Ken Roberts Chat

Tovi (tm) Chat #1 with Ken Roberts
from September 30, 2003

Good evening, and welcome to the first-ever TOVI (tm) chat! Thanks for joining the TOVI Team and I. This is Ken Roberts, president & co-founder of Market Valuation Institute, and I'll be your moderator this evening. Also with us online and by phone is the entire TOVI Team of creators, programmers, and technicians who will help me thoroughly answer your questions tonight. We have an assortment of cookies, the cigars are lit, and the coffee's poured. So let's get going!

John the Methodist asks:
Howdy Ken, I’m sold! TOVI is awesome! As far as using it as a market entry tool, it’s like shooting fish in a barrel. However, I need some help with exit strategy. Where I’m stuck is when a market has not yet reached the target, but the short-term momentum turns extreme. Which takes priority, the target price or the extreme momentum?

at 6:11:44 PM
Great question, John. Assuming the market is still moving in the direction you want, I'd stay in the trade. Here's why: "Extreme" can become trecherous if your're not yet in a market and waiting to enter. However, "Extreme" can be your best friend AFTER you've already entered the market because most profits are made DURING "Extreme" moves! As a current example of this, take a look at the Japanese Yen, Soybeans, and Feeder Cattle on TOVI's Short-Term Rankings page.

Angel asks:
How do the TOVI recommendations help with buying futures contracts?

at 6:18:11 PM
Great question, Angel. I LOVE TOVI's Long-Term and Short-Term Rankings for futures trading. For example, the Long-Term Rankings keep me OUT of a market until it's "ready" (technically speaking) to take off. This way, I'm not in the market and waiting, waiting, waiting, and waiting some more for the eventual (and inevitable) takeoff. The Short-Term Rankings tell me short-term whether to be long, short, or neutral a market. Example: I like Sugar long-term for a move to the upside. However, I just got out of a SHORT Sugar trade (based on TOVI) while I'm waiting.

NOTE: It's taking me a little while to answer your questions (because I'm listening to twelve people!), so hang in there . . . .

wal asks:
Hi Ken, on the long-term market rankings screen, the minimum time recommendation doesn't seem to move. For example, I started looking at copper two months ago and the minimum time recommendation was 6 months. I see that the miminum recommendation is still at 6 months, shouldn't this go down to 4 months from 6???

at 6:22:30 PM
Great observation, Wal. TOVI doesn't count down less than 6 months because we feel that the prudent minimum time to approach a market long-term is 6 months. Example: Silver is "long overdue" for a takeoff, but if you entered the silver market today, you wouldn't prudently purchase an option that expired in one month.

Avi asks:
I have trouble going from US Charts to TOVI, is there a way to keep both on the screen at the same time? Then I can compare long term against short term options. PS the sites are both great, the comparitive history of the options has really simplified my life. Sincerely Avi

at 6:26:12 PM
Open up two separate browsers. (Some techie here just recommended buying a "dual Matrox" video card. Then you can hook up two monitors to one computer).

afs5431 asks:
Ken, what does "DTE" column on options prices table stands for?

at 6:26:38 PM
Days Till Expiration

munkman asks:
The amount of information on Tovi is a little overwelming. How do yo suggest I get up to speed as quickly as possible on all the jewels to be found on the Tovi pages?

at 6:28:28 PM
Well, for starters, Munkman, this Chat tonight should really help. PLUS, I'm frantically (still) working on my own personally guided TOVI TOUR. In the meantime, go to the TOVI site and when you have questions, use TOVI's Support feature (or call a TOVI Counselor).

Casey asks:
Is a 2.097 Value Factor in Feeder Cattke more valuable than a 1.588 Value Factor in the Eurodollar? Thank you.

at 6:32:00 PM
Hello Casey. The short answer is TOVI does not compare options between markets. That is, you cannot compare an option's Value Factor in Feeder Cattle to an option's Value Factor in Eurodollars.

casey asks:
Hi Ken. I have been asked the same question from a few different clients regarding short term rankings on TOVI and your the man to ask. Will you be adding a risk target on more expensive options? In other words, will there be a fixed dollar amount(of the option) to risk the trade to or a risk target in the underlying futures contract? TOVI has simplified my job as a broker. Keep up the great work. Casey Chandler Senior Market Strategist Ken Roberts Trade Desk Lind Waldock

at 6:38:04 PM
Thanks Casey! Use TOVI's "Budgeted Options Search" (which asks you how much you're willing to invest over what amount of time) and stick to TOVI's picks using those parameters. Another technique: Once you've purchased an option, hang onto it until TOVI's Option Warning Indicator turns red. Or, simply establish a dollar amount that you are willing to risk and stick to that.

