Spread Trading

JonnyT

Senior member
2,560 22
Any one trade commodity spreads?

Any good books on this subject?

I'm particulary looking to position trade Commodities to suplement my Day trading of Currencies.

Thanks

JonnyT
 

bgold

Established member
532 5
I have recently started myself. Bought the following:

Joe Ross, Trading spreads and seasonals
Courtney Smith: Futures Spread trading: The complete Guide.

Haven't yet read them in full but do provide the basics and more. Try also www.MRCI.com for ideas etc.
Good luck
 

dant

Newbie
6 0
Direct equity bb

don't forget http://www.direct-equity.net/forum/default.asp
Great BB with a few good spread traders. The guy that runs the site has been spread trading for quite a few years now and will bend over backwards to aid you in your spreading journey. He has posted on here before and probably goes under the name Wagnerz or possibly Andreas.

I am currently trialing the Tnt software and it appears pretty good. You can chart spreads and also show a seasonal indicator (only on single contracts though). It has functions that show you the point move between 2 points in dollars which I find very handy - better than manually calculating it. You can also export your data to a variety of formats. For instance, one could export all data to Metastock where you can then overlay say, each Nov Soybean contract for the last 10 years on the one chart maintaining the same scale - very interesting. Good software (no personal interest in it blah, blah ....)

dant.
 

bgold

Established member
532 5
dant said:
don't forget http://www.direct-equity.net/forum/default.asp
Great BB with a few good spread traders. The guy that runs the site has been spread trading for quite a few years now and will bend over backwards to aid you in your spreading journey. He has posted on here before and probably goes under the name Wagnerz or possibly Andreas.

I am currently trialing the Tnt software and it appears pretty good. You can chart spreads and also show a seasonal indicator (only on single contracts though). It has functions that show you the point move between 2 points in dollars which I find very handy - better than manually calculating it. You can also export your data to a variety of formats. For instance, one could export all data to Metastock where you can then overlay say, each Nov Soybean contract for the last 10 years on the one chart maintaining the same scale - very interesting. Good software (no personal interest in it blah, blah ....)

dant.
DANT,
I wouyld agree with you. Andreas has been bvery helpful to me. His website has lots of interesting posts. Unfortunately, traffic is (still) quite low with sporadic posts and the site is not as advanced as T2W (fe no e-mail notifications and complex uploading of charts).
I have heard good stories about TNT.
I am using eSignal where one can in the Advanced Chart create virtually all spread relationships (although it took me a little to getr proper spreads in intermarket products (like crushspread). Data can also been exported etc, etc
 

-oo0(GoldTrader)

Well-known member
345 5
Books




1. Trading Spreads and Seasonals
by Joe Ross


-oo0(GoldTrader)0oo-'s comments:
Best book for trading Seasonal Spreads. Joe introduces filters and how to use technical indicators. You should update to Lane's %D Stochastics. This is a trading manual not a book about trading.

2. Reminiscences of a Stock Operator Illustrated
by Edwin Lefevre, et al


-oo0(GoldTrader)0oo-'s comments:
Original 1923 source for the use and abuse of pyramids. Jesse shows you why and how to build pyramids. How to place orders, how to sell short, when to get out and how long to hold a position.

3. Seasonality : Systems, Strategies, and Signals (Wiley Trading)
by Jake Bernstein


-oo0(GoldTrader)0oo-'s comments:
Jake explains how Seasonal patterns are the heart of consistent profits in trading spreads. As long as summer follows winter we will have tradable cycles. Use with a clearer spread chart service.

4. Trade Your Way to Financial Freedom
by Van K. Tharp


-oo0(GoldTrader)0oo-'s comments:
SnowFight metaphor, Expectancy, Position-Sizing strategies

5. Spread Trading: Low-Risk Strategies for Profiting from Market Relationships
by Howard Abell


-oo0(GoldTrader)0oo-'s comments:
This is a Napoleon Hill of Spread trading book. It has interviews with spread traders, a Eurodollar spread floor trader, as well as with Steve Moore who publishes daily Internet spread charts.

6. Tricks of the Floor Trader: Insider Trading Techniques for the Off-the-Floor Trader by Neil T. Weintraub

-oo0(GoldTrader)0oo-'s comments:
Composite of ideas, systems and methods used by floor traders trading spreads. Primarily short term but includes longer-term seasonal trades. Like book “How young millionaires trade commodities.”

