. How to exit a position .................................................................................. 7-7

8. Damage Control
A. Money management ..................................................................................... 8-1
B. Trading plan ................................................................................................ 8-2
C. Stop-loss orders ............................................................................................ 8-4

9. Paper Trading
A. Paper trading requirements ........................................................................... 9-2
B. Paper trading steps ....................................................................................... 9-2
C. Trading process ............................................................................................ 9-5

10. Pyramids & Pillars

11. Miscellaneous Rules and Advice

A. Miscellaneous rules ..................................................................................... 11-1
B. Miscellaneous advice ................................................................................... 11-1
C. Miscellaneous information ........................................................................... 11-3
D. Where most of your time should be spent .................................................... 11-4
E. When to take profits .................................................................................... 11-5
F. Final thoughts .............................................................................................. 11-5

12. Options (an introduction)

Appendix A. Commodity Futures Glossary

Appendix B. Commodity Futures Trading Resources
Appendix C. Trading Forms
Appendix D. Seasonal Facts

http://www.Learn-Futures.com ii 8 1999-2003 Thomas Wnorowski

Notices
This course is sold as is, without warranty of any kind, either express or implied,
respecting the contents of this course, including but not limited to implied warranties for
the course's quality, performance, merchantability, or fitness for any particular purpose.

Neither the owner nor its dealers or distributors shall be liable to the purchaser or any
other person or entity with respect to any liability, loss, or damage caused or alleged to
have been caused directly or indirectly by this course.

Making copies of any part of this course for any purpose other than your own personal use
is a violation of United States Copyright Laws.

http://www.Learn-Futures.com iii 8 1999-2003 Thomas Wnorowski