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Spread Scan Issue: March 25, 2009 - Volume 239
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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:
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 LCQ9 – LCM9: long August '09 Live Cattle and short June '09 Live Cattle (GLOBEX)
Today we again consider a Live Cattle calendar spread (GLOBEX): long August '09 Live Cattle and short June '09 Live Cattle (LCQ9 – LCM9). The spread could break out of its January and February high at 1.0. Aggressive traders might want to use this level for an entry. More conservative traders might want to wait until the spread moves higher.
Traders may want to enter the spread at a 1.0 limit. Initial margin is $473 (reduced). Suggested risk is $400. Suggested first target at 2.0, then higher. Basis is seasonal (03/10 – 04/30) and a possible resistance level at 1.0.
On March 15 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a Cotton calendar spread (ICE) CTZ9 – CTN9 at a close above 4.06. Initial margin is $420 (reduced). Suggested risk is $200. Suggested first target at 4.50, then a move higher. Basis is seasonal (3/16 – 3/31) and a 1-2-3 low."
Here's how we suggested managing this trade:
03/16 Suggest entering at 4.20 limit.
03/17 In at 4.20 or better. Suggested mental stop at 3.85.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
Is There Room for Hope in Trading?
by Joe RossIn trading, hopelessness is not brought about by the situation, but rather by your interpretation of the situation. Whatever caused a bad situation does not account for how you cope with that situation. If you think, "I've always been incompetent and this is just another one of those times that proves how incompetent I've always been," you will tend to view the situation as hopeless and just want to give up. But if you think: “Hey! This is only a temporary setback, I'll be able to get past it,” you will seek out solutions for changing matters and overcoming a bad situation.
Optimistic thinking, as opposed to pessimistic thinking, has a direct bearing on how you are able to deal with trading losses. For example, suppose you are long and find yourself in the midst of a market that is limit down. The helpless and pessimistic approach to viewing this situation is to attribute the cause to some personality trait with which you define yourself. Maybe you see yourself as being incompetent in all that you do. To you, trading is no different, and that's how you got yourself into this bad situation. When you interpret situations in this way, you will surely feel extreme disappointment. “Why didn’t I see this coming?” A better, more productive and optimistic approach would be to see that the failure came about due to a specific cause that is temporary and will soon change. You may think your trading strategy must be ineffective, and that you'll have to come up with a new method in order to recover from this situation. A trading strategy is specific and can be changed. By focusing on the changeable reasons for a problem situation, you will feel more optimistic and feel you can find effective solutions.
Trading is a tough business in which you must often persist in the face of defeat. The way you think gives rise to the degree of persistence you will exhibit. It's counter-productive to allow yourself to think pessimistically, and to attribute your failures to perceived personality traits which are not easily changed. Instead, see failures as arising from temporary specific causes, which you can change. By looking for specific aspects of your trading that you can actually change, and believing you can change them, you will face difficult situations with a positive attitude rather than despair and hopelessness.
(And incidentally, get out and stay out of limit down markets until they get their own psychological hangups worked out!)
© by Joe Ross
Re-transmission or reproduction of any part of this material is strictly
prohibited without the prior written consent of Trading Educators, Inc.
Meet the Masters Webinar SeriesJoe Ross Only - March 31st, 2009 Webinar
Hosted by Trading On Target
All times are afternoon Eastern Standard Time
(New York)
March 03 Sector Trading Strategies with ETFs Deron Wagner March 10 Navigate the Markets During Uncertain Times Jody Samuels March 17 Every Serious Trader Must Have Ed Dobson March 24 An Evening with Adrienne Adrienne Toghraie March 31 An Evening with Joe Joe Ross $15 for March 31 Webinar Only
TO REGISTER GO TO - http://www.tradingontarget.com
Master Classes, Webinars & Workshops
(Will be available for replay for 30 days)See details of presentation & biography of Joe Ross below:
An Evening with Joe Ross. In this interview webinar you will learn from a legend who is both a master trader and master teacher. I will be asking him:
- What are the best markets to trade under present market conditions?
- Have there been any times in your history with the markets that you found it difficult to trade and why?
- How do you approach developing a system?
- Give us a simple system that will make money if you follow it.
JOE ROSS has been trading and investing since his first trade at the age of 14, and is a legend as a trader and teacher. He has survived all the ups and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits. Joe has written twelve best selling books that have become classics. He is the creator 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". He founded Trading Educators to teach aspiring traders how to make profits using his trading approach. http://tradingeducators.com/
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 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 April 2009:
Wednesday, April 01, 2009
Wednesday, April 08, 2009
Wednesday, April 15, 2009
Wednesday, April 22, 2009
Wednesday, April 29, 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 our trading
methods, and supervises keeping them up to date.
|
 |
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!