Ken Roberts Chat

Let's Talk Trading (tm) with Ken Roberts
from September 10, 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 Cuban Partagas Churchill fired up, here’s our plate of freshly baked chocolate chip cookies, the coffee’s poured, so let’s talk commodities!

macho trader asks:
Ken, at what point can the number of contracts you are trading effect the market? For instance you have said that you are short a couple thousand contracts in the euroyen. Can you roll all of those contracts at once or do you have to do it over a period of time? Thanks.

at 6:11:42 PM
In this market, at this time, macho trader, it takes three orders throughout the day to roll 2,000 Euroyen contracts. But in May Pork Bellies, for example, with Open Interest of 19, things would be entirely different! Good question . . . .

The Professor asks:
Hi Ken, I've been in Wheat for quite some time now. During the past four years a very long channel has been made, and the weekly target, which has been hit, seemed low. Are you waiting for the monthly at 485, or did you already take profits at the daily 50% and weekly 50% Thanks.

at 6:13:10 PM
Yes, yes, and yes (I'm still waiting for the Monthly target to get hit in Wheat). Nice move in Wheat, huh? My daughter, Nikki, just cashed in some of her $50 call options for over $2,000 each!

Krispy Kreme asks:
Hello Ken. David from Houston. After being out of trading for about 2 years now I decided to give it another shot. That box of Krispy Kremes really came in handy when I saw the charts from all my previous trades. I get the feeling a lot of us are nervous about spending more money in options than the 50% retracements will give in return. After looking back at Cocoa when I first started buying options in Jan. of 2000 I would have had to buy 6 or 7 rounds before it hit my weekly target of 1270 in Nov. 2001. Is there a formula to determine the risk/reward ratio in options, or is it safe to just keep buying rounds until the cows come home?

at 6:15:40 PM
No way, Krispy Kreme! Six or seven rounds in ONE year (or even TWO)? I don't think so. Buy options as far out as possible (which, at least, is nearly one year --- except in the Currencies). But yes, I say keep buying rounds until the chickens come home to roost!

DAVE FROM OHIO asks:
KEN: WHEN TRADING CHANNELS AT WHAT TIME DO YOU MOVE YOUR INITIAL STOP ONCE YOU HAVE BEEN TRIGGERED IN THE TRADE?

at 6:17:19 PM
No pat answer here, Dave. That's why I say "Stop placement is an art, not a science." But try letting prices break out of the channel, travel a bit to make a support point, then place your stop under recent resistance. Thanks.

willbefree1 asks:
Hello Ken, willbefree1 from dayton oh. Up $4,000 in coffee in just three weeks! Thanks Ken!

at 6:17:57 PM
Right on! See? This really does work, doesn't it?!

coffee lover asks:
If deep out of the money options increase in value at a higher percentage than closer to the money options do, then why not buy options beyond the 50% to get them really cheap? Can still liquidate them at the 50%, right?

at 6:18:33 PM
Absolutely. Yes, give it a try.

jmfromsunnyflorida asks:
Ken,how far out would you go for a cocoa put now that it's so high on the chart?

at 6:19:46 PM
(Is this actually a trick to get me to compute the 50% retracement level for you . . . ?) Try a 1350 put.

TEXAS RULES asks:
HELLO FROM HOUSTON. Ken, what are your profit levels in Coffee? Hopefully it's on the way. Patience is killing me !!!

at 6:20:37 PM
179 on the Weekly. Go pour another cup right now . . . .

prodigalsun asks:
Hi Ken and crew! anticipate a lot of excitement about coffee's move tonight! Just wanted to say "hey" from the Destin,FLa area and thanks for everything! Hope to visit your town soon.

at 6:21:07 PM
Thanks! Come on out! It's beautiful here.

CarribeanCraig asks:
Hi Ken, Just a note to let you know trading futures has surpassed my wildest dreams ( my account just passed 100k in 9 mos. ) ! I find myself watching the markets move during trading hours, is that not a wise thing to do.

at 6:21:43 PM
Hey, sounds like whatever you're doing is working, so keep doin' it! Thanks!

JT asks:
Hey Ken and gang, I love these chats! Thank you for doing them. I am doing the OPIP in Eurodollars, once the market starts moving my way, when do I stop adding to my position?

at 6:22:28 PM
When those options get "too expensive" (but that's relative --- personal).

