A Trader's First Book on Commodities (Introduction & Chapter 5): Choosing a Brokerage Firm

by Carley Garner

This download is a chapter from A Trader's First Book on Commodities: An Introduction to the World's Fastest Growing Market (ISBN: 0137015453) by Carley Garner. Available in print and digital formats.

Read the following excerpt from the Introduction:

The Rise and Fall of Commodities

It was nothing less than breathtaking to witness the grain complex shatter all-time high price records and continue to climb during the 2007/2008 rally. However, by late 2008 the party had ended. Many retail traders and fund managers watched in horror as the grains made their way relentlessly lower. The selling pressure and losses in the commodity markets was so profound that hedge fund managers experienced unprecedented numbers of redemption requests, which added fuel to the already raging fire. Ironically, the same asset class that investors swarmed to for “diversification” from stocks later played a role in the demise of equities. As investors pulled money from hedge funds, margin issues and client redemptions forced funds to liquidate positions in both commodity-related and noncommodity-related speculative bets.

“There is no tool to change human nature…people are prone to recurring bouts of optimism and pessimism that manifest themselves from time to time in the buildup or cessation of speculative excesses.”

Alan Greenspan

A Commodity Rally for the History Books

Several theories attempt to explain the now infamous commodity rally, including ethanol demand, long only hedge funds, ETFs, shear market exuberance in the absence of an attractive equity market, and sidelined cash looking for a home. One thing is certain…the euphoria caused the agricultural, energy, and metals markets to overshoot their equilibrium prices.

To continue reading, download this Introduction & Chapter 5. The full book is also available for sale in print and electronic formats.

Genres: Business, Finance, Nonfiction

256 pages, Kindle Edition

First published December 14, 2009

About the author

Senior Commodity Market Strategist and Broker, STOCKS & COMMODITIES Magazine Columnist, TheStreet.com Contributor, and Author

Carley Garner is an experienced futures and options broker with DeCarley Trading, a division of Zaner Group, in Las Vegas, Nevada. She is also the author of Higher Probability Commodity Trading; A Trader's First Book on Commodities (two editions); Currency Trading in the Forex and Futures Markets; and Commodity Options. Her e-newsletters, The DeCarley Perspective and The Financial Futures Report, have garnered a loyal following; she is also proactive in providing free trading education at www.DeCarleyTrading.com.

Carley is a magna cum laude graduate of the University of Nevada Las Vegas, from which she earned dual bachelor’s degrees in finance and accounting. Carley jumped into the options and futures industry with both feet in early 2004 and has become one of the most recognized names in the business. Her commodity market analysis is often referenced on Jim Cramer’s Mad Money on CNBC and she is a regular contributor to TheStreet.com and its Real Money Pro service.

Carley authors a monthly column in STOCKS & COMMODITIES magazine and has been featured in the likes of Futures, Active Trader, Option Trader magazines, and many more. She has been quoted by Investor’s Business Daily and The Wall Street Journal and has also been known to participate in radio interviews. She can be found on the speaking circuit.

Reviews

[Daniel · Rating 4 out of 5]

I had no idea what commodities were when I picked up this book to read. I liked learning a little of the history of futures, I liked reading about the commodities like sugar, coffee, metals. I like that she talk about brokers, the math involved, I enjoyed reading the book

[Donald · Rating 2 out of 5]

Much of this one is either pointless or dated. While there may still be viable information included, it is not presented well either initially or after the editing process. The first half of this book could be delivered in a few pages by someone with better editing skills.

[Hüseyin Çötel · Rating 1 out of 5]

Dont read this book if you are not kidnapped for it

[Carley Garner · Rating 5 out of 5]

Why I wrote "A Trader's First Book on Commodities" ~ Carley Garner

Years of dealing with retail traders from all walks of life, experience levels, and amounts of risk capital, prompted me to compile the answers to the most pressing questions asked by commodity newcomers into a single source. As an industry insider, I feel as though I have developed a keen understanding of the risks and rewards of commodity trading and the goal of "A Trader's First Book in Commodities" was to deliver a candid, yet optimistic and entertaining account of the realities involved.

[Jak · Rating 1 out of 5]

As someone who sells to the professional commodities trading communities I expected the book to aimed more at someone like a graduate who's breaking into the market with a trading house. Unfortunately it was actually aimed at retail traders and therefore, rather than discussing actual commodities and how they are traded, the book spent half it's time discussing different types of brokers and trading systems.

As I'm clearly the wrong target audience it's hard to say if he book would be of any use or not for other readers. But for me, it was a painful read and not much use.

[Thomson Kneeland · Rating 3 out of 5]

A good book for the beginner new to commodities and trading. Most of the information in here I was already aware of from trading stocks and options, but it still added a few insights for me regarding differences with the futures markets. Well written, and the best book I've found for a newbie, but not really pertinent for an intermediate/advanced trader. Nevertheless, well written, clear, and methodical.

[Johns · Rating 2 out of 5]

OK, if you intend to become an active commodities trader, this is a necessary book for you to read. BUT . . . if you only want to decipher commodities pricing (that's me!) then this is not the book for you. I'm still panting for a simple chart or description that teaches me how to understand feeder cattle or corn pricing or beans quotes that I see on farm channel TV. Are these units per pound? per ton? per bushel? per animal? WHAT? Still looking to learn.

[Brendan · Rating 2 out of 5]

I just read through this ( not read completely ) I might as well be a guide to playing Texas hold'em. Speculation add nothing to the acutal economy. The best part is ' You can trade futures in an IRA ' < Carley doesn't advocate that put feels obliged to mention it ! >

[A · Rating 3 out of 5]

broad based, but quite info dense book. Title is honestly named

[Mills College Library]

332.6328 G2343 2013