Good evening! Trader Jim here. . .

Thanks for spending your evening with me and your fellow GBE Course Members tonight! We are definitely in interesting times. We have a new President stepping into office in January, the stock indices continue their downward spiral, and a tremendous number of markets are in down trends. September and the first part of October offered multiple opportunities to the astute paper trader. And on the flip side, the last week or so of October saw several paper trades get stopped out. But that's part of the business and why I emphasize how vitally important it is to risk an amount that is appropriate for the size of your account. The use of stops and protecting your capital should be job #1!

Recently we've had nice paper trades trigger in March Cotton and March Eurodollars. These markets, as well as many others, have been featured in our nightly Premium Alert Service™ (PAS) videos.

Please feel free to share your paper trading or real money trading experiences in any of the markets mentioned above, as well as any others you may have traded. When you discuss your market experiences it helps others learn that they are not alone in this business and it's a great way for everyone to learn from one another. Feel free to share your excitement, passion and enthusiasm! It helps provide others with hope and insight of what can happen.

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. Please contact one of our Course Counselors if you need assistance with any of the introductory principles. They can be reached Monday through Friday 8:30am to 5:00pm PT 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, and contract month etc. This really helps your fellow Course Members follow along and learn from your experience.

From time-to-time you may notice that I'll use a bit of "chat short-hand." If you see LOL for example, it means Laughing Out Loud. Or TS, which means Trend Seeker™. These are the two most prominent bits of short hand you'll see within our chats.

Hi Tavius!

Not that I'm aware of, but it's something you should ask each firm you contact. You might simply mention that you're only interested in trading options. If that's the case, perhaps they'll let you open an account with the funds you will only use for options. In other words, if the option premium is $500 for a potential trade, maybe they will let you only have the $500 in the account. Like I mentioned above, it's a good thing to ask the firm you're chatting with.

Not that I'm aware of Keith for Michele in! I simply watch the charts and filter the formations with Trend Seeker. I think it's too difficult to try to guess when and where funds are buying/selling. Plus I really don't want to follow those guys. They seem to be on the wrong side quite often -- especially if you believe what you read in the various financial papers.

Howdy Lance! I'll wait as long as is necessary. I've learned over the years to not try to outguess the markets. To not place my opinion on the markets, to rather trade what I see rather than what I think. So once Trend Seeker identifies the trend I want to have a chart pattern to trade. I use the two in conjunction with one another. If no pattern exists I'll wait til one does.

Hope this helps.

I think that's a common misconception, j29free. I think it's human nature to want to get in at the beginning of a trend. However, it usually doesn't work well. If I have to miss a portion of the move by guessing the trend has changed, so be it.

My suggestion is to wait for a chart pattern to form and trade the breakout in the direction of the Trend Seeker trend rating. Together they do such a good job that I personally have no problem waiting Trend Seeker out. If I don't, it's all about how well I can guess and for me that's the wrong attitude to have.

Also remember that for a trend rating to change, a major point of support/resistance has to be broken.

Hope this helps.

Hey metalman! Our preferred broker, Daniels Trading, is fully versed in all of the strategies and are extremely capable in steering you in the right direction. Be sure to click on the brokers tab here in the GBE site to learn more about them.

They are a great crew and I can't say enough good things about them.

Great question, Aaron! I personally like to look over charts in the early afternoon each day. That's where I "Do Work" as my son likes to say. I'll look through every market, usually the front month contracts and make decisions at that time.

In fact, I'm usually doing this when I'm looking for markets to place in the Premium Alert Service nightly videos.

I will also look through a few charts during the trading session, especially if a market has made a big move on the Heatmap.

Welcome back, Indiana Jim! (Cool name) You couldn't have come back to the business at a more exciting time. So much happening on a daily basis it's amazing.

I'll make a suggestion since you're just getting back at it. Take it slow and easy and don't be in a hurry. Approach this business like you'd eat an elephant, one bite at a time!

Glad the book helped so much, atlast 9! One thing that Mark says that has stuck with me for a long time and that is......... expect the unexpected!

I think that is especially true in this day and age. I chat about some of my early downfalls in our newest DVDs that cover the same important topic as Mark's books do. The Course Counselor's also share insight that they've garnered over the years from chatting with fellow Course Members. You can check out more about it at the link below this post.

Great job working on yourself and getting to that next level. Congrats!

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Hey johnh_2007! I much prefer formations that take over four weeks to develop. However, that doesn't mean I won't trade them. Typically a lot goes into a trading decision. The placement on that chart of the formation, the duration, time til FND or LTD, options expiration, the length of the price bars, nearby support/resistance levels etc.

I stay flexible and won't simply ignore a chart pattern simply because it's less than four weeks in duration. Typically I prefer the longer duration patterns, but when considering what to trade I take all of the above into consideration.

Hope this helps and please call me Jim!

Hi Jim! Not for me and what I teach! I prefer trading with the trend and right now the trend is up. I much prefer not to try to guess when a top (or bottom) is going to form. As I state quite often, it's much easier to swim down river than up.

