Hello and good evening! Trader Jim here. . .

I really appreciate you spending your evening with me tonight. Tonight's chat is very special in that we have two exceptional guests joining us from GBE’s featured brokerage, Daniels Trading!

Please help me welcome Ken Packard and Don DeBartolo.

• Ken Packard is the Chief Sales and Marketing Officer for Daniels Trading. He's been in the commodity business for 14 years and handles all of the daily brokerage operations at Daniels Trading. He's familiar with brokerage operations and trading and is excited to answer your questions tonight.

• Don DeBartolo is a Senior Broker with Daniels Trading. He specializes in servicing GBE and US Chart Company Course Members and also creates the Daniels Trading Premium Alert email Summary every night. Don also looks forward to participating in tonight’s chat.

In addition to our guests this evening, several markets have been on the move of late, so we have a lot to chat about.

Remember, that if you've had a successful paper trade or real money trade recently, feel free to share your trade details with fellow Course Members. 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 supplies others hope and optimism of what's to come.

I encourage you 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. Plus it's a great way for everyone to learn from one another and it provides others with 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.

PLEASE 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 prominent bits of short hand you'll see me use.

Greetings from Chicago everyone!  Don and I are looking forward to informative chat with everyone tonight. 

Hi DIMITRIS! Thanks for stopping by tonight. First off be sure you keep your analysis seperate for the two markets. I just updated the December chart (you can see it in Jim's Chart Book) and it has a channel, but Trend Seeker says the trend is neutral.

First thing is to wait for TS to identify a trend and then we'd consider trading a breakout of the channel. Hope this helps!

Alabama KID - Your plan sounds very well thought out.  You're right, it is a great idea to leverage our experience as brokers and that's exactly what we'll do for you as our client.  The best clients are able to communicate very clear goals and needs and that's what you've done.  Plus, you've highlighted two important concepts - diversification and conservative risk management.  By articulating this to one of our brokers and leaning on Jim for market directional picks you should be able to employ the strategy you've described.  Give us a call and good luck!   

Exactly Technikelvin, remember charting and formations is more art than science. We each may draw our formation slightly different and therefore would have different entry points.

As far as a breakout point. . . I like to guesstimate where the breakout would be by linining up prior highs or lows at a point of where I think it would occur. Again, it's a guesstimate.

Hope this helps. Good question.

It depends on your plan mwan001. Personally I never look at reports. I let the charts tell me what to do. I feel that most information is already built into the markets. However, we just don't know how speculators will react to "reports." So it's up to us to manage trades the we see fit based on our personality and risk tolerance.

That said, you may want to approch said reports differently. I encourage you to paper trade them both ways and see what works best for you.

You bet Wayne. I've attempted to do that every week or so. In fact, I just recieved the update levels from one of the Course Councelors yesterday. So I'll try to update them in the blog on Thursday.

Thanks for joining us tonight.

Hi LasVegasMike - There's no need to cancel/replace the orders.  If they were placed GTC they're working on the floor.  Be sure they're placed as open orders...have you confirmed that with your broker?  Has the strike in question traded at all?  Is there any open interest?  How far away from the market are the bids or offers?  How far away is the settlement price every day?  Even is a strike doesn't trade, the exchange will give a "nominal" settlement based on fair value.  If other trades are taking place at near strikes and yours are within range based on delta, then ask your broker to get a bid/offer for your specific strike.  I hope this helps.    

Hi DrRyan! Stop loss placement and the amount risked is entirely a personal matter. One person might be most comfortable risking $500 per option while some else is fine with the $1,000 risk -- or any other amount.

So you have to decide what is best for you in regards to the amount risked. You can do this via paper trading and using the GBE methodology. 

Keep a close eye on your mailbox tomorrow as I'll be releasing information about Something Huge That Is Developing in the markets right now.

The potential that this opportunity has to offer is very exciting and is frankly in the infancy stages of developing right now!

I've literally rushed to put this information together -- spending the last 7 days with my nose to the grindstone preparing this program for you.

Just part of what you'll learn includes:

• A complete explanation of the special situation that's developing today
• Four separate methods you can use to trade this opportunity, ensuring that you can design your perfect trading program – one that fits your budget and trading style – and prepare yourself to take advantage of this unique market situation
• A wide variety of formations you can use to enter and exit these markets using the methods I teach
• A step-by-step guide to carrying out each of the trading methods using the incomparable tools on US Charts Online

I think you'll be blown away by what you'll learn, as they say the "proof is in the pudding!"

Hi morras - Just tell your broker you asked this question at the chat and they'll be happy to help.  We can work with you based on Jim's commentary and recs to formulate strategies and then give you realistic fills prices and asses how your trade management decisions would play out in real-time once you're in a paper trade.  Practice is never a bad idea.  Good luck!    

Azibowsky, Each clearing firm has it's own rule to account minimum to initially fund a trading account.  Daniels Trading does not have a firm minimum but must adhere to the clearing firm set levels.  Give us a call to learn more. 

But remember, when starting your own trading business it will be advantageous for you to fund your business with as much risk capital as possible.

Well zzzzz I do include these markets when appropriate and I watch them regularly. However, I just haven't seen anything taking place that I feel is worthy to post on the Premium Alerts in quite a long time.

But I do watch both markets and if I see something I'll be sure to include the opportunity.

Hi LasVegasMike - Yes, it is not uncommon for pit executed markets to place order restrictions when things get crazy.  Clearly electronic execution has the edge, but even that has occasional limitations.  Overall, electronic trading can handle the volatility better and they're more apt to accept all order types during periods of volatility.  I think the pits will always be around in some capacity, especially for options, but clearly the futures pits know their fate based on how much volume is now electronic.   

You bet Wayne! Being involved in this business is so much fun and I just love teaching and helping folks.

Thanks for your kind words.

I stick to my rules LasVegasMike which means all criteria must be met for a 1-2-3 bottom formation. That said, the 50% retracement level doesn't come in to play in regards to the formation. Unless you are using it as a target. If that's the case I'd look for a point of support or resistance and use that as a target instead.

Right now I prefter to use the channel formation in my analysis of this market.

Glad you enjoy the chats, they are loads of fun to do.

There sure is zzzzz! Simply log into US Charts Online and click on the Quick Quotes tab. Then click the 52-Week High/Low link and you'll see them all right there.

Here's a direct link: 52-Week Hi/Low.

I'm not sure what you mean, DrRyan. Profits are calculated the same way whether the option is in or out-of the-money. If you pay 10 cents for a Corn call and it's now trading at 20 cents, you'd have a 10 cent profit.

Plus remember that US Charts Online will automatically calculate profits/losses for you in Trade Tracker.

How to Trade Chart Patterns
with Early Entry Techniques™

In fact, look at any chart at US Charts Online right now and you'll see the chart has a price bar with current action but is dated with tomorrow's date.

Hi ATLAST9 - It can be a thick read, but check out Option Volatility & Pricing: Advanced Trading Strategies & Techniques by Sheldon Natenberg.  It would be a great complement to what Jim provides.  

If you can follow Douglas' teachings, you'll do yourself a great service.  So much of this game is mental.  Good luck!   

Nice job on finding the setup too!

From there you manage the trade until one of your exit points is hit. Then you'd liquidate.

Welcome The chic! Feel free to ask your questions or just sit back, relax and read about your fellow Course Members have to say.

Thanks for joining us tonight!

Dede99, I am glad you bought this up.  Make sure it makes sense to exercise an option by doing the calculations.  First subtract the underlying futures price from the strike price you have the right to.  NOW subtract the premium paid for the option because you will have to forfeit this.  Are you more or less profitable by just liquidating the contract in the options market?

Otherwise, by executing a futures contract first you reduce your risk once exercising an option.

Please let me know how it works out for you at next month's chat.

B,  The MIT order type becomes a market order once your specified price trades.  To have a four cent differential the order could have been filled during a time of increased trading activity or the opposite, very little trading.

I suggest using a limit order instead.  You cannot be filled below your price in that instance.

Find Market Tops!

Click here to learn all about one of the
most powerful trend reversal patterns

Morras, Options trading is more of an art rather than a science for those exact reasons.  Two suggestions for you:  Call your broker to determine the Theoretical Value of an option and place your order after a market has opened for the day (anywhere from 10-30 minutes to let the market settle in for the session).

Targets, Stops and Money
Management Made Easy™

Click here to learn all about our brand new
Master the Chart™ DVD set,
Targets, Stops and Money Management
Made Easy™

Glen, A personal broker as back up to your self-directed trading, 24 hour support, educational resources and market analysis, exclusive webinars and much more.

 Also, we write a nightly email covering Trader Jim's Premium Alert Videos. 

Looks like we're wrapping up, Folks.  Thanks for having us!  We always enjoy these chats.  On behalf of Don and Daniels Trading, we appreciate your time and consideration.  We thank you for your business and hope to serve your trading needs in the future.  Give us a call anytime at 800-800-3840. 

 I'll stick around and answer any stragglers.  Thanks again!  

Well that's it for this month. I want to thank Ken and Don and each of you for investing your time with us tonight. As you can tell, Daniels Trading is a first class operation and they will go out of their way to make you happy.

So give them a call at: 800-800-3840 and discuss your needs.

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!

Between chats please stay in touch with me via both my blog and Twitter. You can read my blog by clicking here. And you can follow my Twitter posts (a.k.a. tweets) by clicking here.

Plan your trade and trade your plan!

My next chat will be on Tuesday, October 13, 2009. God Bless and I look forward to seeing you then!