Beginning futures traders: For those new to the futures game, this collection of nine past Active Trader Articles will provide a solid foundation for understanding how the futures market works, the unique characteristics of futures contracts, and an introduction to some basic futures data and analysis tools.

This collection is 30 percent off the regular price. Price shown is the discounted price.


ARTICLE 1: "The futures advantage" by Active Trader Staff (Oct. 2002)
Summary/excerpt: Part one of a two–part guide showing the unique short–term trading benefits of futures. The article also explains basic principles, highlights key trading concepts, and provides ideas for minimizing the risks of trading in this arena.

ARTICLE 2: "Market mechanics," by Active Trader Staff (Nov. 2002)
Summary/excerpt: This article highlights the unique properties of futures contracts and the mechanics of futures trading that will allow you to focus on strategy instead of things like "rollover" and price limits.
     From a strategic standpoint — where to enter, where to take a profit, where to take a loss — trading futures is no different from trading stocks. The same forces that move stocks or any other market — greed and fear, in reaction to various pieces of "news" — move futures markets.

However, last month’s article ("The futures advantage") also addressed the reality that futures have two characteristics that result in minor but noticeable differences in the mechanics of trading futures compared to stocks: 1) low margin (high leverage); and 2) futures are traded in individual contract months with finite life spans that represent unique assets.

ARTICLE 3: "Flavors of futures: Using the right price data," by Active Trader Staff (January 2004)
Summary/excerpt: Futures price data comes in more than one format. Depending on your analysis and trading needs, one type of data may be more appropriate than others.

Stock traders usually don’t give much thought to the price data they use in historical research and system testing, aside from its basic accuracy or cleanliness. That’s because data for a stock represents an unbroken stream of prices for the same instrument. Oracle (ORCL) stock represents the same asset today it did five years ago; only the price is different. Stock price data, in effect, comes in one flavor.

Futures price data, on the other hand, has a variety of flavors. Because futures trade in contracts with limited life spans (typically ranging from one to three months), each contract month is a distinct asset even though it represents the same market.

ARTICLE 4: "Rolling over" by Active Trader Staff (May 2003)
Summary/excerpt: One thing that makes trading futures different from trading stocks is the fact that futures are contracts with limited life spans. If you’re going to hold a long–term futures position, or you have a short–term trade that straddles the expiration of one contract and another, you need to understand the process called rollover.

ARTICLE 5: "Open interest" by Kira McCaffrey Brecht (Feb. 2003)
Summary/excerpt: Along with volume, open interest gives traders a way to measure a market’s liquidity, as well as the strength or weakness of a price move.

ARTICLE 6: "Overnight futures trading," Kira McCaffrey Brecht (Feb. 2004)
Summary/excerpt: Overnight trading has become an increasingly common part of the futures landscape. Should you trade these periods or include them in your analysis?

ARTICLE 7: "Understanding futures margin," by Kira McCaffrey Brecht (Jan. 2003)
Summary/excerpt: Margin is calculated differently for futures and stocks. Find out how much money you need to make a futures trade and what the implications are for your wallet.

ARTICLE 8: "All traders, big and small: The Commitment of Traders report," by Kira McCaffrey Brecht (March 2003)
Summary/excerpt: A primer on the Commitment of Traders (COT) report published by the Commodity Futures Trading Commission (CFTC). The report breaks down the open positions ("open interest") of three categories of futures traders — large hedgers, large speculators and small traders. Many traders use this data to attempt to decipher which side of the market the "smart" money is on.

ARTICLE 9: "Commodity indices," by Active Trader Staff (May 2006)
Summary/excerpt: An overview of the various indexes that track the commodity market. These nine articles would normally cost a total of $36.01 if purchased individually. Save 30 percent and purchase them as a set for $25.21.