Ken Roberts Chat

Let's Talk Trading (tm) with Ken Roberts
from December 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 Cohiba Lancero fired up, here’s our plate of freshly baked cookies, the coffee’s poured, so let’s talk commodities!

Patience asks:
Hi Ken. You say to shop around for two weeks before buying options and then to bid half. So, what do you bid half of: the highest, lowest or average price of the two weeks? Thanks for everything, you've changed our lives.

at 6:24:45 PM
Thanks, Patience (especially since we started late this evening!)(Guess that makes me the host of The Late Show . . . .) Okay, to your question now: Bid half of what you determine to be "cheap" in that market at that time. Try it --- you'll love it!

NOTICE: I need your input! Please let me know your experiences with Main Street Trading Company during the last 12 months. I've set up a special Email address for your comments: feedback@kroberts.com. Thanks!

fizzz asks:
Is there a chart that lists how far out options are traded for each commoditiy?

at 6:26:58 PM
No, fizzz, no chart that I know of. Just ask your broker and s/he'll simply check out what's being offered in that market at that time. Thanks.

OilTrader asks:
Hello Ken and Everyone, I want to express appreciation for your work providing positive futures for everyone who is willing to learn. Just knowing you are there when we need you is a great blessing for all of us.

at 6:27:24 PM
Thanks, OilTrader! (Is this really President Bush?!)

Verge asks:
Where can I learn how to place orders? Does your company have any thing you sell that explains just what to say to your broker. I always seem to have him spend more time with me than he wants.

at 6:28:29 PM
Sure, Verge. Just call a Course Counselor for specific references to all the places orders are covered in my Courses. Thanks.

flmac asks:
Hi Ken. My family nickname is Uncle Fudd. No I'm not married to a Tillie. Yes I have lost money but not my shirt and home. The question I have is with the present up turn on cocoa, do you think it will turn around and head south soon? I have to admitt that my patiance hasn't been real good here lately.

at 6:29:58 PM
Yes, Uncle Fudd, I'm expecting a 50% retracement in Cocoa. Price those puts . . . . Thanks.

brett in fort worth asks:
Hi Ken, Are you in pork bellies? They look high.

at 6:31:06 PM
No, not at the moment, brett. I'm waiting for Bellies to get higher still before shorting them.

Don asks:
Don from Clearwater, Fla. Hi Ken, When are you coming to Florida?

at 6:31:35 PM
Possibly in June, Don. Stay tuned to my Seminar Schedule for details. Thanks!

okie1rookie asks:
Lexington, OK Ken, Do you see a major move on the March Oats chart? What do you think it's potential is? Okie1rookie.

at 6:34:23 PM
Hello, okie1rookie. The major move in Oats was last year. Now we're just seeing 50% bounces. Thanks.

Smooth Sailing asks:
Ken Rod from Indiana I had several May 400 Wheat calls and they are tanking fast. I am holding the last 2 for the weekly 50. They were at 36 points and now at 6 or 7 and its tough to tell yourself you are doing the right thing. I know I have time left but is it your experience that these options will come around again? Thanks

at 6:35:48 PM
Many times they will, Smooth Sailing, and that's why we use them: It's a whole lot easier to wait this drawdown out using cheap options than it is using high-risk futures contracts. Stay with it!

gundennis asks:
Ken thanks for these chats. Is there a best time to purchase an option?

at 6:36:09 PM
Yes: When it's CHEAP! (Really . . . .)

y7677 asks:
do you inhale your cohibas?lol

at 6:36:27 PM
No, oh no!

Brian asks:
Hello Ken you're the greatest.. I find myself shorting markets lately more because I think the spread is less from the front month to further out month contracts. Examples currently are Rice and Lumber compared to Eurodollar and Pork Bellies. Am I wrong to go about it thinking in this manner?

at 6:38:26 PM
Not if it works for you, Brian. I believe what you're describing is "spreading" the market (and, actually, "arbitrage").

bourisaw asks:
Do you ever look at volume and open interest on options? If so what do you look for?

at 6:38:55 PM
No, bourisaw, I never do. All I need is my order filled and that's it . . . . Thanks.

