Magazine article Modern Trader

The Cost of a Futures Education

Magazine article Modern Trader

The Cost of a Futures Education

Article excerpt

Educating yourself in the futures business is crucial to success; however, tuition could wipe out your account before you've even had a chance to trade. While the expense and quality of a good education vary, there are many excellent low-priced alternatives to an Ivy League economics degree.

Introductory information on futures and options can be found at most exchanges. For example, The Chicago Board of Trade (CBOT), Chicago Mercantile Exchange (CME) and New York Board of Trade (www.nybot.com) offer free booklets on trading their products. Many full-service and discount brokerage houses provide their clients with market and product guides at no cost. Some houses also will oblige potential traders. For $5, the Futures Industry Institute (www.fiafii.org) will send you their book, Introduction to Futures and Options while the National Futures Association (www.nfa.futures.org) has several free publications regarding the futures industry, all of which the association says will be available online in the near future.

Next, choose your textbooks wisely. One book that belongs in every traders' library is the classic Reminiscences of a Stock Operator by Edwin Lefevre (available in paperback for under $20). Originally published in 1923, Lefevre's insightful interpretation of trader Jesse Livermore's market observations still holds true today. Beginning technical traders should invest in a comprehensive technical analysis book. Schwager on Futures: Technical Analysis runs around $70 and is an excellent source on technical analysis and its applications. Quality books and videos on trading methodologies as well as beginning guides to futures and options trading can be found at bookstores, through magazines, brokerage firms and on the Web. Try www.amazon.com for discounted books or Futures' resource guide at www.futuresmag.com. In addition, a trade magazine subscription (around $40 per year) can help you keep abreast of industry-related news and new trading ideas.

Training CD-ROM's are another quality educational source, with some programs offering interactive trading situations. These can be purchased through the educational departments of many brokerage firms, magazines and exchanges and typically cost under $100 per subject.

Going back to school is an ideal way to learn about trading futures. The CBOT offers "Introduction to Commodity Trading, Financial Futures I" and "Intermediate Technical Analysis," while the CME's classes include "Introduction to Futures, Technical Analysis and Options for Beginners," all taught by futures professionals. …

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