Ken Roberts Chat

Let's Talk Trading (tm) with Ken Roberts
from March 12, 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 COHIBA Explendido fired up, here’s our plate of freshly baked ranger cookies, the coffee’s poured, so let’s talk commodities!

TooTall asks:
Is it too late to get in Coffee?

at 6:08:02 PM
You're TooTall (and not too quick either!), huh? I'm not being mean, TooTall, but we've all been left behind when markets take off . . . . No fun, is it? Yes, this is one of those times when I say "Don't chase a moving bus . . . ." But continue to watch coffee's action, watch for 50% retracement levels (daily, weekly, monthly) to get hit, and check out those coffee calls' prices on setbacks. This doesn't have to be a BAD thing; use it as an EDUCATIONAL event . . . . Thanks for joining us tonight!

ML asks:
Hi Ken, what is the most common mistake you see course members make in their trading?

at 6:08:54 PM
Listen to their broker (or someone besides themselves). Great question!

pete asks:
What makes a successful trader?

at 6:09:29 PM
Someone who makes his or her OWN plans (and doesn't listen to another). Great question!

Rocky asks:
i am long may bean oil from 15.56 witha 15.50 put is this a good trade u think?

at 6:10:54 PM
Yes I do, Rocky. (I'm long Bean Oil too.)

Ruxpin asks:
Ken, are you loaded up on coffee contracts? Wish I wuz, got a july 150 call and a sep 150 call, hoping and holding..Love this bus. hope to make it someday soon..Keep on Keepin on

at 6:12:07 PM
Yes I do, Ruxpin, and glad you're long too. Those July 150 calls probably at least doubled today, didn't they? And a lot of time left on those Sept. calls too. Good goin'! Thanks . . . .

Reb from Sacramento asks:
Hi Ken! You are my hero. My friend & I are starting a commodities trading partnership in memory of her late father, who always smoked Cubans, and was a patriot and Ohio farmer all his life. We want to do long-term position trading. Thank you for selflessly sharing all through the years.

at 6:12:36 PM
Thank you, Reb. Music to my ears . . . .

Ruxpin asks:
Is this the move on coffee that we have been waiting for?

at 6:14:29 PM
It could be, Ruxpin. When the front month (March) coffee hits its daily 50% of 61, that's a take-profit point, so you could say yes, this is the move we've been waiting for.

southwest asks:
Southwest from Las Vegas: Ken, thanks for the great course(s), my question tonight is on coffee... I see the volume was low today for the big move, does that mean it maybe a false move? If I buy calls, will only the longest out calls pay off big or will the cheaper options on May and July work also for good volatility increases. Thanks, Southwest

at 6:16:38 PM
Hello southwest. I don't know anything at all about coffee's volume today (or ever). I never look at volume figures. Every option moves differently at different times, so there's no way to predict which one(s) will make the largest moves. Price some a see how they fare. Stay tuned!

Bonanza Driver asks:
Ken, I currently have a purchase order to buy 2 Dec 185 Coffee Calls. They have not been filled due to the recent price increase in Coffee. Should I hold tight and hope price come back down or bite the bullet and pay the higher premium?

at 6:18:15 PM
Don't chase a moving bus, Bonanza Driver, but you could continue pricing those coffee calls and see if their price drops on any of the setbacks coffee is bound to make. So you may pay more than your current bid, but you won't pay today's inflated prices either. Hang in there!

Chamath asks:
Hellow Ken, from Sri Lanka (do you know where it is) After all these years of trading do you still stick to 123B/T or use gut feel? Are you going long on Corn around now? Thanks for all the knowlege given.

at 6:22:23 PM
Hello and welcome, Chamath! Yes I know where Sri Lanka is: It's a long, long ways from Grants Pass, Oregon! (On the Bay of Bengal, isn't it?) (At 7 degress North and 81 degrees East?) (Don't they issue a whole lot of postage stamps there too?) After all these years, Chamath, I buy futures as new #1 bottoms are being made (the same principle as Fishing With Options). Yes, I've been long Corn quite awhile now. Thanks for joining us!

contango asks:
Good evening Ken. You are doing a great service to traders by taking the time for these chats. My question: If you have sold at a daily 50% point, then the market falls so you load up on contracts again, is the original high you used for your first 50% sale now "used up", so you have to figure the new 50% using a more recent, lower high?

at 6:23:30 PM
Good question, Contango. I still use that same high point to compute my 50% retracement level. Rule of Thumb: Use the chart points that give you the greatest move! Thanks.

dave asks:
Ken, I have a question in regard to "averageing". If you end up with several contracts in the same month and your first target is hit are you able to specify which contract goes first or are you at the mercy of you broker or the market?

at 6:24:21 PM
It's always the "First in, first out" rule, Dave, and we have no control over that. It's an exchange rule. Good question. Thanks for joining us tonight.

