Chat Archives
Let's Talk Trading (tm) with Ken Roberts
from 08/06/2002
As we begin this evening's session, let me state the reason I conduct these monthly chats: to provide you the opportunity to ask questions and pick the brain of a successful, long-time, real-money trader. It's not the highest and best use of our limited time here together for me to define basic terms and explain introductory principles taught in your TWMPMM Manual. That's what my Course Counselors are here for... Now 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 along those lines, so much better. Alright... I've got a Fuente Opus X Robusto fired up, here's our plate of freshly baked ranger cookies, the coffee's poured, so let's talk commodities!
Rocky asks (6:10:54 PM):
Rocky from arkansas here do u think 2 9550 puts in mar03 eurodollor for 1 point was a good purchase?
Right off the bat, Rocky, I'd say yes it was (how can you go wrong for $25?!), but I must ask: Is that the farthest out in time that puts were available? Remember: TIME is what you're always after in trading . . . . Thanks!
coffeman asks (6:11:54 PM):
What's the name of the book that talked about millionaires whose lives got worse with the new found wealth?
I don't know that it was ever published, Coffeman. I kept hearing the study mentioned on CNN. Please let me know when you find such a published tome. Thanks!
ML asks (6:14:21 PM):
Could you explain what a "silent stop is", and how you use it in your own trading?
If I wish to place a stop, I tell my broker who then sets an "alarm" on his computer to let him know when that price in that market is hit. He then calls the floor directly and places the order at that time. This way, no open order is sitting there for a floor trader to learn my trading plans by.
Jim asks (6:15:40 PM):
good evening from massachusetts! are you watching the currencies? looks like the dollar may have found a bottom. as it strengthens, the euro, pound, and swiss franc fall. what do you think?
Yes, Jim, the U.S. Dollar's bottoming and so's the Canadian Dollar.
emtrading asks (6:18:06 PM):
Good evening Ken. I was wondering what your opinion of the Euro Dollar is these days? I have a couple of Euro puts that aren't even trading right now. What happens with them, now that I have purchased them, and they aren't showing as being active trades?
It's EXTREMELY high now, emtrading. Yes, puts are smart now. What you're describing are options that have gone "cabinet," which means they aren't trading. But it doesn't mean they're "dead." I think of cabinet as meaning "coma." They're in a coma, but they can come to life at any moment the Eurodollar begins its plunge! Good going.
Bluerose asks (6:19:57 PM):
Good evening Ken I hope you had a marvelous birthday and may God grant you many more! I look forward to these monthly chats as part of my continued education. After deciding which options I was going to purchase and deciding the strike prices I put in my bids at half the price or better for the options I wanted and they were filled. What is interesting is that if I bid let's say 4 points or better it is usually filled at the 4 points when I go to check where the price settled it is lower than what I paid for the option. Seems like I get filled until the market gets that low, is that the way it supposed to happen?
That's typical, Bluerose. An option actually has to trade BELOW your offered price before your order is filled. (But PLEASE don't ask me why . . . .). Thanks for joining us this evening.
Contango asks (6:22:30 PM):
Hi Ken! A question about weekly and monthly 50% levels...in theory wouldn't they both always be exactly the same unless you put some time restriction on the weekly, like 5 years?
Yes, I think that's true you deep thinker you! Remember, a weekly and a monthly chart are created from the same information: the front-month daily. The only difference is the layout (e.g. each vertical line on a weekly summarizes one week's prices whereas on a monthly chart, each vertical line summarizes one month's price action).
Niroo asks (6:22:48 PM):
Is the Chat Room on at this moment or not?
Wait a minute, let me check . . . .
HatetoWait asks (6:23:51 PM):
South Bend,IN...KenI've been purchasing coffee call options for about a year and a half. If the front month of a commodity is in a narrow sideways channel, but the monthly chart is in a downtrend does this indicate that the trend will continue downwards? Thank you.
According to trends, I think that would be true. But remember: Trends always change.
Drew asks (6:27:44 PM):
Good evening Ken and Friends. Do we have a 1-2-3 Bottom in coffee??! By the way, do you know what the specs (margin/maint & tick value)are for the new mini-contract in coffee?
Yes, Coffee's working on a 1-2-3 bottom formation (again). No, I don't know specs on the new mini coffee, but call any broker to find out. Thanks!
RoyalFlush asks (6:34:31 PM):
Several course memebers have asked "who pays such high prices for futures and options" and your answer has been, " someone who is covering losses". I don't understand, please explain.
