Euro Chat with Joe Ross

Chat log from: Thursday, February 15, 2007
SusanL joined.
keith joined.
joeross joined.
ian joined.
joeross Hello ian
ian hi Joe
joeross what's new?
ian Well, me joining the chat for one thing. This is so amazing to be able to speak to my guru in real time!
joeross Thanks
ian first question i have a few lined up.
crosten joined.
joeross good, we need questions
joeross Hi crosten
murra joined.
joeross Hi murra
ian

 we always read about needing a good risk :reward ratio when entering a trade eg putting a stop at -$100 and T/p at +$400...is this right oris 1: 1 also good
murra hi joe
joeross





 Ian: it really depends on the entire way you are trading. For example, you might have a method that wins 95% of the time but has a very small profit amount compared with the loss amount. So you have a situation where you have to have a lot of wins to make up for the occasional losses. Similarly, you might have a method or way of trading that wins only 25% of the time. But the wins are huge compared with the losses and overall, you make money. So risk reward is not everything to take into account,
stickyfingers joined.
joeross hi sticky
ian ok tks. That helps a lot. I quit my job in the financial industry a short while ago to give my trading a shot full time. I had made some money
stickyfingers hello
joeross good ian. Keep making it
murra

 Is the gimmes an appropriate method in this time that the market don't trend. What do you think?
crosten Hi Joe what scaling do you use on the S&P 500 in your trading by the minute?
joeross

 The central bank makes it by creating it out of thin air. We have to make it by taking it away from someone else :D
joeross



 murra: gimmees are good in that kind of market for short term trading. You more or less scalp. But make sure the range is not so narrow that there is not enough room for you to make money. Gimmees were designed specifically for trading ranges.
Jim joined.
joeross


 crosten: I don't set any particular scaling. I just look at the chart the way the software presents it.
joeross Hi Jim
Jim Afternoon Joe
ian



 No the problem is I was making some money while trading very part time in the evenings, using the type of method you describe 25 % wins , but big winnings. there are not many trades like that when trading full time so I have been trying to increase the percentage wins and take smaller profits but it has not been working...any suggestions?
crosten

 Joe you mention in trading by the minute that we should be trading the index after 2 when the bond markets closed, why does the bond market mess the index ?
joeross

 ian: if you trade not so often, then you must increase your lot size. Trade more contracts.
Mikhail81 joined.
Mikhail81 Hi Joe, Susan and all! :)
ian

 what i struggle with when having to trade full time is...what do I do with the other time in the day and also with the insecurity of not knowing when the next win will come
joeross




 crosten: that is a great question. For some reason the bonds put a lot of pressure on the stock indexes because they are working off of interest rates. In general, but not all the time, bonds tend to go the opposite way from stocks. it is that trading that causes pressure on the bonds.
joeross Hi Mikhail
crosten Joe did you take the GBP/USD ledge today, it was picture perfect?
Mikhail81 I took my profits early, today in the bonds
joeross



 ian: I had that problem for many years. When I began trading, I was able to make only about 30 trades in the outrights per year. But I was able to add to my trading by trading spreads. I could find 40-50 spreads/year to trade, and that gave me something more to do. Eventually though, I had to go out and begin new business and/or learn new skills
Mikhail81 didn't like what I was seeing on the tape when the housing market index report came out
joeross

 crosten: I did not. I was watching the bonds and the Russell mini. I did not get a trade in either one.
crosten Joe, do you trade the emini index? How much do you risk on emini index for each contracts?
ian

 I read in one of your books you sold insurance...was the other business to make up for the shortfall in income or just to give yourself something else to do
joeross

 crosten, when I trade it, I risk 1.5 points. But honestly, I have not traded it this year, not even once
elliew joined.
crosten Joe, you mention in trading by the minute that you trade NYFE, does that mean the russell?
joeross





 ian: it was to give me something to do. I sold insurance, and did very well at it. I also learned to program computers and was an independent contract programmer for many years. I also owned and operated a chemical company, invested in real estate, owned and operated a paint contracting business, also a magnesium cement company, and invented and ran a deodorizing business. All of that before 1981 when it became possible to day trade.
stickyfingers Joe , ...the Euro/dollar
joeross Hi ellie
ian wow...
joeross I guess you could say "I've been around" ;)
elliew ::smile ::smile Hi Joe!
Jim


