-oo0(GoldTrader)
Well-known member
- Messages
- 345
- Likes
- 5
Your first seasonal spread
"Secrets!"
If you have gotten this far by choice or accident, you have stumbled onto the most profitable way to make a living with the least amount of margin in the field of speculation.
Ross' refers to seasonal spreads as a "closely guarded secret.” Many books about trading assume that you are starting out with many thousands of dollars earned somewhere else.
This little known facet of the commodities market is ideal for people who have a steady income and want to earn a second income trading a small amount of capital.
The key here is supplemental income. You have to find a way to keep your day-to-day needs for income separate from your program of wealth building. You have to find a way to keep your spending from increasing just because you are making a bundle trading. Seasonal Spreads are how many new traders build up a large trading account in a short time, starting with a hardly any capital in the commodities market.
In high school you should have become familiar with the "Ten Multiples.” Let me refresh your memory. Money grows geometrically. How much do you have when you double one thousand dollars ten times?
1. 2,000.00
2. 4,000.00
3. 8,000.00 etc.
If you can save $20.00 a week and you will have that first thousand dollars in less than a year.
Now the thing is this. People often talk about a Million dollars as being a lot of Money. But really, do the math. Let's see what the flow-of-sums returns.
How much income per week will you have if you had one million dollars invested (not in spreads)?
You will find that you can easily exceed a Millionaire's weekly income with a small amount of trading capital, perpetually in seasonal spreads.
Ok what is the minimum trail to your first successful trade. At a minimum
1. "Reminiscences of a stock Operator," which you an get here for free. "Reminiscences," gets into the details of Speculation and details you must thoroughly understand if you are considering making a living Speculating in securities.
2. "Ross's Spreads and Seasonals," which you can see a preview of here. Ross shows spread chart reading, in-depth technical analysis and trading tactics.
With these tools, you should soon be able to enter and exit your first seasonal spread at a profit.
"Secrets!"
If you have gotten this far by choice or accident, you have stumbled onto the most profitable way to make a living with the least amount of margin in the field of speculation.
Ross' refers to seasonal spreads as a "closely guarded secret.” Many books about trading assume that you are starting out with many thousands of dollars earned somewhere else.
This little known facet of the commodities market is ideal for people who have a steady income and want to earn a second income trading a small amount of capital.
The key here is supplemental income. You have to find a way to keep your day-to-day needs for income separate from your program of wealth building. You have to find a way to keep your spending from increasing just because you are making a bundle trading. Seasonal Spreads are how many new traders build up a large trading account in a short time, starting with a hardly any capital in the commodities market.
In high school you should have become familiar with the "Ten Multiples.” Let me refresh your memory. Money grows geometrically. How much do you have when you double one thousand dollars ten times?
1. 2,000.00
2. 4,000.00
3. 8,000.00 etc.
If you can save $20.00 a week and you will have that first thousand dollars in less than a year.
Now the thing is this. People often talk about a Million dollars as being a lot of Money. But really, do the math. Let's see what the flow-of-sums returns.
How much income per week will you have if you had one million dollars invested (not in spreads)?
You will find that you can easily exceed a Millionaire's weekly income with a small amount of trading capital, perpetually in seasonal spreads.
Ok what is the minimum trail to your first successful trade. At a minimum
1. "Reminiscences of a stock Operator," which you an get here for free. "Reminiscences," gets into the details of Speculation and details you must thoroughly understand if you are considering making a living Speculating in securities.
2. "Ross's Spreads and Seasonals," which you can see a preview of here. Ross shows spread chart reading, in-depth technical analysis and trading tactics.
With these tools, you should soon be able to enter and exit your first seasonal spread at a profit.
monarch said:
This is my second attempt at posting a question on Spread Trading ( I originally posted on the spread trading book thread but it disappeared or was removed for some reason- possibly because it wasn't a book specific question?).
Ok here goes.
First thing i need to know is this / What is the difference (if any) between Spread Trading and Pairs Trading.
Both techniques seem to involve going long and short on different (but related) financial instruments at the same time.
I only trade via Spread Betting and would like to know if following example is a technique which would be considered a spread (or pairs trade).
I havent used any stops as i believe that this is a hedge related trade- the whole purpose of which is to (attempt) to reduce any potential losses by having a short and long trade.
For example:
Lets just say i expect the Dow to outperform the FTSE over a specific time frame.
I buy the dow at 10500 for £1 a point (expecting it to go up)
The FTSE is trading at 4900. In order to gain the same exposure on the FTSE i sell at £2.14 a point (10500/4900)
When i come to close my trades the Dow is trading at 10578 (+78) and the FTSE is at 4881 (-19) my net position would be:
Dow 76 x £1= +£76
FTSE 19 x £2.14 = -£40.66
Net Profit therefore= £76- £40.66 = £35.34
The above example takes into account any trading spread costs.
Would appreciate any feeback regarding the above, particularly with reference to spread and pair definition (and differences)
Is the maths correct with regard to exposure
Any other points
Thanks in advance.
Mick
Ok here goes.
First thing i need to know is this / What is the difference (if any) between Spread Trading and Pairs Trading.
Both techniques seem to involve going long and short on different (but related) financial instruments at the same time.
I only trade via Spread Betting and would like to know if following example is a technique which would be considered a spread (or pairs trade).
I havent used any stops as i believe that this is a hedge related trade- the whole purpose of which is to (attempt) to reduce any potential losses by having a short and long trade.
For example:
Lets just say i expect the Dow to outperform the FTSE over a specific time frame.
I buy the dow at 10500 for £1 a point (expecting it to go up)
The FTSE is trading at 4900. In order to gain the same exposure on the FTSE i sell at £2.14 a point (10500/4900)
When i come to close my trades the Dow is trading at 10578 (+78) and the FTSE is at 4881 (-19) my net position would be:
Dow 76 x £1= +£76
FTSE 19 x £2.14 = -£40.66
Net Profit therefore= £76- £40.66 = £35.34
The above example takes into account any trading spread costs.
Would appreciate any feeback regarding the above, particularly with reference to spread and pair definition (and differences)
Is the maths correct with regard to exposure
Any other points
Thanks in advance.
Mick
FTSE Beater
Experienced member
- Messages
- 1,518
- Likes
- 6
Hi Mickmik1973 said:
The answer is. There isn't much.
I think the difference is, with spreads treading you're looking to make money purely on the difference in price. With pair trading your looking to make on both sides of the trade.
That's how I see it anyway.
