Edition 304 Wednesday, June 23, 2010
Edition 304 Wednesday, June 23, 2010 |
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Commentary by Andy Jordan
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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 ExampleThis week we look at LCV0 – LCZ0: long October 2010 Live Cattle and short December 2010 Live Cattle Today we once again consider a Live Cattle calendar spread: long October 2010 Live Cattle and short December 2010 Live Cattle (LCV0 – LCZ0). After moving mainly sideways in April and May, the spread made a new low on June 11. The spread has been showing some strength since then, and currently gives us an entry signal in the form of a 1-2-3 low. Will seasonality (06/18 – 07/29) help move the spread higher? We looked at a similar spread last week, but I prefer this one due to better volume in the front month. |
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On May 7 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a currency ETF spread: long FXB and short FXY (using a ratio of 1:2) at -74 or better. Suggested stop after entry at -80; suggested first target at -68."
Here's how we suggested managing this trade:
06/08 In at -74 or even better. Suggest exiting the spread (on the same day) on a close below -80.
06/15 Suggest cashing in the first half today and moving the stop for the remaining position to break even.
06/16 It was possible to cash in the first lot at approx. -69.50. Suggest moving the stop to -72.00.
Visit our Spread Website for more information about our daily newsletter, Traders Notebook.
© 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
Losing a battle doesn’t mean losing the war
No matter how carefully you plan, there are times when trades just don't go your way. In fact, taken individually, every trade has only a 50% chance of being a winner. What counts is not necessarily how often you win over a series of trades, but whether or not you win more money than you lose.
When you sign up to open an account, and on virtually every website that involves trading, you are told that past market performance is no guarantee of future market behavior — so if you used historical correlation or seasonal data to develop your trading strategy, it may not work out the way you had planned.
Professional traders take such events in stride. There is no reason for you to be upset or angry. There is no need to be frustrated. As much as you may try, there is no way you can anticipate every possible way prices may move.
It is erroneous to believe that you can always make the perfect trade. Profits are never a sure thing.
Many traders spend a lot of time seeking for perfection in a venue that is chaotic and imperfect. They believe that it is possible to plan every part of a trade, and in so doing, guarantee success. No way! Reality proves that trading is uncertain.
Once a trade is executed, no one knows for sure what will happen next. No one even knows where the very next tick will be. If you assume that it’s possible to know ahead of time everything that could go wrong, you're living in la-la land. The result is frustration when things don't go your way. Instead of looking for perfection, it’s more realistic to realize that there will be times when you have to stand by while the market does what it wants to do. That doesn't mean you are helpless, but it does mean that you can't blame yourself when the price action is not in agreement with your trading plan. All you can do is manage risk so that an unexpected losing trade doesn't wipe out your account. At that point, you have to accept the loss and move on. Persistence, and the discipline to be diligent, will help you to keep trading. It is your long-term results that count, not what happens on a single losing trade. Just because you lost a battle doesn’t mean you’ve lost the war.
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Many traders lose far more money in a few days than the price of the seminar. When you trade using the techniques you'll 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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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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Joe Ross has been trading the markets, virtually all of them, beginning
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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 to "white list" us to 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 inform you about additional educational services and products to help you grow as a successful and profitable trader.
Educator for Spread & Swing 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 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.
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:
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.
Readers should consult with expert legal, tax, business, and financial counsel before considering any action on the information contained in this newsletter. The publisher and its associates, editors or employees may have taken positions in and may from time to time make purchases or sales within markets and market vehicles mentioned herein. Reproductions of this newsletter are prohibited except by permission.
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"Traders Notebook is a great starting place to learn how to trade real spreads. You learn a lot from just watching the trades selected, basis of selection, and most importantly the management of these trades. Thereafter you can select and trade the spreads that you feel comfortable with! The trading tidbits also provides one with a wholesome approach to trading. Thanks Andy Jordan, for all the good work."
-- Alpha A., Tanzania
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We know that many of you are looking for a smarter and better way to be more consistently profitable in the E-mini S&P 500 market, and we are happy to let you know that through Joe's "Day Trading the E-mini S&P 500" e-book, you have finally found what you are looking for.
Be more consistently profitable in the
E-mini S&P 500
We have received lots of great feedback ever since we released this e-book. We are really excited to know how much our clients have profited from studying Joe's E-mini S&P 500 course. Here is what
E-mini Traders have to say:
“I have all of Joe's books - logical, accurate trading methodologies, and the E-Mini S&P 500
e-book is another successful extension of Joe's honesty and legacy in helping traders. Thank You Sir. I have successfully used Joe's trading methods in the past.” -- Tim A., U.S.A.
"Full Advise with great emphasis on market dynamics, an essential ingredient to trading success.”
-- J. Torrelles, Spain
“Joe, your e-book "Day Trading the E-mini S&P" was just as expected. Fantastic! Your book has given me a better understanding of what the markets are doing throughout the day and why. Thank you for all that you do." -- Shane K., USA
“This is a fascinating book which explains why the E-mini S&P 500 moves the way it does and how to profit from that knowledge.” -- Thomas C., U.S.A.
“There is a wealth of wisdom and knowledge packed in this E-mini S&P 500 e-book. What is especially outstanding is the abundance of chart illustrations taking the trader through the day trading technique. Joe's years of experience permeate the method from start to finish. Both the experienced and new trader will benefit from the approach to trading the e-mini S&P. I'm most grateful for his sharing what has taken him a lifetime to achieve.” -- Billy A., U.S.A.
"I am very grateful that I purchased Mr. Ross's book on day trading. It was an eye opener to me in how to look at the daily action in the S&P e-mini contract. I position trade and this will give me a better way to enter and add to my positions for my system. In the past I was taking too much risk by entering a position at the end of the day where if I could have entered earlier there would have been better money management. Thank you for a great way to look at day trading." -- Patrick Bayes, USA
“I thoroughly enjoyed the book and finished it within the first few days of purchase. The information about the insider was an eye opener." -- C. Croeser, South Africa
You'll find more trader testimonials if you visit "Day Trading the
E-mini S&P 500"
e-book
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