 Joe: I attended a spread betting seminar yesterday. The focus seemed to be on using Fib. techniques. Do you use / believe in these methods? It all seems a bit illogical to me.
stickyfingers


 broke out in the fall. I always have on my mind it could be a stop fishing move ...what you think, could it be so big?

joeross




 Jim: I do believe it is illogical. I use Fib ratios to fade the Fib traders. The market movers watch them carefully, and when they want to make a move, they look to see if the Fib traders are in the market. They like to use the momentum of the Fib traders to run the stops.
crosten Joe, when you said the NYFE in trading by the minute are referring to the russell?
ian



 2 questions in one: I have trading by the minute is it necessary to upgrade to Day Trading. 2nd in TBM there are a lot techniques based on the breakout of the high/low from the previous day. But with so many 24 hr mkts particularly in FX, what do I use as the high or low/
joeross




 sticky: The move yesterday was not stop fishing. The Fed indicated they would not raise interest rates, while at the same time it is almost certain that the ECB will raise interest rates in March. The currency traders made a massive response to that situation, however most of the time it is stop fishing in the eur/usd
crosten Joe which markets are you day trading ? are you trading live as we chat?
joeross


 crosten: The NYFE referred to the market known as the New York Futures exchange. They traded an index based on the NYSE. I don't think it exists any more.
bergis joined.
joeross

 Ian: You do not need to upgrade. for the high or low use the high or low printed as the daily bar
joeross Ian: the one that prints last before they begin the next day
ian that's printed at 24.00 gmt?
joeross crosten: I have been trading bonds and mini Russell. I am not trading during the chat.
joeross Hi bergis
bergis hie joe
joeross ian: Yes.
Jim

 Joe: Sounds like an interesting idea, do you think Fib trading "works" because people believe it works, ie self fulfilling?
ian tks. what do you mean by fading the fib traders?
Jim same Q from me!
joeross


 Jim: It is a self-fulfilling thing in many cases. However, scientific studies have shown that Fib numbers are not hit any more than any other numbers.
crosten



 Joe do you have a specific trading method for trading the emini russell? or are you currently trading the emini russell using the methods in trading by the minute ? can I trade the emini russell using the methods in trading by the minute ?
stickyfingers I meant the big long move up from the sideways market that hold us up the whole summer .
joeross





 ian: it's like this; Picture it if you will: Let's say a market mover wants to take prices higher. Prices have been falling and he sees they are now at the 50% retracement. The market mover will wait to see if Fib buying comes into the market. If it does, he will begin to buy as well to take prices higher. He gets help from the action of the Fib traders.
sharky joined.
joeross


 sticky: That long move was not stop fishing. It was pure economic perception. Stop fishing is virtually 100% a short-term phenomenon
sharky hi
joeross Hi sharky
Jim Susan: Hello Susan, is it possible to save the chat?
elliew


 I am using Sierra charts. They start painting the daily bar at 12:00 AM. They show the open price as of the 12:00 AM price.
sharky hi GURU JOE
crosten

 Joe, why did you come to the conclusion to day trade the emini russell and the bonds ? How do you select which markets to day trade ?
sharky Joe thank so much for " the law of chart"
elliew



 I am looking at bonds and I know that the "bond pit" opens like 7 or 8 in the AM ... so is there a 2nd "open price"? what price would I use - the 12:00 AM or the bond opening .. or what?
joeross



 crosten: the bonds and the Russell both move a lot of money. The bonds do it because of the large tick size. The Russell does it by being extremely volatile. Both make very nice tradable clusters in the overnight markets. I trade those cluster breakouts
ian






 Nowadays it is so easy to day trade, with full instant market access. Many people (me incl.) do not fully learn how to position trade and they are already day trading. The urge is so great I mean the software we have is awesome. Joe do you think the fact that you started day trading in 1981 which was after many years of position trading that gave you an advantage and that nowadays we get sucked into day trading too quickly. In other words is all this technological progress actually a negative since it makes access to trading so easy?
joeross ellie: use the prices from the all-night market
ian With all the tsp running esp in EUR/USD etc should we day trade at all
crosten Joe, do you day trade economic announcement using currency futures?
Mikhail81 Joe: when you say clusters, do you mean congestions?
joeross




 ian: you are 100% correct. When I began to day trade I already was a trader and what I saw on a 1 minute BP chart looked exactly the same as what I saw on a daily corn chart. I literally position traded the pound during the day. But since that time the markets are full of scalpers and you don't get those beautiful intraday trends.
joeross