Here's an example: In futures, you've heard of "locked-limit" moves. This means the futures market has risen or dropped its limit and no one can get in or out. But this cannot happen with options. Options ALWAYS trade, even during lock-limit moves in the underlying futures market. So if you're long coffee futures and it's dropping in locked-limit moves, you can hedge those losses and purchase an (expensive) put option. Think about it awhile . . . .
Bajafishr asks (6:35:34 PM):
Hello Ken, I made money on Oct. Lean Hogs on the way up. It looks ready to go back up. Would you look at options or stick with a futures contract? I have only been doing this for real for a month, but it still gets confusing. P.S. I started June 28. as of today I have profited $3800.00 Thanks Brian.
Thanks Brian. That's like asking me whether YOU should buy a Chevy or a Ford. That's up to YOU. Sounds like you're doin' great . . . .
GYPSY WOMAN asks (6:36:38 PM):
Good Evening Chief Cohiba and all! Have been looking at SugarOptions past the ones I am holding for March 03 and see that I can go out thru the July contract for about the same price as the March AND May Strikes, buying more T-I-M-E! Thinking about using Delta Options on them "if they make $ sense". Your thoughts on that, please...
Good one! Always go for time. Yes, if the Delta makes $ sense, bid half!
ohana-oh asks (6:37:23 PM):
Hi ken, from Honolulu. Started paper trading just this week, so have been trading mostly Mar/May 03 contracts. When can I reasonably expect some difinitative movements on these far out contracts?
Wait, let me get that crystal ball I saw lying around here . . . .
jsmulliken asks (6:38:14 PM):
...from NorCal. Ken, how do feel about the Elliot Wave principal? Does it have any relationship to the formations that you have taught us? Thanks.
Hello jsmulliken. Did you watch my Paper Trading Video . . . ?
mexter asks (6:40:33 PM):
What is the upside target you are currenlty looking for in Corn right now?
362.5 on the Monthly. (Is this a new way of getting me to calculate those 50% levels for you?)
tmetze asks (6:41:56 PM):
Tmetze from Sumter South Carolina....Ken I have been away from trading for a year and a half. What is your advice for someone seeking to get back into trading?
Check your charts. (And it helps to have a box of Krispy Kremes by your side as you're doing this.)
SaratogaBill asks (6:42:44 PM):
Ken,Thanks so much for the chats. Ten dollar options (strike) are pretty cheap a year out and would pay a small fortune if silver ever retraces that $50 run in the seventies. A decent strategy? Thanks again.
Yes, if you plan on staying in until that takeoff occurs. Thanks!
TonemasterP asks (6:45:30 PM):
Hi Ken, TonemasterP here from Port St. Lucie, FL. I know that you don't like using fundamentals to determine the direction of a certain commodity, but when a market is influenced so much by the weather (grains) how do you ignore those opportunities ? Thanks for everything, YOU DA MAN !!!!
Thank you, TonemasterP! Here's why: Once in the U.S., there was a drought. Everyone jumped into the grains for that reason. The grains promptly DROPPED, baffling everyone. Then the news came out that there was a bumper crop of grains in Australia! Of course fundamentals drive markets, but there are just too many variables for you and I to ever know. But technical traders (like me) believe that ALL the variables that apply are built into the price chart.
rc28 asks (6:46:13 PM):
Ken, I'm looking to make trading my primary income. I was laid off from a telecom company last month. I've made $1100 last week trading the EuroDollar and Silver. I'm currently looking to short Dec Lean Hogs and longing Dec Coffee.
Thanks rc28! Stick to your plan!
ToothDoctor asks (6:48:20 PM):
Hi Ken, Liquidated October cotton 48 calls bought for $145 each for $1200 each. Only held them 70 days. Still have Dec 55 and March 57 Calls. Whats your take on cotton?
This is another trick to get me to compute your 50% retracements for you, isn't it?! My Weekly 50% = 55.5 and the Monthly's even higher! (I've cott on to your trick . . . .)
dejongster asks (6:49:58 PM):
How does previous performance and seasonal trends enter into decisions made with regard to contracts? Do they help in making an informed decision?
Previous performance certainly factors in, since that would be past price movements shown on the charts. "Seasonal trends" play NO part in any trading plans of mine. Thanks!
BasicInstinct in Den asks (6:53:17 PM):
Hi Ken, I first wanted to say thanks for keeping the archives, they are invaluable! Second, I love to play with numbers, so paper trading is something I really enjoy. I have noticed however that if I papertrade (using futures) a commodity that stays low for a long time (say 2 years), I am losing a lot of money due to time value. I've found that if I trade a contract that's a year out, it helps to minimize that loss, but there is still a loss. My question is, you have been in markets such as the yen and coffee which have not "YET" made their move...when they finally do, do you find that you will recover what you've lost through time value? And on the same line...I haven't studied options nearly enough but it would seem that they offer a good way to trade for the long term without the affects of losing so much to time-value, what are your thoughts on that? Sorry for typing a novel...so many questions, so little bandwidth hahaha..
