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Spread Scan Issue: March 4, 2009 - Volume 236
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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's Spread Trading Example
- Previous Trades
- Andy Jordan's Trading Bites: Stop and Reversal
- Get Fully Equipped for Futures Trading
- Live Spread Seminar with Joe Ross and
Francesco Fabi in Italy: May 2009- Next Joe Ross Live Chats for Traders: Wednesday, March 11, 2009
- About Joe Ross and Andy Jordan
- TE Traders Forum
- 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.
This week we look at FCH9 – FCK9: long March '09 Feeder Cattle and short May '09 Feeder Cattle (GLOBEX)
Today we consider a calendar Feeder Cattle spread (GLOBEX): long March '09 Feeder Cattle and short May '09 Feeder Cattle (FCH9 – FCK9). After being in a downtrend in December and January, it seems the spread has found its bottom at around -3.30. Will seasonality (02/11 – 3/26) help to move the spread higher, and will it be able to break out of the February high at -2.50?
Traders may want to enter the spread at a close above -2.50. Initial margin is $675 (reduced). Initial projected objective is $500, then a move higher. Last trading day for March FC is 03/26.
On January 28 we told subscribers of our professional daily spreads & position trading
newsletter Traders Notebook, "Consider entering a Live Cattle (CME/Globex) calendar
spread LCM9 – LCQ9 at -0.35 limit. Initial margin is $473 (reduced). Suggested risk is $500. Suggested first target at 0.70, then a move to 3.0 or higher. Basis is seasonal (2/3 – 3/9)
and a 1-2-3 low. Comment: The spread is not very liquid; that’s why I would recommend
such a wide stop. Please talk to your broker if it makes sense taking the trade at Globex
due to liquidity."
Here's how we suggested managing this trade:
01/29 In at -0.35. Suggested mental stop at -1.50.
02/20 Suggested mental stop at -1.20.
02/25 Suggested mental stop at -0.60.
02/26 The spread doesn’t want to move higher and we are running out of time.
Seasonality changes drastically to the down side around 03/09 and I would suggest
closing out the trade at -0.350 or even better.
02/27 Out at approx. -0.35 or better.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, I could see in Traders Notebook that you are recommending stop and reversal orders for your outright trades instead of using only stop orders. Are you using a stop and reversal strategy for all your trades?"
Andy: I prefer to use a stop and reversal strategy for my outright swing trades. The reason for this is that the stop level is usually very close to my entry, and I like to turn the position rather than be stopped out. It usually works quite well in today’s volatile market conditions. Most of the time I am able to reduce the loss from the first entry, or even making a profit. I try to stay in the trade, even if my first entry was in the opposite direction. I would even consider another stop and reverse on the second trade, but only if I was filled on my first target. I do not use this strategy for my spread trades because the spread trades are based on seasonality, so I prefer to stay with the seasonal direction. I also use a much wider stop when trading spreads, trying to give some room to develop.
Get Fully Equipped For Futures Trading
A fundamental educational course for Futures Traders
at ALL LevelsWhether you've been trading for years or are just a beginner (or anywhere in-between), there is much basic detailed information about this business that most traders do not know, and are unaware that they need to know.
You can increase your chances for trading success when you know and understand the background and workings of the business of trading. Joe's Futures Course arms you with vital information and insights - all contained in 21 lessons of "From the Beginning."
Joe Ross teaches you the basics so that you have the necessary fundamental and background knowledge and equipment to get you started and to help you grow as a trader. The more you know, the better off you will be. You need to know the rules and the players; you need to know what can hurt you and what can help you.
This e-book course, Joe's Futures Course "From the Beginning,"
is designed for today's Futures Trader.
For more details about the course or how to order,
please follow this link to our website:
http://www.spread-trading.com/futures-trading-course
Live Spread Seminar in Bologna, Italy
presented by Joe Ross and Francesco FabiMay 15-16, 2009
The World's Only Complete Spread Trading Seminar — learn one of the most profitable and relaxed ways to trade!
"The purpose of my spread trading seminar is to teach you everything you need to know to be able to start Spread Trading immediately. The Seminar opens up new channels of information, and gives you a whole new perspective of trading." — Joe Ross
As you will see from the seminar agenda, the seminar is packed with practical exercises and workshop elements. With what you learn, you can start spread trading right away!
Visit Trading Educators Italy
http://www.tradingeducators.it/fm/spreadtrading
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:
Chats for March 2009:
Wednesday, March 11, 2009
Wednesday, March 18, 2009
Wednesday, March 25, 2009
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
Chats for March 2009:
Wednesday, March 11, 2009
Wednesday, March 18, 2009
Wednesday, March 25, 2009
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. 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 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 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 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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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!