Chat Archives
Commodity Chat With Trader Jim! (tm) with Jim Prince
from 11/13/2007
Hello and good evening! Trader Jim here. . .
Thanks for joining me tonight. I must say that I’m very thrilled about the opportunity of holding tonight’s chat. Several markets have moved very nicely since we last met, so we have a lot to discuss.
For example, January Soybean Oil, March Wheat, December Canadian Dollar, December US Dollar Index, January Orange Juice, January Lumber, December and February Gold futures have all had impressive moves over the last month! January Soybeans and Soybean Meal are currently in the process of setting up possible paper trading entries as well.
To top it off, all these markets mentioned above have, at one time or another, been featured in our nightly Premium Alert Service™ (PAS) videos.
If you’ve had a successful paper trade or real money trade in any of these markets (or others), I encourage you to feel free to share your trade details with fellow Course Members.
Discussing your market experiences lets others know they are not alone in this business. So please feel free to share your exhilaration, passion, and dedication. It provides others hope and optimism of what’s to come.
I’d like send a big “Thank You” to Ken Roberts. Ken started introducing folks to the Greatest Business on Earth™ over 20 years ago. I was fortunate enough to not only be a student of Ken's, but I also had the great pleasure to work for him for 12+ years. I’m happy to be able to share with you what I’ve learned over the years.
As we begin this evening’s session, remember the reason these monthly chats are conducted is to provide you the opportunity to ask questions and to pick the brain of a 20+ year student of the markets.
It’s not the best use of our limited time here together for me to define basic terms and explain introductory principles taught in your Course materials. (That’s what our Course Counselors are here for. They can be reached at 541-955-2885) This chat is the time for you to use me to help you apply the basics you’re learning and to prepare you for what to expect once you’re out in the market itself (either paper trading or with real money). And if we have some fun and laughter along those lines, so much the better.
NOTE!!! When commenting on one of the GBE strategies or US Charts, please identify WHICH STRATEGY AND/OR MARKET. Also, when relating trading experiences and/or results, please provide details: Futures contracts, options, option strike prices, options AND futures, real money or paper trading, etc. This helps others follow along and learn from your experience too.
DougH asks (6:01:46 PM):
Hi Jim, With the Strong 1 Strategy, are there any "chart formations" to watch for, or is this just a method to enter a trending market?
Hi DougH! Thanks for joining us tonight. The Strong 1 Strategy is strictly a "mechanical" strategy as far as entry goes. It's all based around Trend Seeker(tm). I do use support/resistance and 50% levels to help determine exit points. Hope this helps.
JimR2 asks (6:03:03 PM):
If I am trading electronically with my broker, does automatically mean that I am in the E markets?
Hi JimR2! Generally speaking that is the case. Be sure to check with your broker to make sure that is the case. Some trading platforms allow you to trade the pit sessions as well.
Dharts asks (6:07:23 PM):
Jim, new to this just enrolled. Any help as to a daily routine as to which charts to watch? Should I just follow yours? I watched the video and read the e-book...any help would be great
Hi Dharts! Thanks for joining us tonight and welcome to the Greatest Business on Earth! One of the first things you need to do is watch all of the Training videos. That will help point you in the right direction. From there I suggest you call a Course Counselor. They can spend some quality time with you and help provide the details you need to get started on the right foot -- a lot more than I can provide in this forum. From there I would point you to the paper trading DVD set. It's two discs and over two hours long. It covers every aspect of trading -- from start to finish. But before you do that I suggest you call a Counselor. They can be reached Monday through Friday from 8:30am to 5:00pm PT at 541-955-2882. Thanks again and welcome!
KSOUTH asks (6:09:28 PM):
HOW DO WE SELECT A STOP LOSS TO LOSE NO MORE THAN 50% OF OUR OPTIONS
Hi KSOUTH! You can't really set a stop on an option. When paper trading you simply have to watch the option and if its value decreases 50% you would liquidate it at that price. If you have a good broker he/she can help you with this by setting alerts on their computers. When the option falls to that level they can get you out of the trade. Hope this helps.
Chrisjean asks (6:11:10 PM):
Hi Trader Jim. Do you prefer trading the currencies as futures or on the forex market?