PHOM asks:
Good evening Ken, TOVI is pretty neat, I was wondering if you plan to offer options history as part the TOVI subscription. It would seem like a very good fit. I sort of expected that information to be part of TOVI when I signed up. Thanks.

at 6:40:47 PM
That's one GREAT feature of U.S. Chart Company (online), isn't it?! We're putting together a special dual subscription rate for those who wish to subscribe to BOTH U.S. Charts AND TOVI. Stay tuned . . . .

Russ Wichers asks:
What does TOVI stand for?

at 6:41:02 PM
The Option Value Indicator.

traditonal64 asks:
Can Tovi be used by itsself for long and short-term trading tool or was it designed to be used in conjunction with US charts? Woodlawn, Va.

at 6:41:48 PM
Personally, I use both, but it is possible to simply use TOVI. Thanks!

Angel asks:
When is it best to enter a market using TOVI. Extreme, Strong, Moderate or a number (or range)?

at 6:43:18 PM
When it turns from Moderate to Strong.

laulinaharris asks:
Hi Ken- are there any plans in the works to have a live version of the GAB course in a class or workshop format? It could also include teaching how to use Tovi and US Charts Online?!

at 6:45:22 PM
Yes, classes and workshops are in the works. In the meantime, call a Course Counselor and consider booking your own "A Day With A Course Counselor" for private sessions in whatever subject(s) you wish to cover. Thanks!

dolores asks:
What is Tovi?

at 6:47:40 PM
TOVI, to me, is the best trading tool available today!

SusiefromChicago asks:
Hi Ken. Love Tovi!! Made my first profits ever ($5000) from two T-Bond and 2 T-Note options in little over a month!!! Now my question. . . If an option goes into the RED in Tovi and is still 8 months to expiration, can it ever go back to BLACK?

at 6:51:28 PM
Great question, Susie. Yes, an option CAN go from red back to black. So if you hold an option that TOVI turns red, and you believe the underlying futures market will "snap back," you may want to hold onto that option a short while longer (no more than a week) to see if it turns black again. Also, take another look at TOVI's Tutorial for a detailed explanation of, and techniques to handle options, once they do turn red. Thanks!

Caribbean Doc asks:
Hi Ken.....Can you use the primary and secondary Long-Term Ranking Targets to price opotions instead of using 50% retracements?

at 6:54:08 PM
Sure!

oztrader asks:
Hi Ken, Daniela from Australia here. In your chats you're recommending going with the highest rated option you can afford on TOVI's list yet in your GAB updates, all the options you talk about are the cheap ones. Why?

at 6:55:25 PM
It's simply two different trading strategies, oztrader. G'Day!

hunter asks:
hunter asks: Ken, Indicate if you got this message please. thank you.

at 6:55:39 PM
Yes, I got this message.

Wilfbort asks:
Hello Ken & crew, At the moment my interest in TOVI is for planning short-term futures trades; TOVI ranks short-term trend strength, but of course I want to be in the market before the trend begins. What TOVI strategy do you recommend? Greatly appreciated, Wilfbort

at 6:59:21 PM
One of TOVI's main attractions for me is that it keeps me OUT of markets that I used to impulsively enter way too early. So my response to your comment is "Don't jump the gun," wait for TOVI to tell you when a market's trend has changed from moderate to strong.

trwtrader asks:
Ken, I would like to trade the short term trends that TOVI recommends but have a difficult time when I look at the daily charts and the futures prices are already high and TOVI is recommending that I purchase call options. The call options are usually already in the money and tend to be expensive. I don't have an issue with paying for more expensive options as long as they have the potential to increase in value. I guess my point is, is the profit potential still there to make profits based on TOVI's short term trend recommendations even if the options are expensive. Thank you.

at 7:03:06 PM
Yes. To help you see this, when a futures market is sitting at the top of its daily chart, take a look at that market's weekly and monthly charts. That should cool your jets . . . . Also realize that TOVI's Value Factor itself has already considered a lot more about that market than you and I even know to think about, including present price movement.

