Commodity Chat With Trader Jim! (tm) with Jim Prince
from June 6, 2006
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Hi everyone, Trader Jim here. . .
I'm really excited to be with you again tonight. Before we get started with this evening's chat, I thought you might be interested in a quick account of my relationship with Ken Roberts, the Ken Roberts
Company, and my qualifications.
I purchased Ken’s original TWMPMM Course back in 1985 and met Ken in 1988 as a Course Member. I began working for him in 1993 when he moved the Ken Roberts Company (KRC) from Southern California to Southern
Oregon. For over 12 years I’ve been the KRC Company trader. I worked side-by-side with Ken writing the Company Alert-Lines!, newsletters, online chart book, weekly email updates, "It Just Happened" emails, and developing trading strategies. In addition, I’ve moderated Ken’s monthly internet chats since their inception in 2002. I’ve also taught the KRC Weekend Trading Camps as well as roughly 100 one-on-one
seminars with Course Members.
I feel honored and privileged to have known Ken for 18+ years and worked with him for 12+ years. It’s not often that we have a chance to “work” at something we actually love and feel passionate about. I’ve been blessed, as it never felt like a J.O.B. coming into the KRC office each day because I love the markets and I love teaching about them. Thanks, Ken, thanks for the memories and opportunities.
A New Beginning. . .
For over a month now, CRB has seamlessly taken over all aspects of U.S. Charts and the World’s Greatest Business™. CRB is an institution in the futures and financial industries and has been publishing
continuously since 1934. CRB offers an incredible array of online resources and trading tools and continues to lead the pack and set the standard in the financial/commodity industry.
Working with an “institution” in the commodity industry such as CRB is a real blessing. We (CRB/US Charts) have many new products and programs in the works, all of which I think, will delight, surprise
and amaze you in the coming weeks and months.
As we begin this evening’s session, let me state that the reason these monthly chats are conducted is to: 1. provide you the opportunity to ask questions and 2. 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.) 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, please identify WHICH ONE. Also, when relating trading experiences and/or results, please provide details: Futures contracts, options, options AND
futures, etc. This helps others follow along and learn from your experience too.
wildhog asks:
What is your opinion of the forex market for trading?
at 6:12:42 PM
Hi wildhog!
The Forex market can be very volatile! It's a 24-hr market so you really have to mind your positions. If you're considering trading the Forex I'd recommend that you open a "demo" account at one of the many online forex brokers on the net.
Thanks for joining us tonight!
Mike in NYC asks:
Question about "Entry Price" for Trend Seeker?
Is this always the Closing Price for the day the Trend begins?
at 6:14:48 PM
Howdy, Mike in NYC!
Yes, Trend Seeker's Entry Price is the closing price for the day the trend begins. Hey Mike, how about that Yankee/ Redsox series this week?
DAVE FROM OHIO asks:
TRADER JIM, HOW DOES ONE DECIDE IF THE PENNANT FORMATION IS A DITRIBUTION TRIANGLE OR A CONSOLIDATION PATTERN AS IN TED WARREN'S TEACHING CHARTS ????? LOVE YOUR TRADING VIDEOS ON FRIDAY NIGHT...DAVE FROM OHIO
at 6:19:54 PM
Glad you could join us tonight, Dave from Ohio! It's difficult to know for sure, but here's how I do it. First I always try to trade with the trend. If the trend that preceded the pennant is up, then I'm only interested in trading a breakout to the upside. Second, it's important that Trend Seeker says the market is in an up trend too. Then if prices breakout to the upside and the Trend Signal Ranking is at least ranked strong, I'll enter the market on the breakout to the upside.
A market that is consolidating generally will not meet the above criteria. Thanks for the kind words about the videos too!
phutures from phoenix asks:
It seems that many markets do not trend the way they did just a few years ago. Is it just me or has anyone else noticed the same thing?
at 6:22:58 PM
Hi phutures! Well. . . there are many markets in longer-term trends right now. Remember, market price action moves in cycles. So markets will trend up and then pull back. Or trend down and then retrace.
That said, overall, markets do tend to move sideways more than trend.
That's why I prefer using charts and Trend Seeker together. Combined, they offer a good opportunity to enter any number of paper trades throught the year.
trwtrader asks:
Jim,
The Trend Seeker and the weekly online Video Trading Lesson are an awesome addition to US Charts. Thank you.
at 6:25:35 PM
Thanks, trwtrader! I just made a brand new 12-minute Trend Seeker online video today. Be sure to view it from the Trend Seeker page as soon as you can.
Glad you like the weekly Video Trading Lessons too. I really enjoy making them.... might even throw in a joke or two along the way as I produce more (my wife says I'm my biggest fan when it comes to comedy).
