Let's Talk Trading (tm) with Ken Roberts
from February 10, 2004
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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 Course materials. 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...
Our cigars are lit, here’s our plate of freshly baked snickerdoodle cookies, the coffee’s poured, so let’s talk commodities!
NOTE!!! When commenting on one of my Courses, please identify WHICH ONE. Also, when relating trading experiences and/or results, please give details: Futures contracts, options, options AND futures, etc. This helps others follow along and learn from your experience too.
SusieBeans asks:
Ken, If I can no longer renew my subscriptions to GAB and TWMPMM, then how will I be guided as I learn to papertrade? -SusieBeans - Menlo Park, CA
at 6:11:06 PM
I've got you covered, SusieBeans! Stay tuned . . . . (there will always be Course Counselors AND TOVI Counselors). Thanks!
sam asks:
so what is up with sugar and orange juice?
at 6:12:18 PM
You're experiencing the necessity of the virtue of patience in trading . . . . Wait on!
Hans asks:
I am new at this and I would love to just "listen" in at all the questions and answers, this is a great way for me to learn, is this possible?
at 6:13:10 PM
Absolutely Hans! Listen to me now and believe me later . . . .
Stan_mpls asks:
Hey Ken, thanks for your great course i just got done with TWMPMM 1 and GAB.What are the 24 hour markets and how do they work?
at 6:14:58 PM
Trading never stops around the world, Stan! You can do it 24 hours a day if you like. Personally, the American markets are all I care to tackle.
Are you watching The Apprentice?! If not, there are some great business lessons being taught. You can get caught up at Trumponline.com (click on The Apprentice on the right side of the screen).
Another comment: Have you taken "The World's Smallest Political Quiz" at www.LP.org? Bet you're a Libertarian!
Stretch asks:
Hi Ken and Crew, Stretch from Swan Hills Alberta.
While going over my charts today I noticed March Cocoa for Feb 9/04 had an open interest of 16826, but the volume was at '0'. If the volume is at '0', then there can't be any trades available for any months in cocoa? Could you clearify please. Thanks and you guys do a tremendous job.
at 6:19:44 PM
Thanks Stretch. Check those figures again. I'm seeing about 10,000 volume.
Hans asks:
What is a Tovi counselor?
at 6:21:06 PM
It's the person on the other end of the line at 541-955-2797 who takes calls from TOVI subscribers (see www.tovionline.com). Thanks!
madmax asks:
hi Ken, Ric from OH. Love your programs (I & II). Got 2 questions though; 1) do you still go long on contracts that break out of a channel to the upside even though they are at multi-year highs (ie: BOK4 broke out to the upside) and 2, cotton is very volatile, I have 4 put 55 strike options I purchased for 48 pts., It now doesn't seem to follow a chart formation. What are your thought? Been a course member x5 years and find nickel and dime returns work best for me. Thanks for everything.
at 6:23:58 PM
Hello madmax. 1) Yes, breakouts of channels is still a powerful trading formation. 2) Yes, TOVI agrees: Cotton's in a strong downtrend. Hang onto that put!
richman asks:
Hi Ken, as I've mentioned in my past chat comments I've been paper trading in TOVI, options in the monitoring portfolio. Over the past month using moderate to strong, 1 day, 1 option purchase, value factor within the top 4 options. Out of 26 trades, 18 of them are in the money, +$5,323.23, 1 is zero value, 7 are negative -$1,028.25. I think this shows some pretty amazing results for TOVI's track record. These are all one optiion trades, and can be better or worse depending on when you exit, but it's still excellent results. I'd like to get other feed back on trading strategies and results from other members. thks
at 6:25:37 PM
Me too. Great going, richman! (Were you on our TOVI Chat last night? If not, check out the Chat Archives at www.tovionline.com.) Thanks!
jeffg asks:
Hey Ken! Hope all is well. Concerning OJ and sugar. Aren't May 05 sugar calls and March 05 OJ calls great values right now for getting into these markets?
at 6:27:33 PM
Watch those March expiration dates, jeffg, and you can compare (to determine value) by checking option price history at www.uschartco.com.