Sam-I-Am asks:
Hi Ken, Thanks so much for the chat archives!! Great idea. By my calculations, crude oil is only in a high level three right now, but do you think its about to top out. Is it a good time to start pricing puts? Forever grateful for your little brown booklet that introduced me to commodities!!

at 6:24:10 PM
Thanks Sam-I-Am! Yes, I'd say crude (Black Gold, Texas Tea) is hankerin' to make a setback here, so price dem puts!

HEYKen!!!! asks:
What do U think of buying put options in eurdollar? Right now. KEN'S THE MAN!!!

at 6:24:40 PM
Thanks! I think that would be exactly the RIGHT thing to do now.

Eric in Fort Worth asks:
Ken, thanks again for these chats. You have stated that you do not add contracts to your position once the market is moving in your favor, although apparently Ted Warren did (triangle breakouts, etc.). What is your reason for not doing this? Thanks.

at 6:25:12 PM
Risk, man, risk. I don't like chasing moving busses.

CW from Norman, OK asks:
Hello Ken and Crew! I just finished reading my copy of Vernon Howard's Psycho-Pictography again, I read it two or three times a year, and this book is truely amazing how many levels of understanding it contains and teaches on, thanks for the book, it came with my Rich Man's Secret Course. Speaking of Rich Men, I'm much richer with the latest move in coffee, I would like to know if you would share what you see as points of resistance on the weekly and monthly charts? Thanks for everything.

at 6:26:58 PM
Thanks CW. Nope, won't do it. YOU find those points of resistance! (Okay, I'll give you one: 120. There . . . .

Coffee is Celebratory asks:
From CA, Do you know if S&P and Nasdaq will at some point accept GTC orders again? The day orders make it harder to get option fills. My mom and I are making lots in Coffee, Beans, Bean Oil, Wheat, & Corn! You are an amazing teacher! Thanks!!

at 6:28:08 PM
Thank YOU! Don't know, but call the Exchange and ask! They respond to our input (really) . . . .

ML asks:
Hi Ken, I’m about to start trading with real money and I have to admit I’m slightly nervous. Did you experience this when you first started, and if so how did you overcome it?

at 6:29:43 PM
Booze, ML. No, not really. Yes, I, too, experienced nervousness. It's part of being human. Trade on! (And as Vernon Howard used to say "Proceed while being afraid.")

ML asks:
Is there any single trade that you would say was you’re most interesting or memorable?

at 6:31:30 PM
Yes: When the Red Sox traded Babe Ruth to the Yankees! (Can you believe that?!) Yes again, ML. I have two: Palladium and Coffee.

philly dana asks:
Hi Ken,this is my second month to the chat and investing with real money. up $900(not alot,but you have to crawl before you walk). This is a great service, please don't ever stop.My quest. Is your "Bet the farm" trades in markets at extreme highs or lows and/or in markets that are at the largest monthly 50% retracement levels

at 6:32:35 PM
Thanks, Philly Dana. I'd say the least risky trades are those at extreme highs/lows.

mark asks:
Hello all, first time chatter and a long time paper trader. A quick question about broker prices. It seems odd to me that I am trying to buy options at say $6.25 to $10 per option and getting charged $65 in and out. Is it me? I seem to be stuck on this Problem. Any perspective to give me a boost?

at 6:33:45 PM
Yes, Mark. Good question. It WILL seem weird to pay more in commission than cheap options cost, but ALWAYS ASK. Hammer your broker for bigger and bigger discounts. That's the best I can offer . . . .

newtrader asks:
If the nearby charts show 1-2-3s but the march contract bumps a new high do you have to wait for the one two three on the march before entering the market on the march contracts?

at 6:34:29 PM
Depends upon how YOU're trading. I'd still trade the March contract when the front-month contract breaks out of its 1-2-3 . . . .

Eric in Fort Worth asks:
Hi again, Ken. Let this be an encouragement to other traders, esp. new ones: On 8/28 I bought 1 Dec. Coffee on a channel breakout at 53.00, and am up $2,606 (less fees) after today's close. By the way, what's your position in Coffee (I bet at least 100 contracts)?

at 6:34:56 PM
Yes, Eric, at least . . . . (Thanks!)

larryn asks:
Hi Ken, Do you concentrate on futures contracts or do you stick with options?

at 6:35:29 PM
Both, Larryn, but mostly futures contracts.

Trader asks:
Hi Ken, you said in the previous question to buy options as far out as possible. But what about futures?

at 6:36:01 PM
Same thing (but it's not nearly as far out as options).

