Chat Archives
Commodity Chat With Trader Jim! (tm) with Jim Prince
from 08/17/2006
Hi everyone, Trader Jim here. . .
Thanks for joining us this evening. I'm looking forward to a great night of commodity conversation.
Feel free to share your success stories as well as your difficulties. Doing so helps other Course Members realize that they aren't alone in this adventure. Your passion, insight, and zeal can go a long, long way!
Before we get started tonight, I'd like send out a great big "Thank You" to Ken Roberts. Ken started introducing folks to the World's Greatest Business roughly 20 years ago. I was fortunate enough to not only be a student of Ken's teachings, but also had the great pleasure to work for him for 12+ years. I'm pleased to be able to share with you what I've learned over the years.
Make sure you take a peek at Ken's Ultimate Technique for Success Course too. Find out more information by clicking here.
As we begin this evening's session, remember the reason these monthly chats are conducted is to: provide you the opportunity to ask questions and to pick the brain of a 20+ year student of the markets and active trader.
It's not the best use of our limited time here together for me to define basic terms and explain introductory principles taught in your Course materials. (That's what our Course Counselors are here for. They can be reached at 541-955-2885) This chat is the time for you to use me to help you apply the basics you're learning and to prepare you for what to expect once you're out in the market itself (either paper trading or with real money). And if we have some fun and laughter along those lines, so much the better.
NOTE!!! When commenting on one of the WGB strategies or US Charts, please identify WHICH ONE. Also, when relating trading experiences and/or results, please provide details: Futures contracts, options, options AND futures, etc. This helps others follow along and learn from your experience too.
David asks (6:05:24 PM):
Can a 50% retracement line also serve as part of a triangle formation?
Hi David! Sure, the 50% RTC line could be part of a formation. I can visualize it being either the bottom line of a flat-bottom triangle or the top line of a flat-top triangle. I imagine the formations would be rather large. Hope this helps. Thanks for joining us this evening.
Santiago asks (6:07:31 PM):
Are you going to be using candlesticks on your charts anytime soon in the future?
Not that I'm aware of, Santiago. I say this because the chart patterns we trade are based off of bar charts. That said, never say no. I'll mention it to the programmers and see if it's something that can be implemented down the line.
John D asks (6:09:28 PM):
Jim, I have a small suggestion concerning Ken's Chartbook. I love following the chart book, but there's a lot of markets to track. It would be extremely helpful if your opening list of markets and histories indicated when each of the those entries was last updated. That way we don't have to open and review each chart to see if you have added info.
Hey John! Our programmers are working on just such a feature. Hopefully it will be up and running once the new site is in motion. That said, I usually try to update the charts at least three days a week.
equoptions asks (6:10:54 PM):
equoptions - kensington, CTHey Jim,I'm new to WGB, so I'll be just reading along until I get comfortable using the chat feature. :)
Welcome, equoptions! Glad you've joined us this evening. If any questions come to mind be sure to let me know or call a Course Counselor at 541-955-2885 Monday through Friday 8:30am - 5:00pm PT.
Coffee Man asks (6:14:14 PM):
Looks like Coffee is due for a bounce back. Call Option premiums seem to be high. Do you ever sell options to pay for a long call option? What would your method be to determine offsetting calls to sell?
Hey Coffee Man! Have a cup of Joe to get you on the go! Coffee options generally do run on the pricey side. I personally rarely ever sell options and it's not something we teach in the World's Greatest Business. But if you need some better understanding of how writing options works, call one of our Course Counselors in the morning for some assistance. (Don't drink a lot of java this evening, you're bound to be up all night!)
Dave C, Natick asks (6:20:47 PM):
Sharing difficulties, OK. The crude, heating oil and gasoline markets! Man, what a drop the other day! I had to turn on CNN to find out just what was going on. Disaster! LOL. I've been out in November and December and so have decided to take the "contrarian" approach and stick with the long term trend. Any thoughts?
Hey Dave C, Natick!We like to trade the chart patterns taught in the WGB Course. The patterns and Trend Seeker provide a great mix to keep you on the "right" side of things. Stay tuned to your weekly emails to see if we spot any paper trades. Thanks!
