Edition 314      Wednesday, September 1, 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 SBH1 – SBV0: long March 2011 Sugar and short October 2010 Sugar Today we consider a Sugar #11 calendar spread: long March 2011 Sugar and short October 2010 Sugar (SBH1 – SBV0). After being in a downtrend in June and July, the spread moved up strongly at the beginning of August, almost reaching break even. Later in August the spread fell once again, reaching a new low on 08/20. The spread is once again moving up strongly, penetrating the shorter trend line. Because of the current volatility of this spread, I recommend trading at least 2 lots. You might want to enter the first lot at the current level, but keep the second for a later entry (in case the spread drops again to around -1.00).

Previous Trades

On August 22 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a RBOB Gasoline calendar spread: long October and short December RBOB Gasoline (RBV0 – RBZ0) at -1.30 limit. Suggested risk is $420; suggested first target at 0.0, then higher. Basis is seasonal (7/29 – 9/1). Comment: The spread has only a few days left regarding seasonality. If not filled on Monday, I would suggest skipping the trade!"

Here's how we suggested managing this trade:

08/23  In at -1.30; suggest exiting the spread at a close below -2.10.
08/27  Suggest exiting the spread on a close below -0.190.

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

Optimism and Pessimism

Losing streaks are a reality of trading.  Just as sports teams have losing streaks, so do traders.  A trader may take many trades and face loss after loss before scoring a win. Trading requires persistence in the face of seemingly constant setbacks. It takes a rare person to be able to pick oneself up after a fall, ready to face another potential setback with enthusiasm.

If you want to succeed as a trader, you must develop an optimistic way of thinking. It is quite common for traders to face a lot more losers than winners — depending, of course, on trading style and methodology. It takes persistence in the face of defeat for you to keep going until you hit a series of winning trades.

However, you cannot afford to be too optimistic.  You have to strike a balance between optimism and pessimism.  Optimism is not always virtuous. There are often good reasons to be pessimistic.

Pessimists may not be as positive, but in many cases they are wiser. Pessimists often are more accurate in judging how much control they have over circumstances. Pessimists may be more realistic in their judgments. It may be beneficial to think pessimistically from time to time. Optimism may make you feel good, but pessimism helps you evaluate the feasibility of your plans, goals, or ideas. Traders, especially novices, are notoriously overly hopeful and overly confident. It's vital for survival to cultivate a balanced sense of optimism.

Optimism helps you persist in the face of a setback, but a healthy sense of skepticism will keep you based in reality.

Learn from Master Trader Joe Ross. We know this
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of the markets, and be a life-changing experience for you.

The "Life Index for Traders™" simplifies the process of tracking, charting, and evaluating your trading and other aspects of your
life, saving you valuable time. (It also helps solve the problem of balance between optimism and pessimism Andy wrote about in his article above.)

The Life Index™ is a simple concept that, when applied diligently, will guide you into becoming a more successful trader as well as a more successful person. Joe Ross developed it many years ago to help build the right kind of character and to develop the right mindset for trading.

If you ORDER THE LIFE INDEX FOR TRADERS™ we give you our EQUITY EVALUATOR™ free!!   The Equity Evaluator™ lets you see exactly how well you are doing in the markets. But it does even more than that. The Equity Evaluator tells you when you need to stop trading long enough to take a serious look at your Life Index. It tells you when you need to paper trade, and it tells you when it's okay to trade with real money. The Life Index for Traders (LIFT) and the Equity Evaluator™ work hand-in-hand to ensure your trading success. Follow this link to find out more..

"I truly believe Life Index for Traders is an excellent and very helpful tool in becoming better - a better, smarter trader, but also a better, more fulfilled person. I first found it in Joe Ross' book "Trading Is a Business" which to me is certainly the most valuable book about trading. Life Index for Traders e-book is so nicely done that I have soon notice I have become “addicted” to it. It has rapidly become a pleasant and easy to follow habit. It is not only about constant self-evaluation. I think one of the most important things about the Life Index is that it shows you on every day basis what is important for you to do as a trader. And sooner or later you do it. You implement new good habits in your life, one by one. Excellent tool! Extremely efficient! Thank you Joe!!!"
-- Michal Abel, Poland

Ambush Trading Method
Trading Performance

Once again you can see how Ambush performed in two popular markets during the last few weeks. This time we picked the Gold Future traded at the Comex.

As you can see on the chart below, Gold caused a lot of traders problems by false breakouts and wild moves intraday. These are good conditions for Ambush!

Trade Example 1:

Please take a look at the results of those trades 
(without commissions) trading one Gold futures contract
at the Comex:

As you can see,
Ambush managed to make a total of $3.580 profits,
trading one contract.

 

Trade Example 2:

The SPDR S&P 500 ETF is one of the most popular ETFs out there. But it can be difficult to trade, and definitely was during the last couple of weeks. As you can see, basically the SPY just moved sideways. Let’s see how Ambush did:

Please take a look at the results of those trades 
(without commissions) trading 1000 ETFs:

As you can see,
Ambush managed to make a total of $6.160 profits
trading 1000 ETFs.

 

Now that you have a taste of what the Ambush Trading Method™ is all about, we hope you will make this incredibly effective trading method part of your trading today. With this trading method you can ambush many stock index futures, commodity futures, currency futures, forex pairs, or ETFs or CFDs on any of the markets mentioned. If you want, you can ambush more than one market daily.

Marco Mayer has come up with a safer and easier way to trade a large variety of markets, with the potential of locking in a steady stream of profits. If this is what you are looking for, Marco Mayer's Ambush Trading Method™ is for YOU. The Ambush Trading Method™ is designed to perform best in sideways or slowly trending (stair-stepping) market conditions, and is more likely to fail in strongly trending, volatile markets. Statistics tell us that markets trade in congestion most of the time, and trend only 20% of the time. Thus the method will perform well most of the time, but you can further improve your results by avoiding strongly trending markets. Find out more..

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

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Wednesday, September 1, 2010

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Traders Forum - for Traders with passion and a desire for increasing knowledge

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.

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.

If you are willing to share what works for you, then we welcome you. Your ideas may help someone else on his/her 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 over five decades ago. He is now in his seventh decade of life, so he has the experiences of many years that he is willing to share, as he is already doing through his books, seminars and newsletters.

We hope you decide to join us in our forum to make your contributions as well.

You can follow this link to our forum now!

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.

For information about Joe Ross and Trading Educators, please follow this link...

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Copyright 2010. Published by Trading Educators, Inc.
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