Thanks again!
jerrya asks:
I like the videos. Good reminders of how to trade! However the new trend seeker does not help much to tell if change from moderate to strong. Any suggestions or improvements to be added to address this missing feature. Thanks for all you have done so far!
at 6:28:42 PM
Hey jerrya! I produced a new Trend Seeker video today that includes a lot more information about using that portion of the web site. Be sure to take a look.
As with anything new, it will take a bit to get used to using Trend Seeker. However, I think if you give it some time you'll find that it is an awesome trading assistant.
I appreciate your kind words. I love working with folks and love the markets!
mrbaxtor asks:
Hello Jim, There does not seem to be alot of trades being entered into which are affordable right now. I am paper trading a few markets as you chart, but don't see any big money moves, is this just a slow time of the year?
at 6:36:31 PM
Be sure you take a peak at the Chart Book, mrbaxtor! I've outlined many opportunities the last couple months. Recently we had opportunities in Coffee, the Canadian Dollar, Cotton, and Eurodollars.
I guess "affordable" is relative. Just as each of us have different personalities, we also have different risk tolerances and pocketbooks. That said, the summer months do tend to be slower as many of the "big" traders begin to take vacations, so volatility does tend to slow down.
Keep your nose to the grind stone and don't' force anything. Let the markets come to you!
Mike in NYC asks:
Would you ever consider doing a US Charts Video Trading Lesson, Every Day?
I think they are terrific, and we all could learn so much, with a daily 5-minute tutorial about a market for that day. Integrating the Tutorials with the principles of Trend Seeker, technical chart formations, entry & exit points, stops - all this would be fabulous to learn about every day.
at 6:39:43 PM
Good question, Mike in NYC, actually we have plans for something very similar a bit later this Summer. Be sure you check your weekly Friday emails regularly as I'm sure that will be the first place we'll announce the program.
Ethan asks:
Is there anybody here?
at 6:42:30 PM
We are here, Ethan! Having a great time too!
Curt S. asks:
See a top formation and incline wedge in Sugar. bougt some puts at 50% level buy using the top formation. In a incline wedge formation, prices usually go up. would you short sugar using the top formation or go long using the wedge formation
at 6:49:51 PM
Hey Curt S! (Sounds like Curtis). In the Chart Book I was actually following a large pennant in July Sugar for the last couple of months. I prefer to focus on pennants and triangles. Few trades agree on what a wedge is and how it should be traded, so I avoid calling (or trading) them. Anyway, since the trend that preceded the pennant formation in Sugar was up, we were only looking to paper trade a breakout to the upside. This was a bullish pattern in my opinion. However, prices eventually broke to the downside so we avoided paper trading this setup. Remember, we like to see prices move in conjunction with Trend Seeker. If they disagree we'll pass on the setup. I adhere to this saying. . . "the trend is your friend until it ends."
bahamapapa asks:
Hi Jim,: Is it possible to have the weekly trading lessons stored in the archives like the chats, for future reference
at 6:51:17 PM
Howdy, bahamappa! Yep, we are working on that and hope to have an archive page up in the next week or so. The programmers have other things that need attention right now, but an archive page is on the list. Thanks!
vvangus asks:
Do you ever consider or weigh movemnets in a sister commodity, ie. gold or silver, to influence a dicision to enter or exit a market?
at 6:57:22 PM
vvangus, I've only done that when trading the Dow mini futures. I'll take a peak at the S&P emini or Russell mini futures. But for the most part when trading commodities I don't. I strictly try to decipher each individual market on its own basis. But........ gold and silver, corn and soybeans as well as several other markets in similar sectors often tend to move in tandem. Good thing to paper trade. Let me know what you come up with!
AroundTheWorld asks:
Question from Montana: I am just getting started paper trading, but feel like there are "too many" markets for me to track as I learn. Do you have a recommendation for a few markets to follow as I figure out what the heck I am doing? Thanks
at 7:01:51 PM
Great question, AroundTheWorld! When chatting with a newbie I will usually mention that a good starting place is to look at the margin of the individual futures contracts (found in the chart legends) -- even if only trading options. Generally the most volatile markets will have a very high margin. Thus option premiums will be high as well. Therefore, by eliminating high margin markets you will begin to narrow your focus. Do this and get your list down to four or five. I say just four or five because for me it's just too difficult to realistically track more. Try this exercise and let me know how it works for you.
phutures from phoenix asks:
Are the traditional KRC trading strategies (123 t&b, channel, Amplified Trading Techniques, etc.) still as valid as they were or, has TOVI superseded everything?
at 7:05:09 PM
phutures from phoenix, the chart patterns you mention still work as well today as they did "back in the day." (Don't tell anyone I said this but...... they work in the stock market too!)