Be sure to check the Training Videos and the manual to make sure you're on the same page with what I teach Jim. Since most traders don't follow the trend (and we do), we are basically contrarian traders!

Hey Pammie! Good question! I'd use a limit order in front of the target. If trading one contract and your target is hit, and the market continue on with out you, so be it.

You made a profit and it's now time to move on to the next setup. If another setup in that same market takes place you can look to get back in. But don't blindly jump in because the market has moved beyond your initial target.

Good question.

Hey Rottie! I avoid some markets but I think it's up to each individual to decide what he/she should avoid. This can best be decided via paper trading.

There will be lower volume/open interest markets that offer good opportunities. Then, of course, there are those that are just too crazy and never follow through how you'd like them to. So paper trade and find out what markets you prefer and which ones you don't.

I think either options or futures can be used in most any market.  

Thanks for the nice words!

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Hey Gerald! The margins are set high (or low) based on the volatility in that particular market. As a whole I don't think the "economic crisis" has much to do with it. It's really all about the volatility.

Now whether or not they'll decline will depend on if the volatility declines. Remember, there are mini contracts on several of the various markets. Be sure to check with your broker for more info. as these may just be the ticket for you.

Hi jasper, A doji bar is a price bar that both the opening tick and the closing tick are at similar price points. When one forms you might want to be on the lookout for a possible short-term price reversal.

No magic here but it's something that you might want to be aware of when managing your trades.

Hey Big T! The marker I use in contained within the recording software I use to produce the Premium Alerts.

Hey waysworking! If you want to buy multiple options you can do it in just one order. That's the easiest way to do it. You can sell them one at a time too. This works especially well if you have multiple targets.

Good question and welcome back!

Hey grampacharlie! Thanks for the nice words. It's interesting to hear/read the different things to pushed people (me included) to wise up and use stops -- to protect their capital! Glad you "listened" to your inner-self.

Good job!

I'm not sure, George. I don't think we can spend a lot of time thinking about it either. I much prefer to give my attention to the charts.

I don't mean to come across as if I'm dodging your question, but I really haven't given the topic much thought.

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Hey rawhide! You are right on in realizing that the option liquidation needed to be part of your plan. But now you know. Personally I prefer not to use options to hedge my futures trades. The reason? I don't like starting the trade in the red. My futures position has to make up for the cost of the option before it realizes a profit. To me that's just one more obstacle that a winning trade has to overcome.

Thanks for your nice comments about the PAS and DVD.

Howdy Wayne in LA! If long you need to be out of a futures position a good week or more before First Notice Day (FND). If short you want to be out of the futures position a good week or more before Last Trading Day (LTD) (this is general rule of thumb). I typically want to have more time than the 1-2 weeks to let a trade work. As far as the length of price bars go, really long price bars can ad to the immaturity of a chart pattern. I prefer to stay away from the large "spiky" type bars. Take a look at the chart of the US Dollar Index below and you'll see several long bars that added to the difficulty in identifying this chart pattern.

I think what you're referring to is if you simply sell a "naked" option. Other than our Neutral strategy that is not the case. The other advanced strategies have an option that is purchased. In fact, the one sold is usually used to offset the cost of the close-to-the-money option that is purchased.

I'm currently in the process of producing two DVDs about our advanced option strategies. This allows me to go into much more detail than is provided on the web site. In anticipate they'll be ready in February.

I'm not sure how it is that you're getting quicker fills on the pit sessions, but I'll take your word for it. Personally I find you can't beat the electronic sessions during the trading day. But it really depends on the type of order you use. If using market orders they can't be beat.

The evening sessions are lightly traded because the bulk of the activity is taking place during the day session. Traders got to rest sometime!

Hey bearcat! I prefer the electronic sessions because that's where the bulk of the trading activity is located. Most of the action is moving from the pits to the "E" markets. I find the fills are quicker and with less slippage for the most part.

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Orders are placed at different levels depending on what each trader is trying to accomplish. Their reasons could be any of those that you've listed above. Typically a broker can't see an order per se'. What they can see, however, is the bid and ask price. Hope this helps.

Hi anotherjim! Keep in mind that I "watch" the markets all day. But as far as studying charts etc. I probably spend 1-2 hours a day looking at them and marking them up and making decisions. That's me.

For the guy or gal with a 9-5 job and a family it's a bit tougher to spend that much time each day. However, I suggest you get in as much study time as your schedule allows. For some that is just 15 mins a night. For others it's an hour. Try to do something each and every day. That way the markets stay fresh in your mind and you're more likely to stay in tune with what's happening.

Holliday should have gone to the Cards. Albert and Matt in the same lineup would have been awesome! 

Thanks for the comments on the blog. I think the posting has become an obsession. My wife says it's my other love. I told her she was wrong, the markets actually are. . .  

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 training lessons at: US Charts Online. This is a fantastic teaching tool and free to all GBE Members and US Chart Online 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 9, 2008. God Bless and I look forward to seeing you then!