Joe Ross' Spread Scan Newsletter

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Spread Scan Issue: April 04, 2007 - Volume 138

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Otherwise, welcome to this week’s issue of the
Joe Ross Spread Trading Newsletter.

Each week we present spread trading examples and opportunities in order to help you become a more professional spread trader.

Andy's Spread Trading Example
Previous Trades
Andy Jordan's Trading Bites
Contact Us

Be sure you 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 keep you informed about additional educational services and products to help you grow as a successful and profitable spread trader.

About Joe Ross - click through here

About Andy Jordan - click through here

Andy's Spread Scan Example:

This week we look at CZ7 – CU7.

Today we consider an intra-market spread: long December 07 Corn and short September 07 Corn (CZ7 – CU7). The spread traded in a range from November 2006 through February 2007, broke out of the range in March 2007, and has been moving higher since then. The statistical seasonal time window goes from 03/30 till 08/05. That’s a very long time, even for a spread, but the margin is not very high and intra-market spreads are usually less risky then spreads in different markets.

Traders may want to enter the spread market at 3^0 limit. Margin for the spread is $608. Suggested risk is $250. Initial projected objective is $250, then a move to 30 or higher. Basis is seasonal (app. 3/30 – 8/10) and a Hook.

Previous Trades:

On March 20 we told subscribers of our professional daily spreads & position trading newsletter, Traders Notebook, "Consider selling May Corn at 405 ¾ stop market (if open > 406). Initial margin is $1,350. Suggested stop at 413 (app. $400). Initial projected objective is $400, then a move down to 370 or lower. Basis is a TTE in front of a RH."

Here's how we suggested managing this trade:

03/23 Short at 405 ¾. Suggested stop at 413.
03/26 Trade hit first suggested target today. Suggest moving stop to break even.
03/29 Suggest moving stop to 398^2 (if you are more short term oriented) or break even (if you prefer long term trade).
03/30 Suggest taking some money at around 368.
02/02 Suggest moving the stop to 359.

For more information about our daily newsletter, visit our Spread Website to find out more about Traders Notebook

Questions or Comments? Please email us: support@spread-trading.com

Andy Jordan's Trading Bites

Student's Question: "Andy, what do you think about paper trading? Does it fit into professional trading somehow?"

Andy: Yes, I personally think it does. Paper trading cannot replace real trading for many (mainly emotionally based) reasons, but it can be an important part of the process of finding and trading a new method. First you might have an idea about how to trade a market based on price bars, candlestick charts, indicators, or whatever you use for your trading. Next you would back test it with older data. You would do it manually or by using a back testing software. After being satisfied with your back testing, you could start to do some paper trading. Many trading ideas or methods seem to work pretty well during back testing, but cannot make any money in the “real world of trading”. Paper trading can definitely help to find the weakness of any method, but you should take the paper trading seriously. Only if you are satisfied with the paper trading results should you start trading your method with real money. Start with very low risk to see how your method performs with the reality of actual money on the line. Then, if it seems to perform well during trading it for a while with only low risk, you can increase your risk based on your money management. By the way, you should go through this paper trading process with every new method you want to trade, no matter whether it is your own method or a method you have just bought!

View last week's Spread Scan # 137 - March 28, 2007

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Disclaimer:

The Commodity Futures Trading Commission has asked us to advise you that trading spreads is complex and carries a high degree of risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders!


You have subscribed to Joe Ross' Weekly Spread Scan Newsletter. If you have problems reading this newsletter, please follow this link: Spread Scan Issue: April 04, 2007 - Volume 138 This email was sent to you by Trading Educators. To ensure delivery to your inbox (rather than to bulk or junk folders) please add info@spread-trading.com to your address book. To unsubscribe, scroll past the end of this newsletter and click the "unsubscribe" link. Otherwise, welcome to this week’s issue of the Joe Ross Spread Trading Newsletter. Each week we present spread trading examples and opportunities in order to help you become a more professional spread trader. Andy's Spread Trading Example Previous Trades Andy Jordan's Trading Bites Contact Us Be sure you 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 keep you informed about additional educational services and products to help you grow as a successful and profitable spread trader.
About Joe Ross - click through here	About Andy Jordan - click through here
Andy's Spread Scan Example: This week we look at CZ7 – CU7. Today we consider an intra-market spread: long December 07 Corn and short September 07 Corn (CZ7 – CU7). The spread traded in a range from November 2006 through February 2007, broke out of the range in March 2007, and has been moving higher since then. The statistical seasonal time window goes from 03/30 till 08/05. That’s a very long time, even for a spread, but the margin is not very high and intra-market spreads are usually less risky then spreads in different markets. Traders may want to enter the spread market at 3^0 limit. Margin for the spread is $608. Suggested risk is $250. Initial projected objective is $250, then a move to 30 or higher. Basis is seasonal (app. 3/30 – 8/10) and a Hook. back to top
Previous Trades: On March 20 we told subscribers of our professional daily spreads & position trading newsletter, Traders Notebook, "Consider selling May Corn at 405 ¾ stop market (if open > 406). Initial margin is $1,350. Suggested stop at 413 (app. $400). Initial projected objective is $400, then a move down to 370 or lower. Basis is a TTE in front of a RH." Here's how we suggested managing this trade: 03/23 Short at 405 ¾. Suggested stop at 413. 03/26 Trade hit first suggested target today. Suggest moving stop to break even. 03/29 Suggest moving stop to 398^2 (if you are more short term oriented) or break even (if you prefer long term trade). 03/30 Suggest taking some money at around 368. 02/02 Suggest moving the stop to 359. For more information about our daily newsletter, visit our Spread Website to find out more about Traders Notebook Questions or Comments? Please email us: support@spread-trading.com back to top
Andy Jordan's Trading Bites Student's Question: "Andy, what do you think about paper trading? Does it fit into professional trading somehow?" Andy: Yes, I personally think it does. Paper trading cannot replace real trading for many (mainly emotionally based) reasons, but it can be an important part of the process of finding and trading a new method. First you might have an idea about how to trade a market based on price bars, candlestick charts, indicators, or whatever you use for your trading. Next you would back test it with older data. You would do it manually or by using a back testing software. After being satisfied with your back testing, you could start to do some paper trading. Many trading ideas or methods seem to work pretty well during back testing, but cannot make any money in the “real world of trading”. Paper trading can definitely help to find the weakness of any method, but you should take the paper trading seriously. Only if you are satisfied with the paper trading results should you start trading your method with real money. Start with very low risk to see how your method performs with the reality of actual money on the line. Then, if it seems to perform well during trading it for a while with only low risk, you can increase your risk based on your money management. By the way, you should go through this paper trading process with every new method you want to trade, no matter whether it is your own method or a method you have just bought! back to top
View last week's Spread Scan # 137 - March 28, 2007
© 2007 by Trading Educators, Inc Contact Us 1509 Jackson Drive Cedar Park, TX 78613 Phone: 800-476-7796 or 512-249-6930 You can e-mail us: support@spread-trading.com Office hours are Monday - Friday 9 A.M. to 5 P.M., U.S.C.T. back to top
Unsubscribe or change subscription To change your subscription or to unsubscribe, scroll past the end of this newsletter to click the "unsubscribe" link.
Disclaimer: The Commodity Futures Trading Commission has asked us to advise you that trading spreads is complex and carries a high degree of risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders!