You
have subscribed to Joe Ross' Weekly Spread Scan Newsletter.
If you have problems reading this newsletter, please follow this link:
Spread
Scan Issue: March 7, 2007 - Volume 134
This email was sent to you by Trading Educators.
To ensure delivery to your inbox (rather than to bulk or junk folders)
please add info@spread-trading.com to your address book.To unsubscribe, scroll past the end of this newsletter and click the "unsubscribe" link.
Otherwise, welcome to this week’s issue of the
Joe Ross Spread Trading Newsletter.Each week we present spread trading examples and opportunities in order to help you become a more professional spread trader.
Be sure you receive all your issues of Spread Scan so that you can continue to enjoy learning through the best free educational trading information available, and so that we can keep you informed about additional educational services and products to help you grow as a successful and profitable spread trader.
Today we consider an intra-market meats spread: long December 07 Live Cattle and short June 07 Live Cattle (LCZ7-LCM7). This spread has been in a trading range since February, making new highs and new lows, but no real break out. The seasonal time window is very short (app. 3/6 – 3/23) and doesn’t give much time for an entry.
Traders may want to enter the spread at a value of 1.0. Margin for the spread is $540 (reduced margin). Suggested risk is $400. Initial projected objective is $400, then a move to 4.0 or higher. LCZ7 has very low volume!
On February 26 we told subscribers of our professional daily spreads & position trading newsletter, Traders Notebook, "Consider entering an inter-market meats spread 500*FCK7 – 400*LCM7 at a spread value of $14,600. Margin for the spread is $2,633 (no reduced margin). Suggested risk is $1,200. Initial projected objective is $1,200, then a move to $20,000 or higher. Basis is seasonal (app. 3/10 – 5/30)."
Here's how we suggested managing this trade:
02/27 Suggest entering MOC tomorrow.
02/28 In?Open equity: $700 per contract.
For more information about our daily newsletter, visit our website:
http://tradingeducators.com/studentsonly.htm or visit our Spread Website to find out more about Traders Notebook
Questions or Comments? Please email us: support@spread-trading.com
Student's Question: "Andy, can I really make it as a trader by using systems (trading methods)?"
Andy: Be clear that we are not talking about automated "black box" systems here. Such systems are out of your control and will eventually fail as market conditions change. You need to understand and be in complete control of any method you use.
Most traders move from trading method to trading method (or system) over time, until they find one that suits them - one that is comfortable to run, and tests well in the long run, (back-tested, then real time). But don’t expect a trading method to work forever. Markets change too much for that to be practical.
On the other hand, some traders never stop looking for the perfect method, quickly abandoning one method after another in their search, before they have really mastered all aspects of the one they have.. That, too, is a problem.
There are many methods that can generate nice profits over time. To settle on a trading method that’s right for you:
First, you have to believe in the process by which the method generates trades. Does it make SENSE to you?Second, whatever method you decide to go with, back-test it. THINK about the method you are choosing and why it’s right for you. THINK about the results you get from your back-testing and your real-time testing of your method. BE A MACHINE (DON’T THINK) when you are trading your method.
Third, work on your self-discipline. Unless you can control yourself, you can never control your trading. In order to control yourself and your emotions, you have to believe totally in your trading method, and above all, in yourself.
© 2007 by Trading Educators, Inc
Contact
Us
1509 Jackson Drive
Cedar Park, TX 78613
Phone: 800-476-7796 or 512-249-6930
You
can e-mail us: support@spread-trading.com
Office hours are Monday - Friday 9 A.M. to 5 P.M., U.S.C.T.
Unsubscribe or change subscription
To change your subscription or to unsubscribe, scroll past the end of this
newsletter to click the "unsubscribe" link.
Disclaimer:
The Commodity Futures Trading Commission has asked us to advise you that trading spreads is complex and carries a high degree of risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders!