Ken Roberts Chat

Let's Talk Trading (tm) with Ken Roberts
from October 8, 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 (vintage) Cuban Davidoff fired up, here’s our plate of freshly baked ranger cookies, the coffee’s poured, so let’s talk commodities!

jon from LeftyLand asks:
Jon here in LEFTY LAND Hello Ken, During last months chat, I noticed you were watching the Nasdaq 100. In this market, would you continue to buy as the price moves down, or load up one time, at what you believed to be a low price. I understand that your "... either in the market or out of the market", but I don't want to limit myself to one mini contract each time the market goes down a bit, when I could have just bought 1 or 2 full size contracts and waited. How would you do it? Thanks Ken, these chats are AWESOME. j

at 6:10:15 PM
Thanks, Jon (from the Left Coast). If you have the cash to back those 1 or 2 fullsize contracts, that's how I'd do it. Otherwise, why not check out those call options and watch them get cheaper and cheaper as the Nasdaq Index drops. Hope this helps.

Mike A asks:
Please Tell us your thoughts on getting online quotes from the internet, as on futuresource.com instead of calling our broker daily?

at 6:11:14 PM
I've always only called my broker daily, Mike, but if the internet works for you, go for it. It's completely personal. Thanks for joining us tonight.

Rhino asks:
Howdy Ken and Crew, I am currently paper trading, and I have two questions. 1) I know all brokers are different, but I understand that brokers charge a commission per option side (purchase, and liquidate), so if I purchase an option that expires worthless, do I pay the commission to liquidate it, even though I didn‘t? 2) The Canola Chart legend says, "A minimum of 5 contracts is required to register a quote or trade." Does this mean I have to trade 5 contracts at a time and pay commissions on each one? Thanks for the chats. Great course!

at 6:14:26 PM
Thanks, Rhino. Good questions. 1) Ask your broker how his brokerage will charge you commissions on options. 2) No, you don't have to trade 5 Canola contracts. What it means is that 5 contracts must be "grouped" before they will be submitted to the floor. It's kind of like a bus that seats 5 (and 5 only) passengers. If you and your friend take up two of the seats, you'll just have to sit there until the remaining 3 seats are filled before the bus starts rolling. (Hey, great example, huh?!)

Linda Eugene asks:
I have 2 questions: If I have priced options for at least 2 weeks as suggested, then find great prices, do you still recommend bidding 1/2? Also, do you have any suggestions on how to connect with other traders in my area? Last month I think you said something about a radio program. Do you have one? How can I find out what station?

at 6:16:13 PM
Thanks Linda. 1) Yes (I still bid half). 2) I don't recall anything about a radio show. But some Course Members have run ads in their local newspaper's classifieds section (one even got married this way!) . . . .

DADYGRUVY asks:
R U IN LEAN HOGS PUTS

at 6:17:22 PM
I'm presently long Hogs, Dadygruvy, but you're thinking correctly to be thinking puts now for the inevitable retracement. Thanks.

Ben asks:
Ken--Ben--Austin,Tx. --- Do you think corn & the dollar index are starting a 50% retracement?

at 6:18:48 PM
In corn, Ben, it depends upon which chart you're looking at --- daily, weekly, or monthly. Ditto the Dollar.

cozmo asks:
Today I received my first set of charts. I can hardly wait to get started. Thanks for all you do.

at 6:19:15 PM
Thank YOU, cozmo. Welcome aboard. (Don't those charts smell great?!)

riceheadache asks:
ken, long jan rice from 228, I bought 2 jan 220 puts for protection, my question is...what should be a signal to either get out of my long position and take profits on the options or buy more contracts

at 6:20:48 PM
I'd get out if the low on the Rice Monthly chart (3.47) breaks. But I don't think that'll happen, so just hang on!

Ben asks:
Ken--what's the latest on the "Trees" info-still waiting--is it growing?

at 6:21:47 PM
Yes, thanks Ben! The Tree Kits just went out FedEx today (we ran into a bit of a snag!). Wait'll you see it --- it's exciting . . . .

Greg asks:
Hello Ken, Greg here from Texas. I have been investing in the stock market for about 10 years and never even thought about the futures market. How can I get started with as little risk as possible?

at 6:22:52 PM
First of all, you can get started with NO RISK AT ALL by paper trading. Then, make sure you check out the options market. Welcome to Commodities!

Learning in Toronto asks:
Is there any special considerations that some one from Canada (or any other country outside of the US) should keep in mind before establishing a relationship with a broker and beginning trading with "real" money?

at 6:24:21 PM
None that come to mind, Learning in Toronto, except that from my experience, most traders outside the U.S. open U.S. trading accounts.

trwtrader asks:
Ken, I just want to say I am now a full believer in your "listen to me now, believe me later" line. I had recently purchased some cheap cocoa puts but could have gotten them a little cheaper had I put in my bid for 50% of the asking price instead of 75%. It's true that the market does come to you if you are patient. Thanks for all your help.

at 6:24:55 PM
Truly wise words, trwtrader! Thanks!

