If you have problems reading this newsletter, please follow this link:
Spread Scan Issue: December 2, 2009 - Volume 275
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. Follow this link to view this week's Spread Scan immediately, or read on.
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's Spread Trading Example
- Previous Trades
- Andy Jordan's Trading Bites
- GOOD MANAGEMENT FOR YOURSELF AND YOUR TRADING BUSINESS
- Holiday Savings Event at Trading Educators: FREE SHIPPING PLUS 15% OFF ON PRODUCTS AND SERVICES - ends December 4
- Next online live discussions for Traders with Joe Ross: Wednesday, December 2, 2009
- About Joe Ross and Andy Jordan
- TE Traders Forum
- Contact Us
Be sure to "white list" us to ensure that you receive all your issues of Spread Scan. That way you can continue to enjoy learning through the best free educational trading information available, and we can keep you informed about additional trading techniques, educational services and products to help you grow as a successful and profitable spread trader.
This week we look at LHM0 – LHG0: long June 2010 Lean Hogs and short February 2010 Lean Hogs
Today we consider for the second time entering a Lean Hogs calendar spread: long June 2010 Lean Hogs and short February 2010 Lean Hogs (LHM0 – LHG0). I mentioned this spread last week, but instead of moving higher and triggering the entry, the spread made a new low. It still looks interesting to me after testing once again the level around 10.00. The spread is showing a possible 1-2-3 low right now. A close above 11.20 would complete the 1-2-3 low formation and indicate a further up move of the spread. The low from 11/25 could be used as an initial stop.
On November 16 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering an inter-market spread: long January Soybean Meal and short January Soybean Oil (100*SMF0 – 600*BOF0) at a close above $5,800. Suggested stop at $4,800; possible first target for multiple lot traders at approx. $8,000. Basis is seasonal (12/3 – 12/24) and a 1-2-3 low. Comment: There is a similar trade using the March contracts with an optimized entry date on 11/27. Both trades are similar but the January contracts look stronger. Based on the entry you should calculate a risk between $1,500 and $2,000 per lot."
Here's how we suggested managing this trade:
11/17 Spread close above the suggested entry value. Suggest entering MOO tomorrow.
11/18 In at approx. $6,300. Suggest exiting on a close below $4,800.11/19 Spread moved up nicely today. Suggest cashing in the first lot at approx. $7,800.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
How much profit or loss can I expect from trading?
by Andy Jordan
Answering this question is a difficult task because it depends on many factors such as the experience of the trader, the way of trading and, very important, how much the trader wants to risk.
Profits and risk go hand in hand, and every trader gets a losing strike once in a while. If you want to make it in the trading business, you have to take losing trades into account. You will lose money; sometimes even more then you thought! To be prepared for such an event, you have to make the overall decision: “How much money of my trading account am I able to lose?” This is a difficult decision I know, but it is a must for every trader to know the answer to that question. Unfortunately, without knowing your trading goals, your account size, and your risk tolerance, it is difficult for me to come up with any numbers.
But here is a tiny calculation you can do: multiply the risk you are willing to take on each trade by 6, and you get a good estimation of your overall risk.
For example: if you are willing to risk 4% on each trade, you should be prepared for a drawdown of 24% (4 * 6 = 24).
Because profits and risk go hand in hand, the question that will arise is: “how much profit can I expect?”
Answer: If you are able to make profits of the same amount as your worst drawdown, you are already a good trader; if you can make double that, you are excellent.
Always keep in mind that trading is a long term business; your time frame should be at least 6 months, or better yet, one year. Short term results, either profits or losses, are meaningless in this business!
All the calculations above are just a rough estimation, but you might have a better idea now about trading results and what to expect.
GOOD MANAGEMENT FOR YOURSELF AND
YOUR TRADING BUSINESS
In "Trading Is a Business" Joe 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.
Joe 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.
'Trading Is a Business' 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.
Are you ready for this empowering book?
GREAT! Please follow this link to visit our websiteHOLIDAY SAVINGS EVENT - ORDER TODAY AND GET 15% OFF,
PLUS FREE SHIPPING!
FOLLOW THIS LINK TO SEE AN OVERVIEW OF OUR PRODUCTS
AND SERVICES
*DISCOUNT OFFER: Don't miss out! Order online by 11:59 p.m. CT, December 4, 2009, to get free standard shipping plus save 15% on your purchase of $100 or more. Discount applied to product total only. Gift cards not included. Shop any link in this e-mail or on our websites.
Offer valid within the "Exclusive Offer" category only; discount will be applied at checkout at the Trading Educators store. Offer valid online only. Not valid on special orders, e-gift card orders, previous purchases, or on orders after the specified date. Not redeemable for cash. This offer is subject to change, including termination, without notice. Discount on subscription services applicable for the first month only. Discount not valid on Private Tutoring with Joe Ross, Live Seminars in Dallas or abroad, Mentoring Program for Spread Trading with Andy Jordan, taxes, or shipping charges. Offer not valid with other promotions or coupons. We reserve the right to limit quantities. Offer valid from November 20 through December 4, 2009.
** FREE SHIPPING DEAL: Free standard shipping: offer valid within the "Exclusive Offer" category only; free shipping discount will be applied at checkout. Offer is valid online or on phone orders. Not valid on special orders, previous purchases, or on orders after the specified date. Offer is valid for standard shipping only. If you need Express or Overnight delivery, shipping charges will apply. If you need your shipment faster, require tracking and/or signature confirmation, please contact Denise Ross at ross@rosstrading.com or contact by phone: 800-476-7796 or 1-512-249-6930. Offer not valid with other promotions or coupons. We reserve the right to limit quantities. Offer valid from November 20 through December 4, 2009. See further details on shipping times.
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 U.S. Chats for December 2009
Wednesday, December 02, 2009
Wednesday, December 09, 2009
Wednesday, December 16, 2009
Wednesday, December 23, 2009
Wednesday, December 30, 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 Euro Chats for December 2009
Wednesday, December 02, 2009
Wednesday, December 09, 2009
Wednesday, December 16, 2009
Wednesday, December 23, 2009
Wednesday, December 30, 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 1980'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:
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.
|
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.
 |
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 fifty years ago. He is now in his seventies, enjoying sharing his experiences of many years through his books, seminars, individual tutoring, 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!