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Spread Trading and Seasonal Trading

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How to trade with a real commitment of 1/2 hour a week

Spread trading is one of the first techniques I was taught. That’s why I say it is also suitable for a beginner with a small bill. Moreover, the way of doing spread trading that I have created in my experience of more than fifty years, is much more effective than what I was taught at the beginning of my career as a trader in 1957!

  Trading spreads is simple – you buy a future and sell another related future. In fact, the characteristics and benefits of spread trading can be summarized in just three points: minimum time commitment, profitable trades (with a return of 200-300% on capital) and reduced risk! Spread trading takes less than 1 hour a day with my technique, because it is based on data at the end of the day.

Spread Trading and Seasonal Trading is a 320 page manual that contains practical information on spread trading and dozens of real trade charts. It gives you a deep understanding of what spreads really are and, more importantly, how to enter and how to manage your spread trades.

Here are 11 good reasons for spread trading:

1) Each spread creates a protected position, with one future to buy and one to sell. This way you avoid the risk on the price and replace it with the much less risk on the difference between the two sides of the spread.

2) Since the risk is lower, a very low margin is required to trade compared to a single future. The benefit is there is a need for less capital. Often the margin on the spread is only 20% of the margin on a single future. For example, for a wheat future you need a margin of $ 608 right now, while the margin on the spread is $ 101 (just 16.6% of the future margin).

3) Thanks to the lower margins, the return on capital can be much greater than for a single future. For example, instead of 1 wheat futures, you can have 5 spreads with the same capital.

4) There are specific tools to select spreads and this means that it is easier to make the selection and the chances of success are greater than with futures and options.

5) You can also select spreads based on seasonality. The benefit is that most seasonal spreads have very high winning percentages.

6) You can enter trends with high profits. Spreads, when they move, often form stronger and longer (and therefore more profitable) trends than individual futures.

7) Spreads give you extra opportunities to trade: sometimes there are spread trends and profitable trades, even when individual futures move sideways.

8) You are safe from the stop hunt, because you are in two different markets at the same time or in two different months of the same market.

9) If you are only partially right about the spread, you can close the losing side and keep the winning side open.

10) Spread trading takes little time, because it is based on data at the end of the day. So you can successfully spread trading even if you have little time to devote to trading.

11) When you trade with spreads you are much more relaxed than with other types of trading.

Using spreads, traders create hedged positions to reduce their risks until they see an opportunity to close a position profitably. Markets were born to favor the creation of hedged positions: those who produce or use raw materials protect their positions through futures. Professional traders also protect their positions. So why shouldn’t you do the same thing too? You can do this by learning spread trading! This is why I wrote the book Spread trading and seasonal trading. The book says the truth about spreads and I invite you to read it!)

Joe Ross

Also available in E-Book format. Soon available in our store

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Joe Ross in his life achieved great successes and the most important professional triumphs he could achieve.

The Joe Ross Fair Trading creation  highlights how he, having reached and exceeded the “eighties”, does not stop thinking about the future and wanted to undertake a new activity that is at the top in terms of importance in this discipline.

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