Master Trading e-book 3rd edition

I update this book each January and send the revised edition to all previous purchasers! To order your copy email: [email protected]

We update the book each year so it remains current and not outdated as so many books quickly become!

The book is 293 pages and 103k words providing fundamental knowledge, insight and trading tips. Below is the complete content listing so you can see for yourself;-

INTRODUCTION....................................................................................................................7

Derivatives................................................................................................................................8

FUNDAMENTAL DRIVERS IMPACTING THE FINANCIAL MARKETS..................... 10

What is Macroeconomics...................................................................................................... 10

Gross Domestic Production (GDP)........................................................................................ 11

Non-farm payrolls (NFP - USA employment data)............................................................... 13

Automatic Data processing (ADP).........................................................................................14

US Employment Situation Report..........................................................................................14

Those in part-time employment..............................................................................................14

Jobless Claims....................................................................................................................... 14

Manufacturing and Non-Manufacturing ISM.........................................................................15

NAPM Purchasing Managers’ Report – New Index Orders.................................................15

Phili Fed Index and Chicago PMI Manufacturing Surveys...................................................16

The Dallas Fed Manufacturing Index.....................................................................................16

BUSINESS INDICATORS....................................................................................................16

NAPM Purchasing Managers’ Report – Business Barometer...............................................16

Business Inventories..............................................................................................................16

Business Climate Indicator.....................................................................................................17

Business Confidence...............................................................................................................17

Productivity and Capacity Utilisation.....................................................................................17

Productivity and Costs...........................................................................................................17

TRADE BALANCES............................................................................................................ 18

Current Account Trade Balance............................................................................................ 18

International Trade................................................................................................................. 19

CONSUMPTION.................................................................................................................. 19

Advanced Monthly Retail Sales............................................................................................19

Retail Sales.............................................................................................................................19

Consumer Credit.................................................................................................................... 19

Factory Orders...................................................................................................................... 20

SENTIMENT......................................................................................................................... 20

Consumer Confidence Survey................................................................................................20

Michigan Consumer Sentiment Index................................................................................... 20

GERMAN DATA (IFO & ZEW) (Note: These are sometimes available/released early!)...21

IFO Business Climate Survey Index...................................................................................... 21

ZEW Indicator of Economic Sentiment (European Economic Research Centre)................. 21

CONSTRUCTION................................................................................................................ 22

Construction Spending..........................................................................................................22

PMI Construction................................................................................................................... 22

Housing.................................................................................................................................. 22

MBA Mortgage Application Survey...................................................................................... 22

Existing Home Sales.............................................................................................................. 23

New Home Sales................................................................................................................... 23

Nationwide House Prices........................................................................................................23

Housing Permits and Starts....................................................................................................23

INFLATION.......................................................................................................................... 24

Central Bank Inflation Controls............................................................................................. 25

Some of the key points of 2019............................................................................................. 33

Stock Markets 2019................................................................................................................39

2020 Expectations.................................................................................................................. 44

Where might the next financial crisis come from!.................................................................44

BREXIT (the story to date).................................................................................................... 50

SUBPRIME CRISIS.............................................................................................................. 51

Subprime mortgage crisis...................................................................................................... 51

Mortgage Fraud and Predatory Lending................................................................................ 58

Quantitative Easing (QE)........................................................................................................58

Economic Impact....................................................................................................................60

Flight of Capital..................................................................................................................... 60

Quantitative Easing and Creating Money.............................................................................. 60

How QE works:..................................................................................................................... 61

How QE is performed.............................................................................................................62

Targeted Longer-Term Refinancing Operations (TLTROs)...................................................67

Helicopter Money..................................................................................................................68

Quantitative Tightening (QT).................................................................................................69

The Dow Theory (economic)..................................................................................................70

Modern Monetary Theory (MMT).........................................................................................73

TABLE 5. VALUE OF THE DOLLAR..................................................................................80

TABLE 6. INDICATORS.......................................................................................................81

CENTRAL BANK..................................................................................................................82

Bank of England (BoE)..........................................................................................................82

European Central Bank (ECB).............................................................................................. 86

The Federal Open Market Committee (FOMC).................................................................... 91

TECHNICAL ANALYSIS.................................................................................................... 95

Charts and Indicators............................................................................................................ 95

Bar Chart................................................................................................................................ 98

Candlestick Chart................................................................................................................... 99

Heikin Ashi...........................................................................................................................101

Point & Figure..................................................................................................................... 102

MARKET PROFILE........................................................................................................... 104

Renko.................................................................................................................................. 107

Chandelier Exit.................................................................................................................... 107

Volume Profile.................................................................................................................... 108

CHART STUDIES/INDICATORS....................................................................................................111

Ichimoku.............................................................................................................................. 112

How to use the Ichimoku Cloud...........................................................................................114

Technical Indicators............................................................................................................ 114

Leading Indicator................................................................................................................ 115

Long Candles...................................................................................................................... 116

Moving Averages................................................................................................................. 116

Bollinger Bands................................................................................................................... 118

Momentum Oscillator.......................................................................................................... 119

MACD..................................................................................................................................119

Rate of Change (ROC)......................................................................................................... 120

Support and Resistance....................................................................................................... .121

Breakout from a trend channel............................................................................................ 122

Chart 1................................................................................................................................ 123

Pitchfork...............................................................................................................................123

How to select the three points.............................................................................................124

Pivot Points...........................................................................................................................127

Fibonacci Pivot Points......................................................................................................... 128

Price Gaps............................................................................................................................ 128

Reversal Patterns.................................................................................................................130

Chart Formations................................................................................................................. 131

Technical Strategic Stop Losses and Risk/Reward............................................................. 132

Dow Theory (Technical)...................................................................................................... 132

Fibonacci Retracements.......................................................................................................134

Fibonacci levels as displayed on a chart........................................................................... 134

Relative Strength Index ...................................................................................................... 135

Stochastic Oscillators.......................................................................................................... 135

StochRSI............................................................................................................................. 136

Trading & Psychology......................................................................................................... 138

Trading & Psychology......................................................................................................... 141

RISK MANAGEMENT..........................................................................................................146

Planning Your Trades.........................................................................................................148

Stop-Loss and Profit-Taking................................................................................................149

How to select Stop-Loss levels............................................................................................ 149

Calculating Risk-Reward................................................................................................... 150

Kelly Ratio......................................................................................................................... 151

Trading Plan..................................................................................................................... 154

How to Control Emotions in Trading................................................................................. 160

Mindset............................................................................................................................ 160

Trading & Psychology......................................................................................................... 162

How to trade Derivatives......................................................................................................165

Strategies............................................................................................................................. 166

Options............................................................................................................................... 167

The `Greeks`. These are crucial to the seller of an option regarding pricing and risk........ 168

Regulation...................................................................................................................... 170

Wash Trades...................................................................................................................... 172

FINANCIAL MARKETS - SECURITIES..........................................................................173

Fixed Income..................................................................................................................... 174

German Fixed Income........................................................................................................ 178

Bund, Bobl, Schatz............................................................................................................ 178

Schatz.................................................................................................................................178

Bobl.................................................................................................................................... 178

Bund.................................................................................................................................... 179

Short-Term Interest Rates (STIRs)......................................................................................179

TED Spreads........................................................................................................................ 183

Foreign Exchange (forex)................................................................................................... 184

Currencies.........................................................................................................................184

Dollar Index........................................................................................................................186

Commodities........................................................................................................................191

Rollover (futures roll).......................................................................................................... 193

The impact of the Climate on Commodities................................................................... 195

The Five Major Commodity Categories...............................................................................199

AGRICULTURE................................................................................................................ 200

Grains..............................................................................................................................200

Contract Specifications.....................................................................................................207

THE ICE BRENT NX (new end of month expiry) CRUDE FUTURES CONTRACT......207

West Texas Intermediate (WTI)....................................................................................... 207

Low Sulphur Gas Oil........................................................................................................209

Crack Spread (Crude Oil, Heating Oil and gasoline).......................................................... 210

Heating Oil.......................................................................................................................... 210

Gasoline (RBOB)............................................................................................................... 211

Nat Gas................................................................................................................................ 212

ORGANISATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC)........... 214

AGRICULTURAL & SOFTS PRODUCTS....................................................................... 215

Corn................................................................................................................................ 215

Soybeans..........................................................................................................................218

Cotton..............................................................................................................................222

Wheat...............................................................................................................................223

Cocoa................................................................................................................................ 227

Coffee................................................................................................................................ 229

Sugar............................................................................................................................... 231

Barley................................................................................................................................. 232

Canola...............................................................................................................................234

Rapeseed...........................................................................................................................235

Rice...................................................................................................................................237

LIVESTOCK....................................................................................................................... 239

Lean Hogs.............................................................................................................................240

FINANCIAL CONTRACTS SPECIFICATION................................................................. 241

German Bund...................................................................................................................241

German BOBL................................................................................................................... 241

German Schatz..................................................................................................................242

EuroStoxx......................................................................................................................... 242

T. Bonds............................................................................................................................242

FTSE 100............................................................................................................................ 244

S+P 500.............................................................................................................................. 244

DJIA................................................................................................................................. 245

METALS............................................................................................................................ 246

Gold................................................................................................................................... 246

Silver.................................................................................................................................. 247

Platinum............................................................................................................................. 248

Palladium........................................................................................................................... 249

Steel................................................................................................................................. 249

Copper............................................................................................................................... 252

A CHRONICLE OF ECONOMIC DISASTERS OVER THE LAST 200 YRS............... 254

GLOSSARY OF MARKET TERMINOLOGY.............................................................. 258

READING MATERIAL................................................................................................... 289

Trading/Investor...................................................................................................... 289

Fundamentals.............................................................................................................289

Technical Analysis........................................................................................................ 289

Options........................................................................................................................... 290

DISCLAIMER      292