JT asks:
Hey Ken and Gang, I have 2 contracts of Oct. Sugar. I have enough profits that, according to my plan, it was time to add a third. I noticed that there were only a couple of weeks left in Oct. before we have to "Roll Over" our contracts, so I bought a Mar. instead. 1) Should I ever have contracts in multiple months or should I go ahead and Roll my Oct. into Mar. now, so I can keep them all together? 2) Since I had a hunch that this trade was going to take a while should I have started with the Mar. contracts to begin with?

at 6:36:49 PM
You did just right, JT! It's perfectly OK to have contracts in different months. Keep on doin' what you're doin'!

Rhino asks:
hi again ken, you say that everything in twmpmm 1 is all you need to start a business. but i haven't learned too much about options, i'm learning some from the chat archives. is it safe to go into this just trading futures contracts, and then when i make some money i could get the delta manual? I'm still paper trading futures though.

at 6:37:51 PM
Keep paper trading, Rhino, and also paper trade the "Fishing With Options" strategy. Thanks.

Drew in Atlanta asks:
Good evening, I'm long in wheat and corn. My broker called me yesterday to "recommend" that I consider liquidating my positions on Wednesday (tomorrow) in anticipation of the USDA report on Thursday and to consider getting back into the market after the report is released. Ha! Can you imagine that?! I'm a chartist, not a fundamentalist! I don't rely on stupid news! I'm trusting the charts. My stops are just under recent support and I'm riding this train to the monthly 50% retracement points! Thanks for sharing the knowledge, Ken. Happy Trading!

at 6:39:10 PM
Right on, Drew! Good for you! (And if the grains move limit up after that report, ask your broker about that one!)

night-trader asks:
Mike here in S.Korea, First, thanks for doing what you do, it is truly appreciated! I've been involved with KRC since 1994 and have made every mistake you have ever warned people about. Everytime, I pick up and start over a year later. It's all come together now, and this is truly 'The World's One Perfect Business', as we are a military family and relocate every 2 years, the entire business fits in a 2-pocket folder. God Bless You Ken, God Bless Commodities, and God Bless America!!!! When are you coming to Asia???

at 6:40:22 PM
Thank YOU, night-trader! No plans to visit Asia, but you never know . . . .

Eric in Fort Worth asks:
Hi again, Ken. Pork Bellies has made a nice breakout after forming a very strong/wide base, but I didn't get in on it because prices really were not low. In your opinion, is market action like this a good enough reason to buy on an upside breakout, regardless of price? Thanks.

at 6:41:17 PM
Sure, Eric, and in this case, Pork Bellies broke out of a channel.

pqhpat asks:
Hello,Ken. This is your yogi friend from Texas. Is it now time to take a long position in Rice and a short position in Cocoa? When is the best time to get into the coffee market after the daily 50% retracement has been hit with an eye for the weekly 50% retracement?

at 6:43:09 PM
Yes, Rice looks nice (making lows now). Cocoa looks good on the short side (for a retracement along the way up). And I just bought some CHEAP May 150 Coffee Calls for 50 points just this morning . . . .

big T asks:
Hi Ken. Big T from Massachusetts. I want to thank you now and personally next year when I will take my family and myself upto Oregon for your classes. I have done very well this year. I am glad I listened to you and stuck with the program. So far this year it is over $100,000. I can't believe it. Quick question. I want to trade platinum and palladium but my broker says there is very low volume and doesn't recomend it, what do you think? ther

at 6:44:32 PM
Do NOT trade palladium (high margin, no options). Platinum has options for risk management, so that's okay. Come on out! Thanks.

badboy asks:
what do you in your free time

at 6:45:31 PM
I don't have much "free time," but once in awhile I do watch reruns of Magnum P.I. and Bonanza.

Oddjob asks:
Oddjob from Mass. Hi Ken and friends! Glad you could host this chat again, i look forward to them! When you are in a market with a full futures contract and it is "lock limit up or lock limit down" for example, you can neither add a contract or exit your position. Does this same rule apply to options of not being able to buy another option or liquidateing when the market is "lock limit" ? Thank you for these chats and answering our questions.

at 6:48:01 PM
Great question, Oddjob! Yes, you can get locked in or out of a futures contract but you can NEVER get locked out of the options market! (This partially answers the most-often-asked options question: "Who on Earth would pay $9,800 for a coffee option that I paid only $300 for???" Answer: Someone hedging against losses in the futures market!)

Meda asks:
I know you said NO novice questions, but I'm anxious to participate. How soon after watching the charts, can I paper trade? P.S. Love your sense of humor!

at 6:49:04 PM
Thank you Meda! How soon? NOW!!!

