In this introduction to his book, George Kleinman presents various methods designed to identify profitable market patterns and the four essentials you'll need to start trading commodities and futures.
- “It’s tough to make predictions...especially about the future.”
- —Yogi Berra
A floor broker once told me the following story, and he swears it’s true:
In the 1960s, there was a corn speculator who traded in the pit at the Chicago Board of Trade. He was known for plunging: taking big positions.
Early one summer, he put on a large short corn position for his own account. (Short positions make money if prices fall but lose if prices rise.)
Within days, the weather began to heat up in the midwestern United States, where the corn is grown. The corn crop needed rain, and prices began to rise. Day after day, the sun shone, the temps rose, not a cloud in the sky—the corn crop was burning up. The market continued to rally against this guy, and he knew if this continued, he’d go broke.
Late one trading session, the big trader started a rumor in the corn pit. His rumor was that it was going to start raining the next morning sometime around 10:30 a.m. The other traders laughed at this prediction.
The following morning, the sun was shining without a cloud in the sky, and the market opened higher once again. Then, almost miraculously, at precisely 10:30 a.m., rain started pouring down the windows that surrounded the grain trading room. (The old grain room, located on the fourth floor of the Chicago Board of Trade Building, had tall windows that looked out over La Salle Street.) Inside, in the corn pit, a selling panic immediately developed, as the pit traders scrambled to sell out their corn futures. Traders around the world saw prices crashing and joined in the selling frenzy. The market quickly went down the limit! On this break, the speculator covered his entire short position and was saved from bankruptcy.
How did the floor broker know it would rain at 10:30 that morning? It seems he was owed a favor from his drinking buddy, the chief of the Chicago Fire Department. The chief brought out the hook and ladders, and decided it was a good day to wash those tall windows that looked out on La Salle Street!
So you’re thinking of trading, but you don’t know the chief of the Chicago Fire Department? Actually, today, even if you do know him, it wouldn’t matter much because computer traders from tens of thousands of locations globally have replaced the pit traders, and computers don’t care about the weather.
So, let’s assume you’ve just finished reading a private newsletter, a firsthand report of how the “witch’s tail disease” is devastating the cocoa crop in Ghana. Cocoa sounds like a moneymaker, but you have no way of knowing for sure how true all this is. You do like chocolate, but you didn’t even know it all starts with a bean called the cocoa bean. (You thought it came out of a can.) Hey, you don’t even know where Ghana is, and you’re thinking of trading cocoa against the likes of Hershey and Nestlé and whoever else really does know what’s going on? Why would you do this? To make money, of course!
Try illinois inst of technology
Try illinois institute of technology. they have a degree program in the financial markets ( learn to trade options,forex,etc) they are located in the greater Chicago,IL area. with the merger of CBOT with CME ( now called CME Group), then it shall be the financial market of the future. the new director of that training program is the former chariman of CFTC ( commodities futures trading commision)( simliar to SEC only for commodities) very respected. get into MS program eventually and major in options,financial engineering,etc. traders on most of the major forex exchanges make about $650,000 per year + bonus