Marc from N.B. asks:
Hi Ken !! I have been long Coffee for a while and we saw some movement this last two days !! Here's my question : I could at this time add two contracts in coffee with the profit from this last rally. With your experience, would you do it now, or you would wait for a retracement ?

at 6:25:42 PM
I "load up" at the bottom, Marc, and only liquidate contracts on the way up. But I'd never add on rallies; only setbacks. Thanks.

KimB asks:
Hi Ken, Of the 3 brokers I've had, they've all pushed me toward Options which I know little of. I don't papertrade with them, and when talked into them I've lost. Do you use options regularly to protect your futures, or as a separate strategy? Thanks for your help! KimB

at 6:27:25 PM
Good question, KimB. I use options as a separate strategy. But you should paper trade and familiarize yourself with both ways to use options. One of these ways will strongly appeal to you and your style of trading. Options are tools we have available to us that should certainly be used. I consider them an essential advantage. Thanks.

Bozo asks:
Hi Ken. I am trying to understand the concept of buying the next series of options. Corn for example, last peaked in 1996 at 550. Any first round of options would have expired worthless. If a second round was purchased, say 6 months later, it would have also expired worthless. My queston is: Do you just keep buying subsequent rounds and hope for the best or do you change stratigies?

at 6:28:38 PM
Hello Bozo. I stick with the plan and keep buying until that market makes a move (even if it's just a rally to its daily 50% target). I've learned that changing midstream is NEVER a wise idea.

omar la california asks:
The May Oats chart is upside down. The March contract is trading around 240 while May is around 210. Do you see the May contract going to 240 or beyond?

at 6:30:39 PM
I'm out of Oats now, Omar, since its rally in September and October. Now I'm waiting for a 50% retracement down on its weekly and monthly charts. Thanks.

Doc Com. asks:
Ken. Since we want to follow the front month for any formations, if I am long on a contract, say coffee, when do I switch to the next month--at the "fnd" or at the "ltd", or when the chart is no longer in the booklet?

at 6:31:57 PM
If you're long a futures contract, Doc Com., you must pay attention to FND (First Notice Day). I practice rolling out that contract at least a week before FND to avoid the rush. Thanks for logging on tonight!

signia asks:
is it possible to buy 10,30,100,etc. puts or calls on futures?

at 6:32:52 PM
In most markets, yes, I believe it is -- even thousands of options if you want. But I'm sure there are some markets that just wouldn't support those numbers.

DavidM asks:
Ken, Thank you, thank you, thank you! This truly is the world's one perfect business. I opened an account in Feb and made my first trades Feb 28 and March 6. My $3000 has turned to $4600 in 12 days! Mostly options in coffee, cotton, eurodollars, and bean oil. I've been papertrading off and on for three years and now I'm in for real and it feels good! Thank you for everything you do to encourage course members. Your'e the best.

at 6:33:37 PM
And you're a genius, DavidM! Thanks for those kind words.

Blue Rose asks:
Ken and all, I was introduced to commodeties by my nephew who took your course and has been trading for a couple of years. When I signed up for the course I knew if was going to change my life but as I got into it, and heard about the Richman's Secret and read the book, got the course and I'm begining to wake up. I believe I went for one thing and got a lot more. Now for my question, in one of the tapes that with my course you said that "when people lose interest in a market it is the time to get in", but on one of your chats you suggested "to look for the interest to pick up and then get in the market". Could you please clarify for me? Thank you!

at 6:35:35 PM
Thanks, Blue Rose. Good goin'! Sorry, I don't recall ever saying to wait for interest in a market to pick up before getting in. I'll stick to what you heard me say on that cassette tape!

phillipgs asks:
Hello Ken, I am interested in trading the Canadian Dollar with option yet I can not determin any obvious major moves on the weekly. How would you trade this market? As its in extreme level 1 status.

at 6:37:41 PM
When you don't see an obvious move on your weekly chart, look to the monthly. And in the Canadian Dollar market, that monthly move will be a 50% retracment to 78.5. Glad you spotted its Level 1 staus, Phillipgs. That's really all we need to know to go long!

Ernie asks:
I've been watching cotton for quite some time now, going on 9 months. I have a couple May 50 call options which will expire soon. Is it time to buy some more cotton call options? Seems like it is never going to take off. I'm getting somewhat concerned that it is so long in moving up.

at 6:39:03 PM
That's exactly the time it WILL take off, Ernie (just ask anyone who's been trading coffee!)! Hang in there . . . .

jeff h asks:
ken what do you think about the unleaded gas market

at 6:41:00 PM
I think it's a rip off at the gas pumps -- jumped over 20 cents here this past weekend! But on my price charts, check how Unleaded is moving towards making 50% retracments now . . . . Thanks!

