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

Euro Chat with Joe Ross

Chat log from: Wednesday, January 16, 2008

	zendre joined.
JoeRoss	Hi!
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JoeRoss	How are you?
kenle	Hi Joe, Happy New Year!
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JoeRoss	Same to you
	YV joined.
dasziel	Hello!
YV	Hi everyone.
JoeRoss	Well I can see that some of you found out that the chat is on Wednesday, at least I won't be talking to myself :-)
kenle	Is this the first chat of the year??
zendre	Hello.
JoeRoss	Yes, this is the first chat of 2008. Questions and comments are welcome.
dasziel	It's my first time.
dasziel	I'm from Spain.
JoeRoss	I haven't been here in several weeks.
kenle	I see.
zendre	Joe, What do you think about gold?
JoeRoss	I have to have a vacation some time
zendre	Do you think it would be a good TTE Long?
dasziel	That is a great idea.
dasziel	I'm a newbie.
dasziel	What's a TTE?
JoeRoss	zendre: I think we will see 1000 or more in 2008, but first may come a big correction. The problem is when?
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YV	Joe , I had a very painful experience today, please comment. I was trading 5 minute currencies and was doing great, had already profit of 250$ per contract all according to Day Trading book methods, and then I got greedy and tried something in the bonds which i I wasn't sure about and lost 450$
JoeRoss	Zendre it will be good if you have the resources to hang on. It could be a rough ride.
YV	How how can I bring myself to be satisfied with what I got till now?
zendre	I meant a quick trade with a TTE tomorrow, with a tight stop.
JoeRoss	dasziel: TTE = Traders Trick Entry.
YV	It seems I always can't get enough when I am winning.
zendre	Try to think about the money in terms of money when you are winning :-)
JoeRoss	YV: Greed will always bite you in the end.
YV	I agree.
zendre	e.g.: Try to spend half of what you won before you get into a trade again :-)
JoeRoss	YV: When you get burned enough times, you will learn to keep what you have. If you get it early in the day, close your screen and go to the beach :-)
zendre	Or pocket at least half your position.
dasziel	Joe, what do you think about options selling as investment strategy?
dasziel	Covering with futures if necessary...?
JoeRoss	zendre: gold should be worth a quick trade.
YV	I hope I will do it next time.
zendre	Thanks for Dasziel, I realized that I almost forgotten to ask about the option selling newsletter.
JoeRoss	YV: Greed is a battle you must fight with yourself. If you don't win that battle you won't be around very long.
dasziel	Where is an option selling newsletter?
YV	Joe, I hear you were talking about an option trading newsletter, and also I saw Forex spreads in the site. When will this be?
JoeRoss	dasziel: I love selling options. I think it is a great way to trade and these days the premiums are very high.
zendre	That is the question for Joe. Not where, but When?
JoeRoss	dasziel: Writing options and covering with futures is what my book Trading Optures and Futions is all about.
dasziel	Ok, i agree. indeed, when I want a conservative portfolio, selling options are one of the best ways to improve your returns.
zendre	And for YV I would recommend Trading is a Business.
dasziel	Where can I get that book?
JoeRoss	Zendre: the person we thought was going to do it has not followed through. We need a very reliable person to write that letter. We are still looking for one.
zendre	By some unknown, but very talented author :-)
JoeRoss	YV: Forex spreads will be there when I can find the time to work on it.
YV	Thanks.
JoeRoss	dasziel: You can get the book: www.tradingeducators.com/books.htm
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zendre	There is a forex spread in the TN (Traders Notebook). I think it is GBP/SF, but I would prefer GBP/EUR
myrrdin	Concerning selling options: Is it - in your opinion - already the time to sell OTM gold and silver call options? Will prices go further down?
YV	Joe, I am seeking for a contract to trade that is comfortable for small accounts day trading. Now I do currencies including Curry Blend method and eminis. Can you recommend another contract that I can take a look at that you think will be comfortable for beginners?
JoeRoss	myrrdin: You are asking me a question I can't answer. How can I know if prices will go further down? I can't even tell you where the next tick will be.
JoeRoss	YV: All markets are rough. I don't know your comfort level, but I do know you can get into trouble in any market.
dasziel	Joe, may you paste the link for your options selling book?
JoeRoss	www.tradingeducators.com/books.htm
YV	Yes I know its rough but still I want to investigate some contracts and there are so many to start with.
dasziel	Joe, it seems that options selling, covering with futures if necessary is a safe way to get steady profits..but, what are the risks?
JoeRoss	YV: What is good for one trader and comfortable is not necessarily good for another trader.
zendre	Joe, Some have the opinion, that because of the rising feed (grain) prices meats should go significantly higher this year. Do you agree?
YV	Ok, I will rephrase my question. I do not want to waste a lot of my time finding out a high liquidity market. Can you recommend some?
JoeRoss	dasziel: The risks are considerable even covering with futures. Prices can jump over your futures contract placing the option deep into the money. Prices could trigger your futures and then begin to go in an out whipsawing you until you want to scream.
JoeRoss	zendre: Grain prices will force meats to have to go higher.
zendre	I am just waiting for an 1-2-3 low, or any other reversal sign.
dasziel	But if you sell options very far out of the money and Delta is low, your probability that your futures will be triggered is low...wont it?
JoeRoss	YV: The fastest way to find liquidity is to look for high volume. 35,000 contracts or more in the futures should do it. Why don't you try the electronic version of crude oil.
JoeRoss	But you will also need to check margins to see if it is affordable for you.
zendre	An idea: What about not starting a separate newsletter, but put 1-2 option selling trades into the TN?
YV	How can I find this high volume contracts indicator?
zendre	I mean it would be good to have a separate options writing TN, but if you do not have the right person :.....
JoeRoss	dasziel: The further out you go the less likely you will be in trouble, but also the less premium you will get. Just remember this: In 1993 the yen moved 610 points in one night. 9 months later the yen moved 520 points in one night. I've seen coffee go limit up and make 5 tops in a row in a matter of a few weeks.
JoeRoss	If you can't stand risk, become a clerk in a store. No risk, but not much pay.
dasziel	I'm talking about equity indexes.
dasziel	The risk is much lower.
dasziel	As volatility is low.
JoeRoss	YV: To find volume go to the exchange web sites or bring up the volume indicator in your software.
JoeRoss	Zendre: You still have to have someone prepare the trades and follow up on them. Putting them into TN does nothing.
dasziel	The only problem is that a big pocket is necessary to get a reasonable profit, as money in the account is needed in order to guarantee margins and futures covering.
JoeRoss	dasziel: since when are the equity indexes low volatility?
dasziel	Much lower than commodities, I think.
JoeRoss	Don't think that because an option is far away that volatility is low. That would be a huge mistake. Any market can come into very high volatility in a matter of seconds.
zendre	This was a brainstorming idea only :-) I suggested it, because if it is a separate one, you feel stressed yourself to write some trades. If it is only an addition, nobody will ask his money back if there is a 1 month gap between option writing recommendations.
dasziel	I use IB which is a top notch system for options trading and I can see the implied volatility and price model by Black and Scholes.
JoeRoss	One other thing about option writing in the past few months: many brokers are refusing to let you write them and others are charging very high margins because markets are very volatile across the board.
dasziel	i agree with that.
YV	Joe, are you working on a new trading method? I use what you call a Blended method approach using some of your methods + my own trading knowledge and it's been doing great!
dasziel	That's because a big pocket is necessary in order to make this a winning strategy.
dasziel	Money management is very important for writing options.
JoeRoss	dasziel: I use IB for option selling just like you, and the margins are extremely high. One of my other brokers won't allow anyone to sell naked options no matter who they are.
dasziel	Don't you think so?
JoeRoss	YV: Yes I am working on a new method. It will be ready soon.
zendre	Joe, do you write equity, or commodity options through IB?
YV	May I ask which contract, or is it a secret?
JoeRoss	dasziel: Why just money management? What about risk, trade, and personal management? Aren't they also important? I think personal management is the most important of them all when you trade. If you can't manage yourself then you won't be able to manage money, risk, or trading strategies.
YV	Joe, do you believe in DOM ask bids numbers (Level 2) for a confirmation of getting into a trade?
JoeRoss	zendre: Only options on futures.
dasziel	That's what I wanted to say :-)
JoeRoss	YV: You will know when I release it. But I can tell you that it is a currency.
YV	Great!
dasziel	Joe, Have you used the EFP's in IB?
JoeRoss	YV: I don't believe in DOM numbers at all. They are a way for the insiders to deceive you.
dasziel	It seems a good chance to improve the liquidity returns....
JoeRoss	dasziel: I have considered it. They give you better margins if you do.
dasziel	Really?
JoeRoss	It is the lower margins that give you the better returns. You get more leverage.
dasziel	So, if I buy EFP, I have less margins selling options?
JoeRoss	dasziel: I don't know if they have EFP available for options. I never looked into that.
JoeRoss	It doesn't seem to make sense to have them for options.
dasziel	No, I want to trade futures options but, I want to get from my excess cash more than IBs interest.
dasziel	Sorry for my bad english :-)
JoeRoss	Your bad English is better than my bad Spanish
dasziel	So, my questions is if EFPs are safe to get the extra interest or not?
dasziel	hahahaah
dasziel	:-)
JoeRoss	dasziel: I don't know if it is better or not. I read about them and it sounded interesting, but I never did anything about it. You are taking some extra risk from the way I understood it, but I am not a very good reader.