Coffee is Celebratory asks:
From CA, A couple months ago, I had to fight with my brokerage for 1 1/2 hours to let me place a Canola option order correctly. I wanted Mar 350 Puts for 20 points. At the they were worth 40 points. They insisted I needed an extra decimal and should place the order for 200 points! After threatening to take my business elsewhere, someone there called the Winnepeg exchange and conceded that I was right. As you say, "No one knows what you think they do" and "beware of discount brokers" Thank you for encouraging us to be independant.

at 6:49:55 PM
Thank YOU! Great example for others to learn from.

Goltar asks:
Howdy from Providence Rhode Island! Ken, I made decent money on my Sept 9750 Eurodollar Call for $60 bucks. Now I'm going out on a limb and buying a June 9800 Put -but my question is that the March 9800 is HALF THE PRICE...which one would you go for???

at 6:50:58 PM
I'd place your (lowball) order for the June 9800 put and wait. Make that market come to YOU!

William asks:
Ken and crew thanks for all your help; can not wait for this chats. Ken my question has to do with spreading futures; Ken you say that is something you do not do because of the limit on profits; wich I can understand but I rather have some profits that none. Your thougts?. Thank you again.

at 6:52:01 PM
You quoted my thoughts, William! Why don't you try trading (cheap) options instead of spreads . . . ?

CW from Norman, OK asks:
Hello Ken, thanks for all the instruction on commodities, my account is up $117,000 with the move in coffee! Did you sell half of your postion at the daily 50%? If so, will you sell the remainder at the weekly or split between the weekly 50% and the monthly 50%?

at 6:53:45 PM
No, I didn't liquidate any futures at the daily 50%, CW. I'm waiting for the Weekly (will dump half) and then wait for the Monthly. (I'm going for the BIG MOVE in Coffee. I was in that last one --- to 318 --- and I want to do that again!!!)

CarribeanCraig asks:
Ken, Why when a market comes out of a slumber like coffee recently do the trading rules change ? market orders only, 50 pt increments, etc.

at 6:54:46 PM
Kind of like the Maytag repairman: He sits around most of the time, but if half the town called him for service, he'd better start moving and juggling his calendar.

Trips22 asks:
Ken and the gang Thanks for these chats and every thinng. It has been great learning experience for me for the last two years. Finally I am making profit in Wheat. The monthly 50% Retracement is 480 but the resistance is 450. Does it make sense to take profits at 450 in Dec.,or should I hold on till 48o is hit. In the past I have not taken profits waiting foe 50% targets to be hit and some times the market retraces before 50% target is hit. Is this a good strategy in the long term or not. Thanks for all your help.This commodities business and the Vernon Howard books have changed my life for good.It would not be possible without your help.

at 6:56:20 PM
Thank YOU, Trips22. I know what you're saying: No one knows what any market will do this time (it may not act the same as it did last time). But here's what I do: I wait for that 50% target. (Honest I do . . . .)

cory asks:
Hi Ken, Im Cory from Calgary, AB. Ive been having so much fun learning what you have been teaching me. Im very excited to start trading options. Ive been pricing out Rice and Nasdaq, calls what do you think about these markets? thanks for everything.

at 6:57:13 PM
Thanks Cory. YES --- Rice and the Nasdaq are CALLing out to me!

Sam-I-Am asks:
Ken, any more detail you can give us about the BIG NEWS I was reading about in last months chat regarding funeral businesses and the Padres...(or at least the funeral business part)? Where can we get more info. when available?

at 6:59:27 PM
YES, Sam-I-Am! Call a Course Counselor and ask that I send you "Ken's Tree Kit." Cost is $17 (which covers my actual costs and FedEx). Most Course Members will NOT respond to this announcement they'll see in the new Newsletter (and are they STUPID . . . )!

chart farmer asks:
Hi Ken. I’ve been paper trading contracts based on 1-2-3 tops and bottoms as well as channels for a few months now. I’ve been shown a new strategy where the sugar market returns to it’s 10 year average price, every third year. Is this a trading strategy worth trying?

at 7:00:00 PM
Sure, but paper trade it first (and/or use options).

HEYKen!!!! asks:
How high do u think coffee should go before you would start going short. Sending out major love!

at 7:00:22 PM
Thanks! I have no idea.

