Edition 1059
January 10, 2025
Learn the Art of Trading Joe Ross' Way!
"The second half of a losing trader’s life is made up of nothing, but the habits he has acquired during the first half." -- Master Trader Joe Ross
Happy New Year!
We hope everyone enjoyed their time off from trading and cherished family time. This is something that Joe emphasized each year and actually practiced what was preached. There may have been a time or two hearing him say, as a trader, you're crazy if you don't and owe it to yourself and your family. With that said, welcome 2025 and we are excited to continue posting Joe's teachings and words of wisdom.
It was much appreciated to those who reached out wishing Loretta happy holidays and expressing continued prayers for her. Keep them coming because they are working! Joe's bride of 62 years and our mother has been doing very well, the late stages of dementia have not progressed, and her spirit is happy, smiling and singing at the young age of 89. We've hired a young woman from their church to provide exercise three times a week, and on days she doesn't feel like moving, their time spent are singing or playing games. We brought in experts from the USA to evaluate the situation in Uruguay and they all agreed the trip alone bringing her back home then thrown in new surroundings would not be in her best interest. I will continue to make annual extended trips and February cannot get here fast enough. For those new to Trading Educators, Loretta was Joe's righthand person for all behind the scenes and was very supportive of his work, teachings, and his students. Again, thank you for showing support and compassion towards Loretta, it means the world to us and I know Joe would agree.
Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Chart Scan with Commentary: Divergence - True and False?
We read a lot about 'divergences' in the markets. Divergence is characterized by prices going in one direction, and an indicator going in another.
However, can you trade based on divergence alone? Some traders try to do it. They will look at divergence and tell you that prices are about to reverse.
We can see an example of divergence by looking at (SPY) above. The blue arrow highlights the direction of prices, which are going up, and the red arrow points to momentum, represented by the moving average convergence divergence (MACD), which is going down. The divergence can be interpreted as bearish for SPY, but when? The divergence has been going on for a long time.
Divergences, and their actual ability to forecast trend reversals, might be more easily understood if we realize that momentum by itself is meaningless when it comes to making predictions about the movement of prices. More important is the realization that momentum is also rather meaningless when it comes to making predictions about the markets.
Let’s look at that chart of SPY again, but this time the arrows highlight a time when momentum confirmed the price action. Was either price momentum or indicator momentum able to predict what was to happen to prices? (Blue Box)
Here’s the problem with momentum when it is used alone without some kind of confirmation, it is nothing more than a guess. At times it will seem to predict correctly, but at other times its predictions will fail.
One of the really silly things that many traders do is to look for confirmation from another momentum indicator. Posting RSI, Stochastics, DEMA, or %R for confirmation has to be the height of ridiculous. Yet many times we see traders doing exactly that. Wouldn’t you expect one momentum indicator to confirm another momentum indicator?
We could continue looking at the chart of SPY and find numerous examples of divergences that worked or failed, and confirmations that worked or failed.
We could easily find examples of whatever we want to show on the chart. And that demonstrates why divergences are not that valuable - they simply confirm our opinions rather than predict what will happen.
You will continue to hear about divergences whether stocks move up or down. The ones that work will be shown as proof that divergences are important. The ones that don’t work will be quickly forgotten and replaced by a new one.
No one ever seems to consistently make money from divergence analysis. It is probably best to view divergences as "for entertainment purposes only" and make investment decisions based on firm rules, and detailed plans.
© by Joe Ross, first release 2014. Re-transmission or production of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Trading Article: Planning Trades to Control Risk
The problem with many traders is that they have only half a plan, the easy half. They know how much profit they're willing to take, but they don't have the foggiest idea how much they're willing to lose. They're like a deer in the headlights, they just freeze and wait to get run over. Their plan for a position that goes south is, “Please God, let me out of this and I'll never do it again,” but that's wishful thinking, because if by chance the position turns around, they'll soon forget about their promises. They'll go back to thinking that they're geniuses, and they'll always do it again, which means that they're sure to get caught, and get caught bad.
I have a true story I’d like to share: It’s about a broker I knew and a Coffee trade he made. It goes like this:
I received a phone call from this guy moaning about a Coffee trade he was in. He was managing money and had all of his clients in this particular trade.
Coffee, at least at that time, was, and still can be, an illiquid and extremely volatile market, and is often best traded by people who have a genuine need to trade there. But he was in and in up to his neck in trouble. He said, "Joe! I don’t know what to do! If the Coffee goes down any more, I’m going to wipe out all of those accounts." He told me he had been so sure the market would move up that he never even planned the amount of risk he was willing to take, and by the time he had determined where to put a protective stop, Coffee had shot past that point.
I told him I had no idea of how he could get out of his predicament, and that was an honest answer. I really did not know...read more.
© by Joe Ross, first release 2014. Re-transmission or production of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
This newsletter and future publications are created to keep Master Trader Joe Ross' lessons readily available to traders that want to learn and improve their skills and to show his written word is still very relevant in today's trading world. He passed away on September 7, 2021 and will be greatly missed, but his writings will stand the test of time for generations to come. Take it to heart and learn from the best through Joe Ross' trading examples and articles which have impacted thousands of traders on every continent for over 60 years. Enjoy and let's start learning the art of trading Joe Ross' way.
Professional Trader Andy Jordan
Educator for Spreads, Options, Swing, and Day Trading, and Editor for 20+ years with Traders Notebook, daily advisory newsletter.
In part 3 of 8 in Andy Jordan's Trading Plan Series, he explains how important it is to know yourself and to know your purpose.
© by Andy Jordan. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Professional Trader Marco Mayer
Educator for Forex, Futures and Systematic Trader
Creator of Ambush Trading Method, Ambush Signals, and Head of AlgoStrats.com
Where and How (Not) to Place a Stop-Loss
In this video, Marco Mayer talks about stop-losses in general, ways to decide on your stops that don't make much sense and other pitfalls like using breakeven-stops. Finally he gives you some insights on his own systematic approach regarding exits and how he likes to decide where to put a stop-loss.
Marco Mayer announced in 2016 a new AlgoStrats service was launched: Ambush Signals for Futures. This is how it all got started....read more.
The Ambush Trading System was created in 2009 by Marco Mayer. Since then it proved itself in the markets for over a decade and did so with exceptional results. It's the only trading system we're aware of that is still going strong after so many years. While Ambush is a day trading system, meaning you will always enter and exit on the same trading day - you don't have to sit in front of your trading screen. You simply place your entry orders when the trading session starts and come back at the close!
© by Marco Mayer. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
Even though Master Trader Joe Ross passed away September 7, 2021, his trading knowledge of over 60 years will carry a trading legacy and will live on. As you learn about Joe Ross and understand what he was trying to teach his students, you will find that within his writings, he had a very special gift. Most importantly, it was his students that kept him striving to provide comprehendable trading material to actually teach traders and become independent, to rely on anyone, but themselves.
Joe Ross has been trading and investing since his first trade at the age of 14, and is a well known Master Trader and Investor. He was able to survive all the up and downs of the markets because of his adaptable trading style, using a low-risk approach that produces consistent profits.
Joe is the creater of the Ross Hook™ and has set new standards for low-risk trading with his concepts of "The Law of Charts™" and the "Traders Trick Entry™." Joe was a private trader and investor for much of his life, but a serious health situation in the late 80's caused him to shift his focus, and that is when he decided to share his knowledge. After his recovery, he founded Trading Educators in 1988, to teach aspiring traders how to make profits using his trading approach.
Joe Ross has written twelve major books and countless articles and essays about trading. All his books have become classics, and have been translated into many different languages. His students from around the world number in the thousands. His file of letters containing thanks and appreciation from students on every continent is huge: As one student, a successful trader, wrote: "Your mastery of teaching is even greater than my mastery of trading".
Joe Ross holds a Bachelor of Science degree in Business Administration from the University of California at Los Angeles. He did his Masters work in Computer Sciences at the George Washington University extension in Norfolk, Virginia. He is listed in "Who's Who in America." After 5 decades of trading and investing, Joe Ross still tutors, teaches, writes, and trades regularly. Joe is an active and integral part of Trading Educators. He is the founder and contributor of the company's newsletter Chart Scan™.
Learn the Art of Trading Joe Ross' Way!
