Commodity Chat With Trader Jim! (tm) with Jim Prince
from July 13, 2006
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Hi everyone, Trader Jim here. . .
Thanks for joining us this evening. I’m looking forward to another wonderful night of trading questions and comments.
For nearly a quarter of a century Ken Roberts stated that this is the World’s Greatest Business™! How could anyone disagree? What other type of business can be operated from virtually anywhere in the World -- without the headaches associated with almost every other type of business?
With that question in mind, if you have a commodity business success story that you’d like to share tonight, please pass it on. We’d all love to hear it! The motivation, inspiration, and enthusiasm that
you’ll provide is priceless!
I'd also like to say a special "Thank You" to Ken Roberts for bringing us all here tonight and making this possible. Ken's been a mentor of mine for over 12 years and I look forward to sharing with you some of his many teachings. Make sure you "discover" 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 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.
watinok asks:
Which electronic order is proper for liquidating an option which is anticipated to hit a predetermined target “limit” as in price for example when a pinnate upper trend line is touched?
at 6:09:54 PM
Good evening, watinok! Thanks for joining us. We prefer to use a limit order for not only option exits but also when purchasing options. That way we limit what we'll pay for an option as well as how much we'll take on exit.
silver asks:
TX
Jim, I would like to know if it is possible to add a column on the Option History that lists the closing price of the underlying futures on USCharts.
Example:
Silver Option History
Date Premium Premium $ Futures Price
at 6:14:11 PM
Hi silver! We'll be having a total site revamp soon, so we'll ask the programmers to see what they can do. (Inside tip = the new site will be better than ever!) Thanks!
pegrae asks:
Will you be developing a way to use Trendseeker to implement the strong 1 strategy? That was a successful approach for me on several occasions.
at 6:15:50 PM
Hi pegrae! Yes, we're working a similar strategy for Trend Seeker. Hopefully it will be ready to go in the next couple of months.
michel asks:
i trade on paper just a grain it,s a good idea?
at 6:18:35 PM
Yes, michel, paper trading is something that we all should be doing. It helps us understand the mechanics of the markets. In addition, what other business can you actually practice without putting real $$$ on the line? Great question. . .
Hi All! If you're having difficulty viewing the chat tonight, be sure you're using Internet Explorer and hitting the refresh button. Plus all questions are in red. Thanks!
grantman asks:
What time is the trendseeker updated
at 6:21:27 PM
Hi grantman! Trend Seeker is typically updated at 4:00pm Pacific Time.
scaldabonko asks:
Hi Jim, I new to this but have been paper trading frantically. I'm going to try this but always helps to hear from those who know also. What if I paper traded 2 or 3 options in the direction I believe a market is going but trade 1 in the opposite direction; liquidating the failing side later. Is that a good idea?
at 6:23:30 PM
scaldabonoko, that's a great idea. . . thinking out of the box! Many traders will do just that. My suggestion. . . to paper trade as many "strategies" as possible. That way you'll discover what's right for you. Let me know your results in a few months.
Jack & the Juicers asks:
Jack fm Pickerington,OH Jim, I noticed that TS has Sep OJ at Neutral with a Bullish twist - Yet on the chart it looks like a Big Bear Flag waving..what's up with that?
at 6:27:28 PM
Hi Jack & the Juicers! Trend Seeker analyzes the price action and applies its algorithm to the data. It doesn’t analyze price patterns per se. Keep in mind that recent price activity has OJ pulling back from a strong uptrend. That’s the twist!
Joanie asks:
Shoudn't I be seeing the questions being asked? I'm new and am paper trading options.
at 6:28:06 PM
Yes Joanie, be sure to click the refresh button.
DENVERDON asks:
H i TJ: DenverDon here. I've been paper trading for three months in a row and have been cash positive each month. I am ready to "go live" but don't know how to find a good broker with a good trading platform for options. Do you have any recommendations?
at 6:32:36 PM
One of the best methods is to simply "Google" commodity brokers. Contact as many brokerages as you can and get their "starter packs." The next step is to verbally contact them via the phone. Get a feel for brokers over the phone. Find one you're comfortable with. Remember, they'll work for you so make sure you're comfortable -- it's vitally important.