Mike asks:
Ken, I wanted to book a day with a course counselor. I just got my last issue of TWMPMMII and was thinking about renewing. But since I just got info in the mail about TOVI, do you think that is still a good idea or should I just check out TOVI and then decide? Either way I'd still like to come and visit your neck of the woods there. Thanks!
at 6:29:01 PM
Absolutely, Mike. Come on by! Visit our Trading Lounge and hang out in beautiful downtown Grants Pass! Check out TOVI (you can take my Tovi Tour anytime . . . .)
Kristos in Birmingham England asks:
Ken, when macho trading without stops and the time comes to roll out, would u roll out to the next contract month or the furthest "liquid" contract month? Also, do we really need tovi, or is twmpmm 1 and ted warren's trading techniques all we really need ? Love these chats ken, nuff respect.
at 6:32:03 PM
Thanks Kristos. Let me respond this way: Suppose you wear glasses and go for your annual eye exam. Your eye doctor tells you about a brand new process and surgical tool called lasik, would you look into it?
ML asks:
Are you still doing long term position trading, or are you simply following TOVI’s trends now and getting out of markets when they start moving against you?
at 6:33:58 PM
Yes, I'm still doing long-term trading (with TOVI's help) AND short-term trading (with TOVI's help). EVERY market moves against us at times, but handling such setbacks is where your preset trading plan comes to your aid.
TedfromIowa asks:
Hi Ken, regarding TOVI (awesome), looking at the Short Term Rankings, if March is in a strong uptrend, does that mean the following months are also in a strong uptrend as well since the front month is the driver for all other months that follow?
at 6:35:34 PM
Generally, that's correct, TedfromIowa, but not always. In the LONGrun, however, the front month leads the way.
Hans asks:
I have TWMPMM 1 & 2 what is GAB?
at 6:36:12 PM
The Greatest American Business Course --- the latest evolution of TWMPMM I AND II. Thanks!
DM HydroPower asks:
Hey Ken, I am going to have to agree with you for a change (now thats sarcasm!). The Apprentice is now one of my favourite shows! So many lessons to be learned, including being different, standing up for yourself, and the mother of all doctrines, BUY LOW SELL HIGH! Loved the flea market episode, and I noticed Donald's female assistant has maybe changed her hairstyle a bit? Do you think she heard us comment on that? Just logging in to hear more experiences, and to note that it was nice to see my july coffee perk up a few cents today!
at 6:38:47 PM
Yes, DM! That was a very welcomed 260-pt. move today! Hooray! Glad you're enjoying The Apprentice too. But are these the BEST people NBC could find with over 200,000 applicants?!
Paul asks:
Can you explain why in even a heavily traded market that some of the options listed are not being traded? How do you tell which ones are really being traded?
at 6:39:53 PM
Those that are really being traded with have Open Interest and Volume figures. Those listed as zero Open Interest and Volume are posted by the Exchange in an effort to create more opportunities. Thanks.
richman asks:
yes I was at the TOVI Chat, lot's of great stuff, I just sat back and listened! ( or read as the case maybe!)
at 6:40:42 PM
I KNEW you were out there!
Stan_mpls asks:
Hi Ken, i talked to my broker and he told me about the monthly report for the grains and some other markets. Do i need to pay attention to those reports or charts are enough? Also when are you coming up here in Twin Cities :) I would like to attend one of your seminars. Thanks again for all your help.
at 6:42:10 PM
Thanks Stan. No, I never pay attention to those reports (that's what I call "funnymentals" [fundamentals]). Nothing planned in the Twin Cities area, but keep watching, you never know . . . .