DAVE FROM OHIO asks:
KEN AND THE GANG! WHEN DO YOU FEEL IT IS APPROPRIATE TO SHOW ONES CHILDREN THE CONCEPTS IN TRADING? THANKS FOR YOUR HELP IN TRADING ONES FUTURE. DAVE

at 6:26:50 PM
Thanks, Dave. I think it all depends upon YOUR children. Remember Priscilla (age 7) from the Dallas Rountable videos . . . . What a great thing, to teach your children capitalism (they surely won't learn it in their lefty government schools).

Nicole--IOWA asks:
Hey Ken...been gone 2 months..did ya all miss me? Having a hard time typing tonight cuz I just got my nails done today. How about Hogs? Am in...also Sugar. Holding many options in varied markets..having a GREAT time. Have been trading real moola around 6 months and doing well! My DILLEMA is on ALL the great formations I see and having my capital tied up at the moment in other GREAT formations....gotta love it though! (what a dillema to have!!) Thanks for showing me the door...as I have since opened it and see MUCH more possibilities! LOVIN MY CHARTS!

at 6:28:56 PM
You got it, Nicole! Congratulations. Sorry, I can't relate to your fingernail dilemma, but hang in there! Also, why not paper trade those markets you don't have real money riding on . . . .

Kristos. asks:
Ken,did you take any profits on the recent "blip up" in coffee? It kind of gives us a little "taste" of what its going to be like when that baby takes off .

at 6:29:44 PM
Yes it does, Kristos, and I'm still hanging in there (taking no profits yet). Thanks!

Jeff asks:
Ken, Are you still long cotton?, and if you are do you think Oct's LTD caused the price to drop so much since Friday?. Thanks

at 6:31:22 PM
Possibly, Jeff, but it could just as easily rallied instead. Glad you joined us this evening.

EagleEye asks:
Hi Ken, how many markets on average do you trade at a time?

at 6:32:12 PM
It all depends upon the charts, EagleEye, but currently I'm in 25 to 30.

awesome asks:
Ken ,Thanks for these chats.They are are really great! Looks like cocoa is going off the charts.Those puts are looking good!!

at 6:33:00 PM
That's awesome, awesome! You contrarian . . . .

sickofdayjob asks:
hi ken, I've just started papertrading and I've noticed a wide channel in unleaded gas. I've set my targets on the weekly charts at 86 (long) and 71 (short). These seem to be far away from each other, is that all right? Thanks for everything from NJ

at 6:34:05 PM
Depends upon how much cash you have, sickofdayjob, and also take a look at those calls and puts!

Ron asks:
Do you think gold is beginning a bull market?

at 6:35:33 PM
The Monthly chart's in an uptrend, Ron, but the Weekly chart could be working on a 50% retracement back down, so price those puts AND calls . . . .

tombo asks:
Howdy Ken! What are the chances (if any) of the eurodollar going over 100? Thanks

at 6:37:05 PM
Hello tombo. Chances are very, very slim because that would indicate NEGATIVE interest rates (where YOU pay the bank to keep your money!). But that event did happen for two weeks during WWII in Switzerland when people panicked. So there's always the possibility. Good question . . . .

CAPNAT asks:
if I am going long term on a futures contract and have to roll over to the next month do I keep the same price I paid for when I first bought it?

at 6:38:42 PM
No, Capnat. You'll exit your nearterm contract and enter a farther-out contract simultaneously at whatever those contracts are trading at at that time. Your profit or loss will simply carry forward at that time.

esz asks:
Ken: I owe it to you!!! Started in Jan 2002 with $13,000 deposit in futures account; added $30,000 deposit Sep 3, 2002 = TOTAL DEPOSIT of $43,000. MY ACCOUNT BALANCE AS OF TODAY, OCT 8, 2002 is $136,000!!! WOW!!! THANKS FOR ALL YOUR VISION, HELP AND INSPIRATION!!! BEN FROM Wisconsin.

at 6:39:16 PM
Thanks Ben! But remember: YOU did it!

toothdr asks:
Hi Ken: No 50% needed here. Have always had calls in rice but the market is so nutso lately that long term calls are overpriced even though the market is/was down. I'm trying to buy July 620 calls to stay in but can not get filled at a reasonable price. I will hold on. Any ideas on this market. TIA

at 6:40:11 PM
Sounds like you're doing just right, toothdr (in fact, you're doing the same thing I am!). Thanks.

porteno1 asks:
Hi Ken! I remember you saying many times that you watch the so-called experts? Just for amusement I watched these experts at work and they were saying not to buy options because you’ll never make any MONEY!!!! Are these guys for real? I felt like calling them and telling them that I just tripled my money in October Orange Juice 95 puts. I feel so proud and lucky to be a contrarian and to have studied with you. Thank you, Ken!!!! Just finished the Rich Man Secret (your book) you are a genius Ken! I’m beginning to feel “ rich “ even without money YET! Thank you, Thank you, Thank you. There is a place in heaven for I’m sure.

at 6:41:25 PM
Thanks Porteno1! Good for you. Yes, you should call those ignorant experts and tell them the truth!

