Edition 363 Wednesday, August 10, 2011
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Edition 363 Wednesday, August 10, 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 SMU1 - SMZ1: long September 2011 Soybean Meal and short December 2011 Soybean Meal Today we consider a Soybean Meal calendar spread: long September 2011 Soybean Meal and short December 2011 Soybean Meal (SMU1 - SMZ1). The spread has been nicely following its seasonal pattern (blue line on the chart), and is now at a seasonal turning point. Seasonality is pointing strongly to the upside during August. After making another low last week, the spread moved up nicely during the last few days. Aggressive traders might enter at the current level using a tight stop, while more conservative traders might wait for an entry signal in the form of a 1-2-3 low. |
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On July 18 we told subscribers of our professional daily spreads & position/swing trading newsletter, Traders Notebook, "Consider entering an inter-market spread in the Grains: long September Wheat and short November Soybeans at -690 limit (good till Friday 07/22). Suggested risk is $1,500; initial projected objective is $1,500, then higher. Basis is seasonal. Traders with smaller accounts might want to trade the minis with a suggested risk of $300. Comment: The entry into this spread is very aggressive. I am not willing to lose on the complete risk if something goes wrong. The recomended initial stop will be around the July low."
Here's how we suggested managing this trade:
07/19 I have adjusted the entry value!
07/20 In at approx. -690; suggested stop on close at -711.
07/27 Suggested first target at -665.
07/28 The spread hit -665 twice during the trading day (second time after I sent out the email); out with some slippage at -667; suggested stop on close at -695.
08/02 Suggested stop on close at b/e; suggested second target at -625.
08/07 Suggested stop on close at -680.
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: "Hi Andy, can you give me some ideas about how to calculate the risk for my spread trades?"
Calculating the risk is a very important factor in trading. You can have the best trade selection, but still lose money if you are sloppy in money management. How to calculate risk depends a lot on your general trading plan. Because you cannot have a stop loss in the market while trading spreads (only a mental stop), you should always look at the volatility of your spreads to calculate your risk.
For example: Your mental stop for your spread is $200 away from your entry, but the spread you are trading usually moves $400 per day. Using only the $200 risk in your calculation of your contract size could be fatal for your trading account.
Unfortunately, as it is so many times in trading, there is no “best way” of how to calculate the risk. Watch your spreads to see what makes sense for you. Try to find your own way, but do not let gut feeling into your calculation. Be consistent in what you do!
© 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
A WEALTH OF INFORMATION & EDUCATION
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! |
NEXT LIVE CHAT SESSIONS:
Wednesday, August 10, 2011
We
hope you will join us!
Here
is where you login to Joe's Wednesday Chat
You can also view our saved weekly Chat Logs in case
you missed any Chats but want to be up-to-date
NOTE: Starting next week, we’ll be giving these live chats on Mondays ONLY. You are welcome to join us next Monday, August 15, 2011. The European chat start at 8:00 PM European Central Time, and the U.S. chat starts at 8:00 PM U.S. Central Time. I hope you will join us and other traders, as there is much to discuss about the markets. Visit the chat webpage for more details by following this link: http://www.tradingeducators.com/studentsonly/chat.htm
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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.
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 trading forum now!
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. 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.
This publication is not intended for use as a source of any advice such as legal, medical, or accounting. The Publisher wants to stress that the information contained herein may be subject to varying international, federal, state and/or local laws or regulations. The purchaser or reader of this publication assumes responsibility for the use of these materials and information. Adherence to all applicable laws and regulations, including international, federal, state and local, governing professional licensing, business practices, advertising and all other aspects of doing business in the U.S., Canada, or any other jurisdiction is the sole responsibility of the purchaser or reader. Neither the author nor the Publisher assumes any responsibility or liability whatsoever on the behalf of any reader of these materials.
Connect with Joe Ross &
Trading Educators
Spread Trading is like "insider trading." Why?
Because that's what traders-in-the-know do! What I'm talking about is a different kind of "insider trading" - trading based on the knowledge, experience, and expertise of successful traders who know the inside story of how markets work. Spread Trading completely eliminates stop running. Do you think the insiders want you to know that? What would they do if they didn't have your stops to run?
Trading Spreads and Seasonals - Discover one of the best kept trading secrets
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 other traders — 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 so 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!
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
Trading Educators on FACEBOOK - Become a FAN of Trading Educators
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