Allham asks:
First, thanks for all the things you do for us "Contrarians". Now...how do you determine the most effective strike price for an option as a hedge against a contract? Also, do you buy an option for the same month as the contract. Thanks again!

at 6:42:36 PM
Yes, Allham, you MUST purchase your hedge option of the same month as your futures contract. Basically, try to get an option that's as close to your futures entry price as possible and practical. Your budget will have some say-so in this determination. Thank you!

diesel asks:
Ken, My first trades. Have a Jul coffee 140 call, Sep copper 92 call and June 9700 Eurodollar put and they are all in the red. Am I doing something wrong here? Thanks

at 6:43:47 PM
No, Diesel, you're doing exactly right. I think your tune will change by the end of this week! Hang in there!

Nevada from Arkansas asks:
Hello Ken, I have heard you say that 5000 dollars is the max one should start with. Do you still believe this is true?

at 6:45:23 PM
Well, Nevada, $5,000 today doesn't go as far as it did back in '83 when I first wrote those words, but lots and lots of Course Members still begin with $5,000 today (and even less). Bottom line: Paper trading will show you what's possible (and advisable) for YOU to begin with. Thanks!

toby2late asks:
What are you watching concerning the action in South Asia when it comes to crude oil. Also, do you think a military action in Iraq will continue to drive up prices? Thank You.

at 6:46:26 PM
I don't watch or think about those things when trading, toby2late. I call that "stupid news." Everything I need to know is on my commodity price charts. Keep it simple! Thanks . . . .

JNH asks:
How long should a broker have been trading before I start to consider using him

at 6:47:27 PM
I don't think it's a matter of time, JNH, so much as what kind of SERVICE does this broker provide you. Some of the best brokers I've known have been new at it.

WDDeVoe asks:
Maybe this question is best left for a counselor? I'm pretty intelligent, yet I can't make myself focus on paper trading. I follow some markets, gather and plot prices on graphs, record the Alert Line, but it's all a tedious chore (not fun), and incomplete -- it's not actual paper trading, where we do the arithmetic, develop our intuition, and grasp what the charts show us. What to do? I got the Rich Man's Secret course, read a little Vernon Howard daily, but not very receptive of the simple, profound truths (sometimes it's like white noise). Is this an appropriate query for this forum? Can you help? I do admire you.

at 6:52:42 PM
Yes, your question is appropriate, WDDeVoe. Lots of us go through what you're experiencing now. Maybe this will help: Something in you was (is) attracted to these new principles and subjects you're pursuing. VH would call the frustration and resistance you're experiencing "the false self." He would also say "Beyond the resistance is the flow." So the best I can offer is to suggest that you proceed while being afraid/bored/uninterested/unmotivated/etc. The flow is just beyond that! Give it a try, then you'll know how YOU really feel about these things! Great question. Thanks for logging on tonight.

Old Hickory asks:
Hi Ken, Paper traded contracts, and did real well so opened account and traded options and could not get it right. I had not paper traded options--stupid mistake, lesson learned, --I am presently in May bean Oil from 16.09

at 6:53:31 PM
You're a wise man, Old Hickory (even if you are a bit knotty!). Thanks for joining us.

granpa asks:
ken tnx for sharing . how wud u play cotton, rice, & bonds @ this pt.

at 6:55:03 PM
Thanx, Granpa. I'm long cotton and rice. And I'm short Eurodollars (instead of Bonds).

frappe asks:
Do you have to speak proper English to do this business?

at 6:56:24 PM
Of coorse knot! Ain't nobody should'a told you sucha thang.

nicole asks:
Nicole from IOWA--I started paper trading YESTERDAY, purchased one July Coffee 160 Call Option, and today am showing a net profit of $692.50!! Small change to you I know...but SOOOO exciting for me!

at 6:57:07 PM
Welcome to commodities, Nicole!

CRAIG asks:
DEAR KEN, THANKS FOR YOUR COURSE, THINK I SHOULD ASK MY BROKER IF COFFEE IS IN A BIG BEAR MARKET WHEN HE TRIED TO TALK ME OUT OF BUYING 8 JULY CONTRACTS AT 50 A FEW WEEKS BACK ?

at 6:57:51 PM
Let it be a lesson learned, Craig. Hang in there!