Ty asks:
Hi Ken! I truly appreciate you taking time out to chat w/ your students! I have been watching Hi-Grade Copper recently and decided to buy the 68 calls ($237.50) based on the 123 formation. I'm a bit concerned about downside volatility therefore I bought a 66 put ($400). The 50% ret. was 73-74. Was this a wise move?

at 6:42:20 PM
If you're in the market, you're right; if you're out of the market, you're wrong (even if it's paper trading). Thanks!

money asks:
Jesus Ramos from Overton NV. would you wait to buy coffee call options until the market goes above that wide channel in coffee?

at 6:42:59 PM
No, money, I wouldn't because then they'd be expensive. Low's the time to buy . . . .

amilost asks:
O.K. I'm Obviously A newbe, got as far as pricing and was completely lost. I guess I just need to reread and reread and... Got any helpful ideas?

at 6:43:42 PM
Yes, amilost: Reread! (And don't forget to call a Course Counselor --- that's why they're here.) Thanks.

birdoggg asks:
Hello Ken, What is your opinion on coffee (20 year low)? What are you doing with it? Also, please give your opinion of the Eurodollar (20 year high) and your plans with that market too. thanks

at 6:45:08 PM
I'm long, long, long coffee (and drinking it too) and have been for a long, long, long time. I'm short Eurodollars. (And remember to check out those options in these markets too.) Thanks.

RoyinN.CA asks:
Ken, do you have any better idea than I do why cocoa keeps defying gravity so steadily and convincingly?

at 6:45:41 PM
Supply and demand, RoyinN.CA. Isn't it great?!

Irvine Dave asks:
Hi Ken, since cocoa has continued to charge upward, it has passed through its monthly 50% target. Are you out of your long position or are you still in with your next major resistance target at 2800 on the monthly?

at 6:47:19 PM
I'm still long, Irvine Dave, and trailing a "silent" stop (a price that only my broker knows). Thanks.

vvangus asks:
You have mentioned in these chat rooms about silent stops etc. I have found out the hard way that it is better to have stops in place. The Market changes to fast. I have tried all kinds of different services and none are better than the good ol charts. Thanks, virg from Arkansas

at 6:48:52 PM
Sounds like you're doing great (and learning greatly), vvangus. Thanks for joining us this evening.

Jack-the-Barber asks:
Ken! I finally did it right! Placed an order for two may03 wheat 290 puts on july 17 at 2 1/4 pts or better (which was half at the time)Got filled on aug.22 at 1 1/2 pts each! I'm on my way! Thank's for everything!

at 6:49:56 PM
Good for you, Jack! You shaved off a lot of cost there and are really clipping along toward those profits!

PatientlyPersistent asks:
Greetings,Ken. Am back after >1 year absence. My emotions, impatience and my non-spiritual mind then made me learn hard lessons. Was too wrapped up in the wrong directions and lost. Am still learning to be patient but am very persistent. Paper trading for 6 months helped me a lot. Got back with real money end of July and went futures long March Coffee. I got a put 4750 @130 points but with the profits I raked from this last little perc was worth it. Got back long March again when it made a 50% downward and am prepared to take the ride this time, thanks to your encouraging chats. I also got way out of the money May coffee call. My dilema now is what's my target for futures profit since the daily charts have shown a top with no nice 1,2,3. I could ride to the weekly 50% which may mean rolling over. How do I decide when how what with the put to the month I roll over(hopefully I won't have to do this if coffee percs again). Any advise for me? Really thank you a lot.

at 6:52:21 PM
Thanks PatientlyPersistent. I'd start pricing far-out puts now (try July and September). When/If those get cheap, that would be the contract month to roll out to (if you have to). Glad you hung in there. Thanks again.

Howard from Austin asks:
Ken, I have not been able to follow some of your trading philosophy and it primarily has to do with not getting out. I will make a gain but inevitably the trade will go against me to the point where I have to get out. It seems taking a specific gain such as $500 and using tighter stops is what I need to do. Do you have any further news you could share on any basic guidelines on how much excess you should have in your account while trading ? If it were not for you and your great courses, I would never have gone into this business and I think it has a lot of potential. Thanks for everything you do for us !

at 6:53:30 PM
Thank YOU, Howard. Try looking at and pricing options. I think you'll like this approach.

gundennis asks:
Ken can you explain a little more about bidding less than the asking price for an option?

at 6:54:40 PM
Yes, gundennis: When you've priced an option for at least two weeks, you'll have a feel for what's "cheap" in that market at that time. When you determine what "cheap" means, bid HALF that amount for that option then sit and wait. You'll be surprised . . . .

toofunky asks:
Hi Ken, I was fortunate enough to get filled on a pair of Jul 03 150 Coffee calls at 45 points on Sept 24th (second round!). Yep, couldn't believe it, the market does come to you afterall (it settled at 54 points that day). My question is what do you think is a good target to use to liquidate my first option (for a profit!) seeing that it looks like the front month (Dec) chart daily 50% of 61.10 was hit 9th Sept? Of course the weekly 50% is the target for my second option if the market has the beans to get there!

at 6:56:08 PM
Try using the old front-month contract high as your first liquidation point, then wait for the Weekly 50% target. Thanks, toofunky!

experimentor asks:
Ken, would you say it's a good time to short Jan canola right now?

at 6:57:03 PM
Yes I would, experimentor (and don't forget to price those puts too). Thanks!

