Edition 323      Wednesday, November 3, 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 CLH1 – CLF1: long March 2011 Crude Oil and short January 2011 Crude Oil Today we consider a Crude Oil calendar spread: long March 2011 Crude Oil and short January 2011 Crude Oil (CLH1 – CLF1). After the nice up move in July, August, and September, the spread retraced back down from its September high and is now trading sideways around 1.0. Traders might want to “scale-in” to this spread by entering with the first half of the contracts at the current level, and adding on the second half later. This gives the trader more flexibility in case the spread moves even lower.

Previous Trades

On September 2 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a Soybean Meal calendar spread: long December and short July Soybean Meal (SMZ0 – SMN1) at -3.0 limit GTC (first lot). Suggested risk is $350 (trading at least 2 lots). Comment: This spread is moving lower in big steps. Because the spread might fall even more, I will enter with only the first lot, keeping the second for later (at -6 if it moves down even further)."

Here's how we suggested managing this trade:

09/02  It was possible to enter with the first lot at -3.0. Let’s see how this spread develops over the next few days/weeks.
09/10  Suggest putting on the second lot at -6.0 limit GTC.
09/13  In with the second lot at -6.0. We are now in at -4.5 on average; suggest exiting the spread at a close below -8.0.
10/20  Suggest exiting the spread at a close below -7.2.
10/28  It was possible to cash in the first lot at -2.5 or even better (e-mail). Suggest exiting the spread at a close below b/e.
11/01  Suggest exiting the spread at a close below -4.0.

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

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

How to approach trading - Conclusion

It is critical to develop a well thought out and organized trading plan. It is equally important to have the discipline needed to follow it. Diversify your trading into several unrelated markets, or focus on one market and time frame where you have seen you can make money. Trading, by its nature, is not investing.  Trading requires consistent monitoring on at least a daily basis because of the large impact a small price move can have on your account. You should strive to stay on the right side of the market and manage every trade – unless you find that you can make more money by being on the other side of the market! Being a contrarian at heart, some of my best trades are made by going the opposite way from everyone else.  I believe a lot of wasted time and money can be avoided by working with a professional.  Carefully choose a mentor, so you don’t have to learn everything the hard way. Trading is a means to an end.  In and of itself it is nothing more than that.  Trading should bring fulfillment to your business and personal goals.  Trade as little as possible; you’ll make more money that way!  Avoid becoming a day trading zombie, sitting in front of a screen all day long hoping for another move. 

Joe Ross´ Free Weekly Chart Scan Newsletter

See how to apply Joe`s concepts in today`s markets

The free Chart Scan weekly newsletter is designed to assist you in becoming a better trader by showing you, in the context of the markets, how to apply the Law of Charts™ in today's markets.

In this newsletter you will see applications to a variety of markets, including forex, futures, and stocks. Accompanying each week's chart is a valuable trading article by Joe. These gems of wisdom have helped many traders become more successful. Follow this link to sign up today!

FOREX AT THE MARKET TRADES

Trade #1: AUD/CAD

On October 6th we told subscribers of our professional Forex swing-trading newsletter Forex at the Market, "Consider buying AUD/CAD at 0.9905 stop-market. Suggested stop at 0.9860; suggested first target at 0.9950 (move stop-loss to breakeven when filled); suggested second target at 1.0040. Basis is a possible strong breakout in the direction of the trend.”

Here's how we suggested managing this trade:
10/07 Long at 0.9905; suggested stop at 0.9860
10/07 First target hit at 0.9950; suggested stop at 0.9905
10/07 Suggested stop at 0.9980
10/07 Stopped out at 0.9980

FOREX AT THE MARKET PERFORMANCE REPORT
per November 1, 2010:

Follow this link to find out more and to look at the FX-ATM performance chart of FX-ATM, using a $50.000 account, since we started in October 2009.

Marco’s experienced recommendations tell you which Forex markets to consider trading, and when to trade them.

If you have questions, please don't hesitate to send them to
support@fx-atm.com

We want you to have the greatest success in trading the Forex currency pairs. I (Marco Mayer) am looking forward to helping you to learn and grow your skills as you trade this huge, but extremely volatile, Forex market. During these turbulent times, I will be at your service through the newsletter and the special Forum, to help you make good choices. And, if needed for special help, I am also available via e-mail.

We look forward to your starting your subscription.
http://www.fx-atm.com/subscriptions.html

Best wishes for success in your currency trading,

Your Editor of FX-ATM

MARCO MAYER
http://www.fx-atm.com

AMBUSH METHOD TRADE AND PERFORMANCE REPORT

This month we show you how Ambush performed in one of the most popular markets out there, the S&P 500. And we decided to show you both the E-Mini S&P 500 futures (ES) and the SPY-ETF, also knows as the “Spiders.” Why show two so highly correlated markets? Simply because we want to show you that Ambush can be traded with large and small accounts, with futures and ETFs. Let’s start with the E-Mini S&P 500. Let’s face it, the last six weeks have been especially tough for many traders focused on stock market Futures. It was a terrible sideways-/ stair-stepping market with tons of “false breakouts” and, on most days, almost nothing happened.

The whole chart is full of Dojis, trading days where the market closed close to where it opened. How do you trade successfully in such a mess? Well let’s see how Ambush did...

Please take a look at the results of those trades 
(without commissions) trading one E-Mini S&P 500 contract:

As you can see,
Ambush managed to make a total of $3.100 profits
trading one contract.

Since the E-Mini S&P 500 Future and the SPY ETF are very highly correlated, the chart of the SPY ETF doesn’t look much different. Same mess! 3-4 days where the market actually moved; many days where more or less nothing happened. Well, those who traded using the Ambush method were happy to take the money from the breakout-traders who were caught in “false breakouts” time and time again.

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

As you can see, Ambush managed to make a total of $4.720 profits trading 1000 ETFs. Now if you’re trading a small account, you’d simply trade fewer ETFs, for example 100 ETFs, to have a profit of $472.

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

NEXT LIVE CHAT SESSIONS WITH JOE ROSS:

Wednesday, November 3, 2010

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You can also view our saved weekly Chat Logs in case
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NEXT EURO CHAT SESSION WITH JOE ROSS:

Wednesday, November 3, 2010

We hope you will join us!

Here is where you login to Joe's Euro Chat
You can also view our saved weekly Chat Logs in case
you missed any Chats but want to be up-to-date.

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.
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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