Reviews: Schwager on Futures

We Chimps didn’t devise our trading strategies in a vacuum. Long before Genesis Trade Navigator, long before instantaneous computerized backtesting, there was Jack Schwager. This was the bible, the definitive work on all things technical, and it has been one of  go-to books for new ideas and lucid explanations ever since its release.

Nearly 20 years later, how does the book stand up? Simply put, the answer is very well, but the way in which we use it has changed significantly over time. I recall when I first started trading, some of these concepts had to be hand-coded or calculated. And it wasn’t nearly as easy to search the internet for examples and definitions. This book had it all in one place.

Schwager on Futures: Technical AnalysisSchwager on Futures: Technical Analysis

Now, every single concept he covers is just a click away. Without deeply understanding the concepts, you can put them on a chart. You can trade based on a chart with preset variables and advice found in the comments section of articles on Seeking Alpha. That’s dangerous, and it inevitably leads to confusion, misapplication, and inconsistent trading.

So this is how we use Schwager’s masterpiece today, and why it still deserves a place on every technician’s bookshelf. It takes us back to the basics, and it reminds us of the definitions and the geneses all the fancy indicators in all the dropdown menus in all charting programs out there today. Schwager explains the definitions, the merits, and the stumbling blocks of each of these tools. And if he hasn’t covered the exact tool you’re looking for, chances are that once you take a closer look at the math behind it, he will have discussed it in a more basic form.

Stock traders, don’t let the name of this book put you off. This one is for you too. Yes, most charts in this book are focused on futures markets, but the concepts remain the same, and the tools are all available to you on Thinkorswim, TradeStation, or whatever platform you choose.