That's okay, BasicInstinct. Good question. Yes, DO learn about options. They CAN do what you suspect. And yes, you can actually go in the hole in futures if you have to roll and roll and roll. This is where having a LOT of cash becomes necessary to ride a market out. Wait'll you see what I'm working on now (and have been for about 3 years). It'll knock your socks off! (I'm sitting here bare footed right now . . . .)
DavidM asks (6:54:30 PM):
Ken, I'm long one Sept coffee from 52 cents (so I'm down like the cattle rancher). If I switch out to a farther month I must pay a higher price and if prices stay down I may lose value in that contract month as well. Which month would you switch to and is this what you would do until things change? Also, I have three May 03 150 calls for 50 points and will follow OPIP as we go. Go coffee! Your course has changed my life. Thank you!
Thanks DavidM. I'd stick with options now in coffee for the reasons listed in that last question/response. (Your socks are going to get knocked off too!)
ScottnHouston asks (6:55:28 PM):
Hi Ken, thanks for these "very informative" sessions. When hedging do you buy your put/call first, or do you hedge after you go short/long a futures contract?
ALWAYS put your "insurance" (option) on first. THEN add the futures contract. Otherwise, you're exposed to unlimited risk. Good question.
shady asks (6:55:57 PM):
SHADY ASKS:KEN, MY BROKER KEEPS TRYING TO GET ME TO SELL OPTIONS WAY ABOVE THE MARKET PRICE. HE TELLS ME I SHOULD DO THIS WITH NO QUESTIONS ASKED. WHAT DO THINK HE IS TRYING TO DO?
Generate commissions for himself. Don't do it! Just say NO!
ConvervativeinUtah asks (6:56:46 PM):
I just read your answer to emtrading, about "cabinet" prices. Is it possible to purchase "cabinet" options?
No it's not. (But I always make the bad joke to my broker and say "Well, if they're cabinet, I'll take 1,000 of them!)
Lily asks (6:57:27 PM):
My broker suggested I sell my Euro Fx Put for a $50 profit. I laughed and said it wasn't worth it because I wouldn't even cover my costs. I might as well hold onto it. I can't believe what a goof he is!
Good one, Lily. I'm proud of you. It's YOUR trading plan and YOUR money . . . .
Jim asks (6:58:04 PM):
hey ken!! i went short on the canadian dollar fron its 1 2 3 top and had a great trade!! thank you!!
Good one, Jim. Thanks!
Kaery asks (6:59:31 PM):
Hello Ken,Correct me if I'm wrong but doesn't the US dollar need to go to it's monthly target of 99.86 before we can be more confident that it is bottoming?Thanks!
Yes, Kaery, but NOW'S the time to start pricing those calls! (And many times in the U.S. Dollar they get VERY, VERY cheap . . . .)
Miely asks (7:00:36 PM):
Hey Ken! I was wondering if you were still in cotton? Thanks!
Sure I'm in cotton, Miely. I gave up polyester years ago! Yes I'm long: waiting for weekly and monthly 50% targets to get hit!
Drew asks (7:01:51 PM):
KHello Ken, this is Drew from San Diego area. Ken I took TI and TII done a little paper trading years ago and then went in with both feet in 1995 I was shorting yen and I made a bunch of money. I changed brokerage firms and found myself buying all kinds of grain contracts and eventually whittled down my acct to pretty close to zero. I have not traded since, but now I think its time for me to pick my self up and start again. Where should I begin? Should I go back to following the Alert-line and paper trading? What if I no longer have TI or TII? Am I still in your computer?
Yes, Drew, you're still family here! Just call a Course Counselor and get yourself a "Restart Kit." Welcome back!
trading02 asks (7:03:24 PM):
what a way for us to spend our 20th anniversary chatting with the commodities guru! (our first time actually sending a question/comment but gobble up the printouts every month! this "business" is really our "life".) not quite sure WHY a stop on a previously liquidated futures has to be canceled. why would the stop still be active when the futures contract was liquidated? hope you had a great birthday! thanks a lot
Thank YOU, trading02! Glad you're with us tonight. A stop is technically a SEPARATE order, so it stands alone. Ultimately, you're responsible, but a good broker can be helpful if he or she watches along with you.
ConvervativeinUtah asks (7:04:31 PM):
I usually watch closely the formations in the grains, meats, softs. Real items, for real prices. I often "gloss" over the financials and indexes. They just don't seem like real commodities. They seem contrived. How do I overcome that mindset?
