Trading the SPI: A Guide to Trading Index Futures
A trading book with a narrative! Trading the SPI is written by Brent Penfold, who is eminently qualified to write such a work – apart from being the regular YTE book reviewer, he actually trades the SPI (and other index futures) for a living. Not only that, he might just have produced an instant classic on the topic.
Aimed at being a useful resource for all SPI traders, this well presented book is easy to read and understand. The author explains from first-hand experience all the information a trader needs to know about the SPI, starting from the basics, in three main sections. In part one, he covers things like what a futures contract is; what time in the morning the SPI opens and how to find a good broker. Having spoken to a lot of traders – successful and otherwise – over the last eight years, I can politely confirm that this fundamental information often eludes some, and that all traders should revisit this area every once in a while. There are many exclamation marks in this section, but it contains potentially unsettling assertions, especially regarding the differences between traders and analysts. This is an excellent start for those willing to venture outside their comfort zone and enter a learning environment, as the second part challenges long-held popular wisdom about trading.
The notion that psychology makes the difference between a rich or poor trader has become a cornerstone of trading belief. The author certainly acknowledges its part, but ranks money management and method equal to or higher than psychology. He gives clear and simple reasons, then provides worked examples of different money management techniques and trading methods to back up his line of argument. In the third part of the book the author offers some of his own statistics and analysis, designed to assist readers to work up their own trading plan, rather than take a prescriptive colouring-by-numbers approach.
Continuity is maintained throughout the book with a running commentary on a series of trades made during its writing, providing a personal insight into the workings of a professional trader and the vicissitudes of the market. It is a well written, personal and approachable read, containing new ideas and challenging tired assumptions without ever preaching – a stimulating must-have for SPI traders of all levels.
This article was originally published in the Sep/Oct 07 issue of YourTradingEdge magazine (www.YTEmagazine.com). All rights reserved. © Copyright 2009, MarketSource International Pty Ltd.
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