Howard from Austin Texas asks:
Ken, I learned a good lesson in July. I was making very good gains in my account in July on corn, wheat and soybeans (futures). I pillored my contracts to take advantage of the huge gains. Well, they all turned south and a huge retracement occured. It knocked out all my gains and almost my account. Well, I put more money in and have been making gains in grains again except this time, I am determined to not loose it. I am waiting for the monthly's to be hit but nervous about downturns. Do you have a rule of thumb about how much excess you should have in your account to absorb the ups and downs ? Also, are you long in Corn, Oats and Soybeans ?

at 7:02:42 PM
Thanks, Howard. Great comments. Hang on: In just a few weeks now (I'm working feverishly!) I'll have an EXACT answer to your question (plus a lot more)! Yes, I'm long Corn, Oats, and Beans.

philly dana asks:
Ken,in this past newsletter you pointed out 1-2-3's in the swiss frank and u.s.dollar.(pg.10). The time between points are only a couple of days. I thought we should wait at least 1 week between points. Please explain.P.S. I hear that you are in a movie. Could you tell me which one? Can I call you Mr. Hollywood?!

at 7:05:19 PM
Paper trade it, Philly Dana, and experiment with times between 1, 2, and 3 points. Yes, I'm in RADICAL JACK starring Billy Ray Cyrus, available at Blockbuster Video. Yes, go on and call me Mr. Hollywood (kinda has a nice ring to it . . . .)

CarribeanCraig asks:
Ken, When you bid 1/2 on a far out option how long is too long to get filled before going out even farther. This is awesome !

at 7:05:58 PM
"Too long" is when another, farther out, contract in that market comes available. Thanks.

PaperTrader asks:
Hi Ken, from sunny Vancouver, B.C. I discovered "Let's Talk Trading a couple of weeks ago and have been savoring one chat a day. Much like I once read Hemingway's _A Moveable Feast, a few pages at a time even though I could easily have devoured it and the chats at one setting. I've marked all the levels on the charts and have been pricing options on most of the commodities. My question is . . . on commodities such as Sept. wheat that has a monthly target by my figuring of 485, I've been pricing (in the opposite direction) cheap further out put options based on the 50% retracement of the front month, and in this case I'm pricing March 03 way-out -the-money 290 puts. Am I way off here or is this a sane strategy? Thanks for everything . . .

at 7:07:24 PM
That's a great plan, PaperTrader. You got it . . . . Thanks!

Eric in Fort Worth asks:
Hi again, Ken. I've come across people who don't like trading because in order to profit, someone else has to lose. How do you answer this? Thanks.

at 7:09:05 PM
Do they also not purchase auto and fire insurance (because they "lose")? The farmer "loses" money hedging his crop in the futures market too . . . .

newtrader asks:
Lumber looks like it is heading for lows. It looks to be very thinly traded in march and beyond. Are you more cautous when trading these thinly traded contracts?

at 7:10:47 PM
November Lumber looks fine to me, newtrader. And also price some call options in Lumber now. Thanks!

mnkro asks:
ken,rarely have we seen a person fail who has thoroughly followed your path......so my question is with paper money i'm a millionaire, but when the real money is on the table i choke like the cowardly lion.....whats next?

at 7:11:21 PM
Proceed while being afraid . . . .

trwtrader asks:
Ken, Do you always place a bid for an option at 50% of the ask price and if so how often does it get filled. Why does futures trading seem so much more complicated than options trading to me? They are based on the same contracts but I seemed to have a hard time with the 123 formations. Thanks.

at 7:12:30 PM
Yes I do (honest). My broker figured it out once and told me that I'm filled over 85% of the time. I don't know why, but MOST people have more trouble with options than futures. I guess this is what makes the world go 'round . . . .

dxw asks:
dxw Davis, California Last time you gave a brief explanation for why you don't use Fundamentals or Seasonals. Would you do the same for Technical Indicators-why you don't use them?

at 7:13:20 PM
They never worked for me, dxw. But the simple charting techniques I teach did (and still do)! Thanks.

trucker asks:
Ken For your students. I normally hold on to options til expiration. But My Oct 600 calls were in and out of the money this last week & I didn't want to get into a futures contract until I was ready. I liq. both of them at 17 pts. to help buy two more Jul 800 calls. They shot up to 70 pts. today. This happens, but at least I'm still in. Thanks for your chats.

at 7:14:43 PM
Thanks Trucker! Just be aware that your option will only be automatically exercised if it EXPIRES in the money . . . .

prodigalsun asks:
HI Ken, Re:pqhpat's question. I have been tempted to buy CHEAP coffee options for May also as well as CHEAP Euro$ June puts but stuck to your mantra of always going for time. Is this just a matter of what you're personally comfortable with? After some trial and error (contrary to your teaching, I will opt for time, always...I think!) would you clarify your stance on time vs price of options? Thanks so much for your time and sharing of your knowledge.

at 7:15:30 PM
If possible (which is usually always), go for time.