Take some masking tape and cover up the names on your charts. (But don't use White-Out on your computer screen. I'll never do that again . . . .)
Eric in Fort Worth asks (7:05:01 PM):
Good evening, Ken, and thanks again for these chats. The Coffee market seems as though it just doesn't want to come to life. What is your current position in this market, and how have you dealt with prices being so low for so long? Thanks.
I've just kept plowing money into Coffee.
YahBigFella asks (7:05:49 PM):
Why are only day orders accepted in Coffee and Cocoa since September 11th, 2001?
I believe it's became the New York Exchange is still operating from a temporary location (it used to be in the bottom of the World Trade Center).
DavidM asks (7:06:56 PM):
Hey Ken, I read in a some of your literature that you wanted to fly in a fighter jet. Did you get your wish yet? My son(17) wants to be a fighter pilot for the Air Force or Marine Corps (I was a Marine).
Yes, DavidM. I've been invited to fly with the Blue Angels out of Pensacola. My Dad was a Marine too!
ohana-oh asks (7:07:34 PM):
Hi Ken, Honolulu. just checking out my thinking with you. picked Coffee since so low now w/50% monthly at 161 and weekly @ 85 bot 150 May calls at .5 ($187 each). am i on right track??
Sounds good to me, ohana-oh. Now go pour another cup of coffee!
brewin asks (7:08:05 PM):
Long Island, N.Y....Please say it Ken...Have you ever seen coffee options THIS cheap?
I don't think I have, brewin. Glad you spotted them!
champagne asks (7:09:32 PM):
To.Ken Roberts, friend of universe bringer of freedom. teacher. late Happy Birthday to You with well admiration. which birthday gift did you valued most this year?
The one that allowed me to conduct a Boardroom on my birthday!
skizee asks (7:10:35 PM):
Skizee from wi. asks how close are those Oregon fires to Granrs Pass. Are you sure digger o'dell is not a commodities trader?
About 25 miles or so. It's real smokey here at times, though. Thanks!
RENO asks (7:11:28 PM):
Is it O.K. to use more than one commodity brokerage firm? Are there and rules saying you can't?
Not that I know of, RENO. And make sure you tell each firm about the other firm, just to keep them on their toes . . . .
Did I do that? asks (7:12:27 PM):
Hi Ken! If a tree were to fall in the woods, would there be a sound if only one hand was clapping?
I don't know. But let me ask you this one: If you're alone in the woods in Oregon and your wife is in Paris, France, if you say something, are you still wrong?
BasicInstinct in Den asks (7:13:23 PM):
Ken, you're not leaving this earthly life any time soon? ;-)
Not that I know of, BasicInstinct. It's a huge BUSINESS deal I have in store for those funeral-business people. But thanks for caring . . . .
Jose (from miami) asks (7:13:40 PM):
Is that cemetery deal to make arrangements for the burials of the bears in coffee and the bulls in eurodollars?
No, but that's not a bad idea.
Did I do that? asks (7:14:17 PM):
You know Ken, I was in a locked limit move once....it looked sort of like a straight jacket.
Yes, and wouldn't you have LOVED to be able to purchase an option as insurance while in that straight jacket?!
FBB66 asks (7:16:00 PM):
Hi Ken and Company. FRANK from Clearwater Fl here. Ken do you think 55pts for coffee at a 150 strike price for July 2003 is a good deal?
Yes, FBB66, and now I'd offer 25 or 30 points for it . . . . Good goin'.
Kuzie asks (7:17:07 PM):
I own a small crematorium for stiffs who weigh less than 100 pounds. It's my Weber Kettle in the backyard and it's a good way to supplement my income. So far, my neighbors just ask me if I'm barbecuing. Send E-mail for discount rates for traders.
(Do you live in South Carolina, Kuzie? Have I seen you on the news lately ?)
pepper asks (7:17:49 PM):
hello, i keep hearing bid half, what does that mean could you please explain
Yes, pepper. See two questions back. It means "Don't pay the asking price; bid lower and get a better deal."
Ironman asks (7:18:44 PM):
Hi Ken Greetings from Saskatoon, Saskatchewan, where the wheat is burning in the fields and all the farmers are depressed. I was long Sep Wheat 1 @ 276 and 2 @ 290. I got greedy and pillared up 3 more contracts @ 330. Then was stopped out on the recent drop. However I did make $6600 US. That's like $50,000 Canadian. I'm still holding 2 Dec Wheat from 341. My broker is telling me to get out. I'm holding out till 370 and maybe the big one for 486. Tell me you're still Long Wheat?!
