Schwager on Futures: Technical Analysis

Trader's Library #108 · Technical analysis. A textbook on charts and technical analysis written specifically for futures.

Author: Jack D. Schwager · Original: Schwager on Futures: Technical Analysis · Year: 1996 · Usefulness for traders: ★★★★☆

What it's about

A comprehensive technical analysis textbook by the author of “Market Wizards”, written for futures markets rather than stocks. Schwager covers chart types, trends, patterns, support and resistance and oscillators, then moves on to building and testing trading systems. Separate chapters deal with what ordinary textbooks leave out: contracts with an expiry date, rolling over and building a continuous contract. A Polish edition was published by Linia.

What it gives a trader

Anyone trading futures on the CME sooner or later runs into a problem stock charts don't have: the contract expires and the chart has to be stitched together from several series. Schwager explains why simply splicing contracts creates false gaps, how a continuous contract works and what to watch out for when testing strategies on long history. He is also honest about the limits of technical analysis and how easy it is to “fit” a system to the past.

Lessons for traders

• in futures, the rollover changes the chart: a gap between series is not always a real price move
• a continuous contract is needed to analyse long history, but you need to know how it was built
• a system fitted to the past usually fails in the future, so tests must include data not used to build it
• technical analysis is a tool for assessing probability and risk, not for prediction

What to watch out for

The book is long and in places dated in its examples and its description of software. It says nothing about order flow, volume profile or the order book: it is classic chart analysis, worth complementing with Market Profile (#107 Jim Dalton). Schwager's other book outside the interview series, “Market Sense and Nonsense”, has its own article (#016).

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

← #107 Jim Dalton: Market Profile and the Auction Process · Library index

Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.