Welcome Chrisjean! I trade the currencies via the futures markets. They are very liquid and you don't have to worry about getting zinged for a few pips on a FOREX transaction.
Marsha asks (6:12:30 PM):
I want to thank you, Trader Jim, for all the good information. It's been a profitable 2 months. I've made over $6,000 (real money) on 6 trades. (Had two Dec. Gold 800 calls which I sold too soon, but still made a nice profit on them.) I'm taking it slow and easy. Patience is very important. Thanks again.
AWESOME, Marsha! Glad to read you're taking it slow and easy. That's the hardest thing for folks to do. Keep doing what you're doing, sounds like your're on the right track!
Jim asks (6:16:30 PM):
Hi Jim, We would like to know what realtime charts do you recommend? What program are you using for the bells and music that we sometimes hear during your premium alerts to notify you of a target hit,etc.? Thanks
Hi Jim! (Cool name by the way, hehe) I don't recommend any realtime service because it's not necessary for the way we trade. The sounds etc. you hear on the Premium Alerts are actually from my online brokers trading platform. Realtime data can be expensive because the exchange fees are rather high. The bottom line is all our strategies only require Daily data and this works wonderfully for our approach!
Wingnut from Green B asks (6:19:14 PM):
Hi JimYou have been showing the March Eurodollar chart, I believe, in your daily updates but Trend Seeker shows the June Eurodollar to be the front month. Should we be focusing on March instead of June?
Good question, Wingnut from Green B! Going back several months ago we began placing the Trend Seeker rankings below each chart of each market. This trend rating change has opened up a whole lot of new opportunities because we aren't limited to trading just the front month. You can certainly follow and trade it if you like. I just happened to be watching the March contract. Either of these trading months are fine to follow.
Peter asks (6:21:32 PM):
Was there a bear flag formation in Jan Lumber a few weeks back?
There was, Peter and we followed it and paper traded it in Ken's Chart Book as well as on the Premium Alert Videos. It had a nice little run to the down side that, if managed properly could have resulted in a nice winning setup.
david asks (6:23:25 PM):
Talking about March 2008 Corn Call Options, why wouldn't you use May Call?
You could david. I prefer to trade options that match the underlying futures contract. In other words, if I'm following the March chart I'll want to focus on the March options. If following the May chart, I'll pay attention too the May options. Hope that helps.
carlt asks (6:26:54 PM):
Hi Jim. Question: When entry triggers are given in several different markets at the same time, is there a method to determine wich trade would give the best opportunity? When I enter a trade under those circumstances, it seems like the one I enter makes a small gain, or is stopped out, while the trades that I passed on went on to big gains causing a "grass is always greener" mindset. I like the addition of electronic charts. Keep up the good work.
Hi carlt! In my opinion the best thing to do is calculate the risk/reward for each trade. Then I will usually focus on the trade that offers the best potential. That doesn't guarantee that it will provide a better profit than another setup, but it provides the chance to be more profitable. And that's really all we can ask for.
buddy asks (6:29:34 PM):
Do you think the uptrend in gold is still intact?
Hey buddy! Gold has sure been active of latte, hasn't it? I believe the recent sell off is currently at an important point on the chart. It needs to find support soon. If it does, then we can look for a potential trade setup. For now, Trend Seeker says the trend is now neutral, so I'll watch from the sidelines.
rtmichimoto asks (6:32:55 PM):
Jim,I noticed that on some of the furthur out of the money options have low open interest like 50 or less. Do you concern yourself with open interest when you trade?Ray.
For the most part we tend to stay away from options that are far out-of-the-money so for the most part they don't have low open interest. However, even if they do it's generally not a problem. Our strategies dictate trying to purchase options that are closer to the money. We do this because the options will tend to act more like a futures contract and actually have a shot at making money. Like I mentioned in this last week's Friday email and Training Video we tend to stay away from the cheap out-of-the-money options because they mostly expire worthless.
RxWells asks (6:37:41 PM):
Hello, I am a new member and new to the chat room. I was looking at the coffee and wondered if yesterdays low could be considered a 3 low in a 1-2-3 bottom with a trigger breakout today? I am also worried how it closed at the low today.
