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Spread Scan Issue: December 3, 2008 - Volume 223
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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
- Dynamics Of The Markets
- Next Joe Ross Live Chats for Traders: Wednesday, December 3, 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 LHJ9 – LHG9: long April '09 Lean Hogs and short February '09 Lean Hogs (Globex)
Today we consider once again a Lean Hogs calendar spread (Globex): long April '09 Lean Hogs and short February '09 Lean Hogs (LHJ9 – LHG9). The spread has been trading in a well defined up-trend channel. Will the spread move back up to the upper side of the channel and can seasonality help to move it even higher?
Traders may want to enter the spread at a close above 7.05. Initial margin is $1,215. Suggested risk is $440. Initial projected objective is $440, then a move to 10.00 or higher. Basis is seasonal (10/30 – 1/13) and a 1-2-3 low in an up-channel.
On November 23 we told subscribers of our professional daily spreads & position trading newsletter Traders Notebook, "Consider entering a Lean Hogs calendar spread (Globex) LHZ8 – LHG9 at -7.7 limit. Initial margin is $1,215 (reduced). Suggested risk is $600. Initial projected objective is $600, then a move to -4.0 or higher. Basis is seasonal (11/10 – 12/12) and a trading range. Comment: I will try once again getting into the spread on weakness. Last Trading day for LHZ8 is 12/12."
Here's how we suggested managing this trade:
11/24 It was possible to enter at -7.7. Suggested stop at -8.5.
11/25 It was possible to get filled at -6.7 (see email). Suggested stop at -8.2.
12/01 Suggested stop at -7.7.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, we are almost done with 2008. Any idea how I can get ready for 2009?"Andy: If you have a trading journal, there is plenty for you to do. If not, you should get one for next year. Here is what you can do while going through your trading journal:
- Look at the big winners and the big losers. What caused the good trades to become big winning trades? And what happened with the big losers? Is there any way to avoid them?
- What is your winning percentage (comparing the winning trades to the number of all trades)?
- What is your win/loss ratio (divide your average winner by your average loser)?
- How was your trade management? How does the winning % and the win/loss ratio change when you manage your trade differently? For example: did you exit 1/3 of your position at the first target, 1/3 at the second target, and 1/3 using a trailing stop? What would have happened had you used a different strategy for your exits? What happens to the winning % and the win/loss ratio when you exit ½ at the first target, and ½ using a trailing stop? Try to play with the numbers to find your personal exit strategy.
- What about your risk management? Did you always risk the same % of your trading account on each trade? Or did you use a risk of 10% on some trades and only 5% on others?
- Did you follow your trading plan with enough discipline? Did you get out fast enough on your losing trades, and did you stick to the winning trades?
As you can see, we can learn a lot for the future from the past. The trading journal is essential in helping you to improve your trading. If you don’t keep one – start one!
If you want to avoid loss after loss, and if you really want to become a successful trader, then you definitely should start trading with a defined concept.
Joe's students have verified that once you understand the markets, all you’ll ever need to trade them profitably is an understanding of the Law of Charts™ along with the dynamics of the markets. In his online seminar you will find both, and a whole lot more.
People think that the more complicated something is, the better it is, but the truth of the matter is just the opposite.
Joe's seminar on The Law of Charts brings you the pure simplicity of what the markets are all about.
Trading does not have to be complicated.
In Joe's online seminar, The Law of Charts, you will be looking at the truth of the markets in virtually every scene. There is truth in every price bar you see, and in every group of price bars there is additional truth. It doesn’t matter whether you use traditional or candlestick price bars. You can see the truth with line or point-and-figure graphs.
The truth is the truth, and you will find it on the charts.
This Online Video Seminar gives you a very brief presentation of the Law of Charts formations, and a very detailed explanation of how to implement the Law of Charts for making P R O F I T . This is what we really want to teach you, and it is what you want to come to understand and take advantage of.
The Traders Trick & the Ross Hook
In addition, the online video seminar gives you the rationale behind the Traders Trick Entry™. You will learn what causes Ross hooks™, and how to trade them. You will see how and when to use the Law of Charts when prices are in consolidation.
There is really much, much more, because Joe Ross elaborates on the slides, giving you gems of information with each slide that you will not see in the free pdf Law of Charts material on our website, nor in any of his books. Please follow this link and visit our website for more detailed information about Joe's popular and highly recommended Online Video Seminar on The Law of Charts...
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
Chats for December:
Wednesday, December 03, 2008
Wednesday, December 10, 2008
Next Chats for January 2009:
Wednesday, January 07, 2009
Wednesday, January 14, 2009
Wednesday, January 21, 2009
Wednesday, January 28, 2009
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
Chats for December:
Wednesday, December 03, 2008
Wednesday, December 10, 2008
Next Chats for January 2009:
Wednesday, January 07, 2009
Wednesday, January 14, 2009
Wednesday, January 21, 2009
Wednesday, January 28, 2009
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 (now including Antarctica) is huge. As one student, a successful trader, wrote: "Thanks again for your trust and patience...Joe is a fountain of knowledge...but it is his wisdom that really sets him apart." 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) , Traders Money Club™ 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.
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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.
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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!