You can learn a whole lot if you paper trade, paper trade, paper trade!
trwtrader asks:
Jim,
Should Trend Seeker be used in conjunction with TOVI Short Rankings? Thanks.
at 7:07:09 PM
trwtrader, they are different animals. Trend Seeker has it's own version of short-term rankings. Be sure to checkout the newest Trend Seeker video, it will explain a lot. I just posted it prior to this evenings chat.
Paul from Midland, Ontario asks:
Hi Jim,
is the "Ultimate Technique For Success" on CD and DVD or just cassette and VHS?
at 7:09:47 PM
Hey Paul from Midland, I'm not sure. That's Ken's baby. Best bet is to contact Four Star books at http://www.4starbooks.com . I know Donna will be happy to help you.
Vern asks:
Hi Jim, nice to meet you. What do you think about trading uranium ? China seems to be the biggest consumer and I think perhaps it could be a good opportunity to trade this market. Will we be able to see Uranium as one of the energy market featured in the charts section in USCHARTSCO ?
at 7:13:25 PM
Hi Vern! Nice to meet you too. Wow, I don't know a thing about uranium. Not sure if there's much of a market for it either. So I'm not sure if US Charts will carry it anytime soon. To find out more about it I recommend you contact CRB and find out about their Commodity Year Book. It covers everything -- some of the most bizarre markets you can think of. Check them out at http://www.crbtrader.com/fund/default.asp
robertin biloxi asks:
Trader Jim, what's this about trading videos on Friday nite? How do I get in on this?
at 7:17:40 PM
Hey robertin biloxi! The videos are free to all US Charts Online subscribers. If you are a current subscriber you can view the videos from the home page of US Charts when you're logged in. Once there, find the link (in white text) located at the top of the page. If you're not a subscriber be sure to contact US Charts in the morning at 1-800-230-2427. Thanks for joining us tonight.
dave asks:
Hi jim, I'm having trouble viewing your video; Do I need to download something? Thanks - Dave
at 7:22:29 PM
Hey dave, Here are a couple of things you can try. First, be sure you have latest Macromedia Flash Player installed on your computer. The Flash Player is available for free by going here: http://www.adobe.com/shockwave/download/download.cgi?P1_Prod_Version=ShockwaveFlash . Also consider disabling Norton or McAfee anti virus while attempting to view the videos. They tend run interference. (Then be sure to turn your anti virus program back on right after view the video.)
Just wanted to send out a big THANK YOU to computer guru Steve O'Connor and my trading assistant Corporal Louie Nunez tonight. They've done a fantastic job in making sure we're able to serve you folks to the best of our abilities. Thanks guys!
sparkles asks:
Jim, thank you for continuing the chats. We've all seen the wonderful work you've done. I was wondering if you could explain how the new trend seeker is used to trade the moderate to strong strategy?
at 7:33:29 PM
sparkley, Right now that strategy has been put on hold. Trend Seeker's (TS) Trend Signal Rankings are short-term -- covering just a few days (this is explained in the newest Trend Seeker video that was posted tonight). So, in a nutshell TS different. Don't fret though, I'm working on a replacement strategy. Should hopefully have it available in the latter part of the summer.
catskill,ny. asks:
Hi! Jim, I have always wondered what makes a price change go down. Is it because of the bidding, or is it because someone is unloading a lot of contracts and reducing the demand,like stock?
at 7:36:22 PM
Good evening catskill,ny! Quite simply it's supply and demand! When a market goes up it means there is more demand (buyers). When a market goes down, it means there is more supply (sellers).
The supply and demand function works the same whether it's in commodities, stocks, forex, bonds, or real estate.
Thanks for the question.
Vern asks:
Trader Jim, Great job with the Trend Seeker Video and the trading video training for fridays! Could I conclude that I only need TS and Charts to do all my paper and real money trades ? Also, is it normal to buy a call/put option farther out by at least 90 days left to expire and then EXIT again within a week for profit/loss ? Cheers! Vern
at 7:43:30 PM
Thanks for the kind words. Well Vern, that's all we use -- TS and the charts. As far as buying options. . . we prefer to paper trade options that have at least 90-days remaining until expiration. This time frame seems to provide enough time for the market to move -- if it's going to do so. Plus we don't pay a lot of "time value" for the option by looking for more time. Actual exits are up to the individual. I would never tell anyone when they should exit a trade. That's up to the individual and exactly why each of us needs to have a trading plan in place prior to entering a position. Paper trade the exit strategy you've mentioned above and see how it works for you. Then let me know your results. Thanks!