"The second half of a losing trader’s life is made up of nothing, but the habits he has acquired during the first half." -- Master Trader Joe Ross
Joe's philosophy for helping traders is:
"Teach our students the truth in trading - teach them how to trade."
and
"Give them a way to earn while they learn - realizing that it takes time to develop a successful trader."
Joe sets forth the mission of Trading Educators as follows:
To show aspiring futures traders the truth in trading by teaching them how to read a chart so that they can successfully trade what they see, and by revealing to them all of the insider knowledge they need in order to understand the markets.
To enable them to trade profitably by training them to properly manage their trades as well as their mindset and self-control.
To accomplish our mission for our students we educate them so that they know and understand:
Benefits for Our Clients:
- Where prices are likely to move next.
- Independence from complicated trading methods, magic indicators, and black-box systems.
- Independence from opinion, anyone's opinion, including their own.
- Independence achieved through knowing how to read a chart.
- Independence through having knowledge of insider actions.
- Independence achieved by taking holistic and eclectic approaches.
- Independence coming from knowing how to manage both the trades and themselves.
- Independence because they understand and trade what they see.
- Independence because they have learned how and why prices move as they do, through studying the truth in trading and the truth about markets.
Students learn only proven methods and techniques, which helps them to preserve capital and create more consistent profits; they are offered simple methods that will assist them to earn while they learn.
- They learn to work smarter and more effectively.
- They learn to treat trading as a business; we offer no Holy Grail or magic systems.
- They learn to adapt to changing market conditions.
- They learn a systematic approach to trading rather than a mechanical system for trading.
- Why prices will move there.
- Who and what cause prices to move.
- How far prices are likely to move when they do move.
- Their own role in the movement of prices..
- How to take advantage of the knowledge they receive.
- How to properly manage and exit a trade which they have entered.
- How to manage themselves and acquire the discipline needed to become successful traders.
Read some personal testimonials which Joe has received.
WE APPRECIATE YOUR TRUST IN US AND THANK YOU FOR YOUR BUSINESS!
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A WEALTH OF INFORMATION & EDUCATION:
Joe Ross-Trading Educators' popular free Chart Scan Newsletter has been published since 2004.
Note: Unless otherwise noted, all charts used in Chart Scan commentary were created by using Genesis Financial Technologies' Trade Navigator (with permission).
Legal Notice and Copyright 2025 - Published by Trading Educators, Inc.
Chart Scan is a Complimentary Educational Newsletter.
Dear Traders,
Master Trader Joe Ross passed away September 2021, and prior years he was continously sending me folders filled with Chart Scan and Trading Articles. The emails would be titled "More to follow" and I would reply, "Keep'em coming". I am calling these lessons "hidden vault" material because if Joe were still alive, this is exactly what would be shown in your inbox every Friday morning. This is not regurgitated material; this is new stuff written by Joe or as he would refer to it with such passion, "This is good stuff".
As we continue to receive newsletter sign ups, new students from every continent will start to learn trading Joe's way especially in this challenging market. This is where he would reinforce to his students, yes, that includes you, that learning to trade is possible even in this environment, "A chart, is a chart, is a chart". His writings will stand the test of time to provide teaching lessons and guidance.
The proceeds of Trading Educators will continue to support Joe's wife, Loretta, of 62 years of marriage, which she is our number one priority. We thank everyone with continued support and prayers for her well-being in late stages of dementia.
As expressed in the past editions, the trading world has lost a unique and passionate trader and his material will continue to be relevant. Let's start learning to trade Joe Ross' way with our future Chart Scan publications. I am here to help, so feel free to email me with any comments, questions or concerns.
This newsletter and future publications are created to keep Master Trader Joe Ross' lessons readily available to traders that want to learn and improve their skills. Our father passed away on September 7, 2021 and will be greatly missed, but his writings will stand the test of time for generations to come. Take it to heart and learn from the best through Master Trader Joe Ross' trading examples and articles which have impacted thousands of traders on every continent for over 60 years.
Happy trading,
Martha Ross-Edmunds
© by Trading Educators, Inc. Re-transmission or reproduction of any part of this material is strictly prohibited without prior written consent
