facebook  youtube  blogger

Trading Educators Blog

#1 Trading Blog Site

Practical Teaching Derived from over 60 Years of Trading Experience and over 30 Years of Mentoring .  Click here to learn about private mentoring with Master Trader Joe Ross.

Sep
14

Controlling Your Impulses

When your money is on the line, it's difficult to remain calm, rational, and in complete control. What happens if you lose? How will you recover? It's natural to become consumed with self-doubt and abandon your trading plan, or act irrationally in the midst of the chaotic market action. But winning traders control their impulses. They execute a trading strategy effortlessly and flawlessly, even un...

Continue reading
  971 Hits
Aug
24

E-Mini S&P 500 Q&A

Q: I bought your e-book "Day Trading E-Mini S&P 500" in 2012. Are there any changes or updates to original text due to market character changes, higher volatility etc. since last 10 years?  A: YES, THE BOOK HAS BEEN UPDATED BUT CHANGES ARE MINOR. I have some questions especially to the concept of 2 timeframes - 5-minute and 1-minute charts: 1. Q: Are these 2 timeframes adeq...

Continue reading
  894 Hits
Aug
24

Signal Lines

Hey Joe! Last week in your article about MACD, you talked about signal lines. What is a signal line? Is it the same as a Trigger Line? I'm sorry, I forgot to tell you what Signal lines are. Signal lines are used in technical indicators, especially oscillators, to generate buy and sell signals or suggest a change in a trend. Oftentimes, signal lines are moving averages of a technical indicator, suc...

Continue reading
  1008 Hits
Aug
17

Volatility

Joe! The markets seem to be so volatile. It's really scary with all those wild swings! I don't usually write about investments, but the question has come up with regard to volatility. The tricky thing about volatility isn't its wild swings. It's that we want to believe these wild swings are meaningful, and they're not. With reverence to colored bars and candles, when we see lots of green in the ma...

Continue reading
  825 Hits
Aug
10

Technical Analysis

Hi Joe! Is there a difference between Technical Analysis and Chart Analysis? Technical Analysis is a trading discipline employed to evaluate assets and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysts, who attempt to evaluate a security's intrinsic value, technical analysts focus on pattern...

Continue reading
  723 Hits
Aug
03

Stochastics

Hey Joe! I know you use Stochastics quite often and I want to know why. Is there some "magic" to it? Is a Stochastic indicator better than any other? First, let's define what a Stochastic Indicator is: Stochastics is a momentum indicator comparing a particular closing price of an under lying asset to a range of its prices over a certain period of time. The sensitivity of the oscillator to market m...

Continue reading
  910 Hits
Jul
27

Open Interest

Hey Joe! What is Open Interest and how can I use it? First let's define what it is. Open Interest is the total number of open or outstanding options and/or underlying asset contracts that exist at a given time. Open interest is commonly associated with the futures and options markets, where the number of existing contracts changes from day to day. Open Interest is a strange statistic. It tells you...

Continue reading
  712 Hits
Jul
20

Strike Price

Question by a Trader: Joe I am new to options and I'm confused about some of the terminology. What exactly do they mean by "Strike Price?" The Strike Price is the price at which an option can be exercised, and refers to the price of the option's underlying asset. In a call option, the strike price is the price at which the option holder can purchase the underlying asset. For a put option, the...

Continue reading
  655 Hits
Jul
12

Vertical Spread

Mr. Ross, if I enter a spread long wheat and short corn, both for the same month is that a vertical spread? What if I spread March soybeans against November soybeans, is that a vertical spread? Not really! Vertical spreads typically apply to options not to trading in the outrights. If you look at the definition of a vertical spread, you will see that neither of the spreads you described fit what i...

Continue reading
  617 Hits
Jul
06

Day Trading

Hey Joe what exactly is day trading? Let's face it, all orders are placed during the day, but placing an order during the day doesn't make me a day trader. In fact, lots of times, I am in and out of a trade in a single day, but only by circumstance, not intention. Day Trading is defined as the buying and selling of an underlying asset within a single trading day. This can occur in any marketplace,...

Continue reading
  518 Hits
Jun
28

Selling Short

Joe, what does it mean to be a short seller? Very good question. Here's a definition of selling short as it applies to the stocks and ETFs: Short Selling (also known as "shorting," "selling short" or "going short") refers to the sale of a security or financial instrument that the seller has borrowed to make the short sale. The short seller believes that the borrowed security's price will decline, ...

Continue reading
  471 Hits
Jun
22

Histograms

Joe do you look at volume using a Histogram? Wouldn't it be better to chart volume as an oscillator? A Histogram is a graphical representation that organizes a group of data points into user-specified ranges. It is similar in appearance to a bar graph. The histogram condenses a data series into an easily interpreted visual by taking many data points and grouping them into logical ranges or bins. H...

Continue reading
  556 Hits
Jun
09

Can You Believe?

Joe's Trading Tidbits Can we believe the reports the government puts out? Can we use them in our trading? Since I am not much of a fundamentals trader, I tend to stay away from government statistics. To me, they have very little value. As far as I can see, they are full of errors. Let me explain. What's wrong with traditional statistics? They fail to measure what is really going on in the economy ...

Continue reading
  360 Hits
Jun
07

CAN YOU BE TOO BIG?

A lot of people wish they could trade more contracts or more shares. But I try to tell them that there is a point of diminishing returns and diminishing productivity – two laws of economics. People have an erroneous impression that, if they could only trade well with a couple of contracts or 100 shares, they could do even better with 100 contracts and thousands of shares. However, that is not quit...

Continue reading
  530 Hits
May
04

Risk Management: Protecting Your Account Balance and Your Emotions

The markets go up and down, and so will your account balance if you are not careful. Winning traders manage risk. There are many ways to manage risk. Some traders patiently wait for high probability setups, while other traders limit the amount of money they risk on any given trade. What strategies do you use to manage risk? How do you compare with other traders? A group of traders were asked to ta...

Continue reading
  442 Hits
Apr
20

Beliefs About Money: A Possible Source of Self-Sabotage

Do you have trouble following your trading plan? Many novice traders do. They develop a plan with specific guidelines as to when to enter and when to exit. The night before it all seems so clear, what they are going to do and how they are going to do it. But when the markets open the next morning, they are persuaded by a little voice to throw the plan out the window. It's a common ailment, and man...

Continue reading
  513 Hits
Apr
13

The Cynic and the Realist

In the trading business, it's prudent to take everything you hear with a grain of salt. Our field is full of false prophets who claim they can make you rich quickly and easily. Realistic skepticism is healthy. For example, there are many traders who made huge profits in the late 90s, and now claim that they can help you live comfortably by trading a $10,000 account. How do you do it? It's easy, th...

Continue reading
  441 Hits
Apr
06

Wishing Upon a Star

When you wish upon a star, what do you wish for? If you're like most people, financial freedom is one of the first things on your list. If you had a million dollars, think of what you could do. You wouldn't have to ever work again. You could just sit on the beach and relax. But if you're like most traders, you couldn't stay away from trading even if you had infinite wealth. What else could you wis...

Continue reading
  447 Hits
Mar
23

Instant Income Guaranteed

Hi, Master I have a few questions that I don't quite understand, about Instant Income Guaranteed. Please explain to me, thanks. Q: "Only take the trades you can afford, keeping your put cover ratio at the advised strict minimum of 50% (80% preferably)"----Could you tell us how this data (50%-80%) is measured? A: If you have a $100,000 account you would use only $20,000 of it for trading IIG if you...

Continue reading
  431 Hits
Mar
16

Rekindle Your Hidden Passion for Trading

After months of trading in a slump, Jake tells his best friend, "I think I want to quit the trading business. Why am I doing it? There must be a better way to make a living." Have you ever felt like Jake? Trading can be stressful and demanding. It's understandable to feel like throwing in the towel at times. If you are ready to find a new job, or if you just don't seem to have the same passion for...

Continue reading
  439 Hits

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.