Trading Educators Inc. - Joe Ross - Day Trading and Online Trading

Euro Chat with Joe Ross

Chat log from: Thursday, September 13, 2007

	SusanL joined.
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crosten	Hey Joe.
crosten	Are you ok? I heard that a hurricane hit your area.
JoeRoss	Hi we start in 6 minutes.
JoeRoss	The only hurricane to hit my area is the flu. I am in bed with it today.
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crosten	Joe, can you please tell me the price of gold, I really do not know
crosten	LOL
JoeRoss	I don't know either.
crosten	You 're kidding with me right? Come on Joe.
JoeRoss	I never kid, crosten :(
marsh	crosten: see www.kitco.com
crosten	You said in your Chart Scan Newsletter that gold is going down, where is gold now???
marsh	Spot market is closed. opens in 4 minutes.
marsh	Last: about 709.
JoeRoss	crosten: gold already went down when I said it would go down, and I'm saying it will go down again. Gold is famous for going up and down.
crosten	I know marsh, I still cannot believe that joe forecasted a drop in gold.
crosten	Joe, are you impressed with the rally in the equities market? It is as if the drop that we had was not even there.
JoeRoss	crosten: I'm not impressed.
crosten	What is your reasoning? No 1-2-3?
marsh	China may surpass South Africa as world's biggest gold producer. Interesting headline.
JoeRoss	crosten: I am not reasoning anything. I am just not impressed.
JoeRoss	marsh: Very interesting news.
crosten	Joe, can you give some commentary of the market, gold rallying, wheat making new highs and euro?
JoeRoss	The SA mines are very deep and the gold is increasingly difficult to get.
JoeRoss	crosten: No comments. I try to not form opinions.
marsh	And China doesn't care how many miners die.
johngas	Joe - having quite a bit of good trading - trading triangle formations.
JoeRoss	johngas: Interesting. They can be fun.
johngas	Yes - when trend not clear.
JoeRoss	Right, johngas.
crosten	Joe, did you manage to catch any of the markets that are making new highs?
JoeRoss	crosten: No, not a single one. The only thing I caught was the flu.
crosten	Are you currently long any market?
crosten	Joe, what is the main advantage of trading CFDs?
JoeRoss	crosten: Good question. What is the main advantage of trading CFDs?
crosten	?
JoeRoss	Don't you have an answer?
crosten	Nope.
JoeRoss	Neither do I.
crosten	Joe, come on you are the master here.
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murra	Hi Joe an everyone.
JoeRoss	Hi murra
JoeRoss	Come va?
murra	bene grazie and you?
JoeRoss	Not so good, I have the influenza today.
murra	I'm sorry for you?
JoeRoss	murra: Me too.
crosten	Joe, why do ledges occur? Is there a psychological reasoning behind ledges?
murra	What do you think in general about all this liquidity that the central banks are putting in the system?
JoeRoss	crosten: Ledges occur because of price uncertainty.
marsh	http://www.gcitrading.com/cfd-trading.htm is a good summary of the advantages of CFD trading.
crosten	Thanks.
JoeRoss	murra: The are giving temporary relief but some day we will all have to pay the price.
crosten	Joe is a Sept. 18 rate cut a done deal? The market seems to assume it is?
JoeRoss	crosten: I guess we will find out on September 18.
crosten	ben did not give any clue unlike the maesetro.
murra	It look like price cannot to go down , but when they bring back the money, what will happen?
JoeRoss	But I can tell you how I'm going to play it. For each contract I go long, I will buy 2 at-the-money Puts. Whichever way it goes, I will drop the opposite side.
JoeRoss	murra: When they bring back the money the entire banking system will collapse.
crosten	What contracts are you talking about Joe?
JoeRoss	crosten: ES
JoeRoss	The bonds and notes have already discounted a Fed Funds rate cut, and actually they may already have done it quietly.
crosten	Joe, what strategy is that long 1 contract buy 2 puts?
JoeRoss	Actually, it is called a modified fence.
crosten	I read somewhere that the fed cut the discount rate quietly.
murra	Law of Charts appart that is first signal, which would be the other strong signal, Joe, which we have to consider?
JoeRoss	I read that also.
crosten	Joe, what were you doing 3 years in Africa?
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JoeRoss	crosten: Relaxing and position trading, and enjoying the natural beauty of the place.
BenHH79	Good evening @all
crosten	And mosquitoes, right?
JoeRoss	murra I didn't understand the question.
JoeRoss	crosten: No mosquitoes.
JoeRoss	Hi Ben
crosten	Joe, do you buy strangle or sell strangle?
JoeRoss	crosten: You buy or sell out of the money Puts and Calls.
murra	We can look a collapse on the chart with the analysis but is there other signal that are a good alert?
BenHH79	Hi Joe! I shortly heard that open interest may be a useful to look at in a sideway market, is that right?
JoeRoss	murra: The best signals I know of are the TTE, reversal bars, inside bars, cluster breakouts, and train tracks.
crosten	Joe, what is the most important thing that you look at what when looking at options, IV, theta probability to expiry?
marsh	Train Tracks?
JoeRoss	Ben: If the market is really sideways, like gold is right now on the weekly chart, and you see a sudden and severe drop in OI then prices are probably going to move up. If you see a sudden and severe rise in OI, then prices are probably going to move down.
JoeRoss	Yes, Train Tracks.
JoeRoss	They work great in the mini Russell.
BenHH79	Yes, that is what I read. alright!
marsh	What are train tracks?
JoeRoss	crosten: I look at time to expiration. 20 days or less. I look at volume, 50/day or more. I look at IV, 15 or greater.
JoeRoss	marsh: If you stop by, I'll show you.
marsh	okey, doky.
crosten	Great.
JoeRoss	Ben: The problem is WHEN? When you see as described above for OI, it could happen tomorrow, or 3 months from now.
BenHH79	That's right...
JoeRoss	Ben: Over the years it has not proved to be a very reliable indicator.
BenHH79	I don't like indicators anyway :-)
JoeRoss	Ben: It's more of a techno-fundamental thing than an indicator.
crosten	What is techno ?
JoeRoss	There is a lot of judgment involved. What exactly is a sudden, steep drop in OI????
JoeRoss	crosten: Short for technical.
JoeRoss	Partly technical, partly fundamental.
crosten	Joe, when you were long gold some time ago, which contract did you use comex, cbot , etc.?
JoeRoss	crosten: CBOT.
crosten	Joe, you are selling options, do you hold them until expiration?
JoeRoss	crosten: Not if I can help it.
JoeRoss	So far this year I've been able to buy them back before expiration day.
JoeRoss	I prefer to not be short an option during the last 5 days of its life.
crosten	Joe, do you have any open positions?
JoeRoss	crosten: I am long euros.
BenHH79	I'm trying to filter seasonals with something techno-fundamental...
crosten	Which level did you get in ?
crosten	Are you aiming for the 140 level l?
JoeRoss	crosten: Latest trade was when euro was 129.
JoeRoss	crosten: 140-145
JoeRoss	It's a purely economic fundamental trade.
crosten	Joe, are you trading the euro on the monthly or weekly chart, it seems that your time horizon is very big?
BenHH79	Joe, do you know if there's a backwardation indicating tool in Trade Navigator?
JoeRoss	crosten. My time horizon is quarterly and monthly.
JoeRoss	Ben: I never heard of such a thing.
crosten	the euro looks good on monthly, clear define up trend, which year did you go long euro, Joe?
JoeRoss	Ben: The best way to filter seasonals is by seeing that the seasonality is actually working.
JoeRoss	crosten: November of 2006
crosten	A traders trick entry?
JoeRoss	Not a perfect TTE, but close enough for me to take the trade. I think I got in around 1.295
JoeRoss	As I recall, it was a bar that had 3 signals. An imperfect TTE, a reversal, and it was also a train track.
BenHH79	But there are often good signs that the probability is high!
JoeRoss	Ben: If you mean seasonality, you can see when a seasonal trade is doing what it should be doing. If you mean the euro trade, I had 3 strong signals on the chart, plus economics that said the dollar must go down in the long term.
JoeRoss	Yesterday euro hit new all-time high.
crosten	Today also.
JoeRoss	I need to get some pounds as well.
JoeRoss	I think BP will go to 210.
BenHH79	What do you think is the dollar's destination?
crosten	Economic fundamental trade for the pound also Joe?
JoeRoss	Ben: I think the dollar has a good chance of becoming something else.
JoeRoss	crosten: Yes. The BP is very strong.
JoeRoss	Canadian dollar, too.
BenHH79	Oh my!
crosten	What time frame are you look at the BP, monthly or weekly?
JoeRoss	crosten: Both
crosten	Am i correct to say that the BP is in a range in the weekly but in an uptrend on monthly?
JoeRoss	crosten: I see a trend.
crosten	On what time frame are you seeing the trend Joe?
JoeRoss	crosten: Weekly.
crosten	The Bp is in a range this past few days?
BenHH79	Joe, I think of programming my own seasonal line, but I need data for all the past year contracts... do you know if TN supports that?
JoeRoss	crosten: This week it came out of the measuring bar. I see higher highs and higher lows.
crosten	The measuring bar is the last down bar right ?
JoeRoss	Ben: If you mean Trade Navigator, yes, they support a huge database of prices. If you need to go back to 1969, just call them and tell them what you want and you will get it.
crosten	4 bars ago?
BenHH79	Great, thanks!!
JoeRoss	crosten: That is correct.
JoeRoss	Guys and girls I have to get into bed to fight off this flu.
JoeRoss	See you next week.
murra	good night Joe and all thank you.
JoeRoss	Bye

Next EURO Chat with Joe Ross:
Thursday, September 20, 2007
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)

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