Jim from Kalamazoo, MI asks:
I've tried to short a mini Euro $ contract, and I just can't get filled. I have asked my broker about it and he says that the market is not big enough in mini-euro$ contracts (in other words low volume). What can I do?

at 7:15:54 PM
Try puts.

Tahoe Clay asks:
Hi Ken and crew: I finally get what you mean when you say "the most difficult thing is knowing when to take profits". I sold my Oct 02 sugar yesterday when it hit my daily of 6.55. Now I am knowing what it feels like know I made $1525, and not being satisfied, because I know it is going to hit it's weekly, just like they always do.... I got some options anyway..... Hey how 'bout coffee and Cocoa on the monthly? Yow!!! I am having so much fun!!! Best trading regards.

at 7:16:51 PM
Thanks Tahoe Clay! (They're still talking about you here in town!)

philly dana asks:
Seems to me that the grains are more consistent when it comes to continuing a trend when it breaks a top or bottom formation and bouncing off of a 50% retracement level. Am I correct in this thinking?

at 7:18:24 PM
I don't know, philly dana, I never analyzed it before.

Krispy Kreme asks:
Hello again Ken. When you say you place an bid to buy options at half the price are you expecting the market to come down to your asking price, or are you expecting someone to take your offer at half the market price? By the way, have any of your RMS course members found the letter left by Clement Watt?

at 7:20:49 PM
Answer to your first question: Same thing. Answer to your second question: Not so far. Thanks!

excited in San Diego asks:
Hi Ken, Almost a year ago I got in Dec Cotton options at 45 and 50 calls. They went up through the roof but I didn't sell them because it did not hit the 50% level. The retraced after hitting a 50% retracement of the last move. I have not been able to buy more because they are too expensive. I have lost almost all of my profits. What did I do wrong?

at 7:22:48 PM
Nothing, excited in San Diego, except to plan for TWO rounds. Keep pricing them now, though, and wait for CHEAP!

Goldie asks:
Mary from Poulsbo, WA...I am gearing up to start trading again after two years off. I found out the brokerage firm I was going to use is in trouble; probably why they haven't answered their phone or returned my calls. How can I check these companies out before I open an account? Thanks for all you do, Ken. You're a legend in your own time!

at 7:24:22 PM
Thanks, Goldie, but, no, I'm a legend in my own MIND! I think you can check out brokerages through the CFTC's website.

gholdings asks:
hi Ken, long road to the money but good to see coffee take a run. Waiting for daily of 100 seems long off. i have july03 130 calls. starting to have fun!

at 7:24:50 PM
Yes, isn't it GREAT! Well worth all the waiting we do . . . .

trwtrader asks:
Ken, How do you deal with the anxiety of trading with real money?

at 7:25:14 PM
I proceeded while being afraid, Grasshopper.

Bonita Joe asks:
Ken - having a great time with eurodollars, Canada Dollars, lean Pigs, gold, rice, and coffee. My question is do you ever trade in the "night market" and also, have you hedged for 9/11 at all? Keep up the good work! Bonita Joe

at 7:25:52 PM
Thanks, Bonita Joe. No, I've never traded the night market and no, I haven't hedged for 9/11 at all.

Richard Janowicz asks:
If I keep looking for more and more indactions that I am right about my entry and exits am I ready to trade real money?

at 7:26:25 PM
Are you saying "I'm tired of being right and not making any money on it" a lot?

newtrader asks:
When a commodity hits a 15 year or all time low do you still suggest waiting for a 1-2-3? It seems like loosing extra money to buy above the two point. ok slap me if you want to.

at 7:27:02 PM
If you can back your futures position with cash, or hedge with a put option, go ahead, enter the market! Thanks . . . .

captainkidds booty asks:
ken ...kidd here im in the irons here about rice...i rode for a little then i had to get out...not because of a stop but because the options i was hedging with expired first then i had to risk more money on the next mont...the problem was rice kept falling so it kinda took the wind out of my sails to stay in. any suggestions when your in that situation. ps...rich mans secret is the best book ive read in years

at 7:28:36 PM
Thanks, Captain! Plan for two rounds of cheap options.

Roy asks:
Roy from Kansas Hi Ken, When you liquidate an option or futures contract do you liquidate with a limit order or at the market.

at 7:29:07 PM
Limit order (unless the Exchange doesn't accept these at the time). Thanks!