Woolycoo asks:
G'day Mate! from Victoria Australia. Coffee sure is perking up. Bean bidding to replace a couple of May 150calls. The market settled repeatedly up to 5pts. below my bid but no fills. Have all the sellers percolated away? Never had this happen before. Was wondering if you had similar experiences? Appreciate if you could espresso your opinion. Thanks.

at 6:59:26 PM
Yes I did, Woolycoo. My order to pay 90 pts. for July 150 coffee calls is still sitting there right now (as it traded at over 135 today, UP from 95!!!). Stay with it . . . .

chartr4 asks:
Hi Ken,(Thanks for the TWMPMM I loveit!)What do you think about the Siver Market for opportunities right now?

at 7:00:20 PM
I'm long Silver, chartr4 (just like I usually am). It's low, low, low . . . .

jeff bates asks:
Hello Ken I am from missouri and i was wondering about your opinion on cocoa

at 7:01:08 PM
It's made a 50% retracement on its weekly chart. So I'd watch for a setback now. Thanks!

Julie asks:
Ken, I prefer trading just futures,not options. Do you think I'm missing the boat, or if this is what I'm comfortable with should I continue doing this? Thanks!

at 7:01:52 PM
If only futures is right for you, Julie, then stick to just futures. (I'm assuming you paper traded/tried options . . . .) Thanks!

homer s asks:
HI ken, You seem to be more courteous than usual and have had some misspelled words. Who is filling in for you tonight? Thanks.

at 7:03:40 PM
What the xx**)%^$##!!!! are you saying, Homer S?! Nobody fills in for me, ever!

DANTE asks:
What are other reasons why prices fluctuate from your experience in trading for other than supply and demand?

at 7:05:24 PM
I suppose you could say stupid news/rumors will set a market off, but can't sustain that move to long-term 50% retracment levels. The idea is to be in the market when no one else is interested in it (that's what makes for LOW prices). Thanks!

Matty asks:
Ken, First things first: love US Charts (hardcopy & online), your course, the workshop & roundtable videos...all good stuff. Bought several KCK2 contracts (as you instruct in the Roundtable Video) beforeyesterday and not using any stops (like a real man-did you pick up on that?). During previous chats, you suggest taking profits at the daiy 50%, which for May Coffee is around 62 cents and its weekly/monthly is around 180....a big difference between. 62 cents is right around the corner and still a pretty low price for coffee. So, when are you taking profits on coffee?

at 7:06:31 PM
Just as I preach, Matty: some at the daily 50%, weekly 50%, and monthly 50% levels. Glad you're on board!

Die Hard Cocoa Trader asks:
It's been said that good things happen in three's. I've been tracking coffee for 26 months and presently am in my third round of options. It looks to be worth the wait. Thank you Ken for giving me a chance for a new way of life. I am now in my fourth year and your programs have never missed a lick. Bottom's up coffee..........

at 7:07:29 PM
Thanks, Die Hard! See now why patience is probably the best virtue any trader can have? Good for you . . . .

nytrader asks:
hey Ken, Thanks for keeping it simple for us. Was wondering if you were bottom fishing sugar? Also, are the initials at the end of the letter by clement watt in Rich Mans Secret real initials? I think I have a few figured out!

at 7:08:58 PM
Yes, I'm in sugar, nytrader, and still waiting (kind of always doing this, just like in silver). Yes, those initials on Clement's letter are real. Thanks!

Russ - Malibu asks:
Ken: OK, now I need some real help. I had 4 May coffee contracts, long from 49.00. After yesterday's great pop I sold off 2 of them,(because I couldn't resist the 5K profit. Now I'm still holding 2 and of course we caught another 2.5 points today. I show the following 50% goals for the remaining 2 contracts: Dec. 01 was 62.98, March (current front month) is 61.05 (conservative 50%), May is 63.55, and weekly is 160.75. If you only had 2 contracts left where would you bail out? I'm thinking of the weekly but know I'll never be able to contain myself for another 100 points. Dude, I need your help on this one!! Russ

at 7:11:11 PM
Russ, dude, you da man! I'd hang on to those remaining two futures for the weekly 50% level of 184! Listen to me now, believe me later . . . .

Gator asks:
As a novice in trading and paying high commisions to a broker -- isn't it part of the learning process to take the advice of an experienced broker?

at 7:11:40 PM
For a lot of people, the answer is yes, Gator. But I wish it weren't so.

larry asks:
Hi Ken: We really enjoy your Chat Room. My first Question is: Does the Euro dollar move when the fed makes an actual rate increase/decrease or does the Euro dollar move by other means? My second question is: "Are you Puffing up on Rice?" Larry and Gang

at 7:12:48 PM
The Euro an anticipate the fed's actions, so it's not a point-for-point reflection of what Greenspan does. Just read your chart and forget Greenspan. Yes, I'm puffed up on rice. Thanks!