Nicole--IOWA asks:
OK KEN... on your answer to my earlier question of my delima of so many opportinuties and so little capital..I DO paper trade them...but there ain't nothin like the REAL thing! You know! ON the fingernail delima...maybe you should try it out!!!!! HA HA HA...or at least PAPER trade it!! :)

at 6:59:45 PM
Sounds like you're doing great, then, Nicole. Yes, it's true, there's nothing like REAL profits, but always remember that paper trading helps LEAD to those REAL profits. (I'll pass on the fingernails . . . .) Thanks again!

Linda Eugene asks:
Thanks for saying all you do about brokers. I started with an awful, intimidating man. I switched brockerages, and now have a wonderful lady who is easy to relax around and ask questions of. Also, I took my first real trade profit today!!! This is exciting. I am currently in 4 commodities, and paper trading 7 others. It is taking me awhile, but I'm finally getting it.

at 7:01:10 PM
Fantastic, Linda! Good for you! You're building a SOLID foundation (which takes time) . . . .

trwtrader asks:
Ken, When calculating the weekly 50% retracement how far do you go back in time? Some of the charts go back several years. I usually use the last extreme high or low from the current high or low that is forming.

at 7:02:02 PM
I use the greatest 50% retracement that's possible on any chart.

BOOMERANG asks:
BOOMERANG Hi Ken. With The Dow Forecasted to fall to 5000 or possible lower it would be better to wait to by call options on the nasdaq. Right? Thanks for all your help. I have took most of if not all of youre courses. Waiting on a new one now.

at 7:03:16 PM
Thanks, Boomerang. Yes, since the charts have fallen so steeply, a retracement (up) is surely coming. So start pricing those call options now . . . .

gundennis asks:
Ken i am about to do my first trade, i am thinking of march or may cocoa puts, does this sound ok?

at 7:03:40 PM
Yes, gundennis. Go for TIME and get them CHEAP . . . .

Tahoe Clay asks:
Hi Ken and Crew: Coffee is sure making a nice formation 123, I am long, and patiently waiting for my bids to get filled on my July 03 calls. I will be in Ashland next week, and will try to make the sunday at Guy Finley's....Hope to see ya all.

at 7:04:54 PM
Hello Tahoe Clay, and thanks! Yes, come by and see us when you visit (lefty) Ashland. Go coffee, go!

trwtrader asks:
Ken, I just purchased a couple of cheap Eurodollar puts. How long have you been short in this market? It seems like it is taking forever to move. Thanks.

at 7:05:14 PM
I think I've been in it forever, too, trwtrader.

flmac asks:
Hi Ken; I wish to thank you for sharing your wisdom and knowledge in commodities. The people at work look at me like I'm crazy when I tell them about this. They are the same ones that are crying doom and gloom because they put all their eggs in one basket (401K) and can't retire when they want to. I have puts in Euro Dollars and Corn, as well as a call in Sugar. Thanks a million!

at 7:06:17 PM
Thank YOU, flmac. Yes, their 401k's turned into 201k's!

Eric in Fort Worth, TX asks:
Hi again, Ken. You have said that you don't use any of the popular indicators (stochastics, RSI, etc.). Is this because you just don't need them, or did you find they gave false signals? Thanks.

at 7:07:14 PM
Yes, Eric: I don't need them (my charts tell me everything I need to know) and I found they don't work. Thanks!

Ninja asks:
Hi GANG, With all the talk from President Bush about Iraq and the REAL threat of war, would you be buying crude oil calls at this point? I know it's stupid news, no, make that really stupid news since its coming from Washington! THANKS

at 7:07:49 PM
I know it's tempting, Ninja, but honest --- I just go by my charts.

Russ - Malibu asks:
Dude, love these chats, your humor cracks me up. Here’s a position update: 9/9 got long 10 SBH3 from $6.30 after a perfect 1,2,3 – looking for weekly $7.70, Still long 5 KCZ2 after the flat top triangle on Sept 4 – looking for $90 - $100, Short 10 OJX2 from $99.22 after that classic 1,2,3 top (sorry, I had to put in a buy stop @ $94.98 because my weekly target was hit @ $96), and I’m still holding 10 of those CLZ2 that I got long @ $21.80 in January (remember the Porsche). I’m going to have to get out soon if it doesn’t get back over $31 again. What a rush! You gotta love it, thanks for turning me on to a great gig.

at 7:08:44 PM
You da man, Russ!

LeeinSC asks:
Hi Ken! Lee here from Lexington, SC. First time here in the chat room. I just wanted to thank you for introducing me to commodities! I am so excited about this that I had to share my first successful trade. I bought 2 Orange Juice Nov. '02 95 puts on Aug. 14 for $90 each. Last Wed., I sold both for $375 each. I could have held on to them a little longer and made over $1000, but I was so excited about finally making profits, and they were close to expiring, that I went ahead and took my profits. But like you said, you can't loose money taking profits. I also have 2 May '03 1150 Cocoa puts and am thinking about buying some Jul '03 and/or Sep. '03 puts at the weekly 50% level. Does this sound like a good plan? Thank you again for introducing me to "the world's one perfect business".

at 7:10:17 PM
Yes, Leein SC. Sounds GREAT to me. Thanks for joining us and hope to see you here again and again . . . .

BP Bob asks:
Hi Ken, Do you think that using U.S. Charts On-line would be a good tool for paper trading?

at 7:10:54 PM
A lot of Course Members do, BP Bob. There's even a "Trader Tracker" feature to use for paper trading. Thanks!