Kristen asks (6:24:02 PM):
Hi, Jim, I am actually a former course member (from approximately 1996-ish), and have been a "re-signed" course member for about a month. There are quite a few changes, although the basics are still the same. I guess I have a question about the Trend Seeker. I have it in my head to look for a 1-2-3 formation starting to develop, but it seems like some of the neutral trends don't necessarily follow that. Any comments on using this?
Howdy Kristen! Welcome back! We still trade 1-2-3 formations however, we wait for Trend Seeker to confirm the change in trend. In other words, if we see a 1-2-3 bottom take shape we wait to trade the break of the #2 point once Trend Seeker (TS) says the trend is up. The TS confirmation helps to keep us out of a lot of "false" 1-2-3 formations. Until TS is in agreement with the formation, we sit back and wait. Patience is the key!
Paul from Ontario asks (6:26:22 PM):
Hi Jim,I'm having a great "sugar high" this week. LOLI bought two October 75 put options for 0.73 back on June 01.As usualy the market turned against me for about 4 weeks,They were only worth 0.15 at the lowest point.I hung on to them and this week they are worth 2.81 as of today's closing.I'm just kicking myself for not buying more at 0.15 LOLToday my surgar profits were $985.60in the last week my profits are $3,606.40It's been quite a roller coaster ride with these options since June 1st LOL
Howdy Paul from Ontario! Congrats on your Sugar trade! That's sweet! Don't kick yourself to hard for not buying more. If your plan was to buy what you did, then you "done good!"
watchman8 asks (6:31:54 PM):
Hi Jim,When holding a call option, say in October Live Cattle, as long as the trend is still continuing, and the Expiration Day is 10/06/06. How long can I hold this option before I need to start looking to liquidate? Thanks for all you and the staff do, and for the WGB. It truly is THE World's Greatest Business!!
Good evening, watchman8!It really depends on how far your option is in-the-money. Options tend to lose time value the quickest during the last 30-days of life. The further your option is out-of-the-money the quicker it will lose value because time is running out. In reality watchman I should mention that this is something you should plan for ahead of time. The biggest reason folks fail in this business is because they lack a plan. Taking profits should be part of that plan, along with a stop loss. I say this so that "next time" you'll plan your trade then trade your plan.
uncle fudd asks (6:34:00 PM):
Good evening Jim. I traded Feeder cattle on a penant formation. I went up like planed but trend tracker said it was weakest when I made the trade. When is it better to trade a penant formation, according to trend tracker?
Hey there uncle fudd! We generally try to take positions when Trend Seeker says the Trend Signal Ranking is at least "strong." But feel free to paper trade other rankings. It's what trading is all about, finding out what is best for you!
Paul from Ontario asks (6:36:54 PM):
Jim, why don't you track lumber in "Ken's chart book?"
Hey Paul, I do when I see something shape up that I like. That said, this is a very, very thinly traded market. Weird things happen in thin markets and I tend to stay away from most things weird (I say most, hehe). While I have personally traded lumber from time-to-time I usually shy away from it just because there are so few participants and because the market is quite volatile.
Craig asks (6:41:30 PM):
I have 4 MAR 07 Sugar 1300 puts. Profits building. Where would to place a mental stop for this trade? I chose 1350, but is that too close? And how do I use Trend Seeker in my exit strategy?
Hey Craig, I mentioned in my reply to watchman8 that you should always have a plan before you enter a position -- ALWAYS! So always have an idea as to what you'll do if and when the market moves as you anticipate. That said, I can't tell you where to exit or place a stop. Personally, I prefer to trail a stop above resistance or below support. If the market breaks the level I'm watching, then I'll exit the trade. An alternative is to simply watch Trend Seeker. If and when the trend changes, many traders will exit at that point in time.
colin asks (6:48:50 PM):
Hi Jim, Thanks again for your weekly video lessons. I've been extending my technical chart analysis into the stock market. It is amazing to see the accuracy of the formations we have been taught. My questions is regarding how much is included in the " trend seeker"....all the tech guys in stocks talk about the 200 day moving average. It got me wondering what was bundled in to TS. Thanks...colin
Hey colin! Isn't it interesting how formations appear over and over again on all kinds of charts? In addition, it's amazing how they will repeat over decades too. Anyway, there are a lot of computer generated indicators built into TS. The good thing is it's all narrowed down and easy for us to tell exactly what TS says about a particular market at a glance. To me, that's much better than trying to read a bunch of mumbo-jumbo on a chart. Thanks for the kind words about the videos. I hope all of our Course Members are taking advantage of them.
