Edition 303      Wednesday, June 16, 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.

Before I start this week's weekly Spread Scan Example, I'd like to ask you for a favor — to take a minute to give me some feedback about Spread Scan. Follow this link to the short feedback form. I would really appreciate your input about our Spread Trading Newsletter. Thank you so much. Weekly Spread Scan Example This week we look at LCV0 – LCJ1: long October 2010 Live Cattle and short April 2011 Live Cattle Today we consider a Live Cattle calendar spread: long October 2010 Live Cattle and short April 2011 Live Cattle (LCV0 – LCJ1). After showing some strength at the end of March, the spread dropped again in the last few weeks to almost -6.000. Because we are close to historic lows, we might watch this spread in the next few days to see if we get an entry signal to the upside. The spread has been following its normal seasonality in the last few months. Will this also be true for the expected seasonal up move between 06/18 and 07/29?

Previous Trades

On May 6 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a Corn calendar spread: long March 2011 and short September Corn at 20 limit GTC. Suggested risk is $250; suggested first target at 30, then higher. Basis is seasonal (5/20 – 8/15) and possible support at 20. Comment: The statistical entry into the spread is in 2 weeks but I personally would try to enter at the current level using a wide stop."

Here's how we suggested managing this trade:

05/06  In at 20; suggest exiting on a close below 15.
06/01  Suggest exiting on a close below 15.
06/03  Suggest cashing in the first lot at approx. 25 (recommended only if you trade more then 2 lots).
06/04  It was possible to cash in the first lot at 24 (email). Suggest exiting on a close at 19.
06/09  Suggest exiting on a close below 20.

Visit our Spread Website for more information about our daily newsletter, Traders Notebook.

Andy's Trading Articles

© 2010 by Trading Educators, Inc. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc

Moving to the next level

I received an e-mail last week from a trader who has been in the markets for several years. He managed to become a winning trader. To be more precise, he manages to not lose money any more, but he isn’t happy about the overall outcome of his trading. He is keeping a trading journal about the trades he takes and the trades that fall into his trading scheme (but that he doesn't take). He told me that he plans many trades ahead of time, but somehow he just can’t pull the trigger when it comes to an entry.

A look into his trading journal tells him that he would be quite successful if he would just follow his trading plan. Something is keeping him from doing what is necessary. But what is it that is keeping him from success? There are so many possible reasons, like lack of confidence in his trading method, or in his own identity as a trader, that I cannot go into them all.

I have seen such problems many times while teaching my mentoring program. Finding out where the real problem lies is sometimes a difficult process, but it has to be done for a trader to be able to move up to the next level. The problem with trading is that most of the time we are not trading against the markets; we are trading against ourselves. To become a good trader, we have to find out who we really are. This might be a frustrating task, but it is the only way to consistently make money in the markets.

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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, the CEO of Trading Educators, 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 the primary author and Editor-in-Chief of the company's newsletters: Chart Scan™, Spread Scan™, Options Scan™, and Traders Notebook™. 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"

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.

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