In addition, if you're just getting started I recommend you use a full service broker via the phone. Using a trading platform is difficult when just starting. You'll make mistakes. Let your broker help you and then, when you're ready, make the move to online trading.
Jim in Northfield asks:
Hi Jim, Will we still be receiving Friday night updates from you alerting us to market opportunities - I really missed your input the last 2 weeks.
at 6:37:13 PM
Hi Jim, the Friday night videos are educational in nature. So I use that time to teach about not only the markets but also the tools of the trade. We'll be adding a daily video market commentary service probably sometime in August. Were tentatively thinking our new "Premium Alert Service" will be available sometime in August. Thanks for your interest and kind words.
Dave C, Natick asks:
Yello! The new US Chart training videos are great! Thanks. I was on vacation in SE Asia and missed a few. I've looked for an archive, but haven't found it yet. Do we have one?
at 6:39:39 PM
Hey Dave C, Natick! Glad you like the videos. . . Our new US Charts Online site design will have an archive area available. We'll store all our educational videos right at US Charts Online and make it easy for you to access them. Thanks!
Ceil asks:
Hi Jim. I've ordered Ken's latest video. Do you know when it will be available?
at 6:45:06 PM
Hi Ceil! Ken is in the final editing stages now. Once the final edits are made it will go out for reproduction -- hopefully sometime in August.
justanoldtrader asks:
Hello Jim,
I see that Ken has passed the baton to ya and I think that's just great, but what is he up to now? Is he doing anything that we need to know about? How can we get in touch with him?
at 6:47:49 PM
Absolutely! Here's what Ken's up to now (be sure to check it out)...........
scaldabonko asks:
When shopping for a broker, will they be evaluating my credit report? and why is it so important they know my financial statement?
at 6:51:48 PM
When you open a trading account the broker wants to know that you can afford the "risk" associated with trading. For example, a person on a fixed income living on social security should not be trading. In addition, if you lose a lot of money on a futures trade the broker wants to know that you can indeed cover the loss. I hope this helps.
todd asks:
I have a silly question: If i look at the Aug 06 NG, and the at the
Dec 06 NG daily charts; I see that for Aug the price is 6.129 and the
Dec price is 9.649; doesn't that tell us something about the prices direction from now? Or not?
at 6:53:47 PM
Hi todd........ not necessiarly. Higher prices in the further out months are often indicitive of storage costs etc. Some traders try to use this information in their trading. I however, like to let the chart patterns tell me what is going on.
Jim in Northfield asks:
Hi Jim, Is there any way for you to answer this: What percentage of the time does the Hi-Lo breakout strategy work? Does the price continue its path the next day? or do I have to give it some time to work? Thanks.
at 6:56:22 PM
Give it sometime to work. This is why paper trading is such a good tool. That said, here's something you'll want to keep an eye on. . . I don't have actual statistics on this, however, it is my feeling that the strategy works best on markets breaking to new highs, rather than new lows. Great question!
BlackZorro asks:
I'm new in this trading business. Question: Why would a person be more inclined to purchase future contracts as opposed to Options tradings? Any advantages with futures or vice-versa?
at 6:59:18 PM
Options are a wasting asset. In other words they are time sensitive and thus will lose value (time and price) if the market doesn't move in the direction anticipated. Futures are not a wasting asset and do not expire like an option does. Be sure to take a peek at your WGB Manual for more insight on this interesting feature of the commodity markets.
Paul asks:
What is the "Premium Alert Service"
at 7:02:07 PM
Hey Paul! The Premium Alert Service has not yet been released. It will be our daily video commentary about the markets -- examining different markets and paper trading opportunities on a daily basis. Look for it sometime in August. Thanks for your question tonight.
junie asks:
Hi Jim, I really appreciate the "Look what's about to happen" notices and your chart book updates. Last night I received the Canadian Dollar notice and this morning it was already at the Extreme rating. My question is should we go ahead and purchase options that are already rated Extreme or wait for a pullback?
at 7:05:04 PM
Hi junie! Great question. . . yes, feel free to paper trade options in markets rated extreme. Ideally if you buy on a pull back the options will be less expensive. But you risk missing a move. Both strategies are great for paper trading. Give them both a try and see which you like best.
green asks:
Hi Jim, I was thinking of implementing a new strategy, at least to me. Am I allowed to buy a put and call option in the same contract month? for example, trading OJ with both a put and a call.
at 7:06:36 PM
Hi green, yes, chat with your broker about implementation of such a strategy.