Bud asks:
Why haven't I seen a change in the price of my May coffee options in the last two days?

at 7:13:35 PM
I have some May coffee calls too, Bud, and they haven't moved either because of the lack of much time value in the May options now. But the day ain't over . . . .

omar la california asks:
Ken, I saw you say that you load up at the bottom and liquidate on the way up. Do you still believe in pyramiding on the way up?

at 7:13:50 PM
No.

TahoeClay asks:
What is the furthest out you have had an option filled? nine months, a year? two years? Bidding for Dec coffee calls.

at 7:14:42 PM
I don't remember exactly, TahoeClay, but in some markets you can get them up to two years out. (I'm bidding July '03 coffee calls now.)

alc asks:
Hi Ken....sure glad I got into those cofee futures when no one was looking at 49 cents!!! My mind is now playing games...my target is daily 50% but my mind is now saying sell and take some profits..what to do...what a problem to have...but you always say stick to your plan...what do you think Ken..you are my teacher!

at 7:15:25 PM
Stick to your plan, alc. (This is your teacher speaking . . . .)

Clay asks:
Hi Ken,whats your thoughts on online trading versus talking to a broker in person or on the phone.

at 7:17:07 PM
Whatever works best for you, Clay. (These chats are the ONLY time I ever get on the internet, Clay, so you're speaking to a technologically challenged person!)

Clark Kent asks:
Hi, Ken: To simplify my earlier question (they may have left it out because it would've taken up half the screen), If you're trading on a smaller budget, would you liquidate options as soon as you see some decent profit instead of waiting on the 50% levels to get hit, for the sake of not risking the option expiring worthless before the 50% targets get hit?

at 7:17:50 PM
Nope. I've tried that approach too in the past, so I stick to those 50% targets. (Honest!)

newcomer asks:
When a person first starts in commodities, how long should they paper trade before trading with $$

at 7:18:21 PM
When you're often saying to yourself "I'm tired of being right and not making any money on it!"

sdboy asks:
Hi Ken, Randy from SD, Hey I have a 150 Sept. call in coffee. should I look at keeping that and getting a Dec. call on a retracement, so I keep moving out time wise?

at 7:19:07 PM
That sounds good to me, sdboy. If you have just one coffee call now, I'd look at getting another on a setback.

Bill in SD asks:
Is The high of 665.00 on the weekly Wheat chart [May 1996] still good or should one stay within the last 5 yrs. when calculating highs & lows

at 7:20:26 PM
Monthly Wheat's 50% level = 485. Use the full chart, Bill.

Strings asks:
Ken, you've said before that you don't trade the financial markets very often. Do you think the Canadian Dollar is an exception right now?

at 7:20:43 PM
Absolutely. It's at the bottom of the ocean!

nicole asks:
How do you select questions to answer? First come first serve, or based on the question?

at 7:21:05 PM
Based on the Questioner's I.Q., Nicole.

donnie asks:
Hi Ken, Any advice on staying positive when the money's tight and the markets don't seem to be doing much. I appreciate four star books and all the wisdom you bring to us all. Thanks, Donnie.

at 7:23:08 PM
Yes, Donnie, learning what you are from the books at Four Star is THE best (and ultimately ONLY) way to handle that negativity. But from a practical standpoint in the physical world, just read what those who have waited it out and endured the negativity in the coffee market have shared with us this evening . . . . Glad you logged on tonight.

azfolks asks:
Ken, thankyou,thankyou, for AMAZING generosity with information and the world's one perfect business...and ...that is why we did not follow our broker's advice when he called yesterday to say coffee had moved up and was leveling out and that we should sell our contracts. Thanks again.

at 7:23:45 PM
Thank YOU, azfolks, for sticking to your guns and doing what's right! Hooray!

pbausana asks:
Ken, if you have a long contract and it's moving well, but getting closer to the FND, how do stay in that market?? How do you get into a further out contract?? Thanks

at 7:24:37 PM
You simply tell your broker to ROLL your contract(s) into a farther-out month. It's nothing to worry about.

savvy asks:
Hi Ken. I'm so upset that my broker talked me out of buying call options on the yen and coffee about 2 wks ago. Any suggestions on listening to him without his opinions, if you know what I mean?!!

at 7:25:53 PM
Just because a broker speaks doesn't mean you have to listen. The beauty of this is, it's YOUR inner work and no one else's. You don't need anything from anyone. Halleu---- (Hooray!)

alc asks:
Hi ken, Sugar looks real low...buy and hold? Just like the cattle ranger?

at 7:26:16 PM
Same chart formation, alc!