LOGIN AND CHAT asks:
KEN,WHAT DO YOU THINK ABOUT ENERGY MARKET IN GENERAL. ANYTHING WITH WAR WITH IRAQ?

at 6:39:56 PM
That would be "stupid news," Login and Chat. I just trade the charts. (None looks especially extreme right now, though.)

CapNat asks:
CapNat in Houston here Ken, Have a Jan Rough Rice futures contract will be expiring soon, should I prepare to buy further out options to cover my position on the futures contract rollover?

at 6:44:33 PM
You'd use put options to hedge your long futures contract, CapNat, OR you could trade Rice using call options only. Be aware, however, that if you "roll" your futures contract, you will never NOT be in the market.

Deanna asks:
Deanna from Alabama, are you short wheat?

at 6:45:11 PM
No, Deanna, I'm long Wheat waiting for the Weekly and Monthly 50% targets to get hit. Thanks.

Art P in Palm Desert, CA asks:
Ken, you always advise to buy options as far out as possible, which I do. However, it seems that closer in months seem to have more volitility on the premium values than the further out months (Coffee, Cocoa) is this usual?

at 6:45:54 PM
Yes, that's typical, Art P. (For the same reason rear-end collisions happen: People don't look far enough down the road!)

Mike asks:
Yakima, WA. Ken As far as bidding half on options, what if the move starts while you're waiting? The boat will leave without you and the option prices go up! Thanks!

at 6:46:41 PM
Yes, that's possible, Mike. But has it ever happened to you? I'll bet not. What you're "hearing" is what ALL our minds keep yelling at us traders!

Richman asks:
Hi Ken, At the last "chat" I told you that I missed buying a July 160 Oats put for 3 pts. by a hair. Well this time I got myself a Sept. 2550 Cocca call for my asking price of 35 and today it hit 84! So I'm up $395 so far after commission... Thanks for all the info

at 6:47:12 PM
Good for you, Richman. Patience pays again!

Eric in Fort Worth asks:
Good evening, Ken, and thanks again for these chats. I know you've been loaded up on Coffee for some time, which made a fairly good move but has recently pulled back. When a market does this, do you get out (with good profits) and look for an opportunity to re-buy, or do you hang on and wait for a resumption of the trend, thereby trading as little as possible? The daily 50% retracement occurred a number of weeks ago, so I'm curious how you handle situations like this. Thanks.

at 6:48:05 PM
I've hung on through the ups and downs in coffee. And just today, in fact, I added more. Thanks for joining us.

appy asks:
when you observe a #1 top in a chart would it hurt to fish with options while you wait for a formation to occur?

at 6:48:32 PM
Not at all. That's being a CONTRARIAN! Go forth and fish!

CamaroGuy asks:
Good evening Ken. I've watched and charted options in Coffee Eurodollar, and Barley, and determined a cheap price. Then I bid half. It's been a couple months, and I have yet to be filled on any of them. This doesn't appear to work -- bidding half. In fact, I've only once been filled at half price, and that was becuse the market was quickly moving down (The recent dip in cocoa).

at 6:49:25 PM
I know what that feels like, CamaroGuy, but I have to say KEEP AT IT--- it WILL pay off. Thanks!

Johan asks:
Johan from Pretoria, South Africa, Hi everyone, It is 4:15 AM here and my first live visit to the chat room. Thanks for a great course. Started in June this year and are presently long in Coffee and Copper and short in Euro $. The ride in Coffee is presently hair raising! What is Coffee's outlook?

at 6:50:47 PM
Thanks Johan! (What are you doing up so late/early?!). I'm still long Coffee and still hanging on for what I know will be a REALLY hair-raising ride! Good morning!

yael asks:
Hi Ken! Can you trade options in a month that has no formations? For example, Jan 2003 Beans is showing a narrow sideways channel and I want to braket channel with a put and a call option. However, the Jan options are very near expiration. Can I buy options in another farther out month i.e. May 2003, even if it is not channeling????

at 6:52:15 PM
Sure, Yael. That's exactly what I do. I WATCH the front month for my trading cues, but I trade as far out as I can.

kristos asks:
kristos in England. Ken, what is the most memorble trade you have had over the years that us course members could learn something from?

at 6:56:01 PM
Palladium. Call a Course Counselor and ask. So what's happening in England, Kristos? Glad you joined us this (morning)!

trwtrader asks:
Ken, I have some JULY 03 cocoa puts that increased in value when the market was in a downturn a few weeks ago. My 50% daily and weekly were not hit on the front end futures price so I did not take profits. As you know, cocoa just recently had a rally upward and now my options are worth far less than they were. Do I hold the line for the 50% retracements to be hit or should I have taken profits earlier? I know there is no hard and fast rule for taking profits, but I'll be disappointed if the puts expire worthless in June 2003. Any advice would be appreciated. Thanks.

at 6:58:01 PM
Yes there is a "hard and fast" rule for taking profits (as far as I'm concerned): Wait for your 50% targets to get hit and do nothing until then! (You may have to buy a second round of options to accomplish this, trwtrader, but that's my plan . . . .) Welcome to commodities (The World's One Perfect Business)!

WHERESTHEBEEF asks:
IM LOOKING AT JAN. LUMBER AND IT LOOKS CLOSE TO PASSING A #2 POINT, BUT NOT YET. IS THAT WHAT YOU SEE? THANKS

at 6:58:46 PM
Yes, that's what I see too, Wheresthebeef. Thanks!

secondswing asks:
Hello Ken, I just began paper trading yesterday, dec 9. I find it a little overwhelming talking to the broker. I feel a little uncomfortable and find they're a little pushy as far as trying to set up an account right away and get going. I am a Beekeeper by trade and am looking forward to branching out into this commodities thing, but I'm in no rush. I enjoy doing things at my pace. Any insight or words of wisdom for a greenhorn?

at 7:02:05 PM
Absolutely, secondswing. You do NOT want to get stung by any broker! Stick to your plan and tell any broker to mind his/her own beeswax! It gives me hives whenever I hear about brokers buzzing around being pushy. Ask questions, take your time, and smoke those brokers out when they begin to swarm. Bee leary of all brokers. Follow my advice and you'll soon bee basking in the land of milk and honey!

That was bee-utiful!
Boy, that was a honey of a question . . . .

Ninja asks:
Holiday greetings Ken & crew, Swiss Franc is trading in a very wide range for about the last 5 months and is near the top of the channel now. Since the daily,weekly and monthly 50's are all lower would now be a good time to short this market or wait for a breakout to the downside? Do have any positions in this market? all stay well

at 7:04:30 PM
Why don't you try trading the Swiss Franc with puts, Ninja? Now would be a great time to find cheap ones.

Beth in New Mexico asks:
Hi all, I just made my 1st trade in lumber, Ken what are your feelings on lumber? Hey, thanks alot for everything!!!

at 7:05:43 PM
I'm lookin' at lumber long, Beth. Hang in there (and don't get board)!

dsample asks:
Ken, I have taken two of your courses in the past and have had "things" get in the way of staying on course. I know what you teach is workable and have even set up an account with a broker, though I have not traded. I'd like to get started again...any suggestions...I am only one hour from your office and could drive down for a class....

at 7:06:38 PM
Come on down anytime, dsample, and visit with a Course Counselor in our Trading Lounge. THAT's a great way to get started. See you!

tjenks asks:
Ken, I was at your Toronto work shop last October (GREAT TIME), does the offer on the little green and yellow sheets still stand? I love those little things and I'm almost out.

at 7:07:13 PM
Thanks, tjenks. Absolutely! Just call a Course Counselor.

appy asks:
Ken, live cattle seem really high. should i try fishing with puts while waiting for a formation?

at 7:07:57 PM
Absolutely, appy. Fishing for cows would be a wise MOOOve right now.

birdoggg asks:
Hello Ken! I have a few questions concerning the Eurodollars: 1. I have 4 june put options at 97.75 (first ever real money trade about 1.5 months ago). I placed an order today for my first real money future contract for 98.100 Sept. What is the real prospect of the Euro to go to 100? I did not place a stop on this order because of the STRONG downward prospect. Would you recommend a stop in this instance with the Euro having a supposed wall at 100 (I have $5,000 in the account now)? Also, historically, does war have a tendency to increase interest rates to help pay for the expenses of war; or, does it have a tendency to decrease during war to help the people in a stuggling time? Finally, do you think there will be a strong explosion downward in the Eurodollar after the turn of the year? Thanks, Greg

at 7:12:37 PM
Most of your questions, birdoggg, are fundamental questions (which I honestly do not consider while trading). It's HIGHLY unlikely that the Eurodollar will move up to 100, but it's always a possibility. Also, please call a Course Counselor and ask him/her to describe "the Elvis Phenomenon" to you. That's a very real possibility too. In the meantime, I'd suggest you stick with shorting the Eurodollar market using put options. Lots of cheap ones out there now . . . .

TahoeClay asks:
Hi Ken and Crew: Just a little lesson about leaving my orders alone. I had some bids in on some July 03 and Oct 03 Sugar calls, and they sat while sugar took off steadily and after about 6 weeks I cancelled my orders thinking they wouldn't get filled as sugar kept rising, well much to my chagrin, I would have, could have, been filled when sugar just did it's last retrace back in November. So now I am trusting my orders and getting pleasantly surprised when the market hits my bid....wonders never cease.....PS it snowed all day here, skiing is really shaping up for the holidays....

at 7:13:37 PM
Hello TahoeClay!!! Thanks for a great lesson. (Is everyone watching out there?) Good night!

coffe is celebratory asks:
Is $300 an unreasonable amount to pay for Sep Coffee options?

at 7:14:09 PM
I'd find cheaper ones, coffe is celebratory. Keep shopping!

NewTrader asks:
Ken, I have been following your weekly updates, and running them at differant levels of trailing stop loss, I've found a $500 trailing stop will give you an overall better return on average. My question is do you have any advice on placing a trailing stoploss and then every once and awhile moving it closer to the current price? Ex. $500 stop then moving it to $400 and then to $300 and then to $250.

at 7:15:05 PM
I have no experience with this technique, NewTrader. But I like your experimentation. Those are lessons that will surely pay off. Thanks!

Deanna asks:
When you first began trading commodities to whom did you tell your frustrations?

at 7:15:27 PM
Everyone who would listen, Deanna!

y7677 asks:
y7677 says: My sister has been makeing fun of me about buying 20 cans of coffee on sale at$ 2.99 (maxwell house). . . they go for 7.99 a can!!! Just watching my charts. P.S. Should last till spring :)

at 7:16:41 PM
That's it, y7677! That's what commodities is all about! (Let 'em laugh . . . .)

Ruder asks:
Hey Ken It has come to my attention that many contracts have night markets (some grains, currencies, metals and indexes) are these price movements included in US Charts or just the day session? Should we even pay attention to movement at night?

at 7:17:21 PM
Only the day markets are included in U.S. Charts (and that's all I watch and trade too). Thanks.

LMAC asks:
LMAC in Studio City: Ken, who do I ask about listing further out options in the December coffee market? I trade online and the ones I want are not yet listed. What is the system? Who decides? Many Thanks for the Chatroom.

at 7:18:20 PM
The Exchange decides, LMAC. And for what's not on-line, call a broker for ALL listed option months and strikes. Thanks.

tjenks asks:
Ken, do you feel you make more money on the up side or on the way down? The guy's at work think I'm nut's when I tell them I make money on the down side ( they just don't get it).

at 7:20:37 PM
I never analyzed my trading this way, tjenks. Keep talkin' to your friends at work --- one day they'll get it (and then you won't be able to shut them up!).

Lynne asks:
I've been long in coffee (either in options or contracts)for close to two years now and am anxiously awaiting a 50%. I know that it will come, but I have added contracts twice when it broke above the past high and both times have ended up losing money. I've made good money in other markets, but keep getting 'kicked' with the coffee. Any advice for how to know when it really is time to add contracts? It's really starting to discourage me.

at 7:21:57 PM
To my way of thinking, the BEST time to add contracts (and call options) is when the market DROPS, Lynne. Hang in there!

Gerald asks:
Hello Ken, I know that you watch the front month for clues, But do you watch that month untill the last trading day?

at 7:22:48 PM
Yes. The front month disappears on the close of Last Trading Day. Then I watch the new front month contract. Thanks.

BRETT asks:
HI KEN;DO YOU THINK THE GOLD COULD HIT $400+ NEXT YEAR ???

at 7:23:09 PM
Wait --- where's Miss Cleo?

CamaroGuy asks:
Alright. That'll bee enough of the bee jokes.

at 7:25:11 PM
What's the matter with you: Got a bee in your bonnet? So bee nice. Don't bee so stuck up. (What's all the buzz about anyway?)

Stan the Man asks:
Hi Ken For those folks that ask if you inhale cigars, I would tell them if you do, you will need help exhaling! By the way, do you still sell cigars and humidors? I re-read these chats several times afterwards and I learn a lot from the questions from other chatters. Last chats you told someone that cocoa will rally, and it did. You told another that was lamenting that he/she missed the boat on coffee, and you said to hang in there, coffee will be cheap again, and they are. I order some more cocoa puts yesterday, and am watching for more, the same with coffee. Also cotton looks like it may do me some good. Like all the rest, I look forward to these chats and your insight is amazing! You will have us all smoking cigars! Must be some brainpower in there somewhere!

at 7:26:56 PM
Alright, Stan the Man. Thanks! You da man! Yes, if everyone smoked cigars, the world would be a much better place.

bert asks:
HI KEN! I,VE BEEN PAPER TRADING FOR TWO YEARS NOW,AND I,M ENJOYING YOUR CHATS. THANKS FOR ALL THE INFO.

at 7:27:21 PM
Thank YOU, bert!

okie/rookie asks:
Ken, Charlotte in Lexington, What do you suggest to do if a person isn't real sure on a broker. They seem to be ready to get you started and make a lot of promises when getting signed up on an account. But later they don't seem to have as much time for me as I would like for asking questions? What to do!!!

at 7:28:23 PM
Ask him/her. (Also, make sure you're not needing to ask questions and chat during trading hours.) But if you're not comfortable, change brokers and/or brokerages. Thanks!

The Jack of Trades--Union City, GA asks:
Hello Ken: Once again, thanks for showing me my future full-time occupation. Is it just me, or is it a great time to check out some Canadian Dollar calls (nice retracement coming)? By the way, the beekeeper puns were hilarious.

at 7:29:39 PM
Thank you, Jack of Trades. You are a man of great distinction. ABSOLUTELY yes on those Canada calls! (Eh?)

TahoeClay asks:
Hi Ken and Crew: I just want to tell you that for the last month every morning I sit down with my cup of coffee and do my paper charting updates using the Quick Quotes on my US Charts Co. online. I used to not do updates on my paper charts at all, I feel closer to my trading now more than ever.... thanks for everything trading!

at 7:30:09 PM
Right on, TahoeClay! You da man!

CW from Norman,OK asks:
Hello Ken and Crew! Know when to hold them, Know when to fold them, Know when to walk away, Know when to run. Thanks Ken for teaching me the game and Merry Christmas. Looks like I may be up about 200k this year and looking forward to more next year and wishing the same to you and your crew. Happy New Year!

at 7:32:00 PM
You too, CW. YOU are da man! Here's another great lyric from Kenny Rogers (about the simple rules of life): Love your neighbor as yourself/Don't use money to measure wealth/Trust in God but lock your door/Buy low, sell high/And slow dance more . . . .

harris asks:
read rich man's secret and found my blue rose. now i place trades over all my broker's woes. upwards with coffee and down canola goes. amazing how much NOW has to show.

at 7:33:35 PM
We love your comments/You are so deep/The markets go up/The markets go down/Doesn't matter which/Only that YOU'RE around . . . .

blues asks:
Libertyville, IL I am a member of the US Chart online. I am going to trade options and I was wondering if you have any type of written form or guide for pricing options? Something that makes organizing the information while using the online charts and option pricing functions easier? Something to make it easier to know how far out to go and generally make it simpler? Thanks

at 7:34:29 PM
Yes, blues. Please call a Course Counselor. Thanks for joining us this evening.

GYPSY WOMAN asks:
"Kohiba Ken"! Almost missed tonite;glad I didn't; am miffed about my Cocoa puts that should have given me a tidy profit and then were settled at 28, when the mkt. closed at low 60's.(I know, I know, I still took a tiny profit but I was feeling flush cuz I purchased them so cheeep!) (Do you)think Bean Oil is going to continue down? Also, the sweetness is going South on my July Sugar call (I know it's in a 1-2-3 Tops and should I just hold onto the remaining option since I have time? Also, Broker suggests buying closer in and taking a few hundred in profits, cuz buying further out, your strike may not be hit - thoughts? Had a little talk with my broker about this "bad fill" and how often does this/should this happen? Just set my liquidation price "or better" and leave it (firmly) at that? Thanx for being there for all of us - hey, am seeing your Infiniti commercials and billboards all over SoCal - way kewl!

at 7:40:25 PM
(How did you sneak so many questions into one submission, Gypsy Woman. We think you set the record tonight . . . .) Bean Oil = Yep, looks like a 50% retracement back down. Sugar = I'd hang on long in Sugar for the REALLY BIG move. Options: Realize that when purchasing cheap options, you'll probably never see its strike price hit (what you're banking on is VOLATILITY). I'd still go for TIME, not nearness of strike price. Liquidation price = Don't set a liquidation price!!! No one can possibly know what an option WILL BE worth when your target is hit, so don't short-change yourself!!! INFINITI = Yea, that G35 Sport Coupe looks super, doesn't it?! Still waiting for mine to be delivered . . . .

Anna in OK asks:
Hi Ken. Yesterday I put together my first paper trade in Soybean Meal. As a "newbie" I had soooo many questions, and your course counselor was great. I think what sets you apart is your combination of tools: the book, the counselors, the chat room, etc. Keep up the good work so I can keep learning!

at 7:41:04 PM
We will, Anna. And thank you for noticing (and utilizing) all we do! Appreciate that . . . .

matttituck mike asks:
tell us again how you load up on contracts in an extreme market and then "peel" the contacts off. (it gives me goosebumps just thinking about it). thanks ken

at 7:49:27 PM
(Yes, and even bigger goosebumps when doing it!): Okay, let's say you buy 12 coffee calls (or futures contracts). When Coffee's Daily 50% Retracement is hit, unload 6 and take your profits. When Coffee hits the Weekly 50% target, unload 3 more, and then hang on with your remaining 3 for the Monthly 50% Retracement target.

Russ-Malibu asks:
Dude: How's it going? I always like to keep up with your chats...they're interesting and you crack me up! I just wanted to tell you that April 2003 Natural Gas was in a tight channel last month and it broke out to the upside and has been going up since Nov. 15th. I hope you are with me on this one. I sold off a couple today (big margin and nice profit) but am holding the balance for $5.85 weekly. I'm not sure I'll be able to wait that long for all of them, but for sure the last couple are destined for big bucks!

at 7:51:02 PM
Russ: You da man! Where have you been?! Now I see: You've been wheeling and dealing in oil. Glad you're with us tonight.

ML asks:
Have you ever met or heard of the commodity trader John Henry? What do you think of him???

at 7:52:51 PM
If you're referring to the John Henry (former owner of the Marlins) in Florida, yes I have. He manages Billions of dollars in commodity funds. Like all of us traders, he's had his ups and downs too.

TahoeClay asks:
Hi Ken and Crew: You guys crack me up with your humour!! Keep up the good work!! the Elvis Phenomenon, and the bee keeper answer are classic!! Also thanks to Russ in Malibu and those words of wisdom he shared with us all a couple of chats ago!! I wrote those words down and they are on my desk now... This is the greatest classroom ....and funny tooo!!

at 7:53:19 PM
You are da man, TahoeClay!

Dan asks:
Ken I have 1 1500 July put & 1 1350 may put on cocoa my question to you is did I miss the boat ? Thanks Dan

at 7:54:10 PM
I don't think so, Dan. Wait for Cocoa's Weekly 50% Retracement . . . .

jedc asks:
coffee,coffee,coffee.......while I sip on coffee with my cream and splenda I wonder if I can stay in the markets long enough to spenda.

at 7:55:21 PM
Of course you can, you contrarian trader/Coffee WILL take off (if not sooner, then later) . . . .

tymo asks:
Hi Ken; As always, I'm enjoying these chats,as they help me learn by listening to other questions & your response to them. I did the dirty deed,( listened to my broker & lost money), now that I've learned the hard way, I will only listen to you & my charts. You were so right on your advice," don't listen to your broker", I let him talk me into some spread trades that went south. Never again, I've learned my lesson well. You're still my mentor & I'm back on track again. Thanks for all you do. Tymo from Colorado.

at 7:56:12 PM
Did anyone ever tell you you're brilliant too? Thanks!

corncobb asks:
Hi Ken, Happy Holidays! Do you have a rule of thumb or formula for how much margin to leave available for your trades. Lately I've had great success trading but I run my margin a little too tight. Forcing me out of good positions. Thanks for your time.

at 7:57:08 PM
DOUBLE your plan, Corncobb (and also don't ignore options). Thanks!

Deanna asks:
No one mentions cotton, it's been in a channel for about five months now. Is that channel too long to bracket?

at 7:58:43 PM
Cotton's off its extreme lows, Deanna. That's why you don't hear much about it lately. No, no channel is too long to bracket (but that's a mighty wide channel). Good chartin'!

TahoeClay asks:
Hi Ken and Crew: Does your broker ever know anything?

at 7:59:02 PM
Yes, but never if his lips are moving!

matttituck mike asks:
did you ever speak to vernon howard? would he approve of what we do here?

at 8:02:28 PM
Yes I did, matttituck mike, but not in a sit-down, face-to-face conversation as I would have liked. I've thought a lot on what you've asked and yes, I think he would approve of what we do here as long as we keep that "separation" that's all-important. In other words, as long as we don't give our life over to the markets. We live in this world and in this society, and that's just the way things worked out for us. I belive the Bible summed up what you're asking with the verse "The LOVE of money is the root of all evil."

Goldie asks:
Hi Ken, Mary from Poulsbo, WA here. After a three year break, I'm finally back in the market. Today I bought two Mar 03 Coffee call options for 34 points. I waited for two weeks to get this price. Anyone who doesn't take your advice on "bidding half" is wasting their money, and missing the boat! Many thanks for all you do to teach us!!

at 8:03:36 PM
Thanks Goldie, you're welcome!

showmetheMONEY asks:
Hi Ken! First time for me on the chat but I read all the time. I am new to trading and just waiting for the big run in COFFEE! Hold On!

at 8:04:02 PM
Absolutely, showmetheMONEY. Trade on!

always-learning asks:
How do you decide when a commodity changes it's front month, do you use the FND,LTD or some other date?

at 8:04:20 PM
LTD is the date to watch!

Stretch asks:
Hi Ken and crew, Stretch from north of 60. Are you still long on gold? It hasn't hit the monthly 50% yet.

at 8:05:05 PM
Yes, Stretch, I know. Thanks for the sharing . . . . :(

Beth in New Mexico asks:
This has sure been fun with all the bee jokes tonight. My 16 yr old son is sitting here with me. I hope he doesn't wait till he is 45 to get it. Merry Christmas to all !!!

at 8:05:42 PM
Thanks, Beth. How great that is --- to share all this with your son. He'll get it. Merry Christmas.

Gideonsdad asks:
Ken, Just want to say that although I'm currently pretty broke, I was able to turn $170.00 into $700.00 with a cotton option a few months ago, because of your courses and these chats, so here's a big thank you. I can't wait to get back into the markets with real money. Even though I can't right now, it sure is a relief to know that I can read charts and know how to invest in commodities (and stocks too) properly. Thanks again.

at 8:06:30 PM
Thanks Gideonsdad. (And keep paper trading while you're waiting. THAT's the BEST teacher of all!)

Howard from Austin Texas asks:
Ken, I don't quite understand what is happening when a market is oversold or overbought and I am seeing open interest also increase. Could you please explain how all of this works. Also, today my Broker said there are not many speculators in Orange Juice and I just went long yesterday. Is this something I need to be concerned about ?

at 8:07:29 PM
Not as far as I know, Howard. Sorry: Overbought and Oversold just aren't in my vocabulary . . . .

gus asks:
Gus from Penticton, British Columbia Hi Ken, do I still need a broker or may a trade directly by Internet, like Currency Trading?

at 8:08:12 PM
I've never done it, gus, but yes, you can trade on-line without talking to a broker.

Russ-Malibu asks:
Dude: I'm concerned about your state of mind tonight. First of all you are handing out a lot of "You Da Man"s when you know who is really Da Man, and to answer your challange of last month, when you finally receive that G35 Sport Coupe remember there is a 320 HP Carrera waiting to go for one close-to-the-money coffee call.

at 8:11:09 PM
I didn't forget Russ! (In fact, I've thought about it a LOT since last month.) So where are we going to face off? Laguna Seca, Thunderhill Park, Willows . . . where's it gonna be? And remember: HP has nothing to do with it. It's all about commitment of the pilot. (And I got the need --- the need for speed!) (signed) TOP GUN

christine asks:
Hi, this is Christine from Alberta. I have been tuning into your chat room for many months now. The trading has not been great, but have not given up. I'm sure it will come. Thanks for introducing me to the business and Rich Mans Secret.

at 8:12:07 PM
Don't give up! Persistance (and commitment) are everything . . . .

scott asks:
hi ken are you shorting bonds? Thank you

at 8:13:30 PM
Yes, I'm Long Bond Silver (who's short bonds). Call me Bond, Ken Bond. (But never call me Bon Bon . . . .)

Cozmo asks:
Hi, I like that I can print these chats. I study them and it helps me to understand some of the stuff that I feel is over my head. Thanks, for all you do.

at 8:15:12 PM
Thank YOU, Cozmo!

Angel asks:
Ken, how far out would you look to buy Eurodollar puts right now. The difference between June and Sept is incredible. What are your thoughts on it?

at 8:15:29 PM
Wait for Sept. to get cheap.

Tombo asks:
Thomas from Bakersfield, Hi Ken, the front month Eurodollar contract (Dec) has been as low as 95.93 as recently as March. My question is, why doesn't the weekly chart reflect this? Am I missing something? Thanks for all of your help!

at 8:17:03 PM
Good question, Tombo. The answer is: Because the December contract was NOT the front-month contract at that time. Remember: The Weekly chart is made from the current front-month chart.

Joshua from Florida asks:
Ken, Have you found that most of your successful students set up their commodity account in a "Personal Trading Account," or do they use a certain Entity, such as a Sub-S corporation. My tax attorney is recommending the latter. I assume your response will be that he is the expert, but I value your opinion. Joshua

at 8:17:46 PM
I'd stick with my tax attorney's advice, Joshua. He knows your situation best.

Did I do that? asks:
To bee or not to bee? I signed on later than you and have no idea what is up with the B's or the G's for that matter. What about the B G's? I don't have a question, but I think you may have an answer. Thanks for your support, Jason

at 8:19:25 PM
I love the BeeGee's! Tell me, why do you ask?

Well glory bee! That's it for me! Here are my favorite web sites if you're interested: www.wildlifeimages.org; www.LP.org ; www.uschartco.com ; www.fourstarbooks.com. ; (new!www.historictrees.org. ; (even newer!) www.foxnews.com/oreilly. My next chat will be Tuesday, January 7th. Also remember Matt's stock and commodity chat next Tuesday, December 17th. As always: Use these newfound powers only for Good. Warmest of Holidays. Happy New Year. And Good night!

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