7. Futures Spread Trading: The Complete Guide
by Courtney D. Smith


-oo0(GoldTrader)0oo-'s comments:
Courtney Smith’s textbook is specifically and comprehensive about spreads. His whole book is about spreads and nothing but spreads. Probably the most useful from the fundamental perspective.

8. The Wisdom of the Ages in Acquiring Wealth
by Welles Wilder


-oo0(GoldTrader)0oo-'s comments:
The Wisdom of the Ages in Acquiring Wealth is THE textbook for "Wealth Acquisition 101!"

9. How I Made 2,000,000 in the Stock Market
by Nicolas Darvas


-oo0(GoldTrader)0oo-'s comments:
When prices move out of a narrow trading range, this often leads to an extended move in the same direction as the break. The box-breakout technique works well on all securities including Spreads.

10. New Concepts in Technical Trading Systems by J. Welles Wilder

-oo0(GoldTrader)0oo-'s comments:
Original work on how indicators predict tops and bottoms.

11. A Complete Guide to the Futures Markets : Fundamental Analysis, Technical Analysis, Trading, Spreads, and Options
by Jack D. Schwager



-oo0(GoldTrader)0oo-'s comments:
Schwager’s textbooks while not specifically about spreads are comprehensive and complete about futures. This book has a small section about trading commodity futures spreads.

12. Advanced Commodity Spread Trading
by Harold Goldberg



-oo0(GoldTrader)0oo-'s comments:
Catching the big moves in spread trading is what Twin-Line does best. Harold’s method relies on two indices to put on and offset positions. Signals often occur near or on trendline breakouts.

13. Fortune Building Commodity Spreads
by Thomas Kallard


-oo0(GoldTrader)0oo-'s comments:
Spread Trading in Commodity markets.

14. Sure Thing Commodity Trading: How Seasonal Factors Influence Commodity Prices
by Larry Williams



-oo0(GoldTrader)0oo-'s comments:
Comprehensive guide to the effective use of futures, seasonal concepts, methods and systems.

15. The Handbook of Economic Cycles: Jake Berstein's Comprehensive Guide to Repetitive Price Patterns in Stocks, Futures, and Financials by Jacob Bernstein, Jake Bernstein

-oo0(GoldTrader)0oo-'s comments:
Any up to date spread chart service will uncover these spreads. The exchange gives lower margins on spreads because of there reliability. These books offer different trading perspectives.

16. Traders Instruction Book by Burton H. Pugh

-oo0(GoldTrader)0oo-'s comments:
Burton H. Pugh

17. A Better Way to Make Money
by Burton H. Pugh


-oo0(GoldTrader)0oo-'s comments:
Burton H. Pugh

18. The Fundamentals and Techniques of Trading Commodity Spreads by Inc. Center for Futures Education

-oo0(GoldTrader)0oo-'s comments:
Small Booklet no new material, last chart 1978, soon to be out of print.

19. Charlie D. : The Story of the Legendary Bond Trader
by William D. Falloon



-oo0(GoldTrader)0oo-'s comments:
Charlie made most of his money as a pure spread trader. He Simultaneously traded both sides of the market, taking little blips out with enormous size. Not much about trading Spreads.

20. Trading Chicago Style: Insights and Strategies of Today's Top Traders [DOWNLOAD: MICROSOFT READER]
by Neal T. Weintraub



-oo0(GoldTrader)0oo-'s comments:
"Scalping, position trading, and spreading," Basic!

21. Cycles, the Science of Prediction by Edward R. Dewey

-oo0(GoldTrader)0oo-'s comments:
Dewey on Cycles

22. Cycles: The Mysterious Forces that Trigger Events by Edward R. Dewey

-oo0(GoldTrader)0oo-'s comments:
Dewey on Cycles

23. The I Ching or Book of Changes
by C.F. Baynes (Editor), et al



-oo0(GoldTrader)0oo-'s comments:
The Ching puts in plain words the laws of change upon which the concepts of seasonality are based. Change is a natural phenomenon that can be charted and predicted. Envision the big picture.

24. Tao Te Ching: The Book of Meaning and Life (Arkana S.)
by Lao Tzu, Richard Wilhelm (Translator)



-oo0(GoldTrader)0oo-'s comments:
The I Ching is the philosophy of change; Wilhelm’s Tao Te Ching is about action. Managing your position when you are in it. Spread trading is the middle path between stocks and outright futures.
 
 
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