Dean in Laguna Niguel,CA asks:
Hi Ken....yes, I'm in one of the few conservative pockets in the Peoples' Republic of CA (actually, one of the most conservative areas of the country...woohoo!). Anyway, responding to an ealier question about whether you can start with $5,000, I started last summer with $500 (some Cocoa calls which I made $3,800 on), and have built to around $6,000. Thanks!

at 7:27:18 PM
Thank YOU, Dean! Watch out for those lefties! (Hope you watch the O'Reilly Factor on FOX News Network . . . .)

hendu asks:
Ken, just curious as to why you settled in Grants Pass, OR. form Cali. Does it have to do with the spitual message Clement Watt sent to Victor?

at 7:29:18 PM
No, hendu, but Grants Pass (Southern Oregon) had everything I was looking for (and didn't have) in Southern California -- clean air, plenty of water, plenty of wide open spaces, no sales tax, you can't pump your own gas here!, people are genuine and friendly, no gangs, no grafitti, . . . . Come on out and take a look around!

SuzieQ asks:
Ken, Here is my question again. You know, my Dad lives in Grants Pass, too! What do you think of the spike up in LIBOR? Would you buy puts? If so, what month and level? Thanks

at 7:30:45 PM
Has your Dad been by the office to visit our Trading Lounge? Yes, I'd be pricing LIBOR puts now around the 95 to 95 levels. Thanks!

David asks:
Ken, Thanks for the Tools of the Trade Video. I am on tape 3 and really learning new things. You are sooo right about "stupid news". Question is: How are commissions handled when you roll out of an expiring contract and into a new farther out one?

at 7:32:04 PM
Thanks, David. Aren't those videos GREAT?! Couldn't have WRITTEN it better than it happened in real life!!! How 'bout that call to Bob Brinker?! OK, on to your question: You'll pay one commission when you roll out to a farther-out contract.

flyboy asks:
hi ken, am long RoughRice, and taking quite a hit right now. Would you recommend buy more contracts, as prices have dropped from my original entry point? Thanks for the chats...

at 7:32:40 PM
If you can afford it, yes, flyboy: Average your cost down. If your budget doesn't allow that, just hang on.

possum asks:
possum in NC: Do you see silver honestly making a 50% retracement to around 2700 without someone like the Hunt brothers trying to manipulate the market? I can't see how. But I haven't been doing this long, either.

at 7:33:29 PM
Yes I can, possum. (But I sure wish those Hunt Brothers would take another try at it soon . . . .)

Dusty asks:
Hi Ken, thankyou for inviting and reminding me to this chat.It is great.I have been paper trading and made a few dollars and this chat with questions/answers is putting things in perspective. Thanks again for the course, I hope to start trading soon and have my acct in order,I feel fortunate to have a concerned broker at MST Toronto.

at 7:34:08 PM
Thanks, Dusty. Glad you have a good broker, but remember to make YOUR own decisions . . . .

dave asks:
Ken, If you are long two contracts in the same month ,but at different entry points, can you specify which on you want to liquidate?

at 7:34:36 PM
No, Dave. It's First In, First Out. That's the rule.

nathan asks:
instead of buying cheap options,I am going as far out as possible in coffee options and when the premium on a 150 strike comes down to 100 points I buy it. I now have a march 2003 150 call. Is this a good strategy?

at 7:35:09 PM
I'd sure say so, nathan. Good goin'!

Going to take a short break now. Be right back and then we'll continue on till 8:pm Pacific Time. Stay tuned . . . . (Whistle or something!)

Blue Rose asks:
Redding, CA Since I started the course in Feb & sent in the names of friends and relatives who I thought would be interested in the course, three of them have signed up in the last week, this is coming to be a family affair, do you recommend that we all get together and open one account and each trade different markets or let each one work individually?

at 7:40:24 PM
That's a loaded question, Blue Rose. I'm not getting in the middle of this one! Do what's right for YOU.

rdh asks:
I got out. I lose. I had four sets of coffee options expire, and didn't continue. My last ones expired a few weeks back. Now I've got to fight two problems, buying high and hoping it goes higher, and my own brain telling calling me names.

at 7:41:59 PM
Yes, isn't that interesting, rdh, that the same brain that told you the smart thing to do is get out is the same brain that's now beating you up because you got out?! Isn't that interesting . . . . And that's what Four Star Books is all about. Thanks for sharing this.

sammie asks:
CAN YOU BE SUCCESSFUL DOING OPTIONS WITHOUT PAPERTRADING FUTURES FIRST

at 7:42:43 PM
I don't see how, sammie, but who am I to say it can't be done?