Golfin Dan asks:
Golfin' Dan, Ontario Canada... Hi Ken, The initial targets and secondary targets listed in the long-term rankings don't always have any relevance to weekly or monthly 50%'s why? PS. I plan to come to visit in late July 04, I hope you'll be there. Do you have any good golf courses in Grants Pass?

at 7:08:01 PM
TOVI's technical analysis of price charts is a LOT more extensive than my teachings of simple 50% chart retracements. Notice, however, that TOVI's Initial Target on the Long-Term Market Rankings are not that far from the long-term 50% retracement targets. (There are many great golf courses around here, including courses designed by Robert Trent Jones, Jr. AND Arnold Palmer! Come on out . . . .)

Terry asks:
Good evening Ken and Team, My wife and I are sitting in beautiful Grants Pass, OR on vacation. I am new at using TOVI, but it has helped me to pick out options in coffee, live cattle, and eurodollars. I was just wondering where all the cookies, coffee, and cigars are at? HA!HA! Its great to be in OR!

at 7:09:27 PM
Come on by the office tomorrow! We'll save you some cookies, I'll leave a cigar at the front desk, and the coffee's always on.

kcarl asks:
Do you combine the 'Short Term' and 'Long Term' rankings to select a commodity to monitor?

at 7:13:12 PM
Yes!!! First of all, long-term, I only trade those markets with green lights. (Meaning, both the long-term and short-term rankings agree with each other.) Second, short-term, I only trade those markets that TOVI listed as going from moderate to strong. Try several strategies, however, using TOVI's Monitoring Portfolios to determine which works best for you.

lo-hi jim asks:
lo-hi jim mesa,az oldtimer with webtv will TOVI work on it? Thanks Ken for all of the courses, charts, and online charts. . . they are the greatest!

at 7:14:02 PM
Thanks lo-hi jim! Yes, since there's no download, TOVI should work on webtv.

John the Methodist asks:
Funny you should mention Yen and Feeders. I started shorting Feeders BEFORE I learned about TOVI. The drawdown is painful! However, I would have never traded JY at 86. But, since TOVI showed green lights and a large upside move coming, I bought a couple of puts as stops and went long. I took $3,750 in profits today, I owe completely to you & TOVI. I'm still waiting for you to come to Dallas - I believe you said the you wanted to eat at the Palm?

at 7:15:44 PM
Thanks, John! And congratulations! And since you're giving me all the credit, how 'bout if YOU buy dinner at the Palm when the TOVI TEAM and I show up on your doorstep?!

oztrader asks:
Hi Ken I have soo many questions... I think TOVI is fantastic, however I don't think I'm using it to its fullest extent or in the best way possible. I always use the value factor search and go down the list until I see one I like/can afford. Then I check out its history (if possible) on US Charts online, and if it still looks good, I buy it. This works for me but I'm sure there's lots more I could be doing with TOVI. Any suggestions? Many thanks!

at 7:18:53 PM
You're doing GREAT, oztrader! Experiment using the Monitoring Portfolio feature and try MANY strategies as they occur to you. Also, don't overlook TOVI's Tutorial. There's LOTS of valuable information, tips, and techniques listed there. (And once again, I think you'll love my TOVI Tour when I finally finish it . . . .)

HAPPY JOSE asks:
Can one be successful with TOVI if you do not trade the highest rated options (and most expensive) as selected by TOVI?

at 7:23:03 PM
No way, Jose! (Just kidding . . . .) Seriously, yes, you can be successful with lower rated options. The more important issue is selecting the right markets to be in. TOVI's Long Term Rankings and Short-Term Momentum Ratings will help you choose those markets.