Eric in Fort Worth, TX asks:
Ken, Cocoa is a good example of what you've been saying for years. Two years ago it was at 25 to 30 year lows, and hardly anybody was interested in it. Now that it's in the stratosphere, people are talking about it, but it's really too late to buy. The charts truly are all an investor needs!

at 7:11:25 PM
Couldn't have said it better myself, Eric. You da man!

BeachBoy asks:
Hello from Naples, Fla. KEN-BEEN WITH YOU SINCE 95, THANK YOU FOR BEING THERE TO TEACH ME THE ONLY PERFECT BUSINESS IN THE WORLD.I DO TRADE FULL TIME AND I TRADE LONG TERM POSITIONS AND OPTIONS IN ALL MARKETS. NEW MEMBERS, LISTEN TO KEN, LISTEN TO HIS SIMPLE TEACHINGS AND I KNOW YOU WILL BECOME SUCCESSFUL IN THIS WONDERFUL BUSINESS. I AM IN WHEAT,BEANS,SUGAR BONDS,COCOA,EURO$, AND OF COURSE COFFEE ALL WITH OUT OF THE MONEY OPTIONS AND FUTURES. LETS SHOW THESE EXPERTS WHAT WE ARE ALL ABOUT- THANK YOU!

at 7:12:10 PM
Good one, BeachBoy. YOU da man!

reynaldo asks:
what are the chances of silver going any lower than it already is?

at 7:13:33 PM
No one knows, reynaldo, but it's not that far down to Silver's Monthly low . . . . (Kind of like jumping off the front porch versus from the top of the roof.)

Toody asks:
Do you feel that wheat will still take a run toward the monthly at 486 or is it in a down trend now? Thanks for all you do.

at 7:14:39 PM
Right now it's in a downtrend, but I think it's just a typical small setback along the way up. Look at that Monthly 50% retracement target . . . . Thanks!

Ninja asks:
Hi Ken, You mentioned using a silent stop so that the floor traders dont know your plan. Does it matter much if any if you only trade one or two contracts? If you set your stop close to your entry price with one contract will the exchange guys try to stop you out? THANKS MUCH

at 7:15:37 PM
Not if they don't know where your stop is, Ninja. That's why it's a SILENT stop. Every Ninja should know this . . . .

Russ - Malibu asks:
Dude, I want to share with you a motto that I have framed and sitting on my desk. It applies to every endeavor, especially when there is competition. I consider trading a major competition. I take it very seriously. “TOTAL FOCUS IS REQUIRED ON WHAT ONE DOES BEST, TO THE EXCLUSION OF ALL ELSE, BECAUSE THERE WILL BE SOMEBODY ELSE THAT DOES BETTER WHAT YOU DO SECOND BEST”

at 7:16:20 PM
Good one, Russ. As I always say, You are still DA MAN!

Howard from Austin asks:
Ken, Could you give us an idea how much money you started with in your account when you first started trading futures ?

at 7:16:35 PM
$600.

Bunny826 asks:
Ken, are you still trading by the 4 different "levels" that you taught in one of your courses that markets tend to do? If so, I'm thinkin' cocoa is headed for the 4th level......Is that the right thinkin'? Is that what you're thinkin'?

at 7:16:59 PM
Yes, yes. Good one, Bunny826.

coacoaman asks:
Hi Ken, I have been trading since Febuary of this year and yet to show a profit. All my losses have been my fault one way or another something I missed or didn't wait to see the sign or got in to fast. I was wondering waht advice do you have to keep motivated. I am excited about commodities and really want to get a handle on this business, but it gets tough some times.

at 7:18:20 PM
One great way to stay motivated until you get those first profits under your belt is to join in these chats. I wish I'd had something like this when I first started in this business so many years ago. Thanks!

Irvine Dave asks:
Irvine Dave here again. The monthly paper chart shows that a "new" contract started for the Euroyen in March 1996. Do you start from that point forward using the low (approx 9870) to calculate the 50% retracement or do you use the historical low of 9120 hit in 1990 under the old contract? Thanks for all your generous guidance!

at 7:19:45 PM
I use the entire chart, Irvine Dave, but either target is going to produce HUGE profits in the Euroyen since it's SO extreme. Thanks!

Rocker & Roller asks:
Ken - I was on a vacation/work trip last week in Hilton Head SC. I am always amazed at the waste of energy most people go through trying to impress others. All I did was get up and walk to the pool, call my broker, place my orders, then go to the beach. Thanks for everything. Question - Will the New York markets ever get back to limit orders that last longer than a day? Any insight?

at 7:20:51 PM
Thanks, Rocker! Good observation. Yes, I think we'll get back to "the good old days" when things settle down again.

BeachBoy asks:
BEACH BOY NAPLES, FLA. KEN IF YOU COULD EXPERIENCE ANY THING YOU WANTED THIS MONTH-WHAT WOULD IT BE ?

at 7:21:08 PM
Enlightenment.

