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Hi RTrs, Richard, Bob Hunt, Tom Stein,
Richard, I agree with your assessment that spreads can be used to indicate
whether bullish or bearish market conditions exists.
Richard, Bob Hunt, Tom Stein how do you guys set up spread charts with the
current active month and flip through 30 to 50 markets doing automatic
updating every download. What kind of software do you use.
I use CSI Unfair Advantage with seasonal index and basis and Windows on
Wallstreet. I have been unable to use spreads simply because I don't know
how to set it up so that it updates every download. Any guidance on setting
up spread charts with any software would be appreciated.
Like options, spread is a tool. Under certain market conditions, It may be
more advantageous to use spreads than an outright position.
1) For Limit moves, I heard sometimes you can do a spread to get out of your
position even though the contract is locked limit - I don't know if this is
true or not. I didn't have to use it till now. Perhaps somebody can
enlighten us on this.
2) Sideways market:At times, Spreads may be trending much better than the
individual contract. Spread can than be traded to generate some return on
otherwise idle money while trading the individual contract could result in
whipsaws losses.
3) Small Account: Most account especially between $3000 to $ 10,000 blow out
within 3 to 6 months especially in the hands of an inexperienced trader.
Starting with Spread Trading, a trader could built up the account slowly or
atleast avoid blowing out the account while gaining valuable trading
experience.
4) Danger: Sometimes the spread behaves like two separate positions both
going against you - In such case, only option is to close the spread.
This is my 2 cents worth.There must be quite a few spread traders out there
among RTrs, Their input about pros and cons/profits/seasonals spread
trading/suitable markets-agris,currencies etc on the same subject would be
most welcome.
Happy Trading Ashif
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