Dale & Ginger asks:
I currently have 2 call options for Jap Yen at 8500. This market is up down and all around. What do you think it is going to do. Are you in this market? I am very new in this business and am having a hard time watching my profit (however small it may be) go up and down and not selling it before it hits my goal? I guess it must get easier. Thanks - Ginger

at 7:44:20 PM
You're doing just right, Dale & Ginger. Here's a solution for you: Blame it on Ken and wait for those 50% targets to get hit!

Joan of San Diego asks:
Hi Ken, There are a couple of chart situations now that the daily goal is too risky, but looking at the weekly, it's incredible. How do you determine to go ahead or not?

at 7:46:09 PM
(Are you Joan Embry from the San Diego Zoo who was a regular on The Tonight Show?!) Take a look at options in that/those markets. Thanks!

Jim from Kalamazoo, MI asks:
I am pricing put options in Eurodollar. I have been looking at Sept. 95.25, Dec. 94.50, Mar. 93.75, and a June 92.75. Are these too far out of the money? I picked these options based on weekly 50% of current contract and adjusting the differences on the further out contract months as described in Twmpmm II.

at 7:46:40 PM
That's just the way I'd do it, Jim. Right on!

Walter Vaughan asks:
What do you think about corn right now? I've just started paper trading. It looks to me like it has been in a narrow sideways channel for awhile, or am I reading this wrong?

at 7:47:22 PM
Looks good to me, Walter Vaughan, and I'm long Corn!

Tymo asks:
Hi Ken, Tymo here from Colorado. I'm still watching sugar & since it's started its move up, this looks like the time to get a few of those call options, maybe Oct. calls, what do you think? I'm itching to get in. Thanks for all your help, love these monthly chats.

at 7:48:19 PM
Don't chase it, Tymo. The time to get in is when sugar looks like it's in a coma . . . .

Oddjob asks:
Oddjob from Mass, Good evening Ken !!! I am long May Copper with a 84 strike call option. I am waiting for my weekly target of 77.25 to be hit. I am using the high of 94.50 in Aug. of 2000 and the low of 60 in Nov. of 2001. I have been thinking of purchasing another call option using the montly chart, the high in 95 and the low in 99 as my montly target.I am going to wait until the weekly target is hit and then see if there is a retracement before purchasing. My question is are you still long copper and are you going to look for a montly 50% target or are you going to stay out of copper after the weekly target is hit? Thank you for these chats and being with us again tonight!!! These are fun and informative.

at 7:50:45 PM
Thanks, Oddjob. I'm hanging on for the monthly 50% target to get hit (and will take some profits along the way at the weekly 50% target). Thanks for joining us tonight.

renegade in stmbt asks:
Hi Ken! I have to tell you a funny story...when we sold our business late last summer, I decided I wanted to trade in the commodities futures market so I bought all of your manuals and tapes. I spent HOURS every day last fall studying. Living in a ski town in November all the news was regarding snow, or in our case in early November, the lack of. I dreamt most nights of commodities trading because I was jamming my brain with so much, but the funny one was when I dreamt that I was long December Snow! Now I'm long May Coffee and I think it will pay off green.

at 7:51:44 PM
That's good, renegade. Glad you got into Coffee. Thanks!

pia12254 asks:
Hey Ken, I got your course a few years ago (when I was about fifteen). Just over the past couple of weeks my younger brother and I decided to open an account in Mini's. We got kind of lucky (I guess using your strategies I shouldn't say lucky) and got into coffee about a week before it took off. We only invested a few hundred but have just about quadrupled our money. Thanks!!!

at 7:53:25 PM
Good goin', pia12254! (And please tell your teachers at school what you've accomplished -- and HOW!) Thanks!

keith asks:
Ken, I'm long an even # of may coffee cont's with puts at 37 in the same month. Planning to lose 1/2 cont's at 50%dailyand hold the other half. Would you get what you can out of the puts now as they are lossing value fast not to mention it's 1 month to expiration which is when they really lose value, or would you keep them and use them as protecion to long more cont's when and if the market sets back? Truelly appreciate all your work and selflessness!!

at 7:54:39 PM
Since time is so short, Keith, I think I'd liquidate them now since you won't be able to use them for protection on another round of futures contracts. Go coffee, go!

Howard from Austin Texas asks:
Ken, At times, I have a hard time with Technical analysis Vs. Fundamentals. Do you feel pricing in a commodity basically creates fundamental events ?

at 7:55:32 PM
That's an interesting idea, Howard. I'm going to think on that (but I'll still continue to trade using ONLY my charts!). Thanks!

pbausana asks:
Ken, do you find it is easier to start out with options, or futures, or a combination of both??

at 7:56:09 PM
That's a question only YOU can answer, pbausana. Go forth and discover that answer, grasshopper!

