Howdy and good evening! Trader Jim here. . .

Thanks for investing the most precious commodity you have with me and your fellow GBE Course Members tonight -- your time!

As always we have a lot to chat about tonight. After breaking out of trading ranges near mid-May, the majority of the Grains are back inside those ranges. That said, since we last met several markets really got after it! Virtually all of the Currencies moved very nicely and in some cases triggered multiple MET triggers a long the way. To top it off Crude Oil also made a nice run.

And I should mention that for the most part just about all of the markets mentioned above were (or are) featured in my nightly Premium Alert Service™ (PAS) videos.

Recently things have slowed down just a bit -- excluding the crazy action in just about every market during Monday's trading session. The slow down, however, simply means we have to be patient and let the markets come to us. Don't force the setups, let them materialize and then get on board! As I say quite often, patience is the key!

I encourage yuou to freely share any of your recent paper trading or real money market endeavors. Discussing your trading experiences lets others know they are not alone in this business, and it's a great way for everyone to learn from one another.

Discussing your market experiences lets others know they are not alone in this business. So please feel free to share your excitement, enthusiasm, and dedication. It provides others hope and optimism of what's to come.

I'd like send a big "Thank You" to Ken Roberts. Ken started introducing folks to the Greatest Business on Earth™ over 20 years ago. I was fortunate enough to not only be a student of Ken's, but I also had the great pleasure to work for him for 12+ years. I'm happy to be able to share with you what I've learned over the years.

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.

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. Please contact one of our Course Counselors if you need assistance with any of the introductory principles. 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 GBE strategies or US Charts, please identify WHICH STRATEGY AND/OR MARKET you used. Also, when relating trading experiences and/or results, please provide details: Futures contracts, options, option strike prices, options AND futures, real money or paper trading, and contract month etc. This really helps your fellow Course Members follow along and learn from your experiences.

From time-to-time you may notice that I'll use a bit of "chat short-hand." If you see LOL for example, it means Laughing Out Loud. Or TS which means Trend Seeker. These are the two most prominient bits of short hand you'll see me use.

Welcome, donahuenew! I don't use options as insurance when trading futures contracts. It's not a strategy I care for. The reason is the purchase of that option is an expense. Therefore, you begin the trade in the red, i.e. a loss that you have to make up.

For example, if you go long a futures market and buy a put option for protection (instead of using a stop) you have to pay for that put option. Let's say you pay $500 for that option. Your futures position has to make $500 before you're at break even. Plus, for the majority of the markets the options expire the month prior to First Notice Day of the futures contract. So you're back to needing a stop in place or your position is naked.

Hope this helps.

Boy mastercnsltcy, I'm not sure there is such a thing. That said, the Grains are probably the easiest markets to calculate profits and losses. But in this day and age there are very few slow moving markets. I guess if I had to point to one market I'd probably say Eurodollars. But even that might be a stretch.

I suggest you paper trade as many markets as you can. Doing so will really help expand your learning curve.

Thanks for joining us tonight.

Good question, vnormth! I will typically use the price of the breakout about 99% of the time. However, I don't think you can go wrong using that or the angle of the line as you mention.

I hope this helps.

Awesome, Teresa! Glad to hear Brian at Daniels is helping you. They are a great bunch of guys over there and I can't say enough good things about them.

Sounds like you're on the right track now with proper option selection too! Way to go!

Please keep in touch and let us know how your journey progresses!

Glad you're back with us!

Frankly Stan from MO I don't pay a bit of attention to it or those who use the terminology. One man's oversold or overbought market is another man's strongly trending market!

I just trade the trend until it ends! Remember, as chartists the one thing we have going for us is the charts don't lie!

Good question, mldumm! Stop placement is such a personal thing. Breathing room for one person might be a "choke hold" for another. Typically though I will trail stops just beyond points of support or resistance. That said, I may use a level that formed one day ago or a few weeks ago. It really depends on the market and the volatility of the market.

If you follow the Premium Alerts, what you see within the daily videos is pretty much what I do on a daily basis.

Well cschrader, it sounds like your broker had your best interest at heart. However, if you really want to trade a certain strategy you might want to fill your broker in with what you're plan is. Perhaps he would have had a change of heart.

That said, I'm not sure why you would have wanted to buy a put option. While it may have worked out, the Low Ball strategy criteria were not met. So no Low Ball entry would have been initiated. Be sure you read the strategy again and make sure you follow all the steps. In this case Trend Seeker(tm) still said the trend was up and a formation was not in place. So two of the three steps were never in place.

You can trade options, peter. But for the most part even those will be expensive in the Crude Oil market.

When trading futures contracts you'll always have a margin requirement. It doesn't matter if you buy or sell the futures outright or trade spreads.

Well Kailua Girl that's a pretty open question. A couple of the more volatile markets of the last several months have been the mini-Dow as well as the S&P 500 emini contracts.

During the last month Wheat made a 60+ cent move higher and has since given it all back.

Be sure to take a look at the charts of these markets as I think you'll have a better understanding of what I mean.

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Well I'll just be blunt. . . I don't watch the news , haven't watched a financial channel in weeks, nor read a web site news report in a month or more. Because of that I didn't even know of any unrest in Iran. Yep, you read it here. I had no idea. Frankly, I don't pay attention to any of it. In my opinion all the news is slanted to one degree or another. And to top it off, when was the last time you heard good news?

Anyway, like I mentioned earlier, I don't trade based on any report. I just like to know when certain things are coming due. That's about it.

Good question. Thanks for stopping by tonight.  

I'm very familiar with it Crawf! I used to trade it for Ken Roberts back in the day. To my knowledge the VLI no longer exists. At one point we actually switched to trading the NYSE using that strategy. But that also became so thinly traded that it didn't work very well.

I'm sure that strategy could be adjusted for use in today's bigger stock indices. It's just that it would take a lot of research to find out. Maybe one day I'll have some free time to give it a shot.

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Hi timbo! I assume you're talking about futures contracts? If so, yes, the margin money is put back into your trading account.

Thanks for the nice words about the Premium Alert Service videos. Glad you find the service useful.

Thanks for sharing, grampacharlie! It's exactly what I recommend to folks whenever I'm asked what they should do. It really gives your head a chance to clear and allows you to approach the markets with a fresh mindset.

I'm glad you're back in the saddle again (or how about my take on the band Aerosmith's song. . . I'm back trading cattle again. . .LOL)

larry, this is very typical for those just starting out in the business. While it can be frustrating remember that it's a learning process.

I would always shoot for at least a 2:1 risk/reward ratio. Keep doing what you're doing. In the long run ti will pay off the way you desire. You simply have to maintain the discipline. I think modest goals and protecting your account as the number one priority a good option.

Maybe consider paper trading a bit more to find exactly what works for you. That will typically provide a lot of answers if you're honest with yourself during the paper trading process -- and I have no doubt you will be.

While I do talk about three different approaches to trading options in the Grain Report, there is one specific strategy I prefer for this method and it is option based.

Welcome aboard, BUZZ WYLIE! You are absolutely correct in saying that margins are higher. The increase is basically due to the increased volatility of the last few years.

One good thing though that has come out of the volatility is that if you're a futures trader there are many good and heavily traded mini contracts available. Any broker should be happy to provide you with a list if you're interested.

I've marked a couple levels in blue on the chart below. Right now the 600 level is key. If it's lost, the next major level is the bottom of the channel.

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Thanks for stopping by, Bonita Joe! Yep, the markets have been rather volatile and of course uncertainty is always part of the trading process. I think the best thing we can do to combat the emotions etc. is to make sure we always have a plan for each trade. Doing so really eliminates a lot of the bug-a-boos we tend to put into our trading.

Thanks for the nice words too. And just in case you couldn't tell, I'm very proud of my son on his special day. (Bonita is referring to the picture I posted in my blog of my son and myself.)

I'll pass on your idea, NYC Kidd! If I may, I'd also suggest sending in a message with your requst via the link at the very bottom of any US Charts Online page.

It looks like this: We welcome your feedback, or to report a technical problem or error, click here.

Great question, yogii! I personally like this and my plan is to actually produce a Master the Chart DVD about this scenario down the road. Anyway, many times with the front month contract being so much higher the further out months are almost pulled up to a similar level like they're magnetized! Of course there are no guarantees that this will happen, but it does happen quite often.

Anyway, like I said a DVD is in my thought process and thus it would require a lot more time and a bigger explanation to explain this phenomenon. Nonetheless, hopefully you find what I mentioned above helpful. 

Thanks for the nice words, Trader Dave! If a contract is about to expire I won't rollover to the next trading month unless a chart pattern has formed. For me blindly jumping in the next contract doesn't make much sense. I say this because many times the next contract month chart may look completely different. So I wait for a formation to develop or even something like a MET entry in the direction of the Trend Seeker trend rating will work.

Rolling over is a simple matter of liquidating your current positions and entering new ones in the next contract month. For example, if I was long July Corn and wanted to rollover to the September contract I'd sell my July positions and buy new September positions.

Hope this helps.

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I have a 1-2-3 top formation marked on my chart (see below). But won't trade it until Trend Seeker confirms the down trend. Right now TS says the trend is neutral.

Be sure to check out my chart book at US Charts Online. I follow a lot of other markets there and you'll find my notes right on the charts.

Well that's it for this month. I want to thank each of you for investing your time with me tonight.

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 my weekly video training lessons at: US Charts Online. This is a fantastic teaching tool and free to all GBE Members and US Chart Online subscribers!

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!

Plan your trade and trade your plan!

My next chat will be on Tuesday, July 14, 2009. God Bless and I look forward to seeing you then!