Paul asks:
will the Friday night videos be teaching trading stratagies like the ones outline in WGB?
at 7:09:30 PM
Hey Paul, the Friday night videos are available to all US Charts Online subscribers absolutely free. These videos cover a variety of subjects from strategies to using various aspects of US Charts Online. If you're having difficulty accessing them be sure to call a Course Counselor at 541-955-2885.
ftc_watch asks:
Hi all. Just watching ...
at 7:13:07 PM
Thanks for joing us this evening. We just enjoyed a great dinner of Thai food with a fresh glass of water. To learn more about the benefits of water be sure to check out the book "Your Body's Many Cries for Water" at 4 Star Books. Here's the URL: http://www.4starbooks.com/product.php?productid=16408&cat=0&page=1
franman asks:
Hi Jim
I've been paper trading for quite some time now and I've done really well. However, when I put real money into a trade it seems to go south on me.
Is there something I'm missing? Does Ken's Ulimate Success Course
possibly have an answer to this predicament?
I'm convinced that this is the perfect business once it runs as it is supposed to.
Any hints and helpful suggestions are appreciated.
Thank you.
at 7:16:06 PM
Howdy franman, Yes! That's exactly what Ken's Ultimate Technique for Success course is all about. I'd enroll in the course and digest everything you can get from Ken - - especially learn more about his Gold Coins! Here's the URL: http://www.4starbooks.com/product.php?productid=16570&cat=0&page=1
NY-Vince asks:
How often is Ken's notebook updated ?
at 7:17:19 PM
Hi NY-Vince! I usually try to update it three to four times a week. I always place the date on the actual chart that corresponds to the day it was updated.
Ceil asks:
What's NG?
at 7:19:11 PM
Hi Ceil! NG stands for Natural Gas -- and that's all I'll say about that (said like Forrest Gump). ;)
Cowboy asks:
Do you use committment of traders (commercial and non-commercial) when making entry and exit decisions?
at 7:20:20 PM
Howdy Cowboy! Nope, we rely on chart patterns and Trend Seeker. That's all we need to trade in the World's Greatest Business!
optionfirst asks:
The metals ( Gold,Silver,Copper)look ready to explode up looking at the latest formation any word on this.?
at 7:22:35 PM
We're watching these markets every day. However, at the moment there isn't a viable trading formation in place for us to paper trade. We'll keep watching and let the charts tell us what to do and when to do it! Keep watching Ken's Chart Book to stay up-to-date!
NY-Vince asks:
Jim,
Do you use bottom's and tops in your trading as well
as channels, flags, wedges, triangles and pennants?
Which do you seem to use most?
thanks
at 7:25:22 PM
Hey NY-Vince! We sure do.... In fact, I just sent out a special email update titled "It Just Happened." If you haven't seen it yet be sure to visit your Members Mailbox at: www.wgbmembers.com to access it.
slimjunior asks:
hi jim, i placed an order to buy nov oj put about an hour before close and it wasn't filled.
is that typical?
at 7:27:41 PM
Hey slimjunior! I'm not sure about typical but it depends on the price you placed the order and how far it was away from current prices.
George asks:
Could you possible explain the Hi/Lo breakout strategy. You mentioned that TS is not usually a factor in the H/L breakout...but how high, how low? The 50% mark maybe? Is it a breakout of a channel and/or pennant...etc.
at 7:31:29 PM
Hi George, the strategy is explained in detail (with charts and text) at www.wgbmembers.com. If you visit the strategy section you'll find it there. This strategy is based entirely on price action. By nature if the market is breaking to new highs/lows TS will, by default, be in an uptrend or downtrend. It's the nature of the beast. How high is high? Good question. . . look at a chart of Copper. You were provided multiple opportunities during the last couple years in this market -- using the Hi-Lo Breakout strategy.
green asks:
Jim, it's my first time in this chatroom. I was wondering if you had audio so that we could at least hear you. If not, It would make this chat much better to hear you.
at 7:33:01 PM
Hi green, No audio yet. Maybe one day down the line. For now, text will have to do -- along with the weekly videos. Thanks for your kind words though. . . .
chongju64 asks:
Hi Jim how long does a trend take to develop as far as the trend line is concerned?
at 7:35:40 PM
When using trend lines I like to be able to have a minimum of two touches to that line. If not, I won't consider it a trend if ONLY using trend lines. However, we have Trend Seeker available and that's a BIG plus and why I won't just use trend lines. Great question, thanks!