Absolutely, Ironman. Don't listen to ANY advice your broker ever "offers."
Claire asks (7:19:29 PM):
Hi Ken--When will you be conducting another live seminar or roundtable?
Don't know, Claire, but please watch the Newsletter and Chartbook for any upcoming seminar dates. Thanks!
Final Notice Day asks (7:20:39 PM):
Portland, OR, My mom and I (both course members since 97') had a great time last month touring your beautiful office with one of your extremely nice and informative course counselors! We've purchased Dec Nasdaq 1950 Calls on 7/1 for $150 each and have tried every day since then to average down our positions with orders for more but can't get filled in any strike price. Any suggestions? Thanks!
Keep trying, FND. Glad you have your calls, but keep trying for more. Thanks!
Tahoe Clay asks (7:22:48 PM):
Hi Ken, Jim, Jeff,and Crew: What's all this about a funeral home? I know that coffee looks like its fallen and can't get up, I hope you all are all right, I just walked in the door from my drive back from Beautiful Grants Pass today. Thanks for such a great Board Room Boot Camp!!! I already overloaded my Dad as I drove by Ashland and Talked his ear on about all the things I learned this weekend (Plus I left him with a set of the charts I marked up this weekend with all the 50% we worked on, and told to just watch what happens). And all those things weren't just learned at the board room and money related either. Sunday a.m. listening to Guy Finley put a good light on truth into me, which was very valuable to me. I have come away from this weekend with a full belly (your Chef's Delores, and Deborah RULE!!!!)and a full mind. Thanks!! I think I am out of questions tonight, already asked'em this weekend. AGAIN THANKS A MILLION!!!!I am right where I need to be....
Good for you, Tahoe Clay! You were a valuable contributor at this weekend's Boardroom Bootcamp and I'm honored to know you. Tell your Dad that althought he lives in Ashland, NEVER, NEVER, NEVER wear Birkenstocks!!!!!!!
Jim asks (7:23:07 PM):
soybeans has been wild. i'm long this market and i'm using put options to protect my long futures. it keeps me in the market and allows me to sleep at night :)
Right on, Jim. Thanks!
Claire asks (7:23:37 PM):
Do you recommend using a broker or doing all your trades directly on-line?
I've never traded on-line (and never intend to). I like having a broker.
New York Trader asks (7:24:13 PM):
Hey Ken, A few years ago I bought a 650 call option in sugar for $60.00 dollars, I got out at $400.00 dollars! This option went on to $4200.00 dollars!!! I am a big believer in your option program! I now look for simular situations, what do you think about the eurodollar puts, it seems to be at an all time high and it looks like we have them in a corner..
You're seeing what I'm seeing, New York Trader. Right on!
allyn asks (7:25:09 PM):
HELLO FROM BIRMINGHAM ALABAMA. THANK YOU FOR THE BOOK LIST YOU'VE GIVEN US. MY QUESTION IS,DO YOU THINK LIMITING LOSSES TO A PERCENT OF TRADING CAPITAL IS A GOOD IDEA?
No, I'd rather see you try paper trading options. Thanks!
BigLammy asks (7:26:18 PM):
Hi Ken,BigLammy in Michigan, How are you all? just got in the market...Got march 2003 Eurodallar@ .002 2 of them (9600) puts. Then i got March 2003cocoa@ 29 2 of them (1350) puts. Then May 2003 coffie@ .78 2 of them@ (125) calls. Then March 2003 Wheat @ 3-1/4 2 of them @ 300 Puts and last open order of march 2003 Cruid oil @ .1 2 of them@ 4000 is this all right? I hope it is what this is all about. What do you think? Thanks bigLamb in michigan
Thank YOU, BigLammy. Sounds like you're doing great. Stay in touch.
Ezekiel97 asks (7:27:15 PM):
Ken, I've only started to dabble in cigars... without knowing much about them, I know I really like Davidoffs and Dunhill makes some good ones too, but I want to expand my repertoire without breaking the bank (I'm still paper trading)... what's the best way to get into cigar appreciation and learn more about them?
Go hang out at your local tobacconist, and attend one of Cigar Aficionado's BIG SMOKES if you can.
Thomas asks (7:28:02 PM):
Ken, I don't think we're tricking you into calculating 50% retracement levels for us. But you're more experienced at it! LOL!
Flattery will get you nowhere!
STRIVING FOR WISDOM asks (7:29:53 PM):
Thanks to you and your staff for all that you teach us, you are truly are a great teacher.I love watching your tapes and listening to you talk.I want to ask about the rich mans secret course. Is the book you talk about in sprail bound book the rich mans secret or is it another book all together.I truly feel I need this in my life to find out about my self.I will met you someday and thank you in person. I trade options a little, watching and learning not going to give up . I have a 750 oct 03 call in sugar .What do you have for the weekly target. Thanks again.