 Ian: It was also possible to key off the pound to trade the D-mark and the Swiss franc. The pound would make a move and within seconds or minutes the franc and the mark would mirror that move.
joeross Mikhail: Yes, very tight overnight congestions
Mikhail81 thanks Joe!
elliew Like what was in the bonds overnight last night
ian


 tks joe. In currencies since there is so much stop running is it not better to trade by buying at support and selling at resistance/
crosten Joe, do you have a specific time of the day when you day trade the currency market?
Jim


 Joe: Are the scalpers the floor traders? Presumably you would have to be very quick to make any money doing that
joeross


 ian: to day trade or not is purely up to the individual. I do a lot of day trading because I don't have time to do anything else.
joeross I need to get in, get out, and take my money
Mikhail81 Ellie: the open was @ ^28
joeross ellie the high for the bonds was 111^04 and the low was 110^05
sharky i think that the 123low or high are the Best formations
sharky for any time frame
Mikhail81 I was referring to the open of the 2.15.07 bar
joeross



 ian: I am not much of a believer in support and resistance. But a lot of successful traders do trade that way. It is difficult to say what is better. Better is when you are making money, regardless of your trading style.
crosten Joe, do you have a specific time of the day when you start trading the currency market ?
camprodon joined.
joeross crosten: I trade the currencies from 8AM to 10AM U.S. Central time
Mikhail81


 Joe: I think support and resistance works when a lot of traders are paying attention to it, but that depends on the market....
crosten Why that specific time frame Joe ?
Mikhail81 again, as you say, a self-fulfilling prophecy of sorts
Mikhail81 but nevertheless S/R areas give us some sense of reference...
joeross


 Jim: the scalpers are the little guys with small accounts who have to jump in and out very quickly. The churn the markets and make a lot of noise.
joeross sharky: There are many, many traders who will agree with you on that.
Jim Joe: But do they make any money?
ian




 tks Joe. when you were running all those businesses and no doubt making money, do you think that since you had that basic income it allowed you to trade more clear thinking and profitably. I mean the pressure to make a full income from such an erratic profession for me seems too great?
joeross sharky: the 1-2-3 highs and lows have made a lot of money for a lot of people.
joeross Hi camprodon
joeross

 crosten: Those hours are all I have time for. Besides, I think those are the best hours for trading
ian they are the most volatile , no/
crosten

 Joe, are you using ran order or refco express for trading spreads ? I would like to trade the emini russell on a spread basis which other contract should i match it with ?
elliew


 Off Sierra, I got that yesterday's bond high was 111 04 and low was 110 05 and close was 110 27 and today's open was 110 27. But that is just off the charts. Is that what most people use - are the numbers off these charts?
joeross Jim: the scalpers: some make money, most fall by the wayside
joeross


 ian: I always made it a point to live from my trading and banked the rest, but it was a comfort to know I had something to fall back on
stickyfingers Yes , I rather don´t trade with support and resistance , I just forget it all the time and don´t miss it . Goes good without
Jim sharkey: Do you trade a breakout from the 1-2-3 or wait for a RH afterward
joeross ian: those hours seem to contain the best moves
joeross crosten: I am using Ninja Trader with the feed from Interactive Brokers
sharky any methods
Mikhail81 Joe: you ever have problems w/ the IB data feed???
ian

 Joe, there are often a lot of reports during those hours ...do you square up before the reports/
keith Crosten, I have used RanOrder to place spread trades. It works fine.
crosten

 the s&p method that you traded in trading by the minute , can i still apply that method today ?
joeross


 crosten: you should take a look at the CME website to see which markets you can spread with the Russell. If you choose wisely, you can get reduced margins.
joeross http://www.cme.com/html.wrap/wrappedpages/clearing/pbrates/PBISHomePage.htm
elliew


 your website implies that the book Day Trading replaces the book Trading by the Minute ... is that true?
joeross Mikhail: I have never had a data feed that didn't have problems
sharky joe what you think that the SP500 and nd100? Is Bubole???
joeross sharky: I didn't understand "any methods" were you asking something?
crosten joe, how long did it take you to make your first 1 million profit ?
joeross ian: I wait until the report comes out and then trade
keith

