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    Day Trading Grain Futures: A practical guide to trading for a living
    Day Trading Grain Futures: A practical guide to trading for a living
    Day Trading Grain Futures: A practical guide to trading for a living
    Ebook199 pages1 hour

    Day Trading Grain Futures: A practical guide to trading for a living

    By David Bennett

    ()

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    About this ebook


    UPDATED AND EXTENDED 2ND EDITION
    This practical book provides you with everything you need to be able to day trade grain futures effectively. It opens with chapters explaining the author's preference for the grain futures markets, and his reasons for preferring to day trade, before going on to explain the fundamentals of trading and the more specific knowledge required for his chosen approach.
    In a concise, punchy style the reader is introduced to some timeless trading concepts, and shown how these ideas can be moulded into a trading system to attack the exhilarating grain markets. No sophisticated indicators or complex mathematics are found here. Instead, the author builds a system based on tried and true trading principles, combined with sound money management strategies. The particular challenge for a day trader during the volatile market open is to quickly identify support and resistance zones, and form a view on trend direction, based on limited information. The author describes how he does this, with detailed illustrations and real life examples. He then goes on to explain exactly how, based on the initial market movement, he determines stop loss and target levels.
    A key feature of the book is the chapter tracing the progress of a real life trading session. It shows the author's methods being applied in practice, with numerous screen shots giving the reader an understanding of what the trading process feels like in practice - effectively giving you a fly on the wall view of the author in action. Another highly illustrated chapter shows a complete month of trading charts with commentary on trades taken, giving the reader an appreciation of the longer term trading process. A process described by the author as "constant repetition of a simple plan, concentrating on implementation excellence". Other chapters outline the author's views on the need for practice, and discuss the practical points a home-based trader should attend to in their computer and internet set up.
    The book's focus is to highlight the exciting opportunities of grain futures and provide the vital detailed and hands-on information that will make it invaluable to all futures, equity, options or CFD traders.
    LanguageEnglish
    PublisherHarriman House
    Release dateAug 14, 2017
    ISBN9780857196606
    Day Trading Grain Futures: A practical guide to trading for a living
    Author

    David Bennett

    David Bennett is from Sydney, Australia and is pursuing a DPhil (PhD) in theology at the University of Oxford. A founding member of the Church of England’s Archbishops’ college of evangelists, he holds undergraduate and postgraduate degrees from Oxford and a master’s degree in theology from the University of St. Andrews, Scotland.  

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      Book preview

      Day Trading Grain Futures - David Bennett

      Day Trading Grain Futures

      A practical guide to trading for a living

      Second Edition

      David Bennett

      Contents

      About the Author

      A Note on the

      Second Edition

      Preface

      Prologue

      Part I:

      Day Trading Grain Futures

      Chapter 1:

      Introduction

      Chapter 2:

      Why Trade

      the Grains?

      Chapter 3:

      Why Day

      Trading?

      Chapter 4:

      It’s All a Gamble

      Chapter 5:

      It’s All About Managing Risk

      Chapter 6:

      What Do I Trade?

      Chapter 7:

      What a Speculative Trader Does

      Chapter 8:

      Charts

      Chapter 9:

      Support and Resistance

      Chapter 10:

      Entry Rules

      Chapter 11:

      Managing

      the Trade

      Chapter 12:

      Implementing

      the Plan

      Chapter 13:

      My Trading

      Calculator

      Chapter 14:

      My Trading

      Screen

      Chapter 15:

      A Case Study

      Chapter 16:

      A Month at

      the Tables

      Chapter 17:

      The Importance

      of Practice

      Chapter 18:

      The Computer

      Set-up

      Chapter 19:

      The Trading

      Ritual

      Part II:

      Reflections 10 Years On

      Chapter 20:

      A Winter’s Day

      Chapter 21:

      I’m a Trader

      Chapter 22:

      What’s This

      Psychology Stuff?

      Bibliography

      Publishing details

      About the Author

      David Bennett

      is a futures trader living on the Gold Coast in Australia. His formal career spanned computing, teaching and human resource management, but his passion is trading. For many years I tried every trading technique I heard about, with indifferent results, but then I got into day trading grain futures – and I’ve never looked back! A citizen of three countries, UK, New Zealand and Australia, David has followed the sun. The trouble is my body keeps adapting, and I have to go somewhere warmer! However, a youngster at school means staying put, for now at least. David initially became interested in finance and trading when he was chairman of the trustees of a large superannuation fund, working closely with professional fund managers. He believes that a fit body sharpens the mind, and tries to spend as much time as possible jogging, surfing or hitting a ball on the squash court. He has served as a Community Magistrate in New Zealand.

      David’s recent focus has been on developing commercial-grade software to fully automate his personal trading. This project saved me a huge amount of time and stress, while improving my trading accuracy. My idea was to turn my PC into a money machine working in the spare room while I went surfing! He markets this software at TradeOnAuto.com.