TedfromIowa asks:
Hi again Ken, are you confident enough in TOVI's Short Term Rankings that if you were to enter a futures market on the first day of a strong trend, you wouldn't use a stop or an option for protection?
at 6:46:10 PM
What you're describing is risky Ted. Not that some traders don't do it, but all that matters is SHOULD YOU DO IT? And only YOU can answer that.
kokos England asks:
hi ken when mocho trading do you add on break outs or peel away on the way up?
at 6:47:19 PM
I begin with a broad base (lots of contracts) at the bottom and then peel contracts off as rallying prices hit my target(s). Long live the Queen!
BENECKI BEN asks:
Hi Ken, I am paper trading options (gab) using U.S. chart on line,and I am doing well for the past three weeks and really love it.I plan to try TOVI soon. Do ya'll recommend using both while paper trading?
BENECKI BEN
LANES CREEK, N.C.
at 6:48:13 PM
Absolutely Ben! Go forth and paper trade.
Fatty Arbuckle asks:
Hello Ken from Florida. I've noticed that the Weekly and Monthly 50% levels are often very close to a commodities front months yearly high or low. In this situation, which price point would you use to profit. Thanks Ken. Fatty
at 6:48:51 PM
The farthest out, Fatty!
DM HydroPower asks:
They had that many applicants? I never knew. I thought they were slightly "dim" compared to what I expected, but I figured hey what do I know? But now that I think about it, I "know" Ken Roberts, and thats going to make all the difference! Wonder if I can get any free materials for that nice plug for da man?! ;)
at 6:50:33 PM
You bet, DM. Watch for a moving van coming around the corner to your house!
northern asks:
Is it correct that TWMPMM 1 & 2 are no longer available and are replaced by GAB and what about ACTT?
at 6:51:45 PM
Watch for my entirely new Course that encompasses ALL these Courses (and much more)! Stay tuned --- the best is yet to come.
RJC asks:
Hi Ken, based on TOVI's information can you tell us what the outlook is for Sugar? I haven't signed on for my free trial yet, but will shortly. I have one Oct.04 850 Sugar call and need to decide what to do. Perhaps I can find a short term trade in something ( besides sugar)!
at 6:56:39 PM
Get your free trial, RJC!!! (OK, TOVI says Short-Term, sugar is down/moderate and Long-Term UP.)
Did anyone attend Oprah's birthday bash? If so, let us know how it went. (Krista and I were out of town and couldn't attend . . . .)
Fatty Arbuckle asks:
You said in an early statement that you only trade the American markets. I'm not sure which ones these are. I know you trade the Japanese Yen. Is this considered an American market? Can you go into more detail or should I ask my broker? Fatty
at 7:06:50 PM
Yes, the Japanese Yen is traded on the Chicago Exchanges (and the other major Exchanges are in New York). That's what I meant by "American" markets. Thanks.
Stan_mpls asks:
Hey Ken,Do i need to order TOVI or i can take it from the internet?
at 7:07:35 PM
TOVI is a web-based service, Stan.
Proffittaker asks:
Ken, I'm over 36 cents in the money with my May 250 corn call! All on paper of course. But since I've been in this market since Oct I could've cashed out several times and rebought at the same strike price with the premium just a little higher. Is that something that you would recommend or would you have bought a farther out contract?I love playing the contrarian. All thanks to you and your team. P.S. I've still got my first Rich Man Secret mailer from '92 if I head out to Grant's Pass will you autograph it for me?
at 7:09:13 PM
Sure, I'd be proud to autograph that, Proffittaker. What you did with your Corn call was JUST PERFECT (the "profits" tell you so)!
Tre-Tre from Toronto, Ontario Canada asks:
ken are you really doing another course and when is it coming out?
at 7:10:40 PM
Yes, Tre-Tre. As soon as possible (stay tuned)! Thanks.
madmax asks:
Ken, PBH4 was in a broad channel, were you trading the contract? I was short once it broke out to the downside; after which it soared upward. Other than stop-losses, are there any safeguards to minimize the dollar-damage? Would you recommend call options for a hedge with something like that, even thought those prices would be rather steep? Thanks, Ric.
at 7:13:33 PM
I would prefer an opposing option as a hedge,madmax, since that would cover you completely, no matter what, with known risk and cost.
jeffg asks:
Ken, TOVI is remarkably accurate. Do you trade contracts from it or do you just work with options?
at 7:13:48 PM
BOTH, jeffg!
