Commodity Chat With Trader Jim! (tm) with Jim Prince
from February 13, 2007
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Good evening! Trader Jim here. . .
Wow! I thought tonight would never get here! This monthly Chat with you is a real highlight in my month, so thanks for being here!
It's been a great month with many trading opportunities since our last get together. There have been real nice moves in March Lumber, Sugar and Coffee. Plus March Corn; Soybeans; Soybean Oil; and Soybean Meal have moved nicely too. And last but not least, let's not forget the numerous opportunities that were available in the March Canadian Dollar. All of these markets produced some very nice moves. The neat thing is there are other several other opportunities shaping up in too!
To top it off we featured all of these markets in our brand new Premium Alert Service™ (PAS) videos. This service has been a big hit as well.
If you've had a successful paper trade or real money trade in any of these markets (or other markets), please feel free to chat about your trade details with your fellow Course Members.
Discussing your market experiences helps others realize that they are not alone in their trading journey. So please share your excitement, passion, and enthusiasm with your fellow Course Members!
I'd like send a big "Shout Out" to Ken Roberts. Ken first began introducing people to the World's Greatest Business 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.
Make sure you take a look 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 STRATEGY AND/OR MARKET. Also, when relating trading experiences and/or results, please provide details: Futures contracts, options, options AND futures, real money or paper trading, etc. This helps others follow along and learn from your experience too.
aucraig asks:
Jim, How far out do you purchase options on futures? Is there a minimum amount of days/months?
at 6:16:57 PM
Hi aucraig! I generally to give an option 90 days until expiration. This seems give the market enough time to move (if it's going to) and still allows you to not pay an arm and a leg for the option.
KFF asks:
KFF – From PA I have enjoyed the Premium Alert service and think it is going to be a valuable additional trading tool. An interesting situation occurred with Oats on Monday. The Mar Oats fell below the 1-2-3 formation. In your Premium Alert Monday night, you said if Trend Seeker went from neutral to down on Monday, it would signal an opportunity to trade
at 6:20:44 PM
Hey KFF! Yep, in fact I chatted about that in tonight's video. It's a function of Trend Seeker to focus on the month that has the most volume and open interest. That changed to December yesterday. One thing about the March Oats is that because of the two recent down moves I would highly suspect that TS now says it's in a down trend even though I can't verify it. Hope this helps.
DeeBeeTexas asks:
Evening All, In May Sugar, put option strike prices listed at USCharts were whole and half dollar, 11.00, 11.50, etc. Then prices started to move downward and I noticed a new strike price of 9.75 listed. I was wondering if you could tell me why? It was the only strike price with 75 cents listed. Thanks.
at 6:23:55 PM
Hi DeeBeeTexas, I'm not sure exactly why. There is plenty of history available for that option so I doubt it's a fluke. Click on the OH icon (Option History) and you'll see that it goes back for months. It is a little different but seems to be legit.
jw asks:
I was looking @ trend seeker for Mar oats trend. It showed Dec 07 as front month. Is that trend valid for Mar 07 ?
at 6:25:09 PM
Hey JW! Nope, if you look at the two charts you'll see that December is going up and March is going down. Be sure to see my response to KFF for more info.
Bill in NC asks:
Hi Jim It is God's blessing you camr up with the Training videos and especially Premium Alerts. My question...in the 90's Ken advocated NOT to pay the asking price for a strike. I have found success by coming in a quarter or third less and ...sure enough somebody took it. What's been your experience? Thanks for everything you do to help us.
at 6:28:47 PM
Hi Bill in NC! I don't necessarily pay the going price, but if I want to get in the market I'll pay what I think is a reasonable premium. What is reasonable? I look at the Option History at US Charts Online to try to get an idea as to where it's been. Plus I have an idea as to the maximum amount I'm willing to invest. It's great that you've found a strategy that works for you, keep it up!
