Edition 358 Wednesday, July 6, 2011
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Edition 358 Wednesday, July 6, 2011 |
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Commentary by Andy Jordan
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Be sure to read through our free powerpoint spread presentation which describes the rationale for trading spreads, and gives you quite a bit of information about what they are and their advantages. Follow this link to read through Joe Ross' free powerpoint presentation: Spread Trading - A Whole New Way to Trade. Weekly Spread Scan ExampleThis week we look at 1,000*CLX1 - 420*HOX1: long November 2011 Crude Oil and short November 2011 Heating Oil Today we consider an inter-market equity spread in the energies: long November 2011 Crude Oil and short November 2011 Heating Oil (1,000*CLX1 - 420*HOX1). After trading sideways for the most part during March, April, and May, the spread hit a new low during the first half of June. Now, after making a 1-2-3 low, the spread has traded back into its former range, testing the lower bound of the range at around -$29,500. Will the seasonal uptrend during July help keep this spread above the current level, or drive it even higher? Please note: because of the different values of each unit move of Crude Oil and Heating Oil, we have to multiply the buy side by 1,000 and the sell side by 420 to get the right equity chart. The spread is 1:1. |
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On May 31 we told subscribers of our professional daily spreads & position/swing trading newsletter, Traders Notebook, "Consider entering a Corn calendar spread: long May 2012 and short September 2011 Corn (CK2 – CU1) at -30 limit (GTC) OR a close above -25. Suggested risk is $500; initial projected objective is $500, then higher. Comment: This spread (which usually trades in positive territory) shows a strong seasonal pattern for the next few months. Unfortunately, this spread has been rather volatile, and therefore the risk is relatively high for a corn spread."
Here's how we suggested managing this trade:
06/01 It was possible to enter the spread at -30. Suggested stop on close at -37.
06/15 It was possible to cash in the first lot at -20 or better; suggested stop on close at b/e; suggested second target at -10.
06/16 Suggested stop on close at -20.
06/17 It was possible to cash in the second lot at -10. Suggested stop on close at -17.
06/21 Suggested stop on close at -13.
06/22 Suggested stop on close at -11.
06/27 Suggested stop on close at -5.
06/29 Out at approx. -8.
Visit our Spread Website for more information about our daily newsletter, Traders Notebook.
Be sure to read through our free powerpoint spread presentation which describes the rationale for trading spreads, and gives you quite a bit of information about what they are and their advantages. Follow this link to read through Joe Ross' free powerpoint presentation: Spread Trading - A Whole New Way to Trade.
Student's Question: Andy, should a trading method with a winning percentage of 80% or higher be considered a good method?
Without all of the other statistical figures, the winning percentage alone doesn’t tell you anything about the trading method. Let me give you an example: let’s assume you have a method with a winning percentage of 80%, but you have to risk 50 ticks to make 10. In the long run you can expect to lose more than you make (expectation: 10 x 0.8 – 50 x 0.2 = -2). Now, let’s assume you have a method with a winning percentage of only 40%, but you make 2 times the risk when you win. Your expectation in the long run would be 2 x 0.4 – 1 x 0.6 = +2.
Beginning traders seem to misunderstand these numbers. Most professional outright futures traders will tell you that they have a winning percentage of less than 50%. But if they win, they win at least double their initial risk, or even more. They will also tell you that they make the “big” money with only 3% - 6% of all their trades. This means they need very good money management to stay in the water long enough to catch the big wave!
Therefore, when you look at the statistics, look at all of the important parameters at the same time. Try to see the complete picture of how the parameters interact with one another.
© 2011 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
FOREX AT THE MARKET TRADES - by Marco Mayer
On June 8th we told subscribers of our professional Forex swing-trading newsletter Forex at the Market, "Consider selling EUR/USD at 1.4545 (ASK) stop-market. Suggested stop at 1.4705 (BID). Basis is a reversal bar.”
