Andy's Spread Trading Thread

[Jordan_Andy]

Dear Trader,

My name is Andy Jordan, and I am a trader from Germany living in the Caribbeans. Because day trading is not the only way for a trader to make money, I want to show you the “art” of spread trading. To me it’s the best way to trade, and maybe I can convince you to have a closer look at the spreads.

I would like to use this thread to discuss possible trades but also use it to talk about spread trading in general. I will probably not find the time to have a look into it every day but I will try to read it as often as I can.

Happy trading

Andy Jordan

 

[apples10]

Dear Trader,

My name is Andy Jordan, and I am a trader from Germany living in the Caribbeans. Because day trading is not the only way for a trader to make money, I want to show you the “art” of spread trading. To me it’s the best way to trade, and maybe I can convince you to have a closer look at the spreads.

I would like to use this thread to discuss possible trades but also use it to talk about spread trading in general. I will probably not find the time to have a look into it every day but I will try to read it as often as I can.

Happy trading

Andy Jordan

We're all ears and eyes, awaiting your posts with interest . . . .

 

[Bluewave]

We're looking forward to seeing your picks and discussions. Of course your past successes will be proved with real financial records, won't they? Won't they?

 

[charliechan]

why keep the same journal on two web sites? (www.elitetrader.com)
especially when most people visit both sites anyhow.

great journal/results last year though!!

 

[Jordan_Andy]

I do not want to use it as a journal like the other one Charlie. I would like to use it more to talk about different trades, about spread trading or trading in general.

I will try to make some trading suggestions from time to time but would also expect suggestions from anyone else.

Any kind of questions, suggestions or ideas are welcome!

Let's see what we get.

Andy

 

[fxmarkets]

looking forward to it, I mean to me spreads, of which I know absolutely nothing so interested in viewing the concepts, but guessing spreads initially conjurs up fiddling between different contracts waiting for an out of line bias?

lower risk, maybe? intrigued but like options seems more like (conjurs up anyway) fiddling ie I mean why complicate a simple process of is this stopped here, now wheres it going.....

I'll be reading openly mate,

cheers.

fx.

 

[-oo0(GoldTrader)]

Short term or long term.

Short term or long term.
Hybrid Thread

How often do you catch the complete seasonal trend with spreads?​

I want to show you the “art” of spread trading.

 

[Jordan_Andy]

looking forward to it, I mean to me spreads, of which I know absolutely nothing so interested in viewing the concepts, but guessing spreads initially conjurs up fiddling between different contracts waiting for an out of line bias?

lower risk, maybe? intrigued but like options seems more like (conjurs up anyway) fiddling ie I mean why complicate a simple process of is this stopped here, now wheres it going.....

I'll be reading openly mate,

cheers.

fx.

Trading a spread in general means you buy and sell at the same time. You can buy and sell in the same market but different month or you buy and sell in different markets.

All a spread trader is looking for is the difference in between.

I do have some free stuff about spreads (about the basics at least). Just let me know if you need it.

Happy trading,

Andy

 

[Jordan_Andy]

Short term or long term.
Hybrid Thread

How often do you catch the complete seasonal trend with spreads?​

Not so often Gold. I am happy to catch something in between. Very often I get out too soon...but I am working on it.

Happy trading

Andy

 

[fxmarkets]

Cheers, I should be ok following a worked through traded example if you give reasons, thoughts behind the process. I'll shout if i'm lost in the trade.

hmm havent they got computers managing these trades? or do the spreads become too abstract which may require human discretionary decisions to over ride to out perform them?

 

[Jordan_Andy]

I am going to post my first trade.

I did enter 400LC M6 - 500FC H6 on 01/10.

I mention this spread because we can see something that happens very often on a spread chart. As you can see on the chart the spread made a low at around -22,000 in November. Then moved lower to -23,000. The area around -22,000 became then resistance. The spread tried it several times to move higher during December. On 01/04 the spread finally could make it above -22,000. It moved back down a bit but -22,000 did hold and the spread moved higher again.

A resistance point becomes support (and vice versa). This happens quiet often and was additionally to the seasonality my major entry signal.

Happy trading

Andy Jordan

 

[Jordan_Andy]

Sorry guys, somehow I am not able to insert the chart.

Andy

 

[charliechan]

I do not want to use it as a journal like the other one Charlie. I would like to use it more to talk about different trades, about spread trading or trading in general.

