If you have problems reading this newsletter, please follow this link:
Spread Scan Issue: July 30, 2008 - Volume 205
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 immediately.
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.
The Spread Scan weekly newsletter is designed to assist you in becoming a better, more complete trader by showing you, within the context of the markets, how to trade spreads.
In this newsletter you will see applications of spreading in the futures and commodity markets. Spreads are applicable to all futures markets including currencies, commodities, financial instruments, and stock indexes. It is even possible to trade spreads in the all-electronic intraday market using day trading techniques.
Spreads are based on seasonality, correlation, backwardation, chart patterns, and simple observation. Spreads follow the Law of Charts™ and can be implemented using the Traders Trick™ entry.
In each issue of Spread Scan, you will find an upcoming spread trade for your consideration in the following week. You will also find a review of an existing or closed spread so you can see and learn how spread trades are managed.
Spreads offer you the most efficient use of your margin account of any other way to trade. Many traders find they like them so much that spreading becomes their primary way of trading.
Each week we present spread trading examples and opportunities to help you become a more professional spread trader, and we provide you with helpful content of interest to traders:
- Andy Jordan's Trading Bites
- Professional Help for Serious Traders
- Next Joe Ross Live Chats for Traders: Wednesday, July 30, 2008
- About Joe Ross and Andy Jordan
- TE TRADERS FORUM
- Contact Us
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.
Andy Jordan's Spread Scan Example:
This week we look at CDU8 – ADU8: long September '08 Canadian $ and short September '08 Australian $
Today we consider a Globex inter-market spread in the currencies: long September '08 Canadian $ and short September '08 Australian $ (CDU8 – ADU8). After being in a downtrend from November ’07 through June ’08, it seems the spread may have found its bottom at around 2.60. Can seasonality (07/31 – 08/28) help to move the spread in the other direction? Aggressive traders might want to get in at a breakout of last week's high; more conservative traders might wait until a new trend has established.
Traders may want to enter the spread at a value of 3.40 stop on close. Initial margin is $1,674 (reduced). Suggested risk is $1,100. Initial projected objective is $1,100, then a move 7.00 or higher. Basis is seasonal (7/31 – 8/28) and a possible bottom at around 2.60. Comment: Currency spreads can move really fast from time to time, for or against you!
On July 14 we told subscribers of our professional daily spreads & position trading newsletter Traders Notebook, "Consider entering a calendar Lean Hogs (CME) spread LHV8 – LHJ9 at -18.6 stop on close. Initial margin is $945 (reduced). Suggested risk is $1,400. Initial projected objective is $1,400, then a move to -10 or higher. Basis is seasonal (7/22 – 8/4) and a 1-2-3 low."
Here's how we suggested managing this trade:
07/15 Suggested stop on close at -21.00.
07/16 Suggested stop on close at -20.50.
07/17 Suggested stop on close at -20.10.
07/18 Suggested stop on close at -19.70.
07/21 Spread moved up nicely today and it was possible to cash in the first lot with a nice profit. Suggested stop on close for the remaining lots at -18.45.
07/22 Suggested stop on close at -17.00.
07/23 Suggested stop on close at -16.60
07/24 Suggested stop on close at -16.20.
07/25 Suggested stop on close at -15.70.
07/28 Suggest exiting if the spread doesn’t move up tomorrow.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
Student's Question: "Andy, I have heard spread trading is less risky than outright futures trading. Is this true?"
Andy: Yes and no — it depends on what kinds of spreads we are talking about. Maybe we should put them into different categories:
High-risk, chaotic spreads: Spreads with each side in a different, unrelated market.
For example, Live Cattle – Emini S&P. These spreads don’t make much sense.High-risk spreads: Inter-market spreads like Feeder Cattle – Live Cattle; Euro – Japanese Yen; Wheat – Soybeans, and so on. Even if the two sides of the spread are related to each other, both sides can behave independently (i.e. Feeder Cattle can move up and Live Cattle down). These spreads can move even faster than a single outright futures position from time to time, especially when it comes to a limit up or down situation in one of the markets involved in the spread.