RICKJ asks:
Ken when I purcased a 120 May coffee call I had to place my order for 3 days running.I was not allowed to place a GTC order. Is this only true for coffee or are there markets which operate under these rules?

at 7:22:55 PM
ANY market may operate under these rules at anytime. It all depends upon the Exchange and the situation at hand. (See previous question.)

tibo asks:
what is your opinion on those cheap brokers over the internet. they advertise $14. turns. think it is worth a try as opposed to dealing with a human?

at 7:23:30 PM
Try it, tibo, and see if it suits your needs. (I never have, so I can't say.) Thanks!

coffee mike asks:
HI Ken and crew,great chat tonight,thanks for all you do!Just got back from a fly fishing trip in Montana! Before I left, I placed bids in coffee for july 150 calls at 50 points. At the time they were 80 points. When I got back I was surprised to be filled at 45 points! YES Ken, bidding down really does work. Thank you for your advice!

at 7:24:13 PM
You are brilliant to follow my advice, coffee mike.

GYPSY WOMAN asks:
So-o-o, I have the $ to enter 2 (yes a whole 2!) futures K's in Coffee - I am "covered" thru May with 135 and 150 calls in Coffee, as well as March - I should be pricing puts instead of using stop losses, yes?

at 7:24:49 PM
Yes. Thanks for joining us tonight.

ALLYN IN BHAM asks:
KEN MY FRIEND,$900 TO $3500 IN 3 WEEKS IN DEC.WHEAT. WHAT A RIDE!THANK YOU! WHAT DO YOU THINK ABOUT LUMBER'S FUTURE?

at 7:26:13 PM
I'm lookin' to get long lumber (and I'm knot bored).

Trips22 asks:
Ken, What do you think about Wheat. Since the last chat it seems to have made 50% reteracement. What would be a good price to add some additional long futures contracts. I already have call options. Thanks for all that you offer.

at 7:28:12 PM
You're doing great, Trips22. I'd wait for a 50% retracement down on the Weekly chart and then set my sights on that Monthly 50% target up there in the stratosphere!

Bubba asks:
Hello Ken, Bubba here in Pittsburg CA. I was a course member early on. I got the booklet because I went to one of your foreclosure seminars. I got started trading and then let my broker lead me down the wrong path. I didn't lose too much money, but got very discouraged and let things sit for a long time. Now, I GET IT! I am paper trading again and looking forward to getting started with real money. I really appreciate all that you do Ken! You have really opened my eyes!!

at 7:29:31 PM
Hey Bubba! How'd I do at that foreclosure seminar?! Those were great times . . . . Glad you hung in there and stuck with it. Come on up and see us when you can.

Jack-the-Barber asks:
Hey Ken! I still paper trade even though I have a real money account.I have a 43 call in hogs and a 7.00 call in sugar (actually,I wish they were "real money" trades)oh well....,

at 7:30:27 PM
You're still clippin' along, Jack, when you're paper trading (and avoiding hairy trades)!

PatientlyPersistent asks:
Hi Ken. In your last chat you told Krispy Kreme to buy options as far out except Currencies. What's the guideline on Currencies? Am long Canada$ December 02 futures. March is traded thinly says my broker. I'll be happy with small profits with Canada$. Watching the daily charts they look like this is a place that I can get in and out frequently. Is my observation valid?

at 7:31:41 PM
Yes, PatientlyPersistent. What I mentioned was that you can't go too far out with options in the currencies simply because they don't exist very far out!

option-first asks:
Ken ,I havent been able to purchase any oats put options is anyone else having this problem.

at 7:31:58 PM
!

riceheadache asks:
ken, I know what you say about a moving bus but cocoa keeps going up...is it rong to jump in while a market is on a continuous uptrend...please advise

at 7:32:22 PM
I think so, riceheadache.

Quick break. Hang on . . . .

shortmkt asks:
Hi Ken! Would a cash poor nubie be better off with one or two options deeper in the money, or more options out in the cheep seats?

at 7:33:33 PM
Even with a lot of money, shortmkt, I don't purchase close-to-the-money options (unless you're hedging a futures contract). Good question.

Quick break . . . . Be right back.

Ed asks:
Hi Ken,I was curious if you are in beanoil and if so are you out of it? According to my calculation the weekly 50% has not been hit yet, I'm begining to wonder if i should have bailed out already.. It was nice to have met you in Philadelphia 2 summers ago. thanks,Ed from NewHampshire.

at 7:43:34 PM
Still long BeanOil, Ed, and waiting for the Weekly 50%. Philadelphia was GREAT, wasn't it! Thanks.

Nicole asks:
Nicole - Vancouver BC Canada HiLo Ken & Co. Just wondering what the process is when you watch the front month of a futures contract but actually trade a further out contract. Are there calculations to perform? What happens if the next month does not have a formation? Thanks so much for all the trading knowledge you so generously share and especially thank you for the Rich Man's Secret course.

at 7:45:42 PM
Thanks, Nicole, I appreciate that. The only extra calculations to perform are to "adjust" the front-month/weekly/monthly target(s) to the farther-out contract you wish to trade in order to determine your strike price. If this isn't clear, please call a Course Counselor for a lengthier explanation. Thanks again.

NM betty boop asks:
can I change brokers within the same brokerage house?

at 7:46:06 PM
Absolutely! It's YOUR money and YOUR account!

