Chat Archives

Commodity Chat With Trader Jim! (tm) with Jim Prince
from 12/11/2007

Hello and good evening! Trader Jim here. . .

Thanks for joining me tonight. I'm pleased and delighted to be with you this evening. March Cocoa, March Orange Juice and March Sugar have all been on the move of late. Plus several of the Grain markets have been rather volatile too, including March Soybean Meal, March Soybeans, March Corn as well as March Chicago and Kansas City Wheat, so we have a lot to chat about this evening!

In addition, all of the 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 other markets, please feel free to discuss your trade details with your fellow Course Members. Chatting about your market experiences lets others know they are not alone in their trading journey. It provides others with confidence!

I'd like send a "Thank You" to Ken Roberts. Ken first began introducing folks to the World's Greatest Business 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 and active trader.

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.

Soupy asks (5:57:54 PM):

Hi Jim,Can you explain about the Wave projection? I haven't found any explanation in the training videos or manual.

Good evening, Soupy! It would take quite a bit of text to explain it here. However, it is something I cover quite often within the Premium Alert Service(tm) videos. But just in case you're not a subscriber to the videos I'll try to produce a Training video about it. Look for it possibly next week. Thanks for joining us tonight.

DougH asks (6:02:37 PM):

Hello Trader Jim. I want to thank you for the terrific weekly training videos. I have watched all that are in the archive and refer back when I need a refresher on a particular method. Also, the premium alerts are terrific info on knowing what is happening every day. I'm only paper trading at this time to learn all the steps and get down all the routines. Patience and discipline are key elements. So far I've made two mistakes which you caution about. First one I chased a market and it cost me $178. Second one I placed my stop too close and it cost me $287. Currently active in 4 paper trades, following your methods closely, all trades are in the plus today with a combined paper gain of $1,265.50. Going for your "base hits". My Question for tonight - when entering a futures trade, do you ever use a STOP LIMIT order to avoid getting filled to far away from the "trigger point" on a big gap and if so, how do you determine the Limit point. Thanks.

Howdy Doug H! Thanks for the nice words about the videos. Glad to read you're paper trading. That's the time and place to make mistakes. As far as stop limit orders go. . . nope, I don't use them. I use stop orders for entries trading the 1-2-3 formations or I'll use stop orders to exit a trade. These are technically known as stop market orders.

Tommy asks (6:04:36 PM):

How do we zoom in on your charts?

Hi Tommy, We don't offer a zoom feature at US Charts. However, Windows XP does. Go to Start, All Programs, Accessories, Accessibility. Then choose the magnifyer. It works pretty well. Hope this helps.

kumara asks (6:06:40 PM):

I see a pennant forming in platinum january. Is this accurate?

Yes, kumura, there is a pennant that has formed on January Platinum. Be sure to refer to the charts in Ken's Chart Book. I have that chart there with a paper trading approach written out. Good eye!

Future Trader asks (6:11:44 PM):

Hi Jim! I just want to start by saying that the Premium Alerts are the best thing since sliced bread! I've been a course member since the late 80's when it was still called TWMPMM and have paper traded on and off since then and just recently began my "Greatest Business on Earth". My question is haven't most brokers already changed over to the e-markets in many of the markets? If this is the case, shouldn’t I concentrate my attention on the e-markets and the corresponding chart patterns in planning my trades? It would seem to me that it would be a more accurate manner of technical trading. Also, being relatively new to real money trading my risk capital is still rather limited and because of this there are some trades that I cannot get on board. What are your feelings on the e-mini markets and how closely do they really follow the full contracts?

Thanks for the nice words about the Premium Alerts, Future Trader. Glad you enjoy the videos. Yes, many brokers have switched to following just the e-markets, so it's really not an issue for most firms. Now in regards to the markets you're fiollowing. . . yes, you probably want to focus on the E markets. But realise this. . . the pit and E markets follow each other almost tick-for-tick. There is not a HUGE difference. Eventually all the charts at US Charts will have the combined sessions on one chart -- just as they are currently on charts of the various Metal markets. If

Don't worry about being able to trade every market. Once your account balance is built up you'll be able to focus on additional opportunities.

Martin asks (6:12:58 PM):

Do you ever simply buy "at or in the money options" in the last days of the option run, utilizing the technical trading strategies?

I don't, Martin. I will however buy at-the-money options but they must fall under the guise of our trading strategies. Generally speaking we focus on options that have more than 30 days until expiration.