 Crosten: I have spread traded the Russell (ER2) and Nasdaq 100 (NQ). Check margins on CME and check out MRCI.
sharky is bubbole on index???
Mikhail81 the price action pre-report and right after is too RANDOM!
joeross crosten: Yes you can apply the method that I wrote about in Trading by the Minute
Mikhail81 it can go in any direction and the moves can be substantial
Mikhail81 just way too risky
joeross crosten: you may have to make some adjustments.
Mikhail81 no reason to gabmle
joeross ellie: Day Trading replaced Trading by the Minute
crosten what are some of the adjustment that i have to make Joe?
joeross


 sharky: I would not call it a bubble, not yet. There is some solid economic data behind the move. But that data may be not entirely true
joeross


 crosten: I really don't know how long it took. It's not the kind of thing I think about, I am not a number person
Jim

 Joe: There seems to be a huge focus on day trading. I have a full time job so can only use EOD and place orders out of hours. Can the methods in trading the RH be used for this too?
ian


 Joe after the report do you base your directional bias on the report or do u just use charts trading
murra I am having problem with the connection, is it possible to save the chat or will it be archived?
SusanL yes Murra, the chat will be saved and archived on our chat website
joeross crosten: you will have to find out for yourself by testing
joeross Jim: Trading the RH can be used for position trading as well as day trading.
Jim Susan: is it possible to save the chat or part of it locally?
Mikhail81





 there is something that I overhead on Bloomberg a while back, some fund manager has this "flowing bubble theory" or something like that. In brief he thinks that there is always a bubble somewhere, in the 90s it was the stock market, then a lot of the $$$ came out of the stock market and went into the Real Estate, now he thinks that the $$$ is rotating back into the Stock market again. We'll just have to wait and see what happens....
SusanL Jim, I am not sure what you mean by locally.
crosten joe you trading the crude mini, it have made beautiful moves lately ?
Jim Susan: maybe copy and paste from the chat window
sharky sure joe but long positions now scared to death
joeross




 You know it is a strange thing: When I wrote Trading by the Minute I had no idea it would be accepted as a day trading book. I was totally surprised by that. But when people began to call it a day trading book, I let it go at that. But what was in that book and what was in Trading the Ross Hook were both based on position trading.
SusanL




 we didn't enable that feature on purpose but the chat will be available either in a few hours or tomorrow morning on our website page http://tradingeducators.com/studentsonly/chat.htm -- if you scroll down to the Euro Chat section, you will find the chat log from today there later on
joeross


 ian: after the report, I look to see which way they are going to take the market and then join in
camprodon joined.
joeross crosten: I do not trade the crude oil mini. I don't have live data from New York
Jim Susan: thanks, I'll look out for it
joeross sharky: caution is the right way to handle this stock market
Mikhail81 just out of curiosity, how many European traders are here today in this chat?
ian



 with so many indices which group asset classes nowadays it seems everything moves together eg, if usd is weak against eur its weak against everything...if us rates are higher in treasuries they are high in Eurodollars,...if corn is up wheat is up...how do we chose which market to trade/
crosten Joe, are u using interactive broker?
stickyfingers mik ...me
joeross


 ian: I don't have an answer for which market to choose. I simply look for things that seem to be working and I trade them. If they stop working, I look somewhere else.
joeross crosten: Yes I am using IB
crosten How many brokers do you have, Joe?
joeross


 It's time to end the chat, and many of you need to think about going out for a beer before you go to sleep :)
joeross I have a book to write and a newsletter to get ready.
joeross see you next week
ian Joe that was awesome tks so much for you time ::smile
Mikhail81 Joe, what book?
elliew thank you joe
sharky by GURU
joeross I have two brokers crosten
joeross It will be a book on day trading spreads
Jim Thanks Joe, Susan and all, enjoy your day/ night
crosten Which broker is that Joe?
sharky Joe tks for all
Mikhail81 really?!?!? :)
Mikhail81 very interesting!
Mikhail81 when do you expect for it hit the printing press?
sharky bye bye GURU Joe
joeross good night, tschuss, adios, buona note, cheers, and any others I missed
murra good night
Mikhail81 Joe, thank you for your time! :)
joeross mikhail: it will hit the press when I am finished with it
stickyfingers bye folks
sharky now i trade
sharky 123hig on miniRUSSEL 15 minutes
sharky and i WIN
sharky YEAHHHHHHHHHHHHHHHHHHH
Mikhail81 Sharky, making $$$ is the easy part, it's keeping that's tough! ;)
sharky Is Joe my GURU
sharky i study all he writes
sharky bye bye everybody
sharky ciao ragazzi ...alla prossima
stickyfingers tschau
sharky ::up
murra good night for everyone
sharky Any italian traders?

END OF CHAT

Next Chat with Joe Ross:
Thursday, February 22 , 2007
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)

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