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Spread Scan Issue: July 22, 2009 - Volume 256
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. Follow this link to view this week's Spread Scan immediately or read on.
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 ensure that you receive all your issues of Spread Scan. That way you can continue to enjoy learning through the best free educational trading information available, and we can keep you informed about additional trading techniques, educational services and products to help you grow as a successful and profitable spread trader.
This week we look at RBV9 – RBF0: long October '09 RBOB Gasoline and short January '10 RBOB Gasoline
Today we consider a RBOB Gasoline calendar spread (NYMEX): long October '09 RBOB Gasoline and short January '10 RBOB Gasoline (RBV9 – RBF0). After testing the March high at -0.0370 at the beginning of July, the spread seems to be turning around now. Will seasonality (07/24 – 08/14) help to move the spread higher? The June low at -0.370 seems to be a logical place for the initial stop.
Traders may want to enter the spread at -3.5 limit. Please ask your broker about the margin. Suggested risk is $630. Initial projected objective is $630, then a move to 0 or higher. Basis is seasonal (7/24 – 8/14) and a 1-2-3 low. Please note: The spread doesn’t show much volume. Please talk with your broker about the best way to enter and exit the spread.
On July 9 we told subscribers of our professional daily spreads & position/swing trading newsletter Traders Notebook, "Consider entering a Soybean calendar spread SH0 – SU9 at -52 limit (or a close above -43). Initial margin is $1,215 (reduced). Suggested risk is $750. Initial projected objective is $750, then a move higher. Basis is seasonal (7/10 – 8/28) and a 1-2-3 low.
Here's how we suggested managing this trade:
07/10 Suggest entering MOO on Monday.
07/13 In at approx. -41. Suggested mental stop on close at -50. Suggest cashing in the first lot around -30.
07/14 It was possible to cash in the first lot at -30. Suggested mental stop on close at
-48.
07/16 Suggested mental stop at -35. Suggest cashing in the spread at around 0.
07/17 It wasn’t possible cashing in at 0 on Friday. Suggest staying with the trailing stop. (The ones trading only one lot might want to cash in on the next up move.)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, what is the difference between your managing money (your own or the money from your customers) and the trades shown in Traders Notebook?"
Andy: There is no difference at all. I think it wouldn’t be fair holding back trades or trading recommendations from Traders Notebook subscribers or using different entries/exits. I know this is a common strategy, especially for stock recommendations, but I can guarantee this doesn’t happen with Traders Notebook. Our broker has been trading all my accounts for years, together with accounts from other Trading Educators students or Traders Notebook subscribers. I even send out emails whenever something important happens during the trading day. This way every subscriber knows 100% of what is going on.
Please understand it is not always possible for everyone to enter or exit at the same level, especially with our spread trades. You cannot use a physical stop order for spreads, only a mental stop. Some use a stop order for the close and prefer entering/exiting the same day; others might use the same stop level but get in/out of the trade the next day during the open. Even though you might get a different result on each single trade, in the long run it doesn’t matter what you do, as long as you always do it the same way.
Spread & Position Trading Made EasyImagine having an enviable lifestyle trading just end-of-day, and get detailed spread and position trading instructions - every day!
You can! With Traders Notebook!Can you imagine having most of your week to pursue your hobbies and interests, and spending only 2-3 hours each week deciding which spreads to trade?
In Traders Notebook you'll find position and spread trades laid out for you, so that all you have to do is to follow trades suggested by a professional spread and position trader.
In Traders Notebook we show you where to enter, where to take profits, where to set a protective exit, and an exact value at which to take some early profits so that you can let your remaining contracts run.
Make steady and consistent profits with greater relative safety from spread and position trades other traders never see or know about!
There is no need for having to use indicators and oscillators; all you need is a simple futures chart. Can you imagine receiving all the data and information you need to spread and position trade without having to pay for live data? End-of-day data is all you need.
“I am up about $8,000 this year trading Andy's spreads.”
-- C. A. Dodson, USA"Andy Jordan is doing a great job! I got (and still get) much more experience in a shorter time frame.” -- Roland H. Germany
"Traders Notebook is absolutely great for learning to trade spreads. I started trading spreads half a year ago and looking back it feels like a have gone a long way already. I want to thank you for making this service available. It's a perfect way to get introduced to the world of spreads!” -- Onno B., Netherlands
“Traders Notebook is the best tool I have found to trade spreads.”
-- Carlos L., Spain“Traders Notebook has been great for me! I understand that being a successful trader takes alot of work and alot of time to make mistakes so that I can learn hands on, how to handle a trade. Andy Jordan is the best at what he does and is very honest and careful with the trades he takes and he is quick to respond to emails ” -- Lance W., USA
If all this sounds appealing, almost too good to be true, then you need to know more about "Traders Notebook," the premier spread and position trading newsletter. Please follow this link.
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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:
U.S. Live Chats for July 2009:
Wednesday, July 22, 2009
Wednesday, July 29, 2009
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European Chats for July 2009:
Wednesday, July 22, 2009
Wednesday, July 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
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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 1980'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.
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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!