Here's how we suggested managing this trade:
06/09 Short at 1.4545; suggested stop at 1.4655
06/10 Suggest closing ½ position at the market (1.4360)
06/12 Suggested stop at 1.4570
06/13 Suggested stop at 1.4520
06/14 Suggested stop at 1.4455
06/16 Suggested stop at 1.4355
06/21 Stopped out at 1.4355On June 8th we told subscribers of our professional Forex swing-trading newsletter Forex at the Market, "Consider selling EUR/CAD at 1.4245 (ASK) stop-market. Suggested stop at 1.4390 (BID). Basis is a reversal bar.”
Here's how we suggested managing this trade:
06/09 Short at 1.4245; suggested stop at 1.4245
06/10 Suggest closing ½ position at the market (1.4030)
06/12 Suggested stop at 1.4185
06/13 Suggested stop at 1.4105
06/14 Suggested stop at 1.4035
06/17 Stopped out at 1.4035Marco Mayer’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.htmlBest wishes for success in your currency trading,
Your Editor of FX-ATM
MARCO MAYER
http://www.fx-atm.com
SOCIAL NETWORKING WITH ANDY JORDAN
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Joe Ross' trading books are actually full-blown courses for traders. Each of them is designed to deal with a different aspect of trading, such as futures intraday and position trading, spreads, seasonal trading, options trading, etc. The books teach you how to trade the reality of the markets. You look right over Joe's shoulder at real trades made in real markets. You learn his reasoning for entering and exiting his trades. Please follow this link to learn more about Joe Ross' trading books. |
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 for Chart Scan today! |
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NEXT LIVE CHAT SESSIONS:
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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.
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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 2011. 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.
Joe Ross & Trading Educators, Inc. own all rights, title and interest to this publication. No part of this publication may be reproduced, in whole or in part, or by any means, mechanical or electronic, without permission in writing from the Publisher. You have no rights to resell, reprint, reproduce, or digitize Joe's Spread Scan Newsletter. While all attempts have been made to verify information provided in this publication, neither the author nor the Publisher assumes any responsibility for errors, omissions, or contrary interpretation of the subject matter herein.
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Connect with Joe Ross &
Trading Educators
Trading Discipline
All of the discipline practiced before your order has been filled, including the trading discipline derived from practice and repetition, finally comes into play as self-control in a battle situation. The moment you are filled you are in a battle, and if you are not fully prepared you will begin to behave emotionally. Without the discipline gained through practiced repetition resulting in self-control, you will begin to act irrationally and emotionally. Fear, greed, pride, guilt, and other emotions will come into play, causing you to fail to carry out your strategy or to implement the tactics you need for fulfillment of your trading plan. Follow the link below to read more about trading discipline.
THE TRADERS TRICK ENTRY
Of all the available setups, the Traders Trick Entry is the only one that gets better when more people use it. That may sound strange, but it's true.
Most trading setups are effective only when limited to a few traders, but the Traders Trick Entry is quite different. The reason is that the Traders Trick is designed to take advantage of the momentum of others — the more traders who use it, the more effective the trick becomes.
The Traders Trick Entry has now been in use for over 20 years, and with use, it gets better and better. It is a setup that is so consistent that many professional traders use it exclusively for their trade entries. The Traders Trick Entry (TTE) takes advantage of retracement, turnarounds, and pre-breakout momentum.
The TTE works in all markets and in all time frames. To be able to earn a profit, the primary prerequisite for the TTE is that there needs to be enough room between the point of entry and the targeted breakout.
Through 20 years of global experience by thousands of traders, TTE has been refined to the point that it is possible to earn a living using only that single setup.
The Traders Trick Entry is not a mechanical system ─ in fact it is not even a discretionary method. It is a setup, pure and simple. As a setup, it is one way to implement two of the three primary formations of the Law of Charts. Those formations are 1-2-3 highs and lows, and Ross Hooks.
The Traders’ Trick Entry (TTE) is one of the most profitable chart formations to trade. Profit is even greater when you can determine which TTEs are the most promising. Join Jim Augustine in his online Traders'Trick Entry seminar for this unique opportunity to learn the secrets of trading the Traders Trick.