John D asks (6:51:34 PM):
Do you use moving averages as corboration or confirmaton for some of the chart formation indicators that the WGB system relies on?
Hey John! Nope, I use exactly what you see at US Charts Online and what's taught in the WGB course. The beauty of price charts is that "price" never lies! It does what it wants, when it wants. The patterns take shape and once we discover them it's our duty as traders to paper trade them!
Santiago asks (6:52:27 PM):
No ?, Jim. Just want to say that this is my first time on the Chat Room. Like the format much. Did not have any questions ready, but will prepare for next time.
Glad you are with us this evening, Santiago. We look forward to hearing from you again.
Bud asks (6:55:25 PM):
It seems there is a lot of timid people out there, including me.But this my first time on and know not enough to ask questions yet, so, i'll just say "hi! Jim and wish you well in takeing over for Ken.Best wishes.
Hi Bud, no need to be timid. We are here to help you! Whether it's asking questions here on the chat or calling a Course Counselor, we are here to help! If you need personal assistance call a Counselor, they're happy to lend you a helping hand. BTW, Ken is still "the Man!"
Dave C, Natick asks (6:57:15 PM):
Gotta tell ya, US Charts is the cat's meow! My broker's quoting service has been down for some markets all week, but with US Charts, I am able to figure out where I am each day. Without that, I would be totally unaware where I stand in the energy markets.
Fantastic, glad you love the service! Wait to you see what we have in store for you and all subscribers. We have a lot of improvements and additions coming down the pipe. I'm very excited about the changes and I'm sure you will be too!
watchman8 asks (7:04:43 PM):
Hi Jim, We began trading real money in May, learned some hard but valuable lessons about having exit strategy in place. Started with $3k, and was down to about $1,200 last week, now back to over $3k!!!!!! Question: If purchasing more than one option at the same strike price, is there still just one commision/fee or is there a comm./fee for each option?
Hey watchman8, trading is all about learning lessons. The learning never stops! Glad to see you've made a recovery. In regards to commissions. . . there's a commission charged for each option you purchase. It doesn't matter if it's one or ten. You still gotta pay the man! Keep on truckin'!
Neal asks (7:07:23 PM):
I need to understand more about the hi-lo breakout strategy because it seems to have a philosophy opposite the 123 top/bottom formation strategy. What hi-lo material is available through KRC?
Howdy Neal! You are so very right about the Hi-Lo Breakout strategy. In fact, it was developed based on failed 1-2-3 formations. You can find the complete strategy in the Strategy section at the WGB Members site. Login at: www.wgbmembers.com and mosey on over to the Strategy section.
MH from Oregon asks (7:10:07 PM):
I love the on-line charts as well as the paper charts - hats off to all of you! Are you planning in the future to add any other indicators such as Moving Averages, ADX, Net trader positions, etc?
Not at this time, MH from Oregon. I learned from Ken that the simpler I keep my trading the better off I am. Therefore, I don't see me getting behind a big push for a lot of indicators. By the way, basically all indicators lag price action. Sooooo, that's why I focus on price charts so much.
Adriana asks (7:13:33 PM):
Hi Jim, My broker is suggesting I enter a spread between Corn and Oats. What do you think?
Hello Adriana! Before you ever take advice from a broker always remember what Ken used to say. . . "nobody cares more about your money than you do!" That said, the reasoning behind the WGB course is to teach you how to trade -- not to take the advice of a broker. Learn to make your own trading decisions. If you're not quite comfortable doing so yet, paper trade until you are. (Ask your broker how many of those spreads he owns!) I wish you the best!
stargazers asks (7:15:38 PM):
Evening Jim, We would like to take this opportunity to thank you for the weekly videos, they are informative and well done. Question: Doyou use the Triple Zone System as outlined in Burton H. Pugh's bookA Better Way to Make Money. Thanks from Ontario, Canada.