Gerald, for a 1-2-3 formation to take shape the #1 point must be the 12-month low or life of contract low if that market has traded for less than 12 months. Neither December or March Coffee have formed a 1-2-3 bottom at this point. Be sure you read the 1-2-3 strategy located at the GBE Members site. If provides you with all the details and even an example. Also watch the Training Video I did about 1-2-3s. It's dated 10/20/06, it should help as well.
alpineman asks (6:40:46 PM):
How do you know exactly where to place your lines, boxes,etc... Sometimes I notice when you say it has broken out of a channel, penant, line of support, etc...and you are recommending a paper trade, my markings are slightly different and a trade has not yet been triggered?
Good question, alpineman! I simply draw my lines off of support or resistance levels. These levels will begin to jump off the charts at you the more charts you look at. I wouldn't be too concerned though about our lines being different. I think that as long as you're consitent with the way you mark up your charts that that's the most important thing you can do. Keep pluggin' away!
Watson asks (6:43:06 PM):
Hi Jim. when you enter a trade, do you have a days-in time line, without making money on it, before you exit the trade?
I don't, Watson. Once I'm in a market I place my stops and target orders and let the market do its thing. Eventually I'll either get stopped out or take a profit and the amount of time it takes isn't really a consideration.
123top asks (6:45:43 PM):
How soon do you think that there will be no more pit sessions?
I'm not sure 123top, but the word I hear is that it could be just a couple of years. But I don't think those remaining pit traders will go down without a fight! It'll be an interseting thing to watch for sure.
DR. J asks (6:48:12 PM):
PLEASE EXPLAIN ROBO ENTRY. I WATCHED THE ROBO ENTRY VIDEO AND I DO NOT UNDERSTAND THE REASON AND HOW YOU USE IT TO BENIFIT OUR TRADING. THANK YOU FOR THESE CHATS. YOU DO A GREAT JOB.
Dr. J, The purpose of the ROBO Entry is to get us into the market on pull backs. That's it. By using it when the market pulls back we are getting in at a better price than the guy that's buying at the high of the recent move. That's it in a nut shell. Be sure to watch the video a couple more times and keep in mind what I wrote above. I think it will help you. Thanks for the nice words too.
JimR2 asks (6:50:59 PM):
I LOVED Dec Gold. I traded (paper unfortunately) 7300 gold options and made over 4,000.00 and again traded 7800 call options and made in excess of 5,000.00. I also sold 2 days before the recent big drop. Ya gotta love this business!!
All paper trading is a plus. Your recent paper trades in gold show that you're on the right track and that's the most important thing. Don't be in a hurry to trade real money. Keep practicing until you reach a point of comfort and you can honestly say you're ready to move to real money trading. You're right, this is the Greatest Business on Earth!
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chrys asks (6:56:45 PM):
Hi. could you please elaborate on the e markets as opposed to the pit sessions. Thanks.
Chrys, take a look at the nearly 11 minute Training Video I did on 11/02/07. I talk about both sessions there. Hopefully it will answer your questions.
Chief WT asks (6:59:36 PM):
Jim, I just joined this afternoon, any words of wisdom for a one day old? Chief WT
Welcome, Chief WT! The best thing I can say to you is to take it slow and easy. This business offers a lot of opportunity, but you have to take it slow. Also learn to cut losses. You'll have losing trades, so don't let them turn into long term investments just because you don't want to take a loss. Learn to love small winners. Like I say, go for the base hits, eventually you'll have a shot at a home run. Learn to trade just as though you're eating an elephant -- one bite at a time!
snellock asks (7:01:57 PM):
What a week. eh? Someday I'll have an account. Paper traded dec silver long from 1414 to 1598. Then a dec put @ strike price 1598 (seems silver frequently drops like a stone after these big gains). The put was cheap at $1300 and got out with a $700 profit at the end of the day.
Been a very volatile week so far, hasn't it? Good to see you're learning to take paper profits. It's the first step toward working to becoming a success with real money. Good job!
DougH asks (7:04:28 PM):
In some of your daily sessions you have mentionted the "fish hook" and "robo entry" methods, but I do not find any write-ups on these techniques. Are they covered in any of your weekly video sessions?
Hi DougH, Yes, I decided to do videos on these topics rather than a write-up. Fro the fish hook pattern look for the Training Video dated 06/08/07. For the Robo Entry Method look for the videos dated 09/14/07 and 09/21/07. Enjoy and thanks for your interest!