John from Mich. asks (6:18:19 PM):

Good Evening Trader Jim, Will you please comment on the Jan.08 Gasoline RHOB. Do you see a 123top in this market? I havent seen any reference to this on Kens Chart Book. Thanks for this Great Tool

Hi John from Michigan! Yes, I do see a 1-2-3 top formation in place. I don't usually focus on this market because it is so very volatile. Margin is nearly $7,500 per futures contract and options are very expensive. This is not a market that most Course Members will trade. I try to keep things as real as possible and for me to focus on some of the energy markets just is not very realistic use of study time in my mind. That said, there's nothing from keeping you from paper trading it if you desire. I think it's best for folks to treat their paper trading just as though they were trading with real money. Thus most will not paper trade these markets right now because of the volatility. Thanks for the question though.

Thrasher asks (6:21:04 PM):

Hello Jim, I have been with ken and now you for some time. Doing a great job. Is there any other books that you would refer that is close to the way you trade.

Hello Thrasher! Yep, I would focus on the Greatest Business on Earth trading manual. That's all you need! Simply learn to identify the formations in the book, use Trend Seeker, and put them together just as taught in the manual. Master these techniques and you won't need anything else. Thanks for the kind remarks too.

Deanna asks (6:24:14 PM):

Am I sunk with a 9.50 put in May Sugar?

Hi Deanna, I'm not sure what strategy you're using but we are very close to getting an entry triggered to the upside in this market -- as per the Premium Alerts and Ken's Chart Book. Be sure you have a plan in place prior to entering any trade -- a plan to take profits, and a plan to take a loss -- that way you'll know when to exit a losing position.

jmm3319 asks (6:26:31 PM):

Hi Jim, am new and just starting to do some papertrading. Regarding Mar08 Cocoa - It had a big gap up the day after it closed above the top of the triangle. Would this keep you from considering the trade?

That's exactly what happened, jim3319! Be sure to take a look at the March 2008 Cocoa chart located under Ken's Chart Book. I've detailed what happened and why I avoided the breakout. Thanks for stopping by tonight.

Tommy asks (6:29:16 PM):

What does the ICE mean?

Tommy, ICE stands for the Intercontinental Exchange. You can visit the exchange by clicking here.

srcc co asks (6:30:57 PM):

A Big HEY to ya JIM!!! I have been a GBW trader off and on for the past 8 or so years and the first time in the chats. Just a quick question - Is there any first telling signs of the overall average of the markets changing between bullish and bearish or do ya just take it as it comes?

Thanks for joining us tonight, srcc co! I use the charts and Trend Seeker. Together they are outstanding!

WONGSHOW asks (6:36:13 PM):

Hey Jim! I was watchin the PAS today and you u said that March bean oil (E), has triggered a paper trade because it closed above the pennant. My question is that since its the electronic markets and they are being traded at night for the most part, how do you place an order to your broker at night???

Good question, Wongshow! There are two ways to approach it. First, if your broker has a 24-hour trade desk you simply call them whenever you like and place the order. Secondly, you don't have to trade the night session. The E markets trade side-by-side with the pit session. Simply place your order to trade during the day session. Hope this helps.

thomas asks (6:40:00 PM):

GBE definitely teaches technical anaysis. Do you ever take into effect or consideration fundamental news, for example the FOMC meeting today, to determine what your next move should be in any given market?

I don't, thomas. All my trading is based off of the charts and Trend Seeker. I'm aware of the FOMC meeting but don't trade off of the meeting results. In my mind, the charts tell me what to do. Trying to trade any other way is like throwing darts in my opinion.

Howard - Austin Tx asks (6:43:37 PM):

Hi Jim, I have been a Ken Roberts member off and on for 7 yrs and I'll have to say that the Premium alerts are starting to really help ! Please keep this going. I have been through a lot of processes and this one is not too fancy and seems to be anchored in good basic trading techniques. Is it too late to get into Corn ?

You got it Howard Austin-TX. Believe me, the PAS is here to stay. Glad that they are helping you. As far as Corn goes. . . yes, the market has moved quite a bit above our paper trading entries. Basically the train has left the station.

bhowell asks (6:47:15 PM):

bhowell is there a way to transfer the charts you show in the premium alerts to my chart book?

Hi bhowell, Nope, there's no way to transfer the charts from the videos. However, you can find those same charts located in Ken's Chart Book. The charts you see there are the exact ones I use on the videos. Go to the chart book and click on the chart you want to place in your version of My Chart book. You'll see a button at the bottom of the page that will allow you to transfer the chart to your chart book.

Howard - Austin Tx asks (6:50:03 PM):

Jim, I have a problem when I miss a trade in wanting to jump in. How do you combat this ?

I lie down until the feeling passes. LOL! Really that's what you have to do. Don't let the fear of missing a move make you lose money. Ask yourself is it more important to give your money away or protect it and wait for a setup you can actually get in on. You must have discipline!

hhart93978 asks (6:52:03 PM):

Hi Jim, My question is when you trade a fish hook or waiting for the market to work back to the trend line isn't that kinda like trading a stop limit?