Richard Janowicz asks:
Are you still working on a 2nd novel ken?

at 7:29:45 PM
I've got a big file, but that's been sitting there a long time now. But you never know . . . . (It's called REINCARNATION.)

chief asks:
Hi Ken, this past June/July move in Canada Dollar left me sitting on the sidelines with real money but my paper trading made huge gains. My problem is when I entered long Dec Canada Dollar in the beginning of August i just got in because it was low I did not follow a formation, what am I looking for next in the Canada Dollar in the line of formation. I just felt uneasy entering the market just because I thought the market was low even though i was paper trading.

at 7:30:56 PM
Good points, Chief (Have you met Captain?). Try options; I think you'll LOVE them . . . .

DAVE FROM OHIO asks:
DAVE FROM OHIO; KEN JUST WANTED TO CHECK SUGAR WEEKLY / MONTHLY TARGETS OF 8.45 AND 23.55 RESPECTFULLY WITH YOU AND THE CREW.. THANKS

at 7:32:07 PM
Trying to trick me into computing those 50% levels for you, Dave? Well you can't fool me . . . .

trwtrader asks:
Ken, Is it too late to get cheap coffee options now that the market is heading up?

at 7:32:29 PM
Nope. Just bought some this morning (see previous response). Thanks!

philly dana asks:
Mr. Hollywood.You seem to be pretty good at just about everything that you do. Is there an oscar in your future?

at 7:33:09 PM
Yes, an Oscar Meyer Smoky Link sandwich about midnight tonight!

Coffee is Celebratory asks:
From CA, Do you think buying options for the Silver and Sugar monthly retracements is realistic? If those gigantic retracements occured before expiration it would be neat!

at 7:33:35 PM
Absolutely, Coffee. It sure will!

Quick break. Hang on . . . .

JT asks:
Hey Ken and Gang, I can see the up-side to watching the front month chart, but buying a farther out futures contract. You save money by not having to "Roll Over" your contracts right? 1) Do you use this technique on all your trades? 2) How far past the front month do you usually buy your contracts? 3) what's the down-side to this technique (if any)? Thank you so much for these chats...I'm really learning a lot tonight!

at 7:42:01 PM
1) MOST of my trades; 2) USUALLY the next contract out; 3) None that I know of. Hope this helps. Thanks, JT.

mary asks:
mary from Toronto, Hi Ken, I purchased 2 sugar call options and was promised a discount by my broker. Months have passed by and I haven't received the discount. Several times I have asked him about it and each time he gave me the same old story about putting it in my account on Friday. Somehow I feel as if I'm being scamed and is very uncomfortable in dealing with him and for that reason I'm hesitant in purchasing more options. Please tell me what I should do.

at 7:44:00 PM
Call and talk to his supervisor and GET YOUR DISCOUNT. If you're still uncomfortable, change brokers/brokerages. Thanks Mary! (You're learning valuable life lessons . . . .)

Russ - Malibu asks:
Dude, I owe you big time. Before I started with your courses I traded basic moving average momentum moves. I still use this method when the situation is right and it works for me. However, for the past 15 months I have been going with your 1,2,3 formations as well (no stops of course!) and am doing great. At the end of last year Dec Crude started a perfect 1,2,3 formation and broke out in January at $21.80. I went long (a lot of contracts) and kept them until the middle of May when the price hit my weekly target of $25.75. I sold off half at a little above that price and am still holding the balance. I have a silent stop of $28.50 but we'll see if I really dump them now that I know Crude can exceed $30.20. I may hold out a little longer and raise the stop. The reason I'm telling you this is that last Saturday I caved in to a (no longer) secret fantasy and bought a 2002 Porsche 996 Cabriolet (metalic seal grey with a black top

at 7:46:22 PM
Russ, DA MAN! You ARE DA MAN! Now drive on up here to Oregon and open that baby up on the I-5 through Grants Pass!

ggg asks:
Dear Ken, Great Stuff. When a market is trending down, how often do you add contracts? Do you have a method or do you randomly add the contracts?

at 7:46:57 PM
Personally, I don't add contracts. But paper trade and learn what works best for YOU. Thanks, ggg!

captainkidds booty asks:
15 men on a dead mans chest............ken please make cocoa stop so I can get short....but really ...i know about the crystal ball theroy but is this possible for cocoa to keep going much higher

at 7:47:54 PM
Take a look at a Cocoa Monthly chart . . . .

prodigalsun asks:
Hello again,Ken You've got me in a tizzy regarding those May 150 Coffee calls you just purchsed. I'm on a low budget and have been looking at Dec 03 Euro$ puts. I can buy two coffee May 150 calls for about the same as 94.75 Euro$ Dec 03 puts. Do you have a preference. Don't worry I'll take EVERYTHING you've taught me into consideration before making a decision! Thanks so much!

at 7:48:36 PM
But can you budget for TWO rounds in either market?