Wilfbort asks:
Good evening Ken, do you agree with Ted Warren's conclusion that the markets are manipulated? Initially I thought it was simply depression era paranoia, but now I'm not so certain. I would still be in bean oil if I hadn't been stopped out (and I had a very liberal stop) back in November. Two days later it took off (up). Of course I'd still be in it if I had fully trusted TOVI at the time, but I wasn't at that stage yet. Floor traders definitely gun for stops though...
at 7:15:28 PM
Yes, I think you're onto something, Wilfbort . . . . Aren't you glad we have TOVI now?
pittypat asks:
hi ken: pittypat from vermont here- it seemsthat many are leaning towards higher priced options under tovi $500 to $1500 or more. are we still ok with lower priced options $50 to $300?
at 7:17:17 PM
Sure, pittypat, but use TOVI's "Budgeted Option Search" to determine which of those $50 to $300 options have the best value! Great question.
TedfromIowa asks:
For those of you not sure whether you want to try TOVI or not, I was the same way, I sort of dragged myself kicking and screaming into trying TOVI because the last thing I wanted to do was have to learn a whole new way of trading after buying every course and video tape Ken offered. I'm glad I did, however, because I found out that TOVI's an awesome tool to help you in what you've already learned from Ken's courses. It's so easy and it's brought a lot of the excitement back into trading. Just sign up on a month to month basis, and if you don't love TOVI like I do, you can cancel anytime.
at 7:19:55 PM
Well put, TedfromIowa. Can you imagine life without TOVI?!
Janice asks:
Hi Ken,
I was looking at some options the other day on some charts, and I noticed that where it told about the options trading certain months, the months were identified by letters. What do these mean? Why don't they do things the easy way, and just abbreviate according to the actual months abbreviation? Maybe I'm just to simple-minded? LOL
at 7:21:09 PM
I agree, Janice! But NO, H = March, K = May, etc. Go figure . . . .
madmax asks:
Sorry, Ken, but back to a follow-up question to the PBH4 I asked before. Would that call option you bought as a hedge with the market moving against your position, would you use that contract month (PBH4) or go further out? If so, how far out? PBH4 is kind of a bad example because of the option expiration date, but I hope you get the gist of my question. I got burned really bad on PBH4 and want to try and cover all my bases next time. I promise I won't ask any more questions! Thanks again.
at 7:24:45 PM
No, ask away, madmax (otherwise there would be no use for me)! I have no hard-and-fast rules on how far out to buy, but this: Buy as far out as possible (or the option, strike, and month TOVI pinpoints for you).
Sher bear asks:
NO--I cannot imagine life without Tovi I agree most whole-heartedly with TedfromIowa
at 7:25:04 PM
Alright!
denise from victoria asks:
Hi Ken, any plans for creating TOVI for stocks and stock options?
at 7:30:52 PM
Yes!!! Another reason to stay tuned . . . . Thanks.
madmax asks:
Ken, thanks for everything, a lot has been cleared up for me tonight.
at 7:32:45 PM
That's why we do these chats! Glad you were on board with us tonight.
Well that's it for another month. Check out my favorite web sites: www.tovionline.com (Have you taken my personal tour yet?) ; www.uschartco.com ; www.fourstarbooks.com ; www.historictrees.org ; www.billoreilly.com ; www.wildlifeimages.org ; www.salestax.org (Let's abolish the IRS!); www.LP.org (Take The World's Smallest Political Quiz and see where you stand politically). My next chat will be Tuesday, February 10th (The next TOVI Chat is this Tuesday, March 9th!). As always: Use these newfound powers only for Good. Good night, God bless, and watch where you step!
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