Caribbean Doc asks:
Do you focus on the 6 month Minimum Time Recommendation as a starting point on which markets to enter? Or do you look at the Short term rankings first?

at 7:26:58 PM
Hi Caribbean Doc! I always go to the Long-Term Rankings first. I then look for those markets which the recommendation is for 6 months and then look to see if the Short Term Trend is in agreement. Next, I use the Option Search feature to find the options with the best Value Factor that fit my budget for that market.

wal asks:
Ken, just a follow-up on Angel's question... Why are you out of shorting Sugar in the short term based on TOVI? The short term trend is still down. I would have thought you would have got out of the trade if it went from a down trend to a neutral trend; so why get out of your short position if it's still trending down?

at 7:32:36 PM
Good question Wal. This was a three-day trade with a close target and tight stop. This is just one of the many trading strategies that TOVI allows me to use.

Celeste asks:
Hello From Northwest Wisconsin. In August TOVI said the long-term ranking for Cotton was up. So on August 14 2003 I bought a March 69.00 Cotton Call Option for $350 -- it is now worth over $1,800.00! Cotton Futures are now at 70.00 (in-the-money!) Q. On the Long-Term rankings, is the minimum time recomendation for the first target or the second target?

at 7:38:57 PM
Congratulations Celeste! Great question! First, it is important to know that the time frame of the Long-Term Market Rankings are not based on the price targets. They are based on the time between major historical moves. The price "targets" are there to allow you to see the dollar potential of each market's move.

wal asks:
Ken, is it even possible to buy some of the "high value" options listed by TOVI? For example, the highest value coffee call is in July, 2005. If it's not available, which I suspect, then why even have it listed?

at 7:43:47 PM
Hi Wal. Great question! This is a situation where you need to work with your broker. Even if there is not any volume or open interest your broker can ask the floor for a bid-offer for that specific option. Don't avoid options without any volume or open interest. These options are listed by the exchange because there is investor interest.

futurestriker asks:
It has been said that tovi can tell you which market to enter. I have a limited amount of trading funds in my account, at this time. Other than looking at the long and short term pages, how can Tovi help me decide which market would be the best one to enter?

at 7:47:16 PM
Hi futurestriker. You are correct to begin your search looking at the long and short term pages. Once you have chosen one or more markets that interest you, use TOVI's budgeted option search feature to find the best option for you.

sleepless in detroit asks:
I like the shooting fish in the barrel analogy, but I'm not sure how to aim the gun. I did get two march 04 76 cotton calls for 25 points a month and a half ago based on TOVI data, and I'm very happy with how things have gone so far, but I'm not sure just exactly what I did and why.

at 7:48:48 PM
Sounds like you did just right so far. Now plan your exit strategy! Good going.

GPF asks:
Hi Ken and TOVI gang. Thanks for these chats, they're great! Feeder Cattle's long-term is down, but short-term is up. Should I wait for the short-term to change to "down" before entering the trade? ) THANKS! GPF from Ohio.

at 7:50:40 PM
Hi GPF! I'd say yes and wait.

cyhthia asks:
When an option is in rapid decay, do you recomend to liquidate the option or let the option expire worthless?

at 7:53:47 PM
Hi Cyhthia! Make sure to read TOVI's strategy guide that talks about what to do when an option turns red. The basic strategy is to liquidate that option as soon as it turns red, and use the remaining premium to purchase another option. If you are going to stay in the same market ask your broker to place a "spread trade" in order to minimize any slippage on your trade.

John the Methodist asks:
Here's another techie item. As you know, the monthly chart link takes me to the US Chart Co. select chart screen. However, it will take me to the login screen for my username and password, then disclaimer screen, and then home screen. I have different passwords for TOVI & US Chart Co. If I make them the same, will this streamline the link between the two?

at 7:54:22 PM
Hi John! It doesn't matter.

mimi asks:
Hello Ken & Staff, I became a TOVI member just recently. TOVI is very intimidating. I don't go there anymore and I was considering it as a business loss -- not an investment. Do you have other discouraged students? Thank you for this chat.

at 7:56:52 PM
Hi Mimi! Don't give up. Read what others have said tonight. Go back to the TOVI site, read the Tutorial, and most importantly call a TOVI Counselor to assist you in understanding how to use this terrific trading tool. Hang on, you are going to love my Tour!

trwtrader asks:
Ken, You said the best time to enter a market is when it changes from moderate to strong. So we should be looking a all the moderate rated markets and avoid entering the neutral and extreme ones? Thanks.

at 8:00:18 PM
Hi Trwtrader. Tough question. What we are saying is that entering neutral and extreme markets involves more risk than one that has moved from neutral to extreme. But experiment with different strategies using TOVI's Monitoring Portfolio.

tradesimple asks:
Is it possible to see actual examples of how TOVI works and displays the results of a search?

at 8:01:30 PM
Hi tradesimple. Yes, as soon as I can get my TOVI tour online.