Okay, you tricked me: 820. Yes, that's the spiralbound book in The Rich Man's Secret Course. Thanks for joining us tonight!
fanelli,orem,utah. asks (7:30:24 PM):
Hi Ken, I'v been hearing about coffee for over a year, it took awhile but last week i decided the boat wasn't leaving without me. I now have 3 115 may calls and shopping for sept 100's-150s Thanks.
Alright! Good for you! Thanks . . . .
docme asks (7:31:01 PM):
Southern Alberta. Hi Ken. Just want to say thanks A BUNCH! I bought your course in the fall, took a while to get enough cash to open an account, I have one successful trade in Sugar under my belt and just shorted dec cocoa. Very excited and pleased to be here. Based on your course, I was looking at a 1350 50% target...after reading the archives last nite, I see that you recommend 'lowest price you can find, to highest price you can find' and calculate from there...that gives me another 100 points to savour in the future. Thanks again. Darren.
You got it! Thanks, Darren!
shortmkt asks (7:31:39 PM):
Ken, Is the sugar strategy as valid now as it was when the book was writen? I placed calls for march03 in June and My impatience is showing. By the way, I hope your trees and home are safe.
Yes they are. Thank you, Shortmkt. Don't get impatient. You're doing great.
Ty asks (7:32:47 PM):
Hi Ken, thank you for introducing me to the world of commoditites.I just wanted to know if you had any future plans to hold a round table session in Atlanta, GA.?P.S. I have experienced success in the futures market, unfortunately I have not been able to master options...please advise!
Keep working at options, Ty. They're worth it. Nothing planned in Atlanta, but keep watching that seminar calendar in the Newsletter and Chartbooks. Thanks!
Stan from Orland Par asks (7:33:18 PM):
Hi Ken, Chats are great, I've been trading real money for 2 months and the chats help me learn more. Will what you have been working on for 3 years be offered as a new course? Or on the monthly newsletter?When will it be available? Thanks Stan from Orland Park
Hello Stan. In about 3 months . . . .
Black Dog asks (7:34:45 PM):
Black Dog Enterprises Oregon. (They are big, but not for sale.) Wishing and praying for you cause of the Agness Fires. Long Oats have done well. Plan on visiting you and friends in Grants Pass soon. As a final question. . . What is going on with Gold? Thanks Rick.
Hello Rick. Gold's dropping to its 50% retracement target(s). Thanks!
The Jack of Trades asks (7:35:10 PM):
Union City, GA-- Hello Ken, I had to let you know, I received a major enlightenment after watching the "Get Going" video for the fourth time. I am now doing the OPIP thing in Eurodollars. I think it had something to do with the "If you don't do this, you're stupid" comment that turned the light on. Thanks!!
Thank YOU, Jack!
Ron from Toronto asks (7:36:08 PM):
I understand your rules for rolling forward a week before FND if long and a week before LTD if short, but what are your corresponding rules for cash settlement contracts. Many thanks.
You don't need to worry about FND and LTD in cash-settled contracts. They're just that: cash settled. Nothing is delivered!
paul george asks (7:36:56 PM):
MR. KEN ROBERTS, HERE'S A THOUGHT BUT DOES IT MAKE SINCE ? WITH EVERYONE GOING LONG WITH COFFEE AND COTTON WOULD A CONTRIAN VIEW POSSIBLY WANT TO BUY PUTS ON THESE ?
Everyone's NOT going long, paul george. That's why they're so low!
sillyhere4fr asks (7:37:30 PM):
which is better to have the paper chart catalog or online chart catalog?
Whichever YOU prefer.
Mike in IL asks (7:38:00 PM):
In regards to the "wife in Paris" question, wait I'll ask my wife...yes she says I'm always wrong
That's the answer most men get when they ask their wives this question too . . . .
GotCoffee?? asks (7:42:58 PM):
Hello Ken...I look forward to these chats each month. My Question: On your TWMPMM II tapes you say we should never liquidate an option to cut our losses, even as it nears the expiration date and the premium value gets very low. Since I've been in coffee calls for about 1 1/2 years now, I've started to liquidate 1 option when the premium drops to about a third of what I paid for it if there are less than 6 months left until expiration, and get a farther out contract with the money from the liquidated option. I keep "rolling over" my coffee options this way instead of waiting until they expire worthless, thereby losing a lot less while waiting for the big rise. I presently have 150 calls in May and July 03 coffee, and am looking at getting a Dec 03 150 call for about 80 points by late Nov. 02. Wadya' think about that strategy?
