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Spread Scan Issue: November 5, 2008 - Volume 219
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Otherwise, 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.
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:
- Andy Jordan's Trading Bites
- Spread Trading Seminar Online with Joe Ross
- Next Joe Ross Live Chats for Traders: Wednesday, November 5, 2008
- About Joe Ross and Andy Jordan
- 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.
Andy Jordan's Spread
Scan Example:
This week we look at EDM1 - EDM9: long June '11 Eurodollars and short June '09 Eurodollars (Globex)
Today we consider a Eurodollars calendar spread (Globex): long June '11 Eurodollars and short June '09 Eurodollars (EDM1 - EDM9). After falling like a rock in October, the spread moved back up to where it came from (September low -1.60). Is this the beginning of a huge trading range, or can seasonality help to move the spread higher?
Traders may want to enter the spread at a close above -1.975. Please ask your broker about the margin. Suggested risk is $1,000. Initial projected objective is $1,000, then higher. Basis is seasonal (11/5 - 12/11) and a 1-2-3 low.
On October 7 we told subscribers of our professional daily spreads & position trading newsletter Traders Notebook, "Consider entering a Soybean Meal (Globex) calendar spread SMZ8 - SMH9 at -7.2 limit. Initial margin is $270 (reduced). Suggested risk is $200. Initial projected objective is -5.8, then a move to -2.0 or higher. Basis is seasonal (10/1 - 11/4) and a trading range.
09/22 In at -7.2. Suggested stop at -8.2; suggested first target at -5.8."
Here's how we suggested managing this trade:
09/22 In at -7.2. Suggested stop at -8.2; suggested first target at -5.8.
10/07 It was possible to cash in the first lot at -5.8. Suggested stop still at -8.2.
10/16 Nice up move. Suggested stop at break even.
10/17 Suggested stop at -6.0.
10/22 Closed out position at -2.2 or better (see email from 10/22).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
Student's Question: "Andy, please tell me why you chose spread trading as your specialty, rather than other kinds of trading?"Andy: I think there are quite a few advantages of spread trading compared with other trading possibilities. In addition to the ones you can read on our website Spread-Trading.com, I will name two more:
Spread trading is long term trading: in my opinion, trading becomes more difficult as the time frame you use for trading becomes shorter. Spread trading is position trading, and based mainly on daily charts. The trades last from a few days up to a few weeks, or even a few months.
There are no stop orders in spread trading, which is something that scares many outright futures traders. There are no stop orders for spreads, and you have to use a mental stop for your spreads. But the advantage is that no one can run your stop. Stop running is a major problem in trading outright futures. It very often happens that the market moves up and down a lot during the trading day, taking out all the stops, just to end at the same level as the open.
LEARN ONE OF THE MOST PROFITABLE AND
RELAXED WAYS TO TRADETake Joe Ross' Spread Trading Seminar - the World's Only Complete Spread Trading Seminar
The world is entering a NEW ERA of trading in which trading in commodities has recently become more important than trading in financial instruments. If you haven't yet made spread trading a part of your trading business, then we suggest that you take time to start doing so today.
SPREAD TRADING: A PROFITABLE BUSINESS
Already many commodities have reached new all-time highs. Although they are not currently at all-time highs, let’s face it, the world of trading does not consist of trading only stock indexes, currencies, and debt instruments. The shaky global financial situation has come close to melt-down a couple of times in the last two years. Commodities are considerably higher than they have been in the past. For the most efficient use of your trading capital, the safest way to trade commodities is to trade spreads.
Spreads offer you the best and most efficient use of your trading capital.
You will regularly find spreads that are trading for one-tenth the margin required to trade in any other market.
That means you could trade 10 spreads using the same amount of capital you would have had to put up to trade one futures contract.
YOU WILL AVOID YOUR #1 ENEMY
The Number One enemy of every trader is that of "stop running." Spreads completely avoid stop running. There are no stops, and so stop running cannot occur. You can spread just about anything imaginable if you understand how spreading works.
LEARN AN ORIGINAL APPROACH TO SPREAD TRADING
Joe Ross and Trading Educators provide an easy way for you to learn everything there is to know about Spread Trading. Through Joe's original approach to Spread Trading, we can offer you a complete Spread Training Program. We don't want you to just buy and learn — we want to see how you succeed as a professional and profitable Spread Trader when you send us your testimony.
Learn from a Pro and you will become a Pro
To take JOE'S ONLINE SPREAD TRADING SEMINAR at your convenience, there is no need for you to travel far or spend lots of money for airline tickets, gasoline, or hotel accommodations. Learn comfortably at home or in your office. All you need nowadays to connect worldwide is a Computer or Laptop with Internet connection to download the seminar video onto your computer. You don't have to wait any longer:
FRESH PERSPECTIVES - Ready for YOUR active participation.
Joe's live chats are an incomparable service from Trading Educators. The chats encourage forward-thinking, and inspire others by what is shared.
Gather up your questions and comments, and "meet" other traders on line. Joe Ross will answer everything he can - come and join either his U.S. Live Chat or his Euro Live Chat:
Next
Chats for November:
Wednesday,
November 05, 2008
Wednesday,
November 12, 2008
Wednesday,
November 19, 2008
Wednesday,
November 26, 2008
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
Next
Chats for November:
Wednesday,
November 05, 2008
Wednesday,
November 12, 2008
Wednesday,
November 19, 2008
Wednesday,
November 26, 2008
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.
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(TM), and has set new standards for low-risk trading with his concepts of The Law of Charts(TM) and the Traders Trick Entry(TM). 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 approaches to trading. 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 student, a successful trader, wrote: "Thanks again for your trust and patience...Joe is a fountain of knowledge...but it is his wisdom that really sets him apart." Joe Ross 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 an active and integral part of Trading Educators. He is the primary author and Editor-in-Chief of the company's newsletters: Chart Scan(TM), Spread Scan(TM) , Traders Money Club™ and Traders Notebook(TM). 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. Give them a way to earn while they learn, realizing that it takes time to develop a successful trader."
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...
ABOUT ANDY JORDAN:
Educator
for Spread 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. 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 favorite. 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 a one-week online course in spread trading, "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 has developed a number of trading methods, among which are Andy's E-mini 40 and a T-Bond trading method. 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.
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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. |
If you are willing to share what works for you, then we welcome you. Your ideas may help someone else on their 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 well over 5 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.
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Disclaimer:
The Commodity Futures Trading Commission has asked us to advise you that trading spreads or outright futures 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!