Celeste asks:
Hello from NW Wisconsin. I like using the indicators on TOVI, however I am somewhat color blind and have a difficult time distinguishing when an option turns red. Is it possible to use symbols also to indicate when an option turns red? Thanks.

at 8:04:34 PM
Hi Celeste! You raise a good point. We will see what we can do. Our programmers are on it as we speak!

shango asks:
Hi Ken. in regards to oztraders question. . . Why order the GAB if the TOVI is so effective? Thanks

at 8:06:04 PM
Hi Shango. GAB is "driver's training" and TOVI is the autobahn.

trademan asks:
Is there a track record of trade recs?

at 8:08:27 PM
Hi trademan. TOVI is a trading assist tool, not a trading system to be followed blindly.

Don O asks:
I can’t wait to get into the meat & potatoes of TOVI, but I feel I need more training will you ever offer a course on TOVI?

at 8:11:53 PM
Hi Don O! Better than a course, use the services of a TOVI Counselor. They are here to assist you to better understand all that TOVI offers.

wal asks:
Ken, is it possible that TOVI could contradict 1,2,3 tops and bottoms? If I notice a 1,2,3 top for example, and TOVI says that the market is still in a strong uptrend, does this mean I shouldn't enter the trade on a break below the #2 point?

at 8:13:46 PM
You bet Wal! I find one of the best features of TOVI is that it helps filter out the "noise of the market" which may include false 1, 2, 3 tops and bottoms. Great observation.

lo-hi jim asks:
lo-hi jim mesa,az i had a dumb question thanks for not answering it

at 8:14:12 PM
Anytime, lo hi!

brerfox asks:
brerfox from Sherwood Park, Alberta I would like to be able to have more than one active/ monitoring portfolio so I could try out different stategies while paper-trading, i.e. channel trades, estreme level one trades, etc. It would be much simpler to compare stategies this way. Have you ever considered this possibility?

at 8:18:50 PM
Hi brerfox. Good point. We'll look into it.

traditonal64 asks:
If the long term ranking suggests say 36 months is it best not to enter that market until the short term suggests a move?

at 8:19:25 PM
Hi traditional64! Exactly.

DocTrader asks:
Hi Ken, with Gold in in a Bull Market, how would I use TOVI to warn me of the pullbacks and alert me to major upmoves just prior to them happening?

at 8:24:51 PM
Hi DocTrader! There is no way to precisely predict these kind of price moves. The best TOVI can do is tell you the direction and strength of a market's trend.

Pete asks:
Hi Ken: I am a new course member. I love being a part of the "family". My question is: With all this new technology is TWMPMM now obsolete? It seems that TOVI has all the answers. I'm not sure what to do first, but I'm sure you have the answer.

at 8:27:56 PM
Hi Pete! Welcome! TWMPMM is not obsolete; it's a basic introduction and primer to the futures markets. TOVI is an advanced tool that wasn't even a "twinkle in my mind's eye" when I wrote TWMPMM!

Fred asks:
Hi Ken--Fred from Ventura--TOVI is great tool and still better since the re-work---I am using it with short term recommendations and the monitoring addition is just great for determmining the next move---I like the grain markets, but have seen what you mean about "volatility" in what is normally a stable and slow moving area--LOL--wheat is bouncing like that ball you use in TWMPMM 1--keep up the good work.

at 8:28:49 PM
Thanks Fred! Come see us in Grants Pass!

casey asks:
Ken. I think everybody in the chat should be aware of how valuable TOVI really is. One of my clients made over $9000 since 9-10-03 by following TOVI's trading strategies. All of us at the trade desk greatly appreciate your wisdom and the simplicity of TOVI. Casey Chandler

at 8:29:52 PM
Thanks casey!