Mid-risk spreads: Intra-market or calendar spreads in two different crop years like December 07 Wheat – May 07 Wheat. Even if you trade the same market on both sides of the spread, these spreads can move fast because the contracts are in two different crop years. But they are much less sensitive in a limit situation than inter-market spreads.
Low-risk spreads: Intra-market spreads in the same crop year, like September 07 Corn – December 07 Corn. These spreads carry the least risk even in extreme situations.
Whenever you want to enter a spread, think about the relationship of each contract involved. But also have a look at the spread chart, to see how fast the spread has moved in the past. This should give you a good idea of what to expect in the future. Be extremely careful whenever it comes to a limit up or down situation.
Serious Traders Seek Professional HelpDon't spend thousands of dollars in vain.
Train with Joe Ross.It has always amazed us that normally astute professional individuals and business people will embark on a course of action as serious as trading without seeking professional help. By the thousands, in trying to figure it out for themselves, they lose far more money than the cost of our training. People spend thousands of hours and dollars in a vain attempt to go it on their own. No one is beyond the need for professional help when it comes to futures trading.
Even professional traders come to us for help and additional training. Let us help you as well.
Joe Ross offers you a sincere and devoted commitment to teaching and showing you the truth and simplicity in trading.
Schedule your private tutoring time with Joe Ross in person or online. The private training sessions, for traders at any level, pull together all the information from Joe's books and the web courses, and make it more individualized and usable. These sessions go beyond anything you have seen or heard before; material that is simply not covered in futures, stock, or forex trading books or other sources commonly available for traders today.
For instance, do you know of anyone who teaches you about how the market movers really work, what truly takes place in the markets, and how to neutralize the market movers' advantage?
The sessions with Joe are highly individualized. Not only do you learn the important basics, but all of it is focused towards YOUR NEEDS. You will never go away empty-handed (or empty-headed) from a Joe Ross training session.
The objective of the one-on-one session is to give you the information you need in order to survive when trading commodity futures, and to learn to "get paid to trade" as Joe always advocates. Please follow this link now to learn more about private tutoring with the master trader himself...
Opportunities & Solutions for the Sinking DollarFollow this link to find out more about Joe Ross' Money Club
FRESH PERSPECTIVES - Ready for YOUR active participation.
Joe's live chats are an incomparable service from Trading Educators. The chats encourage forward-thinking, and inspire others by what is shared.
Gather up your questions and comments, and "meet" other traders on line. Joe Ross will answer everything he can - come and join either his U.S. Live Chat or his Euro Live Chat:
Next Chat Date: July 30
Join the chats in August:
Wednesday, August 06, 2008
Wednesday, August 13, 2008
Wednesday, August 20, 2008
Wednesday, August 27, 2008
We hope you will join us!
Here is where you login to Joe's Wednesday Chat
You can also view our saved weekly Chat Logs in case
you missed any Chats but want to be up-to-date
Next Chat Date: July 30
Join the chats in August:
Wednesday, August 06, 2008
Wednesday, August 13, 2008
Wednesday, August 20, 2008
Wednesday, August 27, 2008
We hope you will join us!
Here is where you login to Joe's Euro Chat
You can also view our saved weekly Chat Logs in case
you missed any Chats but want to be up-to-date.
ABOUT JOE ROSS:
Joe Ross has been trading and investing since his first trade at the age of 14, and is a well known Master Trader and Investor. He has survived all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits. Joe Ross is the discoverer of the Ross hook(TM), and has set new standards for low-risk trading with his concepts of The Law of Charts(TM) and the Traders Trick Entry(TM). Joe was a private trader and investor for much of his life, but a serious health situation in the late 80's caused him to shift his focus, and that is when he decided to share his knowledge. After his recovery, he founded Trading Educators in 1988, to teach aspiring traders how to make profits using his approaches to trading. Joe Ross has written twelve major books and countless articles and essays about trading. All his books have become classics, and have been translated into various languages. His students from around the world number in the thousands. His file of letters containing thanks and appreciation from students on every continent (except Antarctica) is huge. As one student, a successful trader, wrote: "I really can't thank you enough for the training you gave me...The impact you have had on my life, now and in the future, is immeasurable and I am truly grateful for having met you in this lifetime." Joe Ross holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, Virginia. He is listed in "Who's Who in America." After 5 decades of trading and investing, Joe Ross still tutors, teaches, writes, and trades regularly. Joe is an active and integral part of Trading Educators. He is the primary author and Editor-in-Chief of the company's newsletters: Chart Scan(TM), Spread Scan(TM) , and Traders Notebook(TM). He is also the host of the free Traders Live Chat, the free European Chat for Traders, and the moderator of his popular trading forum. |
Joe's philosophy for helping traders is:"Teach our students the truth in trading — teach them how to trade. Give them a way to earn while they learn, realizing that it takes time to develop a successful trader."
Joe sets forth the mission of Trading Educators as follows:
- To show aspiring futures traders the truth in trading by teaching them how to read a chart so that they can successfully trade what they see, and by revealing to them all of the insider knowledge they need in order to understand the markets.
- To enable them to trade profitably by training them to properly manage their trades as well as their mindset and self-control.
For information about Joe Ross and Trading Educators,
please follow this link...
ABOUT ANDY JORDAN:
Educator for Spread Trading and
Editor of Traders Notebook & Spread Scan Andy Jordan made his first option trade at the age of 18. Since then he has been fascinated by the world of trading. In 2002 he met Joe Ross, and became interested in spread trading. Andy was then intensively tutored by Joe Ross and personnel at Trading Educators. Even though Andy has shown through live chats and in several trading journals that he is able to day trade today's markets, spread trading has always been his favorite. In addition to his own spread trading activities, Andy is the editor of Traders Notebook. For those interested in one-on-one personal coaching, Andy has developed and instructs a one-week online course in spread trading, "Trade with a Pro," during which he demonstrates all aspects of trading from choosing the trades on through how and when to enter the trades, manage the trades, and exit the trades. Andy has developed a number of trading methods, among which are Andy's E-mini 40 and a T-Bond trading method. Andy Jordan was born 1965 in Germany, but is currently living in the Caribbean. He has studied mathematics and business administration in Regensburg and Hagen, and holds a PhD in mathematics.
|
 |
We created our Trading Community Forum for the purpose of providing positive, uplifting educational material to traders who want to participate. There is much to be gained from the collective wisdom and experiences of those who choose to participate. Let’s share what we have learned that has been helpful. Let’s all push forward to exchange new ideas and interesting concepts. |
If you are willing to share what works for you, then we welcome you. Your ideas may help someone else on their way to success. In turn, you may pick up an idea or piece of information that will help you to become a better trader.
Joe Ross has been trading the markets, virtually all of them, beginning well over 5 decades ago. He is now in his seventh decade of life, so he has the experiences of many years that he is willing to share, as he is already doing through his books, seminars and newsletters.
We hope you decide to join us in our forum to make your contributions as well.
Contact Us
1509 Jackson Drive
Cedar Park, TX 78613
Phone: 800-476-7796 or 512-249-6930
Office hours are Monday - Friday 9 A.M. to 5 P.M., U.S.C.T.Questions or Comments? Please email us: support@spread-trading.com
© Since 2004 by Trading Educators, Inc
Unsubscribe or change subscription
To change your subscription or to unsubscribe, scroll past the end of this
newsletter to click the "unsubscribe" link.
Joe Ross & Trading Educators, Inc. own all rights, title and interest to this publication. No part of this publication may be reproduced, in whole or in part, or by any means, mechanical or electronic, without permission in writing from the Publisher.You have no rights to resell, reprint, reproduce, or digitize Spread Scan Newsletter. While all attempts have been made to verify information provided in this publication, neither the author nor the Publisher assumes any responsibility for errors, omissions, or contrary interpretation of the subject matter herein.
This publication is not intended for use as a source of any advice such as legal, medical, or accounting. The Publisher wants to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations. The purchaser or reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including international, federal, state and local, governing professional licensing, business practices, advertising and all other aspects of doing business in the US, Canada, or any other jurisdication is the sole responsibility of the purchaser or reader. Neither the author nor the Publisher assumes any responsibility or liability whatsoever on the behalf of any reader of these materials.
Disclaimer:
The Commodity Futures Trading Commission has asked us to advise you that trading spreads or outright futures 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!