Unique-risk Books

This work describes a system for commodity speculation called Interval
Trading. The premise and system are simple. Because the value of a
commodity will never go to zero, any downward trend will
eventually bottom out and reverse. To take advantage of this behavior
the authors suggest buying futures contracts at fixed intervals as the
price drops, and then reselling them at fixed intervals as the price
recovers.

This system requires the knowledge or faith that prices eventually
will recover, and tremendous capital to cover accumulated losses while
waiting for a price recovery that may take months, years, or decades to
materialize. This advice violates several of the tenets of successful
trading in that it requires trading against the trend, holding losing
positions forever, and only taking small, fixed profits. Small
traders following this advice should expect to go broke.

The authors' credibility is fatally damaged when then spend several
pages arguing that if you are long a contract, and then sell and
immediately re-buy the contract, then this is somehow different
from simply holding the original contract. Where I'm from,

(- X) + X = 0.

Furthermore, the authors never suggest that they or their clients have made
any money from this extremely risky scheme.

This is a highly risky speculation system, and its
exposition here is mathematically unsound. Intelligent speculators
will avoid this book.