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Book: The Professional Commodity Trader :: Book
Date: Thursday, 08 January, 2009 :: 20:02
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The Professional Commodity Trader
List Price: USD $19.95
from USD $8.50
Product Group: book
Manufacturer: Traders Press
Studio: Traders Press
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Editorial Review: Product Description
Reprint of 1973 classic in which legendary futures trader Stanley Kroll describes his trading adventures and discusses philosophy. It is a first person look-over-my-shoulder account of his trading campaigns during the wild and woolly markets of 1973, and a close look into his trading philosophy and techniques. Kroll's primary focus is on trading only with the major long term trend, and he favors entering trades only during significant reactions against the trend, and holding positions until either his long term price objectives are met, his protective stop loss level is violated, or it becomes apparent that the primary trend has changed direction. The book is filled with charted examples of Kroll's actual trades in various markets. He discusses at length the reasoning and timing behind the decisions involved in entering, adding to and liquidating each position. Most positions were idle for weeks or even months, which will be hard to imagine for today's quick in and out day trader. Kroll quotes throughout from the classic Reminiscences of a Stock Operator, which chronicles the trading experiences and philosophy of immortal speculator Jesse Livermore. The key sections to which Kroll refers are those in which Livermore advises that the big money is in the big move, and that his biggest profits were made simply by sitting tight. Kroll kept a copy of Reminiscences at his desk at all times for inspiration, whenever he felt tempted to exit a profitable position prematurely or to try scalping the market for small moves. Of special interest is the time period under study (1973) which was the wildest and most unforgettable year in memory. That's the year in which beans went from 400 to 1290 and back down to 500, wheat went from 140 to 645, and other markets made huge moves as well. While Kroll grabbed the bull by the horns and realized huge profits in these runaway bull markets, others cringed in fear and withdrew from trading, petrified by the risk inherent in huge moves consisting of strings of locked-limit days in both directions. Kroll's narrative is made credible by the inclusion of a summary detailing the track record of 38 individual accounts which he managed during the 1971-73 time period, which shows 37 of the 38 with net profits, with most showing annualized returns well in excess of 200 percent. The one loser lost less than 2 percent. In the aggregate, about $600M of capital was parlayed into almost $3 million during this period. The Professional Commodity Trader is fascinating reading for futures traders interested in formulating a viable, long term approach.
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Reviews:
Average Customer Review: 
2 of 2 people found the following review helpful:
Summary: Nitty gritty
Date: 2007-12-20 - 
Comment: I've been looking for a book like this for years. I don't know why it is not mentioned in any other publications. This is nitty gritty, nuts and bolts, down to earth trading. A good read, entertaining and useful. Not only is an account of the author's trading but it's very practical as well. I read this book because I thought it would be an entertaining and interesting account of trading in the commodity pits. I didn't think I would get any trading ideas out of it, but I was wrong. I actually got some new ideas. Nothing earth shattering, but some fresh ideas nonetheless.
I don't know what the other reviewers are looking for when they say there's nothing practical in this book. In my opinion, the simpler you keep your trading, the better. Just like Stanley Kroll says. In my experience, if someone has been trading futures, day in and day out, for a long time, there's really no "magical" answer that you can expect to find in any book.
We can all learn a little from someone else who survived in the business.
1 of 4 people found the following review helpful:
Summary: Boring and dated
Date: 2007-01-11 - 
Comment: I agree with the last reviewer who said this is a "sleeper" but for very different reasons. I had to force myself to read through this, hoping that something unique would emerge, but it never happened. Everything in it is dated, but it doesn't have the charm of say Darvas's books. There's no "bad" advice here, but little good advice after determine the trend, wait for a reaction, buy or sell and hold on. Worst of all, the book literally fell apart in my hands with pages coming out of the binding (and this was a new copy) so I can't even sell this dog.
