A Complete Guide to the Futures Market: Technical Analysis and Trading Systems, Fundamental Analysis, Options, Spreads, and Trading Principles

by Jack D. Schwager and Mark Etzkorn

Quick Summary

This second edition of Schwager's comprehensive futures reference covers every major aspect of futures trading: chart analysis (bar charts, point-and-figure, candlesticks), trend identification, support/resistance, chart patterns, technical indicators and oscillators, trading systems, fundamental analysis, spreads, options on futures, and practical trading principles. Co-authored with Mark Etzkorn, it serves as both a learning resource for newcomers and a reference encyclopedia for experienced futures traders.

Detailed Summary

Jack D. Schwager's "A Complete Guide to the Futures Market" is one of the most comprehensive single-volume references on futures trading ever published. The second edition, co-authored with Mark Etzkorn and published in 2017, updates the 1984 original while maintaining its encyclopedic scope.

Part I covers preliminaries. Chapter 1 provides a foundation for beginners: the nature of futures markets, delivery mechanics, contract specifications, volume and open interest, hedging concepts, trading mechanics, order types, commissions, margins, and tax considerations. Chapter 2 frames the fundamental vs. technical analysis debate, presenting both perspectives fairly.

Part II forms the technical analysis core. Chapter 3 examines whether charts have forecasting value, presenting both skeptical and supportive arguments. Chapter 4 covers chart types: bar charts, the distinction between nearest futures and continuous futures for linked contract series, close-only charts, point-and-figure charts, and candlestick charts. Chapter 5 addresses the critical issue of how to link contracts for long-term chart analysis, comparing nearest futures with continuous (back-adjusted) futures and discussing their respective advantages and pitfalls.

Chapters 6-8 cover trend-determining techniques. Chapter 6 presents four methods for defining trends: highs and lows, TD lines, internal trend lines, and moving averages. Chapter 7 addresses trading ranges and breakout analysis. Chapter 8 covers support and resistance using multiple methods: prior highs/lows, concentrations of relative highs and lows, trend lines and channels, and price envelope bands.

Chapter 9 catalogs chart patterns -- head and shoulders, triangles, rectangles, flags, pennants, wedges, double/triple tops and bottoms, and rounding patterns -- with emphasis on practical trading rules. Chapters 10-16 cover one- and two-bar price patterns, moving averages, Bollinger Bands, and three chapters on momentum indicators (basic principles, individual indicators Part I, individual indicators Part II). Chapter 17 covers candlestick charting in depth, and Chapter 18 addresses point-and-figure charting. Chapter 19 covers miscellaneous techniques including the concept of relative strength, and Chapter 20 integrates indicators via a case study of the DJ Transports.

Part II (Market Structure) covers price analysis of major averages, sector rotation, secular trend analysis, cycles and seasonal patterns, volume indicators, and market breadth. Part III covers confidence indicators, sentiment, contrary opinion, interest rate effects, individual stock selection, international markets, automated trading systems, and checkpoints for identifying primary market peaks and troughs.

This is an indispensable reference for anyone trading futures markets. Schwager's clear exposition and Etzkorn's technical updates create a resource that is both accessible and comprehensive.