Edition 305      Wednesday, June 30, 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.

Thank you to those of you who helped us by sharing your thoughts about Spread Scan through filling out the brief survey we offered last week. If you haven't yet filled out the survey, please follow this link to the short feedback form. I would really appreciate everyone's input about my free Options Trading Newsletter. Thank you so much. Weekly Spread Scan Example This week we look at SMH1 – SMU0: long March 2011 Soybean Meal and short September 2010 Soybean Meal Today we consider a Soybean Meal calendar spread: long March 2011 Soybean Meal and short September 2010 Soybean Meal (SMH1 – SMU0). The spread has been moving sideways all year long with a clear defined support level around -9.0. Will this level hold for the next few weeks, and will the spread move lower allowing us an entry at around -9.0? I personally would not want to enter the spread at the current level. It might be a better idea waiting patiently for some weakness before entering the trade.

Previous Trades

On June 21 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering an inter-market spread: long September Wheat and short Corn (WU0 – CU0) at a close above 111 ½. Suggested risk is $1,000; initial projected objective is $1,000, then higher. Basis is seasonal (7/2 – 7/23) and a 1-2-3 low."

Here's how we suggested managing this trade:

06/22  In at approx. 112. Suggest exiting on a close below 95.
06/23  Suggest cashing in the first lot at approx. 130.
06/24  It was possible to cash in the first lot at approx. 125. Suggest exiting the spread on a close below 116.

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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

Your edge is small.

Remember always that any edge you have in trading is a small edge. It is always very subtle. Your edge is not a “hit you over the head” advantage. It is quite a small percentage. (While on the other hand, on any given day luck can be a big percentage.) Your edge is very subtle shading or gradation. Treat it humbly. The rule always: Humility!

There is (sometimes well hidden) a deep humility about great traders. While it is true that they may often be colorful (loud, flashy and so on), that is on the surface. It is a kind of “act” that takes place above the framework that they play inside of. But the humility is there, underneath the surface. A humility that usually stems from the fact that they have seen all the worst things that can happen in a trading career.

Success in trading, like success in any other field, is based on a well-defined framework inside of which the trader operates. Ultimately knowledge becomes a turning inward to the skills inside this framework. While it is true that the individual may develop a second persona about how colorful he is, the practice and experience and sweat comes first, and the inner discipline and humility must be there.

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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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