Sonrise 8020 asks:
After calculating the Profit Potential for a given trade, are there any $dollar guidelines that you look for...in other words Profit Potential of $2k or $4k or whatever or better? Thanks for EVERYTHING Ken!!!

at 7:46:58 PM
That's entirely up to YOU, Sonrise. But basically, would you risk $2,000 to possibly make $700, for example?

Heintz asks:
Hi Ken........Thomas from Bakersfield, CA here. I've found that backing futures contracts with cash rather than stops has been more successful for me (only in extreme high or low markets though). Is this how you personally do it now or do you still use stops? Thanks for everything!

at 7:47:44 PM
That's what I basically do, Heintz (just like the cattle rancher I always talk about). Thanks!

Ninja asks:
Hey Ken What is your opinion on what the commercials are doing? Do you look at the commitment of traders report? It has been said they are the "smart" money. How many contracts do these bigshots trade in any given market? thanks

at 7:48:39 PM
Usually thousands, Ninja, but those figures are available in every market. But, no, I never consider them.

NM betty boop asks:
Are options a good way to build my account. I had a couple of "bad" trades, but I know this still works. Have a hard time with options - takes longer than contracts. Love the juice from this!!! thanks

at 7:49:27 PM
They can be, betty boop. But again, it's individual. Glad you're gaining several perspectives here on these chats. Thanks!

Coffee is Celebratory asks:
From CA, With the weekly target on Copper dropping as the old highs drop off the chart, what strike price do you think looks good? PS - Sucessfully trading for 3 years with your course - Thanks!

at 7:50:57 PM
Thanks Coffee! (We sure have covered a lot of markets here tonight, haven't we? That's great!) Okay, copper: 111 basis its Monthly chart.

Comotradr asks:
Ken, I wonder if all your course members feel the same as I do? I have this feeling of total euphoria from feeding off this knowledge and knowing that I know the secret to wealth now. It seems that no one around me understands this feeling!! That's O.K. though, they can just stay in their psycic slumber, that's no longer for me. Thanks a million Ken for all you have taught us!!!

at 7:51:29 PM
Perfect!

Ruxpin asks:
Ken, do you think floor brokers really Gun for stops? I think I was gunned 2 times for having my stop too close, apparently.

at 7:51:56 PM
Yes I do, Ruxpin.

Blue Rose asks:
Hey Ken! Thank you for all your help and knowlege. I have found a snag when I paper trade, the markets that I paper trade do real good but the markets that I have money are not doing so good, when I check my tracker looks real good with the paper trade accounts but my regular account keeps going lower, lower and lower. What am I doing wrong? I love trading is one of my highs of the day!

at 7:53:19 PM
Thanks Blue Rose. Glad you joined us again. Call a Course Counselor and have him/her go over your Trade Tracker records with you and look for that "snag."

nada asks:
Dada from OREGON; thanks for this opportuniy Ken, slow at grasping a few compontents in the course with a couple of small losses but i'll get there; these chats are to me like one big BBQ outing, all of us together chating and learning about commodities,it's a real "I can't wait pleasure thing". Thanks always-

at 7:54:26 PM
Thank YOU!

rhalley asks:
i,m currently working 12 hr. shifts my eyes are all bloodshot but i am still here. would you try to have more chats on my days off. thank you.

at 7:54:49 PM
Sure, rhalley. What's your day off?

walter asks:
I know you prefer your paper charts, my question is for us who are at least a week away by snail mail, would the on line charts be better? or does it really matter that much? Once you have a set of paper charts can you just go online to update them every day rather than calling a broker? Or is it really better to call the broker for this? I am getting close to ordering charts. Just wondering how I should go.

at 7:55:55 PM
It's entirely up to YOU, Walter. I can't answer these questions because it's totally a personal-preference thing. Give it all a try and see which you prefer!

gr asks:
Hi Ken. Do you still use paper charts or have you gone to the online version?

at 7:56:10 PM
Still on paper, gr.

dreamright asks:
Hi Ken, I just received your wondeful charts. Friday I placed a bid on Cocoa at 1300 at half the asking bid of 2 points. My question to you is, at 2 points it was only $20.00, and I bid 1 point for $10.00, as of yet the order didn't get filled. Since this was already low, should I have just stuck with the 2 points. What would you have done?

at 7:56:58 PM
Bid 1, just like you did! (But even if you paid 2, that's still CHEAP!)

Steve from Wyoming asks:
Hi Ken, this is the first chat I've made in many months. Boy have I missed your wisdom. As you might recall I met you in Grants Pass last June and attended Guy's seminar. Just wanted to say Hi, and feel I am on the right "path" and...by the way...have now increased my account balance to 35K from 5K this year. Thanks a million!!!

at 7:57:33 PM
Great, Steve. Glad to hear from you again. Don't miss these chats!

Craig from NY asks:
Hi, Ken! Craig in upstate NY. Thanks for the enlightenment! Made a few $ in sugar. Holding May 90 coffee calls. Looking to liquidate 1/2 at a front month 66, and hold the rest. Am I warm?! This is my future(s)!!!! Thanks!!!

at 7:58:02 PM
Yes you are, Craig! Great goin'!

steve asks:
Hi Ken, just wanted to let you know I made a little over $300 profit on my corn options. started trading for real this summer. thanks for all the info.

at 7:58:21 PM
Thanks, Steve!