PatM asks:
Hello Ken and all- I'm getting discouraged with my trading, but haven't tried TOVI yet. Is it kind of like picking money off a tree? (I hope!)

at 8:34:30 PM
Hi PatM! I'm afraid not, as far as I know money does not grow on trees -- even here in beautiful and verdant Grants Pass. But I do know that TOVI is the best trading tool I have ever used or seen. If you are serious about becoming a successful trader, I recommend that you give TOVI a try. Call a TOVI Counselor for more information: 541-955-2797.

skizee asks:
Skizee asks: This TOVI tour you mention, Will it be on the internet, video or do we need to save our money for plane tickets and hotel.

at 8:35:44 PM
Hi Skizee! The Tour will be available on the TOVI site. (And probably on CD Rom as well.)

Sher bear asks:
Thanks for your help tonight It sure has helped me to understand tovi better

at 8:36:05 PM
Hi Sher bear. Glad to be of service!

jim asks:
Would a narrow sideways channel be a neutral position in tovi?

at 8:37:24 PM
Hi Jim! If it is a long channel, probably. But if it is a short channel, probably not; it would simply be part of its previous trend.

laulinaharris asks:
Hi Ken-Lauri from Goldendale WA. I just want to let you...and Mimi, know that I was feeling the same way as she....discouraged and intimidated, and rather stupid. Being here tonight has helped soooo much! I have been following things on Tovi as the questions were asked, and things are starting to click as we speak! Thank you! I had not been on Tovi since the changes, and I like it much better. I will be looking forward to your tour.......and of course, putting it into action. It's good to feel the fire back! Just wanted to say thanks again, and reiterate what you said......hang in there Mimi! It just takes some of us longer than others!

at 8:39:53 PM
Dear laulinaharris: Well said, thanks for joining us tonight!

encinitasbert. asks:
I am still at the office, working and following the chat, my wife just called and asked if I was coming home? So Good night and Thank you for your great work.

at 8:42:32 PM
Hi encinitasbert! Our wives have been calling too. So we better wrap this up soon. We'll stay on for 15 more minutes then say good night ourselves.

Angel asks:
I can't seem to get myself to purchase options or contracts (such as soybeans) so far into a move even though TOVI recommends it. It is opposite of what you have been teaching in the past and I would like to hear your comments on it.

at 8:43:37 PM
Hi Angel: This is a situation where paper-trading pays off. So open up that Monitoring Portfolio!

oztrader asks:
Hi Ken How come the Value factor is quite often very similar whether its for calls or for puts? For example the highest ranking call option for Feeder cattle right now is 2.282, and for puts it's 2.034. Shouldn't there be a greater difference if TOVI takes short term and long term rankings into account? Thanks

at 8:47:46 PM
Remember, the "value factor" does not take into consideration the long and short term rankings. It is an independent tool that tells you the relative likelihood of an option expiring with a profit.

sleepless in detroit asks:
When you say enter a market, are you refering to options or contracts or either one?

at 8:48:12 PM
Either one.

trwtrader asks:
Ken, I know you always say there are enough markets for everyone to trade and profit from but if a lot of people start using TOVI will the markets become manipulated by it? Thanks.

at 8:52:09 PM
Good question! It is extremely unlikely that this could occur. TOVI would factor in any overbuying of any particular option and lower its rating!!!

shango asks:
Ken, would you still trade soybeans now given its recent up move and TOVI's extreme ranking? i guess my ? is: when is a market too extreme to go long?

at 8:57:18 PM
Hi shango! If I was already long the market, I would stay in and possibly take some profits. However I would not enter an extreme market such as soybeans with a new position. That is just my personal strategy, it is still possible that beans could continue its upward move, and depending on your risk tolerance you might still try to take advantage of this momentum. I suggest that you paper-trade some of these scenarios to see how they play out.

Well, it's time to say good night. Thank you all for joining the TOVI TEAM and me for this first-ever TOVI Chat (I have a feeling there will be many, many more)! I appreciate all your input and if any questions weren't answered for you this evening, be sure to use any and all of the support lines TOVI provides. (To reach a TOVI Counselor by telephone, call 541-955-2797.) I'll E-mail you regarding future chats (and when I finally finish my TOVI Tour!). Good luck, God bless, and watch where you step! Good night . . . .

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