Chuck asks:
Jim- Are there any new commodities on the horizon? Fresh water, Internet access (bandwith) biodeisel?
at 7:37:13 PM
I'm not sure, your best bet is to check with the various exchanges. For instance, you can trade housing futures now via the Chicago Mercantile Exchange (CME). All the exchanges have web sites so be sure to check them out!
sir larry asks:
Hi Jim what was the first trade you made? and how much did you make?
at 7:41:07 PM
Hi Larry........ I don't remember the very first trade I made but I do remember the very first "big" winner I had. It was the summer of 1988 and I was alerted to a trading opportunity by Ken Roberts via his TWMPMM Course newsletter. It got in July 1988 Corn. Bottom line is I was long a Corn futures contract during a draught. I was in the trade for a roughly a month and did very well. (Take a peek at a monthly chart to see the move.) Thanks!
SC asks:
Hi Jim, how different is the old trend traker from the new trend seeker.
at 7:44:25 PM
Hey SC, both tools are great. But both use different algorithms to calculate the trend. If you’ve been studying Trend Seeker for very long you’ve probably noticed how beneficial and clear-cut Trend Seeker is. I love it!
bonita Joe asks:
Jim, I have a question on sugar. The weekly chart has a very definate "Bull Flag" pointing downward, which can mean an uptrend is on the way. I trade mostly options; bought Oct '06 Puts 6 months ago before this flag formation and now am going long with futures using the Puts as margin. On Ken's Trading Book you work with the daily for the immediate future. Is it safe to assume the weekly is for longer term trading? Bonita Joe
at 7:47:16 PM
Hi bonita Joe... thanks for joining us! I'd agree that if you trade off of the weekly chart, you're a longer term trader. Trading from the daily chart is not quite as long-term.
bonita Joe asks:
Jim.........does that "colorful" shirt actually make you trade better?
Bonita Joe
at 7:49:08 PM
Hahahahha, we'll bonita Joe I don't know about that, but I actually think it takes the focus off of my proboscis!
Dave C, Natick asks:
Jim, I just wanted to say that you're doing a great job, and it's much appreciated. I trade with real money, and having access to timely and accurate information & advice really makes a difference! Thanks for your continuing efforts and improvements. Looking forward to upcoming enhancements. Keep 'em comin'! Thanks.
at 7:55:09 PM
Hey Dave C. . . I really appreciate your kind words. I love working with you folks and doing all I can to educate you. I owe a great deal to Ken in that I was able to gather a ton of experience working for him. That said, I'm happy to pass it on to you!
junie asks:
National Fuel Gas (here in northwest PA) is now asking the PUC for an increase in basic rate because people have been conserving too much energy! Go figure!
at 7:56:15 PM
......... imagine that!
ladygarnet asks:
Hi Jim,
I really enjoy your videos. It's just like sitting in a classroom, and I have learned a lot from them. I am very excited about the coming changes you are going to make in the USCharts online. I'll be watchng.
at 7:57:00 PM
Glad to hear it! We have some really neat thing coming....... stay tuned!
Paul of Mokena asks:
Jim, another question from Paul in Mokena, IL (just outside of Chicago).
Looking at crude oil options, they are going absolutley bonkers. Is this something we should stay out of, or just look at for "day trading opportunities"?
Thanks, and you guys are great!
at 7:59:13 PM
Crude Oil options are very expensive! Should you trade them? Only you know if you should. In reality it depends on a lot of things. . . your risk tolerance and pocket book just to mention a couple. Paper trade them to see if you fit the market!
tradetracker asks:
tradetracker asks: Who is Jim Price? Tell us something about yourself. Your business background, how you came to commodities, what are your long range goals for this program, etc. I really like all the changes and additions to this service and hope to understand what you are all about. Keep on keepin on Jim I am impressed!!!
at 8:08:36 PM
I don't have a business background -- rather a KRC background in the markets! 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. Ken got me started, and kept me going, in this business and I'll be forever grateful. I and the crew here at US Charts Online/CRB are working hard for you folks and will continue to do so. On a personal note I have a wonderful wife and three great kids. I'm very blessed!
