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Spread Scan Issue: March 18, 2009 - Volume 238
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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:
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 CTZ9 – CTN9: long December '09 Cotton and short July '09 Cotton(ICE)
Today we consider a Cotton calendar spread (ICE): long December '09 Cotton and short July '09 Cotton (CTZ9 – CTN9). The spread has been in a range since July 2008, giving us a 1-2-3 low for a possible entry. The January low at 3.88 seems to be a logical place for a close stop. The first target of this spread could be the upper bound of the range at around 4.55.
Traders may want to enter the spread at a 4.20 limit. Initial margin is $420 (reduced). Suggested risk is $200. Suggested first target at 4.55, then a move higher. Basis is seasonal (3/16 – 3/31) and a 1-2-3 low.
On March 6 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider selling April Gold (COMEX) at 930 stop market (all sessions; no entries on gap openings). Suggested stop (and reverse) at 937; suggested first target at 923. Basis is a TTE in front of a Ross Hook."
Here's how we suggested managing this trade:
03/09 Short at 930. Trade hit suggested first target; suggested stop at 292. Suggested final target at 901.
03/10 Out with second lot at 901.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, what is the difference between position and swing trading? I know the time for holding a contract is different, but are there any other important points I should be aware of?"
Andy: You usually hold a contract for a shorter time with swing trading. With swing trades you try to catch a “swing” of a few days, while a position trade tries to avoid the daily swings to stay in the trade for a longer time. The advantage of swing trading is that you do not necessarily need a trending market, and you usually use a closer stop. My average risk with swing trading is not very high compared with that of my position trades because my stop is very close. I also reverse my position instead of just being “stopped out.” Today’s markets are very volatile, and require lots of risk if you want to position trade a market.
My spread trading is position trading, but it requires less risk, especially with calendar spreads. Spread trading is pure position trading mainly in that you give your trades much more room and time to develop because you want to get as much as you can out of the nice long moves that appear with spreads.
How Traders Could Make Money Steadily
Joe Ross has studied the markets from the point of view of how traders could make money steadily, getting the most efficient use of their money, while at the same time taking advantage of high percentage trades. Some of the best traders he knows are doing this, but you are not going to see them interviewed on any TV money show. They are too busy living the good life. But they are the most knowledgeable, successful, and respected among trading professionals who are "in the know."
High Probability Trades and How to Avoid Your Enemy
Joe's idea was to find not only high probability trades that give traders the best use of their margin accounts, but also to find a way to avoid being a victim of stop running, that nasty enemy of most traders.
- Is it really possible to find trades that win 80% or more of the time?
- Is it possible to get fantastic leverage in the use of your money?
- Is it possible to never have to worry about being stopped out?
How would you like to be able to take advantage of repetitive events to the point of 80% or greater accuracy time after time after time?
What would it be like if you could discover trades that trend, and trend, and then trend some more?
We've kept you in suspense long enough. The way of trading Joe is talking about has been successful for him throughout his entire trading career.
What he's talking about is learning to trade spreads, and he believes almost anyone, with the right training, has the potential to make money trading them.
Spread trading can be incredibly powerful, profitable,
consistent, and easy to implement.For years Joe has been spilling his guts on how people can succeed at trading, while giving away daily advice, weekly trades, answers to questions posted in his forum, and via weekly online chats. He's been doing this since 1989.
How or where does one start on this less risky way of trading? By reading Joe's book Trading Spreads and Seasonals.
Joe's manual Trading Spreads and Seasonals is a self-contained training course designed to get you to an intermediate level of spread trading. Joe brings you down-to-earth with his vast knowledge of one of the most fundamental ways anyone can ever learn to trade.
Joe himself stated his reasons for writing this book. The text follows:
"Spread trading is virtually a lost art except among professionals, who, by the way, have never stopped using spreads since trading began.
"I encourage every one of my students and subscribers to read this book. Spread trading is probably the best way to trade that I've ever encountered. It beats the socks off both options and outright futures trading. It is far more relaxed than day trading. Much of the stress of trading is removed with spread trading."For more information on this manual,
please follow 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 March 2009:
Wednesday, March 18, 2009
Wednesday, March 25, 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 March 2009:
Wednesday, March 18, 2009
Wednesday, March 25, 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 our trading
methods, and supervises keeping them up to date.
|
 |
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!