Edition 285      Wednesday, February 10, 2010

Spread Scan with Commentary

Commentary by Andy Jordan Trader, Trading Mentor for Spread & Swing Trading Trading Educators, Inc. 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.

Weekly Spread Scan Example This week we look at 50*SK0 – 100*SMK0: long May 2010 Soybeans and short May 2010 Soybean Meal Today we consider entering an inter-market equity spread: long May 2010 Soybeans and short May 2010 Soybean Meal (50*SK0 – 100*SMK0). After falling like a rock, it seems the spread may have found support around the September 2009 highs. The spread has been nicely following its seasonal ups and downs. In studying the 15-year seasonal chart above (blue line), the spread might get another push to the up side in February. The spread has already broken out of its 1-2-3 low formation; the February low at $19,348 might be used for the initial stop.

Previous Trades

On February 3 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a Crude Oil Calendar spread: long June short March Crude Oil (CLM0 – CLH0) at 1.60 limit. Suggested risk is $300; initial projected objective is $300, then higher. Basis is seasonal and a possible 1-2-3 low. Comment: More conservative traders might want to wait for the break out above the January high at 1.91."

Here's how we suggested managing this trade:

01/28  In at 1.60 or better. Suggest exiting on a close below 1.40. Suggested first target at approx. 1.90.
02/03  Suggest exiting on Friday (close) if the spread doesn’t move up to the first target by then.
02/04  Out at break even (see today’s email).

For more information about our daily newsletter, visit our Spread Website to find out more about Traders Notebook.

Andy's Trading Articles

Can anything be learned from a single price bar?

Chart analysis is best conducted using a bar chart. That chart can be of the plain stick variety or it can be of the candlestick variety.

The most accurate representation of time and price are contained in the simple open, high, low, and close structure of a price bar. Here’s one way to analyze a single price bar: the open-to-low is the initial selling pressure, and open-to-high is the initial buying pressure. The low-to-close is the cumulative buying pressure, and high-to-close is the cumulative selling pressure. If the low-to-close distance is greater than the distance from the high­to-close, buying pressure was greater than selling pressure for that price bar during the time interval which it represents.

Of far less importance is the relationship of the close to the open, which is the least accurate price of a vertical bar. Yet candlestick charting emphasizes that relationship.  Price action compares today's high and low with yesterday's high and low. A higher high and low is bullish despite the close. A close greater than the open, mid-range and previous close is bullish, despite the price action. If the close confirms one price bar's bullish price action and an existing bullish trend, expect a higher high and higher low in the next vertical bar over 70% of the time.

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Day Trading Seminar for E-mini S&P, Forex, and Stocks with Joe Ross in Dallas/Ft. Worth, Texas March 20-21, 2010 THE BEST DAY TRADING SEMINAR YOU WILL EVER ATTEND The seminar tuition includes comprehensive training materials, lunch, and refreshments on both days.

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This trading seminar, including how to trade the E-mini S&P, Forex, and Stocks, will forever change your understanding of the markets and be a life-changing experience for you. The seminar tuition includes comprehensive training materials, lunch, and refreshments on both days.

Many traders lose far more money in a few days than the price of the seminar. When you trade using the techniques you learn at the trading seminar, your losses will be considerably less, and your trading account will continue to grow as you apply what you learn.

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On January 24 we told subscribers of our professional Forex trading newsletter Forex at the Market, "Consider selling USD/CAD at 1.0660 limit. Suggested stop at 1.0760; suggested first target at 1.0560 (move stop to breakeven when filled) then a move back down to 1.0300 and lower. Basis is a possible supply-zone around 1.0700.”

Here's how we suggested managing this trade:
01/26 Short at 1.0660
01/28 First profit target at 1.0560 hit; suggested stop now at breakeven (1.0660)
01/28 Stopped out at breakeven (1.0660)

Now that you have a taste of what Forex at the Market™ is all about, you know you can greatly benefit from trading the recommended currency pairs. Currency trading can be a great way to protect and grow your capital — if you know which currency to be in, and when to be in it.

We are working towards helping you be increasingly successful as you trade the Forex currency pairs. Marco Mayer is looking forward to being there for you whenever you need advice or assistance in trading this huge, but extremely volatile, Forex market. During these turbulent times, Marco will be at your service to help you make good choices.  

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A WEALTH OF SPREAD TRADING INFORMATION & EDUCATION:

If you wish to review Spread Scans from the past 3 months,
please follow any of the following links to its weekly issue:

Trader's Live Chat and Trader's Euro Chat with Joe Ross

NEXT LIVE CHAT SESSIONS WITH JOE ROSS:

Wednesday, February 10, 2010
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NEXT EURO CHAT SESSION WITH JOE ROSS:

Wednesday, February 10, 2010
Wednesday, February 17, 2010
Wednesday, February 24, 2010

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There is no "one" way to trade correctly. Trading is as individual in its nature as anything in this world can be. The only thing that is right is what works for you.

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About Spread Scan

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.

About Andy Jordan

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 preference. 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 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.

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™, and has set new standards for low-risk trading with his concepts of "The Law of Charts™ " and the "Traders Trick Entry™." 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 trading approach.

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 tutoring student, a successful trader, wrote: "You have no idea how much improvement in my life and in my trading efforts have those three days with you brought to me."

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™, Spread Scan™, and Traders Notebook™. He is also the editor of the Traders Money Club™ and 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"

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...

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Copyright 2010. Published by Trading Educators, Inc.
Spread Scan is a complimentary educational letter.

The information contained in this educational letter has been carefully gathered from sources believed to be reliable, but accuracy cannot be guaranteed. Readers should not assume that anything written here is to be considered as a recommendation, or that any performances shown will equal performances of the past.

This educational letter is intended solely for purposes of information and does not purport to provide legal, tax, or individual investment or business advice.

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Spread Scan with Commentary Previous Trades Trading Article Trader's Live Chat About Andy Jordan

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