Bayou Bill asks:
Please explain trend line.
at 8:12:02 PM
Hi Bayou Bill, A trend line is a line drawn on a chart that connects points of support or resistance. For instance, if I were to draw an uptrend line I would connect points of support (lows) with the line. Take a look at December Oats in Ken's Chart Book. You'll see two trend lines that outline the pennant. Focus on the up trend line (lower line), it connects two points of support.
Eddie asks:
Eddie in Windsor, Ontario
Hi Jim, Do you still use TOVI to trade, or is TOVI no longer going to be a part of what you teach in the WGB, or am I just jumping to confusion???
at 8:15:21 PM
While TOVI is a good tool, it is not part of US Charts Online. They are separate companies. We use Trend Seeker and the charts at US Charts Online to make all of our trading decisions.
Ceil asks:
Oooh... you're revaping the site. Does that mean we should submit our own personal favorite enhancement requests?
at 8:17:50 PM
Sure..... give the Course Counselor's a call. They'll be happy to pass on your requests.
fix and fly paul asks:
Jim: Off the wall question. Does anyone know if you can trade commodity options in a Roth IRA? This has some very interesting potential. Thanks for all the past help. Fix and Fly Paul
at 8:19:59 PM
I'm not sure about a Roth IRA. I recommend that you check with your CPA, Investment advisor, or commodity broker.
nomad asks:
I'm probably late on the planning, what happened to Ken? Are you now the main advisor?
at 8:23:36 PM
Ken is still alive and kicking. He's simply moved on to other interests. You can find out everything -- in Ken's own words by
clicking here
Robin in Phoenix asks:
Good Evening Everyone:
I prefer to cut to the chase, so here goes.....
I purchased a several options in May that were in the money, at the time of purchase. Over the next two months, these options, most are Sep 06 month, I noticed, that even though the general tendency to continue to move in my favor was present, some of the options actually declined in value over the first 60 days, even though they are further in the money now than when they were purchased. My broker explained this phenomenon as volatility and the summer doldrums.....now I understand the time element and maybe summer doldrums, but I don't quite grasp the volatility explanation. Could you enlighten me a bit?
Hope things are cool where everyone else is tonight, we’re expecting 116 tomorrow.
Cheers, Robin
at 8:28:35 PM
Volatility is what makes (or breaks) options. If the markets are relatively quiet options won't move much and/or may even decrease in value. A market that is moving sideways is considered a low volatility market. However, if a market is moving relatively quickly, in one direction or the other, volatility is quite a bit higher. Therefore, option premiums will be higher or increase in value. (We're looking at over 100 degree temps this weekend and next week.)
NY-Vince asks:
How closely do you watch the strength rating of TS ?
And will you only enter when the rating is strong, extreme or
if the chart formation is there will you enter as long as the
trend is with the formation UP or Down not really caring about the
strength rating? thanks
at 8:32:17 PM
For me, I really pay most attention to the Trend Seeker Trend. Secondly, I prefer to enter positions on breakouts of chart patterns when the Trend Signal Ranking is at least "strong."
David asks:
Oxnard, Calif
Jim. Is there a clear step by step process for determining when to enter a trade, Paper or Real?? Read the manual twice and still kind of unclear as to proper steps to evaluate.Thanks
at 8:34:56 PM
There are two things you might consider. First, refer to the Strategy section on the WGB Member site. Read through the strategies and you'll see that each step is outlined. Next, call a Course Counselor. They are more than happy to help you get started and point you in the right direction.
ready2win asks:
Hello Trader Jim. Will you be having any trading camps in the future?
at 8:36:13 PM
Hi ready2win! We're gearing up for something in the fall. Be sure to check the chats and weekly email updates for more information. Thanks for your interest!
We're going to do something new and different to continue your commodity trading education. Sometime in the next 2 weeks we'll be posting responses to your unanswered chat questions in the WGB Members chat archives. You'll be able to find them by going here.
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! Trade your plan and plan your trade!
My next chat will be on Thursday, August 17, 2006. God Bless and I look forward to seeing you then!
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