Johnny Mac asks (7:06:14 PM):
Thanks Jim for all your awesome help every day with the Alert Service. If I am using the ROBO method to go long and the number we get is below the close of the day, do we place a buy limit to go long the next day?
You got it, Johnny Mac! When going long and the market closed above the proposed Robo Entry, place a limit order. Nice work!
JohnM asks (7:13:06 PM):
I am relatively new to GBE, but have found that the premium alert service provides a lot of good information, thanks for doing it. However, in these alerts, the Strong 1 strategy seems to take a back seat to basic chart formations, Hi-Lo breakouts and 1-2-3 tops and bottoms. It seems Trend seeker is just used to validate direction rather than to indicate an entry. Can you comment on this?
Hi John M, In regards to the Strong 1 strategy there's really no reason for me to spend time on it in the videos. My thinking is that the entry is very straight forward. Either you get an entry siganl or you don't -- it's mechanical. I use the PAS videos to teach folks how to recognize chart patterns such as pennants, triangles and channels. Plus I also point out Hi Lo setups and targets as well as potential stop placement. The patterns are open to interpretation and therefore folks tend to need a helping hand in identifying them. Yes, I use Trend Seeker to simply validate trend direction. I prefer to use it in conjunction with the chart patterns. Together they are a powerful combonation.
mac_in_va asks (7:16:25 PM):
Hello from the east coast Trader Jim! Wanted to let you know that I've been following March Wheat for some time... Didn't get in on the way up but bought a put after the (2nd) number 2 point in the 1-2-3 top. Added a 2nd put on the subsequent pullback and am enjoying the ride so far... Real money too. =) Keep on keepin' on...
Awesome, mac_in_va! Glad you had a plan and were able to execute it! Just goes to show you that you don't have to catch every move to make money in this business. Back at ya Mac. . . Keep on keepin' on!
jackson asks (7:22:30 PM):
jim, looks like you are using the E market more and more. Is there a particular reason for this and will you continue with this method? Is there an advantage for the E or the pit?
Thanks for the question, Jackson! I'm very intrigued by you folks. So many questions have come in about the electronic markets tonight I'm not even sure where to begin. So I chose your question. Recently I've mentioned the pit sessions as well as the (E) sessions in a few markets. I'll eventually be making my way to looking at mostly the (E) sessions. The reason? Just as I mention in the videos the (E) sessions are quickly taking over in both volume and open interest. So with that in mind it makes sense to me to follow the (E) sessions. The (E) sessions are very liquid, and you can get instant fills from your broker. Plus most of the trading world is already or will be going by the way of the machine (computer)! Hope this little bit helps.
truegrit asks (7:24:22 PM):
Hi Jim, Thank you for all your training, it has been great. When trend seeker say's the market is up, but shows weakness or neutral, do you take that in consideration? Thanks
You can, truegrit, but I usually don't. I prefer to focus on the Trend Seeker Trend Rating and use that with the various chart patterns. Some folks like to use the Trend Signal Rankings. You might consider paper trading using them to see if it's something you want to do.
Will from Tennessee asks (7:28:55 PM):
I have been paper trading for about a month, and want to thank you, Jim, for all the tools and training you make available! When I look at option, sometimes the price is shown with a number like 166-2 or 166-7. What does this mean? Do these "-" numbers equate to a decimal?
Hi Will from Tennessee! When you see a price printend like that it's in the grain markets. We use the industry standard of -2, -4, and -6, which is representative of eighths. What this means is that ¼ is shown as -2 (2/8); ½ is shown as -4 (4/8); and ¾ is -6 (6/8). For example, 369 1/4 is now displayed as 369-2. (The -2 representing 2/8). -7 equates to 7/8.
Larry From Long Isla asks (7:35:59 PM):
With respect to the (E) sessions, the USCharts Gold chart incorporates both the pit and the E session. Why did you not make it that way for Soybean Meal and the others as well?