Summary: trading legend in action
Date: 2006-03-11 -
Comment: Kroll colorfully describes a series of trading campaigns that really bring the challenge of commodity specualtion to life. I found the accounts of his conversations with investors interesting in how they llustrated the average trader's dilemma and explained why, in the end, the majority of market players have always surrendered their funds to the disciplined minority. The suggestion to trade with the major trend and against the minor trend is a primary example of the discipline that seperates the winners from the losers.
9 of 9 people found the following review helpful:
Summary: Excellent. This one is a sleeper.
Date: 2005-11-11 -
Comment: This one must be in demand because I got it several years ago for around 10 bucks, now its $20.
Not an "Introduction to Commodities Trading" by any means, but if you have been trading for awhile you will appreciate this book a lot. You will relate to his experiences, success and failure, and will realize nothing much has really changed! We have the same joys and frustrations, emotional highs and lows, insight and bewilderment, successes and failures, we are geniuses one day and idiots the next, and so on. This book contains all the best trading wisdom you will find in all the best trading books, albeit, his language is slightly different.
He quotes Reminiscences of a Stock Operator quite a bit and reinforces the advice contained in that book with his own experience. Kroll was basically a Trend Follower, but this is easier said than done. He even says on page 21 that identifying the trend is only half the job (I would say it is far less than half the job) because you can still get killed if you get in on the trend at the wrong time. Isn't it easy to look at a 5 year old chart and see a clear trend? But it's a little harder to look at a current chart and buy at the right spot, then hang on to a position during those "minor" retracements.
This book was published in 1974, but "Reminiscences" is much older than that and no one seriously questions the soundness of that book. Keep in mind, Professional Commodity Trader was written primarily from the standpoint of a traditional commodity trader (corn, cattle, coffee, gold, and some currencies, etc. but not the numerous financial and stock index futures we have today). Here is a quote from the book:
"The secret of success: knowledge of the markets and of particular commodities, an understanding of both the fundamental and technical aspects of each market, fast reflexes and a good sense of timing, a bit of luck, and a great deal of patience and courage. Add lots of experience, a few `burns', and a goodly number of `killings', and you're on your way."
Does anyone who has been trading awhile question the truth of that statement?
Ch. 16 "Tiptoe into my office and be a fly on the wall" is excellent. It could have been written last week. He really takes you to the inside of the process here and gives you some insight into market activity, how it really works and how the mass of public commodities speculators get hurt. The whole book makes you feel like you are on the inside of the deal, but even more so in this chapter. In this chapter he gives a good example of a statement he makes in chapter 7: "Riding a winning commodity position is a lot like riding a bucking bronco. Once you manage to get aboard, you know what you have to do-hang on and stay hung on; not get bumped or knocked off till the end of the ride. And you know that if you can just manage to stay in the saddle, you're a winner. Sounds simple? Well, that's the essence of successful trading." That may sound like he is advocating staying in losing positions, but if you read the context of this quotation and the book as a whole, you will see he is saying nothing of the sort. In fact, the chapter entitles "The Most Important Chapter in the Book" is about "keeping losses small". Sound familiar?
Kroll apparently used technical analysis, but his approach is not overly technical or complicated, neither is his writing. He tells you the way it is and what it takes to succeed. Books that are nothing but charts and indicators and obscure calculations, are nearly worthless in my opinion. I look at charts constantly and use some indicators, so don't get me wrong, but a book that tells you about the reality of the market, how unpredictable it can be, how contrary it can behave at times, what rules you need to follow, gives sound advice, etc. are much more helpful in my opinion.
I could say much more, but to close this is a very, very good book, in my opinion one of the best. High Probability Trading, The Professional Commodity Trader, Trading in the Zone, and Reminiscences of a Stock Operator have been the 4 books that have been the most helpful to me. They all offer much of the same trading advice, they deal with reality, and they concentrate more on the trader than the trade.
2 of 3 people found the following review helpful:
Summary: Good for serious trader, though some figures are outdated
Date: 2005-02-22 - 
Comment: I borrowed this book from public library. This is the second book from Kroll I read. I think two chapters, one is talking about cutting losses, the other is talking about running commodities business, are the worthest chapters of the book.
I think it's better to read with "Reminiscence of Stock Operator".
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