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Spread
Scan Issue: May 02, 2007 - Volume 142
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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.
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Today we consider an inter-market interest rates spread: long June 07 T-Notes 10Yr and short June 07 T-Notes 5Yr (TYM7 – FVM7). The seasonal time window suggests an entry a bit later (app. 05/07) but the possible 1-2-3 low gives us an attractive entry formation right now. More conservative traders can wait for the next Hook to enter.
Traders may want to enter at the spread value of 2^16. Margin for the spread is $1,486 (no reduced margin). Suggested risk is $250. Initial projected objective is $250, then a move to 2^25 or higher. Basis is seasonal (app. 5/7 – 7/12) and a 1-2-3 low.
On April 16 we told subscribers of our professional daily spreads & position trading newsletter, Traders Notebook,"Consider entering an inter-market metals spread 100*GCM7 – 50*SIK7 market on close tomorrow 04/17. Please ask your broker about the margin. Suggested risk is $1,000. Initial projected objective is $1,000, then a move to 1,000 or higher. Basis is seasonal (app. 4/16 – 4/27) and a 1-2-3 low. Comment: This spread can move really fast! Be careful. For well capitalized traders only!!!"
Here's how we suggested managing this trade:
04/17 In?
04/19 Spread hit first suggested target. Suggest moving stop to break even.
04/23 Suggest moving stop to –820.
04/26 Suggest moving stop to –85.For more information about our daily newsletter, visit our Spread Website to find out more about Traders Notebook
Questions or Comments? Please email us: support@spread-trading.com
From Joe Ross: Is this keeping you from following your trading plan?
Many wannabe traders have trouble following their trading plans when winning may seemingly be in conflict with their basic beliefs. While you may have intended to stay with a strategy having specific parameters for entering and exiting a trade, there are things that can cause you to abandon your plan when you are faced with the reality of a live market. Sometimes this happens because you question whether it is ethical to make money by trading, or if you should be trading at all. It’s possible that you hold a secret belief that it is somehow wrong to make money because you associate it with greed and corruption, or with gambling. Some people perceive a life with a minimum of money as being infinitely purer and more righteous because they misunderstand the teachings of scripture.
If you entertain any of these ideas, it is essential that you identify them and deal with them before they completely sabotage your trading efforts. Money in and of itself isn't evil, it’s the lust for money that is the problem. The truth is that money can be used for many “noble” causes, whether charitable or for simply supporting your family. For some traders, making a social contribution with their winnings allows them to feel more comfortable with the business of trading. In reminding yourself of the more “virtuous” motives for trading, you will feel more comfortable with it and be able to concentrate on honing your skills to become a profitable, disciplined trader.
May 2007:
Next Live Spread Trading Seminars in Italy and Germany
with Joe Ross
If you have not yet attended any of Joe's trading seminars, you should seriously consider attending soon!
Joe Ross' seminars offer over 50 years of profound trading knowledge for traders of every level. They are filled with wisdom from both trading and life experience, and they will open YOUR EYES to a new, different, and better understanding of trading. His teachings are unique - the experience and knowledge he has to offer you, to your great advantage, can never be imitated by anyone else. That's how we can always clearly differentiate his seminars from any other — you will never go away empty-handed (or empty-headed) from a Joe Ross seminar.
Schedule for next seminars in Italy with Joe Ross & Francesco Fabi
May 11 + 12, 2007
Spread Trading Seminar in Ravenna, Italy
Schedule for next seminars in Germany with Joe Ross & Karsten Kagels
May 19 + 20, 2007
Spread Trading Seminar in Munich, Germany
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2007 by Trading Educators, Inc
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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!