Sounds like it works for you, GotCoffee??. The bottom line ALWAYS is: Are you in the market . . . ?
trouter asks (7:43:49 PM):
hi Ken,trouter here from calgary can.,thanks to you for sharing your knowledge and wisdom with us.this is a great business with unlimited potential!No questions tonight,just enjoying the chat with other contrarians,made some decent coin lately through patience and trusting what I was taught.Thanks again,you da man !
Thank you, trouter. And because you see that I'm da man, that makes YOU da man!
ToothDoctor asks (7:44:24 PM):
No 50% calc here and have studied your courses. I always buy options for time. Have calls in rice, coffee, cotton, silver, and sugar. Puts in eurodollars and cocoa. Am frustrated with the lack of movement.
I know, ToothDoctor. We always are. But the moves WILL come . . . .
RJC asks (7:46:40 PM):
HI KEN,RJC FROM ASHTABULA, OHIO MY QUESTION IS:AT ONE TIME YOU MENTIONED THE RULES MAY CHANGE WITH OPTIONS SO THAT A TRADER COULD BUY MORE OPTIONS WITH HIS/HER PROFITS WITHOUT LIQUADATING THE TRADE. HAVE YOU HEARD WHEN THESE RULES MAY CHANGE?
No I haven't, RJC, but it always helps to call the Exchanges and voice your opinion. Thanks!
Sweet-t asks (7:48:16 PM):
Sweet-T in Washington:Hi Ken, I'm new to your chat room,as far as that goes, to anyones! ,but I'm sure happy to be here.Pass through your neck of the woods yesterday sure smokey. Ken I've been paper trading for over a year and have started trading for real. We've made a little money in bean oil so far; right now I'm short Cocoa do you have any suggestions on where or how to place your stops? Thanks!
Hello, Sweet-t. Hope you stopped by the office for a tour and a chat in our Coursemember Trading Lounge . . . . Stop placement is an art, not a science, so I can offer no hard-and-fast rules here. Sounds like you've made a great start. Thanks!
RealWest asks (7:48:58 PM):
Hi Ken, I'm from east central Alberta where the depressed farmers should start commodity trading too!! When you reach a target do you plan to exit the market yourself or do you let a silent stop loss do that for you?
After a target is reached (or surpassed), I place a silent stop with my broker to get me out. Thanks!
Jim from Kalamazoo, asks (7:49:39 PM):
I channeled the Eurodollar w/ a put and a call. The call is doing very well. I feel a little guilty that I am making money as the economy is not doing well. Then that feeling goes away. Thanks Ken!
Good one, Jim. We're all laughing with you here.
dana asks (7:51:06 PM):
Hi,Ken I'm new at this.Thanx for all that you do.My ques.You often say follow the front month of a market but trade a farther out month.Does this mean,for instance,if a front month has completed a 1-2-3 top & has broken the #2 point,enter a later month regardless of formation
Yes. Thanks for joining us this evening.
Jugfork Tup asks (7:51:54 PM):
Hi Ken: Can eurodollars go higher than 100?
Theoretically, no, they cannot. But for two weeks during WWII, the Swiss Franc DID rise above 100 because people were panicing. Good question.
xray asks (7:53:16 PM):
Xray here in WashingtonMy 1st time on this chat, a pleasure.I have a couple of 320 puts in March Eurodollar. On July 29 Euro dropped near to 330, then went back up. Was this this the 50% retrace and thus I missed it or does it appear I am still in the game??
No, xray. Look at your charts (daily, weekly, AND monthly): They're not even close to making 50% retracements. You didn't miss it!!!
bullet asks (7:53:45 PM):
After calculating the 50% level, do you have a minimum return to help determin if a market is worth entering ?
Yes, bullet. See the Newsletter (Risk-to-Reward ratio). Thanks!
sparky asks (7:55:08 PM):
Hey Ken, looks like cocoa is headed south, what do you think?
Nearterm, yes. Longterm, no. (See your monthly chart) Thanks!
Joe asks (7:56:23 PM):
Hi Ken This is surely the world's one perfect business. But how do you minimize paying high taxes any advice for all the money we make?
Yes it is the world's one perfect business (but please don't call me Shirley!). Here's what I look at it: Make so much money that it doesn't matter.
paul george asks (7:56:33 PM):
no special question, just wanted to say thanks for sharing your knowledge. paul
Thanks Paul!
Donnie asks (7:57:28 PM):
Hi Ken, Eurodollar June 95.75P were $100.00 yesterday. I know that's a little outside the daily 50%, but I thought bidding half would still be a good deal for that strike; what do you think? Thanks for everything!