Good question, Larry From Long Isla. The metals, financials and indices have incorporated both sessions on your charts for a long time. We elected to go the current route for the time being so that we could provide subscribers with the (E) data. It's quite a coding process for the programmers and rather than delay being able to provide your folks with the (E) data we chose to offer it in this manner. Eventually we'll supply both in one chart.
snowcat asks (7:38:57 PM):
Hi Jim, Do you ever trade with technicals like MACD or Stocastics to show strength or weakness? and isn't lumber a pretty thin market to trade?
At one time I tried those "indicators" but found they weren't for me. What I've found is that I need to keep things simple. I use chart patterns and Trend Seeker. That's all I need. Yes lumber is on the thin side but the bottom line is you can trade it if you desire. Place your stop and target orders and let the market do its thing.
Futureboy asks (7:41:42 PM):
Jim, how do you feel about day trading? Have you tried this?
I think most day traders fail. I know a lot of folks that have tried it but I don't kow a one that is still doing it. I have tried day trading and don't care to sit in front of my computer like that. It requires intense focus and concentration. I prefer the trading style taught in the GBE course manual. Plus, with the GBE style, you have the opportunity to capture much bigger moves than when day trading.
Will from Tennessee asks (7:43:11 PM):
Thank you Marsha for sharing your recent trading results - that is very encouraging to someone like me who is just getting started! I'll be very excited when I can make $2,000 trading real money.
You are soooo right Will! When folks share there trades it really helps motivate others and show them it is possible!
mac_in_va asks (7:45:34 PM):
Hello again Jim- I know you all just held a trading camp but am still going to ask- are the dates for the next one setup yet? Also, kudos to the US Charts staff - they've been quite helpful and courteous in providing assistance for several recent questions I've had. Thanks
Nothing on the horizon as of yet, mac_in_va. However, we will be announcing a holiday special here shortly for our Trading Camp on DVD. It's taken awhile to get this edited and put together put we are finally to a point of putting on the finishing touches. Watch your email box for a special announcement soon. Thanks for your interest and the kind words about the staff. They are a great bunch of folks.
stepup asks (7:48:23 PM):
How do you determine which month to trade? I'll be watching one month and then listen to the Premium Alert and you will be talking about the next contract out.
A good rule of thumb is to trade a market that has roughly 3 months until expiration. This comes in real handy when trading options. If the front month is nearing expiration then I will usually move out to the next contract month that has the most open interest. You can easily locate this from the Quick Quotes page at US Charts Online.
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dirtfarmer asks (7:50:03 PM):
If the market is eventually heading for the (E) Sessions, could I effectively trade now watching only the (E) Sessions?
Yes you could, dirtfarmer!
stepup asks (7:53:21 PM):
Is march lumber making a 123 bottom and is a paper trade triggered? TS is ranking it neutral?
Hi stepup! March Lumber has not made a 1-2-3 bottom. The #1 point must be the 12-month low. The 12 month low actually took place on May 1, 2007 at 262.50. Be sure to refer to the 1-2-3 strategy write-up located in the strategies section of the GBE web site and the videos I mentioned earlier in tonight's chat for more about the 1-2-3 formation.
Ed in Windsor asks (7:54:39 PM):
Just want to say that I think the new chat format is a nice improvement, once I got used to reading the questions from the bottom to the top of the page. It's nice that we can refer back to questions that were asked earlier in the chat which we couldn't do before. Nice work everyone involved.
Thanks for the nice words. Our programmer, Chris, deserves the props. I'm sure he'll be tweaking even more as we go along. Thanks again!
spruce grove asks (7:57:47 PM):
K from spruce grove Hi Jim: Was just wondering when I put trades in the trade tracker will we be able to print our trades off from there. Then we could file our profits and losses each month instead of writing everything down. Premium Alerts and charts are excellent. Keep it up. Thanks Katherine
Yes you can Katherine! Printing charts of the markets you trade as well as your Trade Tracker trades is a great idea. I encourage everyone to do so. Think of these goodies as your trading journal. They are like gold because you can refer to them often and learn a lot about yourself and your trading.
ccarpen asks (7:59:24 PM):
Hello T.J. I was wondering if you are watching the Aussie $ and the British Pound vis the 1-2-3 formations?