Thanks, stargazers for the kind words about the videos. Glad you find them useful and informative. In regards to Mr. Pugh's book. . . while I've read it and really enjoyed it, I do not trade using that method. If you have the time I suggest you paper trade it. I'd love to hear about your results.
Rocky asks (7:18:21 PM):
When you see a good run-up and then the price begins to stall do you get out of your position?
Not necessarily, Rocky. It depends on what my trading plan says for me to do. While I usually have a profit target in mind, I always trail a stop. That's usually my plan.
Bud from Houston, TX asks (7:20:52 PM):
just curious Jim... I see that Paul is from Ontario. I wonder what other countries are among the memberships here?
Hey Bud from Houston, TX! If memory serves me right there have been Course Members from over 80 different countries throughout the years. That's why it's called the "World's Greatest Business!"
Paul Eddy Farnham asks (7:25:20 PM):
My broker used the term "you want to adjust your risk to break even."What do I do and how do I do it?Could you please explain?Thank you
Howdy Paul Eddy Farnham! Adjusting your risk to break even (a.k.a. in trading lingo is known as "BE") simply means to move your stop to your entry point plus commissions and fees. For instance, let's say you buy a corn futures contract at 250 and your initial stop is at 240. The market moves to 260. You then move your stop to break even at 251 because commissions and fees total $50 (each cent in corn = $50). Hope this helps.
Barkn asks (7:27:56 PM):
Jim, any idea when Ken's "My Favorite Market Now" DVD set will be ready for shipping?
Hey Barkn, The DVD is currently at the duplicating house and close to being ready to ship. We are thinking they'll go out probably during the first part of September.
David asks (7:39:06 PM):
How do you use the Trend Rating? It seems to reflect only the previous days action. I enter the market on a formation and an "UP Strong" --- the next day it's "UP Weakest." Did I make a mistake?
No not at all, David. Remember the markets are always moving. The Trend Ranking is based on the last several days of price activity. If you have a chance watch the Trend Seeker video (the link is at the top of the Trend Seeker page). I provide detailed information about the Ranking and I think you'll find it helpful.
stargazers asks (7:39:50 PM):
Hi Jim, Do you think it would be possible in Ken's Chart Book to have all the same commodities grouped together ie: sugar daily, wkly,and monthly, and also maybe in alphabetical order so they are easierand quicker to find? Thanks again.
Yep, that's in the works too. We have a lot of goodies coming your way with the new site design. Stay tuned!
Andrew in PG CA asks (7:42:01 PM):
Hey Jim, I just want to say I love the weekly online lessons! Reading these techniques in a book is good but the videos have a way of going in much deeper and in a very hands on way. Thanks!
I'm glad you enjoy them. They are a lot of fun to do. I feel the same in regards to reading versus watching someone explain the technique. For me, the visual tends to really sink in. Thanks again for the kind words.
Carlene Thompson asks (7:46:28 PM):
Hi Jim, I don't know if my question is reaching you -- I am Carlene and again I thank you for this opportunity. How do I know the best options to buy? Give me an idea of what to bear in mind when buying. Thanks.
Hi Carlene, Do you happen to read the "It Just Happened" email messages we send out each week? Those little beauties are real nuggets and contain all the information you need to help make a paper trading decision. Each issue provides charts and actual option strike prices that we are looking at. You can find current and back issues in your Member Mailbox at: www.wgbmembers.com . Simply log in with your username and password and you'll find a real treasure chest of information at your finger tips. If you aren't receiving them, call a Course Counselor (541-955-2885) and they'll make sure you do.
Bud from Houston, TX asks (7:49:04 PM):
After seeing TS show a strong change for Palladium today, I looked for an option. Whoops! no options were available. Same with EuroYen. Gee! I thought all markets in the uscharts co. trade options. No?