I'm going to take a quick break and then be right back for another 20-minutes.
newtofut asks:
What was the reason for switching to Trend Seeker from Tovi's Trend Tracker? Did Trend Tracker not work anymore?
at 7:55:40 PM
CRB, the company that purchased US Charts Online from Ken, has been providing trading tools (of one source or another) to traders for over 70 years!) With all the "tools" at their disposal we (US Charts) elected to "show the world" if you will, a series of these tools. We call them/it Trend Seeker (TS). We feel TS is a fabulous trend following tool. And think that you to will see that the proof is in the pudding soon rather than later.
green asks:
Thank you for keeping these chats going! I am a course member since 1999 but dropped away in 2002. I have recently moved back to the west coast and plan to get involved paper trading again. Is it appropriate to ask here how much membership in US Charts is and where it is located (which time zone)? And I'm interested in TOVI also. Is trend seeker anything like TOVI? Thanks.
at 7:57:48 PM
Welcome back, green! US Charts is located here in Southern Oregon. To find out more about subscription rates be sure to give us a call in the morning at 1-800-230-2427. Welcome back and I think you'll really enjoy what we currently offer as well as all the other goodies we have in store for you folks.
Curt S. asks:
After paper trading for some time, I finally got a real money trade in August Live Cattle. Saw the bottom formation and got a 80 call option, which was the 50% level. Less commision and fees, I came out ahead over $400 in less than a few weeks. Not that much, but it showed the chart formations work.
at 8:02:49 PM
Congrats, Curt S! A profit is a profit...... never forget that! Don't get caught in the trap of thinking you have to make a million dollars from one contract in one trade. That's not realistic, not by a long shot. The idea is to build your account slowly over time. Then when you can afford to (and only you know when the time is right) trade two positions and so on. That way you can make money from small moves. Remember this, you don't have to buy at the bottom and get out at the top of a large move. Most successful traders don't. They simply try to get a piece of the pie. And a bunch of pie slices can add up to a lot of pie! And always remember to keep your stops and protect your capital, whether you're trading one or ten positions!
Seymore Shakeouts asks:
Hey JIM; Got Ted Warren's book about 11 months ago, been real money trading the system for the last 5 months, options and futures with great success, this guy was a genius, although it took a while to re-wire my brain to his way of thinking. My question is, did Ted ever factor in the 50% retracements as an exit point? I know he mentions it very shortly in the book but without much detail.Reason I'm asking is because of that juicy looking shake-out in Canola today.
at 8:04:59 PM
That's great, Seymore Shakeouts! Yes, Ted was ahead of his time. I have read (and reread Ted's book) many times. I've never come across anything that says Ted actually used 50% retracements. Ted focused on trend lines and used them as his primary exit points.
tdog asks:
I think everyone is watching and waiting. Welcome Jim. Glad to have you. I have just recently started back into the greatest business ever. The way things are going I need to do something extra and this is the business to do it in! Thanks for your help.
at 8:11:08 PM
Glad to have you back, tdog! As Ken used to say, this is truly the "World's Greatest Business!" I'm glad you and everyone else are here tonight. And I'm happy to help as much as I can! Stay in touch.
dirtfarmer asks:
A follow up on Curt S question from earlier. I understand not trading with the pennant break on sugar because it is going against the previous trend. But I also see a 123 top and break (1 on 2/6,2 on 2/28,3 on 3/30, and break on 5/31) Am I seeing this wrong?
at 8:15:12 PM
Hey dirtfarmer, You are seeing the top formation correctly. However, I was strictly watching the pennant formation. Also, if memory serves me correctly, prices broke below the #2 point but TS did not agree that prices were in a downtrend. So a paper trade was not iniated.
Andrew from Pacific Grove CA asks:
Welcome Jim,
I just tested your new US Chart tutorial and it is great! This is really going to be helpful for me. Thanks!!!
at 8:15:31 PM
Glad you like it!
Deb & Andy from Ontario asks:
Hello Jim, Just wondered if you have any advice for the few people who can't get high speed internet in their area yet to watch the
videos. We have downloaded the macromedia flash player, but still can't watch the videos. Any suggestions? Thanks
at 8:17:43 PM
If you're using dial-up it's going to take awhile (like a loooonnng, loooong time) for those files to load on your computer. Unfortunately there's not much you can do other than wait and let them load.
Areanne asks:
I've been completely out of the action for about five years now. What would you recommend as the best way to reintroduce myself to trading and to the basic concepts the Ken Roberts way?
at 8:22:24 PM
Howdy Areanne! Glad you're excited again. Visit http://wgbmembers.com and/or call a Course Counselor at 1-800-230-2427 for more information. Thanks for stopping by!
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 lesson at: www.uschartco.com . This is a fantastic teaching tool and free to all 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.)
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!
My next chat will be Tuesday, July 11. God Bless and I look forward to seeing you then!
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