The Premium Alert Service
Click Here or Call a
Course Counselor at
800-230-2427
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Sujeevan asks:
Hello Jim, Sujeevan from Toronto, Canada. Been paper trading on and off for about a year. Premimum alert service is fantastic. Same goes for the weekly training video. Love both and I think they're the best features of all. I'm beginning to spot many chart formations now and learning the importance of stops from your videos. I've seen all of the videos, at least twice. Thank you for all that you and the crew do. Appreciate it.
at 6:30:30 PM
Answer
"Hey Sujeevan! Wow, glad you enjoy the videos and thanks a lot for all the kind words. Our crew here is dynamite and we are really trying to do all we can to help you "live the dream."
pips2006 asks:
"Jim do you cover the opitons profit insurance plan still with extreme markets???
"
at 6:32:30 PM
Howdy pips2006! Our strategies changed about three years ago and we now do all of our trading with trend. That doesn't mean you can't use the OPIP, but it's no longer part of our focus. Thanks for stopping by tonight.
Royal Phlush From Phoenix asks:
When contemplating entering a position, we consult Trend Seeker for its direction, ranking, etc. Typically, however, we are not trading the front month but, rather, a farther out contract month. Do we assume that the Trend Seeker trend (and other stuff)is the same for the farther out month as for the front month?
at 6:16:57 PM
Hi Royal Phlush From Phoenix, I'm not real sure about the strategies you're using, but the strategies we're using all focus on the front month market. That's the one with the most volume and open interest. Even now, I'm personally trading March Wheat and March Corn -- the front month contracts. I don't think you should assume a further out month has the same TS rating. Look at Daily charts of March Oats vs December Oats to see what I mean. That said, if the charts look similar, I think it's fair to say the TS rating would work for both markets.
isocracy asks:
Hi I am not sure if this is the correct chat, but I would like to know if you trade the lumber market at all? Also I only have aucraig's ? on the screen.....
at 6:37:37 PM
"Yes I have traded lumber, isocracy. Be sure to hit the refresh button to load "View All-Slowest" to see all the responses at once.
Hope in Oregon asks:
Jim - I want to say how much I appreciate the Premium Alert Service. I look forward to the content daily. It helps me analize the markets that I am currently trading and to also look at the markets that I have not be following - so I do not miss an opportunity. Thank you!
at 6:38:59 PM
You're more than welcome. I'm glad to help and glad that you're enjoying the service. I think the videos are a fabulous teaching tool and I love to do them. Thanks again.
Hank O. asks:
Hank O. from Alberta Canada. Jim, Last week I bought a 440 put option in May wheat. I have been following the down sloping channel. is it wise to sell the option when we are at the bottom of the channel or should we wait for a breakout below and then follow it further down? I suppose doing that makes one greedy!
at 6:43:28 PM
Hey Hank O, Thanks for the question. I'm going to use you as a Guinea pig of sorts -- but it's cause I care. Okay, your question is a great example as to why you should have a plan set up before entering a trade. You must know your stop loss point and your profit targets -- but know them prior to getting into the trade! That way you're not emotionally trading from the seat of your pants like so many others do. I can't tell you where to exit. But you might review the support/resistance training videos I did on July 28 and August 4 for some ideas. I wish you the best!
Jim asks:
Is there suppose to be sound to this chat room?
at 6:44:14 PM
Hi Jim (easy name to remember). No audio here, this is a text only chat. Thanks for joining us tonight.
Leo in Bflo asks:
Jim, when trading options, do you set mental stops on the futures prices or on the option prices?
at 6:46:11 PM
I actually will do both (but not on the same option). It really depends on the chart pattern. If support and resistance levels are nearby, I'll use those levels and place my stop accordingly. But if they are too far away, I'll usually risk a percentage of the option. Something like half of the premium. Hope this helps.
Smokin Joe asks:
Hi Jim,
at 6:49:16 PM
Thanks for joining us tonight Smokin Joe! Never get into a trade based on HOPE. Those that do will generally fail. Have a good technical reason for getting into the trade (chart pattern). And find one that offers a good risk/reward. Doing these simple steps will help put you in a position to make a profit. Otherwise, you're just guessing. Remember, there are no guarantees in trading. And just because we follow the steps mentioned above does not guarantee success. But at least it gives us a fighting chance.