Texas Trader asks:
Hello Ken, I wanted to say thank you! My first trade was in sugar and I liquidated today! For $2300 Thanks a lot!

at 7:49:00 PM
Thank YOU, Texas Trader. (YOU did it . . . .)

Krispy Kreme asks:
Ken. When you say you place a bid to buy options at half the price are you expecting the market to come down to your asking price, or are you expecting someone to take your offer at half the market price? I’ve been trying to get into Coffee for about two weeks now and even today the front month futures came down but the options value still went up. I feel like the high school nerd playing hard-to-get with the prom queen!

at 7:50:36 PM
Same thing, Krispy Kreme. Actually, I placed an order to pay 85 points for those May 150 Coffee Calls today and I was FILLED at 50 points! As my Mom would say "Wonders never cease . . . ."

CarribeanCraig asks:
Ken, As you wait for weekly and monthly 50% in a long position to be hit and the future now is forming a top formation. Does this influence the waiting game at all ?

at 7:50:54 PM
Nope. I wait for that 50%!

George asks:
Are there any more BUSINESS BUILDING fundamentals for futures trading that you use besides the ones mentioned in your TWMPMM I manual? Also why not make some of your past newsletters for sale as they are timeless gems?

at 7:52:26 PM
A few "goodies" I teach at Big Boardrooms and my Bootcamps, George, but I stand by what I say: All you need is TWMPMM I. Why not "past newsletters"? Because they are in the past!

Tahoe Clay asks:
Hi Ken and Crew: In regards to proceeding while being afraid, 3 weeks ago I started skateboarding again after 24 years of not skateboarding in pools and skateparks, and when I started out I was really afraid of just gliding around on the flats: well after a couple of "Paper" "training sessions" I find myself prepared to skate on the walls of a friend of mine's pool....I am 39 years old with a mortgage!! I know being afraid is good 'cause then I know I am really alive in the moment. It all still comes down to Intention, Attention, and Manifestation. I AM....right where I need to be....Free!! Thanks to you guys!! PS. Are the Fires under control now? My lefty father said the smoke is gone in Ashland, CA.

at 7:54:22 PM
Thanks Tahoe Clay! Skate on! Yes, the skies are clear and beautiful (and fresh) again here in Grants Pass.

Jim from Kalamazoo, MI asks:
Any words of encouragement for discouraged traders?

at 7:54:50 PM
Yes: Discouragement is a lie; don't fall for it.

Oddjob asks:
Oddjob from Mass. Ken, have you noticed that the Euro FX and the Swiss Franc have the same similar chart formation from Feb. to the present time in Sept.?

at 7:55:22 PM
Yes, Oddjob. Many markets travel together at times. Thanks!

DelbertGrady asks:
Ken, Why did you make " Tools of the Trade " a U.S. Chart company product instead of a K.R. company product? As a V.I.P. member I feel a little cheated.

at 7:59:00 PM
Sorry, DelbertGrady, but I wanted to make this (fantastic and expensive) video set available FREE. So that's how I had to do it. Thanks for joining us this evening.

Tahoe Clay asks:
Hi Ken and Crew: How about those cheap cheap Cocoa Options? So far I am out to July 03 with a couple of 1250 puts. Working some bids on some Dec03 1250 puts....go cocoa go!!

at 8:00:06 PM
Cheap Cocoa options and Skateboarding --- it doesn't get much better than this, does it?!

Believer asks:
Hello, Ken. I just received a notice from my broker that options expiring worthless will be assessed a fee. Any ideas why? Perhaps it's just another way to wrench a few more dollars out of each customer. Thanks for the chats!! I find them to be very informative.

at 8:00:39 PM
Never heard this one, Believer. I'd switch brokerages. Thanks.

HEYKen!!!! asks:
How many White hats do u own?

at 8:01:47 PM
One Cowboy and one Panama (which I wore on Peter Jennings' World News Tonight segment on my Historic Trees).

Well that's it for another month. Here are my favorite web sites if you're interested: www.guyfinley.com ;www.wildlifeimages.org; www.LP.org ; www.uschartco.com ; www.fourstarbooks.com. ; (new!) www.historictrees.org. ; (even more new!) www.foxnews.com/oreilly. My next chat will be Tuesday, October 8th. Also remember Matt's stock and commodity chat next Tuesday, September 17th. And join Guy Finley's chat Thursday, October 3rd 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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