I will try to make some trading suggestions from time to time but would also expect suggestions from anyone else.

Any kind of questions, suggestions or ideas are welcome!

Let's see what we get.

Andy

Sounds great!!

 

[charliechan]

I am going to post my first trade.

I did enter 400LC M6 - 500FC H6 on 01/10.

I mention this spread because we can see something that happens very often on a spread chart. As you can see on the chart the spread made a low at around -22,000 in November. Then moved lower to -23,000. The area around -22,000 became then resistance. The spread tried it several times to move higher during December. On 01/04 the spread finally could make it above -22,000. It moved back down a bit but -22,000 did hold and the spread moved higher again.

A resistance point becomes support (and vice versa). This happens quiet often and was additionally to the seasonality my major entry signal.

Happy trading

Andy Jordan

ive always struggled with ta on spread charts.

ta on outrights i can understand because you can see the psychology of the traders playing out. a spread chart doesnt really show the psychology of the traders though does it? it just shows a changing difference between two markets.

i guess we could say the spread chart shows the aggregate of the psychology between the two markets/groups of traders, but if we chart the spread between 2 totally unrelated markets (like dell shares and soy bean futures), we often see the same patterns.

should ta be used on spread charts, or should we just stick to the seasonals? i guess going for higher highs is validation of the seasonal taking hold, but are things like support and resistance still valid?

some spreads like the crush and crack spreads are traded as 'products' in their own right - so i guess ta could be used on these.

have i lost it totally?

anyone agree or disagree?

 

[fxmarkets]

I am going to post my first trade.

I did enter 400LC M6 - 500FC H6 on 01/10.

ok, now what specific market is that and what futures please....

now reading it the spread widened between the 2 to -23000 took out 22,000 the spread rallied or then narrowed 10% from low to -21000

hehe whats my buy and sell and risk ? could you get long or look to long that spread on the failure at -23000.

I might need a simplified complete break down. i see the chart spread widening and narrowing, but how many points risk and profit was it ,that low to current?

I may have to, depending on your reply mate , have to research a very basic primer .

I can see the trends, just the technical detail I know nothing of.

cheers

fx.

 

[fxmarkets]

some spreads like the crush and crack spreads are traded as 'products' in their own right - so i guess ta could be used on these.

so I could look to long or short those almost as an outright ? thats what I meant about seems fiddling about compared to reading an outright. purely my ignorance I know at this stage, but i assume the risk side of spreads are very attractive .

Needs someone here to say what the advantage of finding a spread is too.....

 

[charliechan]

so I could look to long or short those almost as an outright ? thats what I meant about seems fiddling about compared to reading an outright. purely my ignorance I know at this stage, but i assume the risk side of spreads are very attractive .

Needs someone here to say what the advantage of finding a spread is too.....

andys web site may give some pointers.....

http://www.spread-trading.com/

 

[fxmarkets]

cheers that will start me off.

 

[fxmarkets]

has anyone got a chart of an outright spread product intra day say 1 minute bars, so I could eyeball the range and whats the typical spread on the market for dealing ?.

If not any good sites that offer an example of intraday spread charts.>

cheers in advance..

 

[Jordan_Andy]

ive always struggled with ta on spread charts.

ta on outrights i can understand because you can see the psychology of the traders playing out. a spread chart doesnt really show the psychology of the traders though does it? it just shows a changing difference between two markets.

i guess we could say the spread chart shows the aggregate of the psychology between the two markets/groups of traders, but if we chart the spread between 2 totally unrelated markets (like dell shares and soy bean futures), we often see the same patterns.

should ta be used on spread charts, or should we just stick to the seasonals? i guess going for higher highs is validation of the seasonal taking hold, but are things like support and resistance still valid?

some spreads like the crush and crack spreads are traded as 'products' in their own right - so i guess ta could be used on these.

have i lost it totally?

anyone agree or disagree?

I am personaly using really basic stuff for my chart reading. Resistance, support, trends, up and down chanels...I guess thats pretty much it. You will be surprised what you find in the spread charts. To me spread charts are much easier to read as outright futures charts. Well, normaly a spread chart is a line chart and therefore easier to read anyway.

Spreads have one big advantage: trends can last much longer then in todays outright futures markets.

I will show you on different examples what I mean of course.

happy trading

Andy