Big T asks:
Jim, RE Options 90 days out. I notice that you use the front month. Should we use the contract that is 90 days out if its not the front month
at 6:51:25 PM
The best way I can answer that question is through the eleven minute training video I did on the subject. Once you're logged into the US Charts Online web site locate the Training Videos tab. Then find the training video dated 11/22/06. It's titled "What Month Options to Trade."
Champaign(IL)Chad asks:
Hey Jim, Thanks for doing the Training and Premium videos. Question: is March Rice forming a HUGE pennant or wedge?
at 6:57:21 PM
Hi Champaign (IL) Chad! You're welcome in regards to the videos. I don't quite see a completed pennant or wedge yet. However, I think one is in the works. Good eye!
Hurican asks:
Hi Jim
at 7:01:18 PM
Hi Hurican, I'm not really sure what trading program you're referring to but I'll take a shot at it. . . If you're referring to the trading platform I use, it's one my broker provides. I want one that is quick, easy to use, and stays connected to the net. I've used many different platforms over the years, but I don't think I could really recommend one to you. I think it's something each individual needs to decide upon. That said, if you're new to trading, stick with the phone and call your orders to your broker. Trading online can be risky, especially if you don't know the correct order types to put into your system.
greg in arizona asks:
Hi Jim and crew. After being away from U.S. Charts for a few months and recently resigned up, I've noticed many improvements. I have to admit, after Ken left I thought the company was going downhill. I was wrong! Keep up the great work. Jim, your videos are excellent too. Thanks a million!
at 7:03:35 PM
Hi greg in arizona! We have a great crew here. All of us worked for Ken for a number of years and the CRB team is awesome too! They've done an incredible job producing the new charts. All in all, you're in good hands!
Paulie asks:
Hi Jim.
I too ppreciate your time to teach us all what you know. You make it look so easy.
I find myself in situations that I jump on a trade which then goes against me and some time later, if it comes back, the same option can be had for a lot less money.
Do you sometimes wait a few days before getting on board, even though you may miss a trade?
at 7:08:13 PM
Hi Paulie! Absolutely. I have no problem waiting for the market to come to me. It's something that took awhile to learn. You have to get yourself past the point of the "fear of missing a move" and just realize that patience can be a big virtue in this business -- and you're example proves the point! If the market doesn't move to where you want to get in, then pass on it and look for something else. It's a lot like buying a house. You're willing to pay a certain amount. If the seller and you can't agree you'll more than likely pass on it and look for something different. (In the case where you don't pass on the house, it's likely you're mortgage payment will probably be more than you're comfortable paying -- kind of like the ultimate losing trade.) Anyway, I rambled a bit but I hope you get my point. Thanks for the kind words."
wildhog asks:
do you have instruction available on writing options?
at 7:10:11 PM
Hi wildhog, All of our strategies involve being long options -- not selling/writing them. Traded correctly, you can get a lot more bang for your buck when buying options plus you have a known, maximum risk -- the option premium plus fees and commissions. In a nutshell, when writing options you have unlimited risk. Thanks for stopping by tonight.
jslozon asks:
is it over already?
at 7:19:31 PM
Nope, we had a technical malfunction.
Our previous Trading Camps sold out in just a matter of days. Because so many are asking for additional camps, we've decided to open enrollment for one in March.
Our newest Trading Camp will be held on March 17-18, 2007.
This is going to be a very special Trading Camp for two reasons.
1.) We will be filming this Trading Camp with the expectation of offering it to fellow Course Members on DVD at a later date. If you thought you'd never be in the movies, now's your chance to become a star!
2.) We are opening enrollment to 16 Course Members. While our previous Camps have been limited to 12 individuals, with four additional seats it means you have four more Course Members to interact with during the two days! This is fantastic because the relationships and networking you develop at these trading camps can be priceless!