JoeRoss	I have to read things many times before I truly understand. I have always been slow when it comes to reading.
JoeRoss	dasziel: I can't paste it, because I can't copy it.
dasziel	And what about IB? Ii personally love it, but maybe are some brokers much better...?
JoeRoss	But you can read what was said by clicking on ACTION and RECENT ROOM HISTORY.
YV	Joe, I was thinking how can I trade index options using TLOC, do you think it's possible? I mean if i get a signal from TLOC that prices will go high can I use this to buy options or is not good for this?
dasziel	A problem I have with IB is with spreads.
JoeRoss	dasziel: If you need service almost every broker is better than IB. Only Trade Station is as bad as IB--maybe even worse!!!!
dasziel	But if you want a great system , IB is perfect.
dasziel	Reliable.
dasziel	Complete.
dasziel	And cheap.
JoeRoss	YV: It works very well that way. I had an entire article on doing that with stocks in one issue of my free Chart Scan Newsletter.
dasziel	I can't make a FTSE 100 - Dax for example.
YV	Do you remember which Chart Scan issue?
dasziel	Is it possible to make intermarket spreads?
YV	Issue number?
JoeRoss	dasziel: Spreads should be no problem if you leg in to each side separately, which is what we do.
dasziel	I can't.
dasziel	I tried and I can't.
dasziel	CME is good.
JoeRoss	YV: No, I don't remember which one it was, but a lot of people wrote to me that it was a great way to write Puts or do covered Calls.
dasziel	But if I use European markets I can't.
YV	I see, thanks I will look for it.
JoeRoss	By the way, while I have you all here, I need to tell you about two things:
JoeRoss	1. I may be late next Wednesday. An unexpected appointment came up and it could cause me to be late. But I will keep Susan informed and she will be on the chat to let you know if I will be a little late.
dasziel	Ok.
JoeRoss	2. If any of you need a great end of day charting program for only $14.95/month it is to be found at www.nextrend.com
zendre	Joe, have you heard of Wave59?
zendre	It is a daytrading SW. Its indicators look expressive.
JoeRoss	I personally use it for all of my stock market analysis and trading. For example, in Chart Scan I told that if you find stocks making new highs you could write covered calls on them or simply sell puts. The analysis was done in Nextrend which has the ability to set up all kinds of scans. It has so many features that you are bound to find something in it that are worth $14.95. Just the research capability using EDGAR would cost $20/month if you had to buy it separately. I love that program and it is finally back again after some financial problems that had nothing to do with the program. It was voted by several publications like Barrons and IBD as the best stock trading program in the world.
JoeRoss	zendre: I don't know Wave59.
zendre	What is EDGAR? (a German boy?)
dasziel	Are all markets supported?
JoeRoss	zendre: Edgar is a German girl who had a sex change operation :D EDGAR IS A RESEARCH TOOL.
YV	Joe, could you recommend a good magazine for futures trading or is it a waste of my money?
JoeRoss	dasziel: In NexTrend Futures indexes are supported and I think also currencies. All the rest is stocks, but American, Canadian, European, more.
dasziel	I need a site where they recommend options selling.
dasziel	do you know some?
JoeRoss	YV: I believe those magazines are a waste of money..
YV	Thanks.
JoeRoss	dasziel: I don't know. Most of them try to get you to buy options.
dasziel	And you know a good program for options strategies?
dasziel	With IB feed if possible....
dasziel	What do you think about ADX and DI's in order to identify trends? I use a lot of with high confidence, but the good signal are only a few...
YV	Ok, good night to all of u from Israel.
JoeRoss	dasziel: I very much like the Options Matrix we sell on our website. It was written by Alan Parry and Alan is one of the world's great option traders. It is the program he uses for his own trading and the one I also use for my trading. It is not loaded with a lot of junk. Just precisely what you need to make money with options. The program lets you screen exactly the options you are looking for. And the data is free. Over 12,000 options on futures/day.
dasziel	I'm gonna take a look.
JoeRoss	dasziel: You don't need live data for options when finding the ones you want. Once you have them, IB is giving you the live data all day long.
zendre	Actually I have a problem with how to place these places, and how to follow them.
JoeRoss	dasziel: If the indicators work for you, use them.
JoeRoss	Good night YV, I'm on my way, too.
JoeRoss	Shalom
Sauff	Good night Joe
zendre	Thanks Joe
JoeRoss	And Servus to you all as well as Adios.
myrrdin	Thank you and good night.
JoeRoss	See you next week, but remember I may be a little late.
JoeRoss	Good night.
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Next EURO Chat with Joe Ross:
Wednesday, January 23, 2008
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)

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