M.L. from Victoria, B.C. asks:
Ken, just read your reply re answering questions based on the questioner's intelligence. I have asked questions a couple of times before, including tonite, which you haven't answered. Guess I'm in trouble.

at 7:57:10 PM
No, M.L., it's just that there were so many questioners at the same I.Q. level as yourself that I could only take those questions as they arrived.

Russ - Malibu asks:
Dude: I've taken every one of your commodities courses and have enjoyed them all. Today I made more money on May coffee than all the courses cost me. A lot more! A little while ago you told me that you would wait for over 100 Points More! for my last 2 May coffee contracts to hit the weekly 50%. Even though I'm running without stops I'm going for it! If you're right I'll pick up another 75K, then I will relinquish my title and you will be da man! DA ONE-AND-ONLY MAN! Thanks dude, you gotta love it!

at 7:58:02 PM
No, Russ, you will ALWAYS be DA MAN!

Trucker asks:
I know they claim the economy's slow. How come we are swamped with so much freight we can't keep up and commodities are moving up down the hiways at an ever increasing rate. I work 14 hour days. After this coffee move, I'm hoping to take a break. Thanks Ken for your time, efforts and teaching.

at 7:59:25 PM
That's right, Trucker, believe your charts, not the news. Roll on!

Hammet asks:
Ken, I don't hear you talk much about natural gas options...Do you trade this market and if not is there a reason why?

at 8:00:36 PM
I trade it, Hammet. In fact, I'm long this market.

sdboy asks:
Hey Ken Thank You for all you do for people that want to do something with there lives other than working for someone else. When are you going to come to the Beautiful Black Hills of SD for a Round Table?? Long Sugar and waiting!!!

at 8:01:21 PM
Thanks, sdboy. We're taking requests now for Big Boardroom locations. Call a Course Counselor and cast your vote!

0sa asks:
Hi Ken Don't know much about options , can you tell me what book, cours or video that could be helpful for me.

at 8:02:02 PM
Call a Course Counselor, Osa. (And begin with the Fishing With Options section in your TWMPMM I Course.) Thanks!

zanester asks:
When an option becomes worth $30,000-$50,000 like in coffee, is it easy to liquidate them. Who buys at those prices?

at 8:02:37 PM
Someone who's covering losses, zanester. I know it seems hard to believe, but those buyers are there!

EReh asks:
Hi Ken, Sure do appreciate the opportunity you've presented for unlimited financial success and FREEDOM!

at 8:03:08 PM
Thanks, EReh!

Hammet asks:
January of last year, natural gas hit an all time high by far. Do you still use the 50% rule on a "fluke" like that when a market does something its never done before?

at 8:03:50 PM
Absolutely, Hammet. That's no "fluke;" it's "footsteps on the moon" (meaning, it either hit that price or it didn't. And if it did, there's a reason for it.)

grantman asks:
Is open interest important

at 8:03:57 PM
No.

Kathy from North Dakota asks:
Kathy from ND Ken can you please clarify your response to Sammie. I was under the understanding that a person could paper trade options until they were successful without investing in futures.

at 8:04:40 PM
Yes, Kathy, that's true. But (to me) you must understand the basics of futures first because that's what you're buying options on. Thanks!

Tom AK asks:
sammie, it is being done by me and (options trading)! i never did understand futures

at 8:05:00 PM
!

Reedist Ohio asks:
Was wondering what ever happened to biker chick. Did your son get married to her?

at 8:05:28 PM
I don't think so, Reedist Ohio . . . .

TahoeClay asks:
Hey ken and Crew, Thanks very much for an entertaining chat.

at 8:05:45 PM
Thank YOU for logging on, TahoeClay.

southwest asks:
Ken, when you say to wait for a temporary drop in COFFEE prices before buying more calls, do the temp drops really make a significant drop in the option premium? Sorry for the dumb question but I'm new at this. Thanks.

at 8:06:21 PM
It's not dumb, Southwest. Yes, they drop, but usually don't get as cheap as they were BEFORE the rise. Thanks!

Well that's it for another month. Here are my favorite web sites if you're interested: www.guyfinley.com ; www.LP.org ; www.uschartco.com ; www.fourstarbooks.com. My next chat will be Tuesday, April 9. Also remember Matt's stock and commodity chat next Tuesday, March 19. And join Guy Finley's monthly chats the first Thursday of every month 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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