It's actually a limit order, hhart93978. You're actually placing an order to buy at a better price if the market pulls back to support. Better because if filled it will get you in at a lower price than where the market is currently trading.

myronhal asks (6:53:45 PM):

Hi Jim:Being Canadian, what are your thoughts on the Cdn Dollar. It seems to like the top but has fallen and is consolidating somewhat... do you feel it is ready to start its trip back Down ?

Looking at the March chart prices have been in a dramatic downtrend since the first of November. Currently I don't see a setup based on our strategies. So I'll keep watching from the sidelines.

Jim from MI asks (6:56:39 PM):

I talked to a broker and they said that it is not legal to liquidate an option based on the futures contract price? Have you heard of this?

Never heard of it. I think your broker is very confused. You can liquidate an option based on anything! Heck you could base an option liquidation on the fact that if the Miami Dolphins win a football game you want out of the position!

Soupy asks (7:00:31 PM):

I have been watching the premium alert archives and checking the results of the trades that were triggered by looking at the current charts. The results are amazing. I am with you 100% because of the track record. The vast majority of the trades were profitable unless stops were set too close and you got stopped out on the minor reversals. Am I correct in assuming that it is more profitable to take a bit more risk by giving the trades room to breath rather than using support or resistance levels that are too close?

Soupy, it all depends on the individual and his/her risk tolerence. Some want to keep tighter stops than others. To find out what is right for you you really must paper trade because many times you'll discover your stop wasn't close enough!

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Tre-Tre from Toronto asks (7:04:03 PM):

Jim are there any differences with the e-markets that I need to be aware of or is it pretty much the same.

What's up Tre-Tre! They really are pretty much the same. Be sure to check out the couple of Training videos I did about the E markets. I covered quite a bit there. Have a great holiday!

hodsontermite asks (7:09:12 PM):

hi jim I shorted feeder cattle march it seem to be going sideways iam up about 300 sould i hold on or move to another market

I can't tell you, hodsontermite. It depends on your trading plan. I'm gonna be a bit hard on you and your fellow course members (that don't have a plan in place for their trades) by showing you some tough love. Folks this is the type of question you should never ask anyone. You should know exactly what you're going to do for each and every trade. Have an exit plan for taking profits and losses in place ahead of ever entering a trade. It is vitally important to your success. It's a must. I can't emphasize it enough.

thomas asks (7:10:35 PM):

I read Wongshow's question and that helped me as well, however, sometimes the night session determines where the market will open the next day for the pit session. I might not be able to get in where I want. Do I just place an order with my broker after the market closes and wait to get filled?

That's exactly what you do, thomas. Your broker can make sure you place the right type of order too. Then it's all about patience.

ShawnWatson asks (7:13:37 PM):

First I want to tell you that since staring the Premium Alerts, I've made 70K since Sept. 01. THANK YOU! I'm curious why you don't focus as much attention on 50% retracements as a possible entry point?

Congrats! ShawnWatson! That's awesome! I don't use 50% levels as entries, only targets. I use the pennants, triangles, channels and 1-2-3 formations for entries. Support and resistance and 50% levels as targets. Keep up the good work!

DougH asks (7:18:24 PM):

Hi Jim, Speaking of the Holidays, can you comment on the market closings and anything we need to do differently and do you exit trades as the holidays approach?

Good question, Doug H. Generally speaking the markets tend to be a bit thinner (i.e. lacking participants) around the holidays. This is because a lot of tbig money leaves the markets, and therefore the chart patterns will often find it difficult to get the "normal" follow through. It's not a bad idea to pull in the reigns some during the last couple weeks of the month and the first week or so of the New Year. Particuarlly just before Christmas and New Years day.

myronhal asks (7:20:39 PM):

I think your premium alert service i smiles ahead of anything out there,,, any try to sell you software. This i sthe only thing I have found, and since 1994 thathas integrity in its approach and teachings. Just a query on how yo uview open interest and volume and what does it signify... Ken initially taught us to ignore it..

Thank you for the kind statement myronhal, it's much appreciated. For the most part I don't focus on volume and open interest. But I do look at it. But know that it won't keep me from trying to trade a market. Thus you won't hear me mention them too often.

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maguila asks (7:28:07 PM):

Hey Jim..I've noticed that you don't ever talk about the Canola market. Any reason why?

Howdy maguila, For the longest time it was a market that was very, very thinly traded. It still doesn't get that much interest. It's not a market that I look at very often I think for the most part because I simply like to focus on the market in Chicago and a few in New York.