Not all markets have options available. That's a decision the exchange makes. If there are options trading, US Charts will display them. Palladium does not trade options. The EuroYen, however, does. If you don't see any EuroYen options listed it doesn't mean you can't trade them. Call your broker and have him throw a bid out there for you. You can make the market yourself.
Mike in Houston, Tex asks (7:52:37 PM):
Jim, if wantng to trade a Dec. contract for example, and the font month sept.contact broke through a trend line or 123 formation but the Dec. did not, do you wait or do you place your order when the front month tells you.
Great question! This is a tough one since the September months are about to expire. . . If I saw an opportunity appear on a September chart today, but not on the December chart. . . I would personally wait for the December chart to breakout. The reason is I don't want to trade the September market because it's about ready to stop trading. I want the month I'm trading to have and breakout of the formation.
KenF asks (7:55:45 PM):
Jim, it would be really helpful if you would date communications, strategies, etc. Is the Strong 1 Strategy in the members section the new or old - a revision date would keep everything clear. None of your "happenings" communications have a date on them.
Hey KenF, This is the first time we've revised a strategy and we just placed the updated Stong1 Strategy on the site today. We'll place a revision date next to it in the next couple of days. Actually all of the It Just Happened communications are dated two different ways. First, the file name is the date it was sent out. Second, if you log into the WGB Members site you'll find all of the links in your Members Mailbox with a date next to the file. Hope this helps.
Carlene Thompson asks (7:57:09 PM):
Hi Jim, I am new to WGB also and I would like to thank you for this opportunity. I started my paper trade but cannot uderstand if I am buying correctly.
Hi Carlene, Be sure to give a Course Counselor a call. They'll walk you through the steps you need and make sure you understand what you're doing. Don't be shy about it either, we are here to help!
Tre-Tre from Toronto asks (8:01:31 PM):
Jim thanks for carrying on kens good work and I love those video trading lessons they help a lot.
Hey Tre-Tre! Glad to hear from you. Long time no see. I appreciate your kind words and am glad you enjoy the videos. Stay in touch!
jimmy d asks (8:05:01 PM):
Jim, I notice that sometimes 1-2-3 strategy and hi/lo do not always coincide. What do you do?
Hey jimmy d! (Is that short for jimmy dean?) Actually the strategies will never coincide. They will put you in the market in opposite directions. For instance, a 1-2-3 bottom formation gets you in a market that hopefully advances. While using the Hi-Lo Breakout strategy will get you into that same market to the downside. The 1-2-3 strategy is a trend reversal strategy. The Hi-Lo Breakout strategy is a momentum strategy or trend following strategy. Hope this helps.
fix and fly paul asks (8:07:16 PM):
Jim: Any way to review past Friday Night videos? I frequently travel and have misse a couple, not to mention being able to review a few I've seen. Thanks for everything.
Howdy fix and fly paul! Yes, once we go live with the new US Charts web site we'll have all the videos archived on a special page. That way you'll be able to review them at your convenience. Thanks for stopping by tonight.
Barkn asks (8:08:46 PM):
Jim, if you are referring to "My Favorite Market Now" being shipped in a few weeks... Awesome. I am excited about getting that program. Ken left us a great teaser on the website to get me interested. Thanks!
Hey Barkn, Yep, that's what I'm referring to. . . I was there when Ken filmed that beauty and I can speak first hand that you'll love it!
Well that's it for this month. Keep in mind, that you're not alone in your trading journey. US Charts Online, myself, and our wonderful Course Counselors (541-955-2885) are here to help you become the best you can be. On that note, be sure to check out our weekly video trading lesson at: www.uschartco.com . This is a fantastic teaching tool and free to all Online Chart subscribers! (The video link is in white text located at the top of the very first page you see after the disclaimer when logging in.)
Finally, make sure you have a plan prior to entering any trade and use stops to protect your trading capital. As a trader your capital is THE most valuable asset you have! Trade your plan and plan your trade!
Plan your trade and trade your plan!(tm)
My next chat will be on Thursday, September 21, 2006. God Bless and I look forward to seeing you then!
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