“All of my webinars are interactive. The students participate in the webinar so that real learning will take place. I have always disliked lectures. From my days as a corporate trainer, my students have always learned best when they participated. I bring that same philosophy to all my webinars. That‘s why I limit the attendance to a maximum of 4 participants. I truly want you to learn how to trade the TTE profitably. I want you to be successful!
I know that after you complete this webinar you will have a new and more profitable perspective on trading. Your self-confidence in your trading abilities will be unshakeable. You will know exactly what to do on every TTE you trade.”
- Jim Augustine
Follow this link and reserve your "Traders' Trick Entry" online class NOW!
Commodities Futures Trading
Part of making money in futures trading is in understanding how to select a market, and in understanding the little things that make one market more tradable than another market.
Do you know exactly what it is that defines an established trend? Are you aware that trends are part of the market’s symmetry? Click on the following link to read more about Commodities Futures Trading.
The Ultimate Trading Method
Trade many stock index futures, commodity futures, currency futures, forex pairs, or ETFs or CFDs on any of the markets mentioned.
Joe Ross and Trading Educators are happy to release the Ambush Trading Method™, through which you can ambush many stock index futures, commodity futures, currency futures, forex pairs, ETFs or CFDs on any of the markets mentioned. If you want, you can ambush more than one market daily.
AMBUSH A MARKET OF YOUR CHOICE
The Ambush Trading Method™, which has been both back- and forward-tested, takes trades based on the daily chart. The entries are based on two very simple indicators that measure volatility and the direction of the market, which are used in a way that actually makes sense. It's not a hocus-pocus method based on optimized backtesting of hundreds of indicator combinations; it's based on common sense.
Follow this link if you want to own this incredibly effective trading method today
THE MOST COMPLETE SPREAD TRADING PROGRAM
No one else offers as complete a spread trading program as you find at Trading Educators. We are #1 in educating successful Spread Traders, and we have the most original and best resources available to you — professional help you won't find anywhere else.
At Trading Educators, we look forward to assisting you in becoming a successful spread trader, and we wish you all the best that life and trading have to offer.
Get started in Spread Trading by learning simple and effective trading techniques and tactics.
Visit Joe Ross' Online Blog "Trading for a Living"
TRADING SEMINARS SCHEDULE
Day Trading Seminar for E-mini S&P, Forex, and Stocks - ONLINE LIVE SEMINAR - October 8-9, 2011 - seminar is presented live by Joe Ross
The Law of Charts Flash Cards 2-HOUR LIVE ONLINE CLASS WITH JIM AUGUSTINE. To reserve a session for yourself and lock in your reservation for the next available class (limited to only 4 students per class), please follow this link to sign up now for the Law of Charts Flash Card online class.
Trading the Traders' Trick Entry - ONLINE CLASS LIVE WITH JIM AUGUSTINE (limited to only 4 students per class). Follow this link to reserve your "Traders Trick Entry" online class NOW!
Day Trading Seminar - Trade Along with Joe - in Bologna, Italy - October 16-17, 2011
presented by Joe Ross and Francesco Fabi
Futures Spread Trading Seminar - in Bologna, Italy - October 14-15, 2011
presented by Joe Ross and Francesco Fabi
Private One-on-One Tutoring with Joe Ross: This is YOUR private training as a trader — Joe builds the course around YOU and YOUR needs. All sessions last as many days as your wants and needs dictate (most are for three days), and are taught near Austin, Texas, U.S.A. with Joe Ross in person ─ OR, if you prefer, Joe can train you online via the Internet. Follow this link to Joe's Private Tutoring for more details.
SEMINARS YOU CAN DOWNLOAD:
From Joe's incredible depth of wisdom and knowledge, he shares with you his innermost secrets for consistent and profitable trading; consistency and profitability are the hallmark of the world’s most successful traders. These are Joe Ross' online courses currently available:
The Law of Charts Online Video Seminar with Joe Ross
Futures Spread Trading Online Video Seminar with Joe Ross
Options Trading Online Video Seminar for beginning and intermediate Option Traders with Joe Ross
Options Strategies Trading Online Video Seminar with Options Pro Alan Parry
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