If you have problems reading this newsletter, please follow this link:
Spread Scan Issue: February 4, 2009 - Volume 232
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:
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.
This week we look at CCH9 – CCK9: long March '09 Cocoa and short May '09 Cocoa (ICE)
Today we consider a calendar Cocoa spread (ICE): long March '09 Cocoa and short May '09 Cocoa (CCH9 – CCK9). After moving up nicely in October and November last year, the spread retraced about 50% from its December high at 14. It seems the spread has found resistance around -11, and is ready for the next up move.
Traders may want to enter the spread at a close above -6. Initial margin is $350 (reduced). Suggested risk is $150. Initial projected objective is $150, then a move higher. Basis is seasonal (2/6 – 2/19) and a breakout of a range.
On January 21 we told subscribers of our professional daily spreads & position trading newsletter Traders Notebook, "Consider entering a Live Cattle calendar spread (Globex) LCG9 – LCJ9 at -3.2 limit. Initial margin is $1,350 (reduced). Suggested risk is $400. Initial projected objective is $400, then a move higher. First Notice for LCG9 is 02/04."
Here's how we suggested managing this trade:
01/22 In at -3.2. Suggested stop at -4.00.
01/26 Suggested mental stop at -3.5.
01/30 Spread doesn’t want to move up. Suggest cashing in on Monday or TuesdayFor 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
It’s all about the exits!
Whenever my spread trading is not at its best, I start trying to find a better entry strategy. I play with indicators or chart formations, trying hard to get a better trading result. Very often I believe I've found something spectacular, but most of the time I end up admitting it is not about the entry. Whenever I enter into a spread trade, I just don’t know what will happen next. I use the trend, seasonality, and I check the COT report to see what the big players are doing. Together with simple chart formations, I make my decisions for my next entry. But even though seasonality tells you this trade has worked out 90% in the last 15 years, you just don’t know what will happen the next day. The trade can move $2,000 against you, ending up with a $150 profit. Statistically, this was a winning trade. But it doesn’t help when you got stopped out with a $1,000 loss.
But what can a trader do if entries don’t make the big difference? We have to focus on the exits. That’s something we can control. We can control when we want to get out of the trades. We can set our initial stop, our target, and our trailing stop strategy for each trade. We know we have to get out fast whenever the trade is going against us, and we have to stick with the trade whenever it is moving our way. Only if we are able to make 3, 4, or more times the initial risk from time to time are we going to succeed in the long run. Unfortunately, we will not find something like the “holy grail of exit” strategy. We have to find something that fits our personality and our trading account. We can use whatever helps us to get out fast on losing trades, and lets us stay with the good ones. A simple money management trailing stop works just fine, but a volatility stop will also do a good job. Trading is actually very simple — it is just sometimes very hard to do!
THE MOST IMPORTANT BOOK JOE ROSS HAS EVER WRITTENJoe Ross' Trading Is a Business continues to be not only our bestselling book, but the one Joe says is the most important book he’s ever written. This is the book that has changed many people's lives over the years.
Many traders say that after reading Trading Is a Business, they became profitable for the first time. You cannot succeed in trading until you learn how to manage yourself as well as your business. Trading Is a Business teaches you how to do both, as well as dealing with risk management, money management, and trade management. You learn the right way to think.
To find out more about this empowering book,
visit our website by following this link
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:
Chats for February 2009:
Wednesday, February 04, 2009
Wednesday, February 11, 2009
Wednesday, February 18, 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
Chats for February 2009:
Wednesday, February 04, 2009
Wednesday, February 11, 2009
Wednesday, February 18, 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. Andy is the founder and president of Jordan Trading, S. A. 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 an online course in spread trading, "Trading Mentoring - 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!