If both you and your spouse wish to attend this Trading Camp be sure to call a Course Counselor and ask about our very special “Couples” pricing, you’ll be glad you did!
Click here to find out more.
Or call 800-230-2427 to reserve your seat!!!
ready2win asks:
Hi Jim. Hope you are having a great nite! I notice on the alerts and the "Just Happened" emails and alerts you mention that when a trigger has been met you say "possibly a paper trade....". at the risk of really sounding stupid is there a different trigger, etc for a real money trade?
at 7:24:38 PM
Hey ready2win, Good question. I say that because it's up to you to decide whether or not YOU want to paper trade it. Paper trade or real money, a trigger is a trigger.
jslozon asks:
March 10 year notes: look at the open, closed and settled prices. Now look at the chart. The chart shows trading at a much higher level???
at 7:27:40 PM
Hi jslozon, The chart data is correct but the quote at the top of the screen is not. We'll see if we can't get that fixed in the morning. Thanks!
jslozon asks:
Hi Jim - HOPE, FEAR and GREED as you have beat into my head are the 3 worst emotional enemies to a trader. I hade a cash trade in an April Crude put option. Profits sailed to over $5,000 in a short time, then the market began to retrace.......... Still got out at $850 net but a few thousand more would have been nice. Why didn't I jump off the boat? Because I didn't stick to my plan because of emotion!!! Thanks for the warnings that are finally sinking in.
at 7:30:43 PM
Sorry to hear that profits slipped away, but I'm really glad to hear you're getting the message! Isn't it amazing how those three "wild animals" take us humans over when we put money on the line? Anyway, keep sticking to your plan, in the long run it'll do wonders for you.
paul asks:
Tonight the trend seekers corn month is December, why so far out when there are still may and july corn charts?
at 7:34:34 PM
Yep, this is a normal occurrence with Trend Seeker. Remember, the front month contract is the contract trading the most volume and the most open interest. Right now, December is the lead month. To see what I mean, click on the Quick Quotes tab and then locate Corn. Look at the Open Interest for all the markets listed. December Corn is at 368853 -- the highest! This is front month rollover is something that has happened quite often with Eurodollars too. Thanks for the question.
money rules asks:
hi trader jim and class...jim, i like the way you teach.... keep up the good work.....do you teach at the trading camps as well ?
at 7:35:41 PM
Hi money rules, Thanks for the nice comments. Yep, I'm the Trading Camp instructor. Thanks for stopping by tonight.
mrbaxtor asks:
Hi Jim, wow what happened to the Candian Dollar, how do you, we as a trader handle the gaps when we are trading a futures contract? Take my lump and move on, it must have hurt more than just me, how about anyone else? Also I am shy of Cocoa, can you expound on your technical info regarding this contract?
at 7:37:37 PM
mrbaxtor, Unfortunately gaps are part of the business. They're great when you're on the right side of them, but not so great if you're on the wrong side. I'm not sure what you mean about Cocoa and "technical info", but take a peek at the Chart Book if you get a chance. I pretty much have it all outlined there. I wish you the best!
uncle fudd asks:
Jim, I have 2 OJ July put OJ contracts. Trend tracker said it was weakest but said it was going down and still does at last check today. Oj retraced to the 50% level and looks like it could go either way at this point. If it goes up tomorrow I will get out. Do you see it the same as I do?
at 7:45:46 PM
Hi uncle fudd, Sounds like you have a plan of attack and that's so vitally important. I'm not sure what exactly you based your plan on, so it's difficult for me to comment on it. But, my opinion isn't important -- your plan is what's important and it sounds like you're on track! Nice job!
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 lessons at: US Charts Online. This is a fantastic teaching tool and free to all WGB Members and 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.)
Due to technical difficulities tonight we were unable to get to all of your questions. If you have a question that you'd like answered please email it to: chat@uschartco.com .
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, March 13, 2007. God Bless and I look forward to seeing you then!
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