Not at this particular time. The reason is because the spread from the contract highs to wherever a #2 point will be is pretty big. I'll watch these markets from the sidelines.
slowmo asks (8:04:05 PM):
Hi again Jim, It looks like Jan. lumber has formed a megaphone pattern. Is that correct? Also, are there any good books you have read that helped you in your trading? Thanks
Good eye, slowmo! That's a nice looking megaphone pattern. Be sure to check out Ken's Chart book as I just updated the chart. Yes, there are two real good books about the psychological aspect of trading that I highly recommend. The author is Mark Douglas and the books are " The Disciplined Trader" and Trading in the Zone. You can find them at Amazon.
littleman asks (8:06:14 PM):
Just want to encourage others who are just beginning to hang in there and to utilize this web site. I also started 15 years ago with Ken Roberts course and remember my excitement back then - its still the same. The potential for substantial returns using options in the futures market is amazing because of leverage. Don't let anyone discourage you because this is for real- I've experienced some nice trades over the past few years with options, especially in the gold market. Trader Jim, thanks for carrying the torch and keep the information and insights flowing because you are right on target. Finally Jim, is it just me or do you find yourself wondering why more people don't look into the futures markets versus the stock market that has so many more variables to consider.
Thanks for the nice words about Ken and the GBE team, littleman. Futures and option trading is a blast and I think a lot of stock traders are beginning to figure out the amazing opportunities this biz offers. Keep up the good work!
bamcmurray asks (8:08:28 PM):
Thanks so much for offering the premium alert videos. The videos help me focus on certain futures markets. On the videos you often mention where you suggest stops are placed. When you paper trade, do you prefer using money stops or strictly technical stops at natural points of resistance/support? Thanks!
Thanks for the nice words about the PAS vidoes, bamcmurray! I'm a chartist so generally I prefer to use natural levels of support/resistance. If I can't find a suitable level then I'll consider a money stop.
kumara asks (8:12:10 PM):
Thanks Jim. I just want to say that for me this is one of the great opportuities and values for the cost each month. I am stillpaper trading and will take my time in getting into real money trading. I actually learned the business with Ken roberts over ten years ago, however, I needed more mental discipline and the willingness to simply follow the guidance being offered and not try to reinvent the wheel so to speak. This time with you, I am earnestly wishing to simply follow your premium alerts and how clearly you display what you're up to with trading. Thanks once again. I know that I can follow this time without being too rebellious in my attitudes.
kumara, thanks for the nice words. Glad you're still plugging away too. Patience and the proper attiuted can go along way in this business. Don't be in a hurry to trade with real $$$. Like I said earlier tonight as well as on the videos and during the Trading Camps. . . take it slow and easy. Be comfortable and have a plan. Only when you're comfortable should you consider trading with real money. Keep on keepin' on!
steveo asks (8:13:24 PM):
Hi Jim,this is the first chat i've joined in a couple of years. thought i would say hi. i remember joining the chats when ken did a loooong time ago. been trading real money for about 7 years. thanks for all you do
You are welcome, steveo. Glad you're with us and thanks for stopping by tonight.
junie asks (8:20:15 PM):
Hi Jim, Do you put any bearing on either the length or the strength of the trend in making your trading decisions? Thanks.
Hi junie! I don't focus on the length or strength of the trend. I focus on the chart patterns that form and then confirm the trade direction with Trend Seeker. The problem I have with trying to focus on the length of the trend is that folks get hung up on it. You'll often hear or read of people saying that we are "way overbought." To me this is nonsense. At what point was Crude Oil overbought? Or the Canadian Dollar or Wheat or. . .? Of course eventually all market rallies come to an end, but no one knows exactly when that will be. So why not continue to ride the trend until it ends? I prefer this thought process rather than trying to guess when the end may come about. Remember, the trend is your friend until it ends!
Well that's it for this month. Keep in mind, that you're not alone in your trading journey. US Charts Online, myself, and our wonderful GBE Course Counselors (541-955-2885) are here to help you become the best you can be. On that note, be sure to check out our weekly video trading lessons at: US Charts Online. This is a fantastic teaching tool and free to all GBE Members and Online Chart subscribers!
Finally, make sure you have a plan prior to entering any trade and use stops to protect your trading capital. As a trader your capital is THE most valuable asset you have!
Plan your trade and trade your plan!
My next chat will be on Tuesday, December 11, 2007. God Bless and I look forward to seeing you then!
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