IndyTrader asks (7:35:04 PM):

Hey Jim, Are we going to see live data for the electronic charts? (overnight trading)

I think we will eventually make it available but you really don't need it. We've traded this way for years without it. If you wish to trade the night session, which by the way is for the most part thinly traded (i.e. few participants when compared to the day sessions), check with your broker to see how he can assist you.

Right now our E charts don't start updating until around mid-night West Coast time. We anticipate changing this after the first of the year. This way the E charts will begin updating during the evening sessions. Hope this helps.

bmaitch asks (7:37:44 PM):

Hi Jim. Your daily PAS video has really been instrumental in reinforcing the discipline required not to chase markets and to set profit targets and stops before placing a trade. I really appreciate your reinforcement of this in your videos. I was wondering if you have any plans in the future of providing information on spread strategies. I have been told that using spreads is not as risky as trading straight future contracts, though they may be more risky than options, but they are an especially useful strategy in volatile markets, which many markets are these days. I realize that you want to keep the information and strategies simple, but could there be any plans for teaching more advanced strategies in the future?

Glad the PAS videos are a help, bmaitch. For now I don't anticipate including any spread strategies. Although I won't say that you won't ever see them (never say never). For now though, I think it's best to keep with the strategies we currently have. Master them and you don't/won't need anything else. Thanks for your interest though.

myronhal asks (7:42:17 PM):

Hi: Back when I started trading with WGB, Ken taught to shop options further out, and shop for strike prices further from current values. Clearly, this approach has changed, in that, weekly and monthly charts aren't mentioned (on Premium Alert service)and strike prices closer to current are used... is this getting away from Ken's phylosophy, and is the new approach more profitable?

We actually began to implement trend following strategies the last year or two with Ken. It's my opinion that the approach we currently use and follow does very well. However, don't take my word for it. Follow the PAS videos and the charts in the chart book and discover it for yourself. I use weekly and monthly charts to discover support/resistance levels. I then use these levels as potential targets.

Jim from MI asks (7:45:38 PM):

Is there a slippage when trying to liquidate an option? I am currently in a paper trade in Mar Wheat, and the prices seem to jump around.

Not really, Jim from MI. . . be sure you enter or exit an option using a limit order. That way slippage won't affect you. You'll get your price or a better one. The only time you'll suffer through the volatility when trading an option is if you place a market order to enter or exit. Doin so you never know where your order will get filled.

Howard - Austin Tx asks (7:49:57 PM):

Jim, I have one other question, my broker is always pushing options that are near the money but in the front month because of the volitility. I know you like to go out more than 30 days. What is your exact rationale and how can I combat this ?

Good question. . . Quite simply to give the trade time to develop. If an option only has 3 weeks til expiration yet the trade takes 6 or 7 weeks to develop, what will you do after that near-by option expires? You'll be sitting on the sidelines while the market is doing it's thing. Give the trade some time to develop and your options a chance by selecting options that allow you to be in the trade while it's taking shape and moving in the direction anticipated.

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BONITA JOE asks (7:57:35 PM):

Jim - You mentioned that you trade mostly Chicago and "some" in New York....any reason why one over the other? Thanks for your GREAT, GREAT, insight to trading! Bonita Joe

Hey Bonita Joe! Nice to hear from you and thanks for the nice comments. I'm a chicken at heart. I don't like wild out -of-control volatility. So some of those that thinner traded or some that are crazy volatile I'll stay away from.

I feel you don't have to trade every market. Over time you'll find there are some markets you're more comfortable with than others. I guess it's two things: 1) Personal preference and 2) Experience.

jerryinMass asks (8:00:21 PM):

Thanks for your service! Made 1200 on Wheat on Strong 1 happening on 11/29. It was nerve wracking trading real money but profitable. Hoping I get over the jitters. Does it get easier going forward?

Great job, JerryinMass! Time will help with the jitters. Just goes to show you how emotional trading can be. If you can become almost robotic in your trading it will help. In other words, place your entry, target, and stop orders and let them do their thing. Remember, these orders are your employees! Great job once again. Keep doin' what you're doin'!

dof from AB Canada asks (8:06:30 PM):

Hi gang ,Last ? on options limit order or market order on a option what is the difference ?????

Hi dof from AB Canada, A limit order is an order you place to buy at a certain price -- your price. For example, you want to buy a corn call option for 10 cents but it's trading at 15 cents. You place your order with your broker to buy at a limit of 10 cents (or better -- which means or lower). So the only way your order will get filled is if the option premium trades down from 15 cents to below 10 cents. You've basically said I don't wish to pay more than 10 cents.

A market order simply means you want your order to get filled at the going rate -- whatever that may be. You basically don't care the price you pay, you just want your order to get filled. Thanks for the question.

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 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, January 15, 2008. God Bless and I look forward to seeing you then!

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