Sounds like a good plan to me, Donnie! Go forth and bid low!
Coffee Rules! asks (7:58:17 PM):
Hi Ken, In the Mar S&P, Sep Euro$, Jul Coffee and Dec Nasdaq I have had problems getting fills on options even after prices have gone below my bid. Is this a fluke? Thanks! I've made thousands with futures and am just getting into options after sucessful paper trading.
Thanks, Coffee Rules! Yes, I think it's a fluke. (Someone else mentioned those non-fills this evening . . . .)
Did I do that? asks (7:58:50 PM):
Ken, can you give and example of what you mean by "previous perfomance certanly factors in" by using the coffee market? Thanks, Jason
I meant that a chart IS a picture of "previous performance."
Michelle asks (8:01:38 PM):
Hi Ken. How old is the Nasdaq? I am surprised the monthly chart only goes back to 1996. And also, how do you know what to do when a daily chart looks like a short order is the way to go but upon examining the monthly or weekly it looks like a long order should be placed? I'm confused - but aren't we all. . . in Canada?!
Hello Michelle. The Nasdaq is quite old, but the FUTURES contract is relatively new (just like the Euroyen). On a Monthly chart, silver prices really have nowhere to go but UP. But on a daily chart, prices may be making one of their many, many small retracements on the way UP. Remember: Nothing goes straight up or straight down; it makes many, many small retracements along the way. Thanks!
Oddjob asks (8:02:40 PM):
Oddjob from Mass. Hi Ken & friends! In your manual you say to use the term "liquidate" when selling your option to get out of your position. When i say this to my broker. he or she says you want to sell your option. In your manual you stress selling an option has a different meaning, always say liquidate. So when i want to liquidate my option, i have to tell the broker "sell to liquidate. Is this the correct way to talk cool in option trading ? Thanks for answering my question.
Yes, Oddjob. The point is, make sure your intentions are clear to your broker.
New York Trader asks (8:04:06 PM):
Hey Ken, New York Trader here, tell me about your Round Table videos, do they teach you how to trade using options to protect your futures trade? I have most of your courses and I love it all! You have tought me a ton on commodities and I want my dreams! Thanks Ken..
Thank you, New York Trader. Please call a Course Counselor with your question; I want to be sure you get exactly what you need. Thanks!
OR Bound asks (8:05:37 PM):
When are we going to get a glimps of this "sock-knocking" revelation? PS Thanks for your consistency. I appreciate the fact that I can count on you, your team, US Chart, etc. Consistency is the mark of a Champion. For 3 years you have not let me down. How refreshing!!!!
Thanks OR Bound! (Does that mean you're coming out to Oregon? Stop by for a tour if you do . . . .) 12 weeks . . . .
Roy asks (8:06:33 PM):
From Roy in N. CA. Big thanks to you and your staff for the weekend woprkshop in July. Great training, great place, good eats, and it was a special pleasure to meet you
Thanks Roy! Glad to meet you too. (Have you taken up cigars yet?)
mhbonanza asks (8:07:00 PM):
People ask a lot stupider questions than mine, Ken. Why don't you EVER respond to me??? mhbonanza in Missouri
I DO respond to you, mhbonanza. What's your question tonight?
Bluerose asks (8:07:32 PM):
I am stumped, since our last chat I have purchased a round of Dec options for several different commodities, two of those commodities are not being traded now one is gone to cabinet. This is my first experience, have you had options going to cabinet? What can I expect next?
Yes, lots of time, Bluerose. Be patient. Hang on.
Russ - Malibu asks (8:09:24 PM):
Dude: What's up? Just wanted to say hello from Malibu. Surf's up, grunion are running and the Sept Dow has made a perfect 1,2,3 bottom and is on the verge of breaking above 2. I've already got my buy-stop placed. Hope you're there with me. You gotta love it!
You da man, Russ! We were wondering if you were on-line with us tonight. Yes, look at those stock index monthlies and tell me you don't believe in 50% Retracements!
Well that's it for another month. Here are my favorite web sites if you're interested: www.guyfinley.com ;www.wildlifeimages.org; www.LP.org ; www.uschartco.com ; www.fourstarbooks.com. ; (new!) www.historictrees.org. My next chat will be Tuesday, September 10th. Also remember Matt's stock and commodity chat Tuesday, August 20th. And join Guy Finley's chat Thursday, September 5th at 6:30 PM Pacific Time. (And visit his site at any time to read inspiring quotes and sign up to receive a free spirit-lifting weekly Key Lesson by e-mail.) As always: Use these newfound powers only for Good. Good night!
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