      A Note on the

      Second Edition

      I

      t’s been nearly

      ten years since I wrote the first edition of this book, and things change. But, of course, the more things change, the more they stay the same…

      When I wrote the first edition, I traded manually. I was a night owl, because Chicago markets open around midnight here in Australia. I used the method described in this book, and it was an adrenaline-pumping experience. But late nights and broken sleep weren’t quite the ideal I was aiming for. Really, I wanted my PC to be a money machine, whirring away in the spare room, while I got on with a busy retirement.

      Fortunately, I was educated in computer science. So, after the book was published, I dusted off dormant programming skills and began automating my trading. Eventually, I built a software tool (called TradeOnAUTO) that enabled me to start my program early in the day and leave it trading, automatically while I slept. This was a huge step forward; I gained good quality sleep, saved several hours per day, and my strategy was always executed flawlessly (no mistakes!).

      In 2013, the CME (Chicago Mercantile Exchange), bless them, twice changed the trading hours of the grains complex. This changed the trading characteristics of those markets, resulting in a poor period for my strategy, and forced me to look at other markets. I developed a simulator, feeding old market sessions into my program to see how various strategy permutations would perform over time. I liked this approach so much that I built it into TradeOnAUTO, so I could easily research new strategies. Now, as well as grains, I trade S&P 500 E-mini futures and the energy complex (oil, heating oil, petroleum).

      So, yes, much has changed, but the technique is still the same, with a few minor tweaks here and there. The parameters in other markets differ from those used in the book – for example, I no longer focus my attention solely on two-minute candles. (Twenty-four-hour markets respond better to longer time frames.) It’s perfectly feasible to trade this technique manually (just as I used to), and indeed for a beginner seeking to get the feel of market trading, I believe it’s a good idea to do so. Practise with a paper trading account before using a live account – markets bite! Apart from changing a few factual items (such as those pesky trading hours!) I’ve left the text unaltered, because it captures the technique beautifully. I’ve added a few chapters at the end, random thoughts of an old trader…

      David Bennett

      2017

      Preface

      What this book covers

      T

      his book is

      about trading soybean, wheat and corn (the grains) futures contracts. The contracts are traded at the CME in Chicago. Only the electronic contracts are considered because these can be traded efficiently by anybody with a reliable internet connection, no matter where they are located.

      (Strictly speaking, soybeans are oilseeds, not grains. But rather than refer to the grain and oilseeds complex, which is a bit of a mouthful, I just refer to the grains.)

      While the book does not discuss options, CFDs, spread betting, or any other derivative products, much of its content is relevant to people trading those instruments. Indeed, I have worked with traders who successfully apply these techniques to trading ordinary shares. This methodology is not market specific.

      The focus is on day trading (not holding the positions overnight), but that is purely my preference. There is nothing preventing these same techniques from being used to find and manage trades in other time frames.

      In short, the book is all about how I day trade the grain markets. But the techniques employed are broadly applicable to most markets and time frames.

      Some readers might wish for a broader description of trading techniques. There are, after all, an endless number of trading styles and systems out there. But this book was born out of a project to document exactly what I do, and why I do it, on a day-to-day basis as I trade the markets. It concentrates on the style I use, on the system choices I have made, and doesn’t make any attempt to discuss alternatives.

      Who this book is for

      This book is written for people who have (probably) already done a bit of trading and are looking for a disciplined methodology that aims to earn reasonable returns while managing risk sensibly. The text will resonate well among those with prior experience in the markets, because its emphasis is on the realities of the trading process, not just theory.

      That said, I have worked with clients who have never traded before. The book contains all the information needed to apply my methods, but it is not a trading textbook.

      For example, my introduction to charting in chapter 8 is very brief. It tells you what you need to know to implement my trading approach, and no more. It makes no claim to be a comprehensive introduction to the subject.

      As a further example, when I discuss order types, I talk exclusively about the order types I use to implement my approach, but I don’t provide a description of all the order types available to traders. If I don’t need it, I don’t describe it.

      A novice can use this book, and I think they would learn a lot from it. But he or she should be prepared to supplement the coverage here with further reading and research. The books recommended in the Appendix would be useful in this respect.

      Every subject has its own jargon, and trading is no exception. I’ve generally tried to define the terms I use, but as my target audience is people with some trading experience, a complete newcomer may come across terms that puzzle them. Again, the recommended texts in the Appendix will help, or a simple search on the internet will generally bring enlightenment.

      How the book is structured

      When I go to the technical bookshop, I sit down with several trading books and browse through them. As often as not, I find a chapter or so in each book that interests me, and skip the rest. I’ve tried to make this into a book that I would like to read the whole way through.

      I recognise that some chapters or sections

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