Taxidermy Dan asks:
Thanks Ken this month will be 3yrs.that I have been paper trading and learning.I opened an account 2yrs ago lost money but decided that this realy works.so I have been saving my pennies and I am ready to trade again.Im a winner and Will do this! dont ever stop these chats.The charts are fantastic I study them every day.I have also been using ted warrens system on stocks and my 401k.I have doubled my 401k in the last 2yrs. using teds principals.thank you very much.I will come and thank you some day.

at 7:59:30 PM
Thanks, Dan! Good goin'! Yes, come on out and see us.

prodigalsun asks:
Hey Ken and Crew! Enjoying my long positions in sugar and coffee calls. My irrelevant question tonight (as eveything else you've explained in detail) is do cigar smokers inhale? Love all that you do and have recently turned my folks on to your course as they have suffered the recent economic downturns in the economy/stock market.

at 8:00:33 PM
Thanks prodigalsun. No, never inhale cigar smoke (but even if you do, that'll be the last time!).

bootcamprich asks:
JUST WANTED TO SAY HI TO ALL THE BOOTCAMP MEMBERS AND THANKS KEN FOR EVERYTHING. WOULD IT BE MY LUCK THAT OF ALL THE ROLLS OF FILM THAT I TOOK THAT ROLL OF YOUR BITHDAY PARTY AND BOARDROOM DID NOT COME OUT.I THINK IT WAS DAMAGE AT THE AIRPORT. SORRY!!! I AM CURRENTLY HAVE CALLS IN JULY COFFEE AND PUTS IN COCOA AND EURO DOLLARS. WHAT YOU THINK OF PUTS IN T-BONDS, 10YR T-NOTES AND CALLS IN THE DJIA? I NOTICE THESE MARKETS DON'T OFFER ENOUGH TIME AND ARE EXPENSIVE.

at 8:01:46 PM
Hello rich! Thanks for joining us. Don't buy expensive options, but continue to monitor them until they get INexpensive!

Sonrise 8020 asks:
The Weekly DJI Index is around its weekly low of 7430...are you in this market or have you stayed away from it because of the uncertainty of the times...9/11...Enron...WorldCom? It seems that the price of admission is relatively high $700 for a call option, but the profit potential is over $16k... Again, I appreciate all that you do!!!

at 8:02:12 PM
That's right, Sonrise, wait for cheap . . . .

trader Jim asks:
Ken I just wanted to say that finally I made 1200.00 $ last week trading the Dow industrials thanks for being my mentor. I really enjoy the picture too.

at 8:03:09 PM
Thanks, Trader Jim. (Do you mean my movie?)

ImBack asks:
amilost? Yes, but I see there is a lot of help out there! Thanks everybody for showing me the possibilities! I'm back to the book.

at 8:03:28 PM
Thanks ImBack!

Caribbean Craig asks:
Ken, Actually had a broker/buddy tell me I was stupid to pay off my house and all other debt, thanks to your course and the futures business. Go figure ?

at 8:03:54 PM
I know, Caribbean. They told me that too!

Bonita Joe asks:
Ken - Have to ask a question that not all will understand, but how often do you actually think of "Now". I have been trying as hard as I can (am successful at work as it requires it - dentist), but in my "own time", my not so friendly mind takes off questioning trades, even though I know better! Bonita Joe

at 8:04:41 PM
More than a few times each day, Bonita Joe, but not nearly enough. (That's what we need to see more and more.) Thanks!

Nicole--IOWA asks:
WHAT!?!?!?! WHO WAS THAT OTHER NICOLE??????

at 8:04:53 PM
!

susan in florida asks:
Hi, Ken. In reviewing options history, it seems to me that the less one pays for an option, the greater the return. Does that make sense? and is that your experience. I.e. proportionately lower priced options seem to increase in value. Any comment?

at 8:05:54 PM
That's correct, Susan. You're now an economic genius!

T asks:
Ken, BigT in Dallas....Would just like to share an observation that may benefit other course members. Every time (And I mean every STINKIN' time) that I listen to my broker or have taken his recommendations...I have lost $$. But when I just listen to my charts..I am in a winning trade!

at 8:06:21 PM
Well put, T. Thanks!

LMAC asks:
Ken, That answer to BeachBoy's question was awesome! Thanks.

at 8:06:28 PM
!

scottishtrader asks:
Hi Ken I am a new trader from Scotland and finding it very exciting. I have purchased one May 120 Coffee call and am unsure as to when to liquidate my position.I also bought 2 cocoa puts that have fallen in value rapidly with the continuing rise in prices.Is this a case of just holding on and being patient? Many thanks

at 8:07:28 PM
Yes, patience pays, scottishtrader. (And see earlier question regarding coffee targets.) Thanks for joining from the other side of the pond!

Jim from Kalamazoo, MI asks:
I sold my Euro $ call and made money. Thanks Ken.

at 8:07:58 PM
Thanks Jim! Good goin'!

AJ asks:
KEN. As to funny metals!!! what do you think the instability in Costa De marfil (worlds largest cocoa producer) will have on the cocoa market??? aj

at 8:08:51 PM
The only costa I consider is how much that option costa!

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, November 12th. Also remember Matt's stock and commodity chat next Tuesday, October 15th. Good night!

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