Euro Chat with Joe Ross
Chat log from: Wednesday, May 28, 2008
| Joy joined. | |
| JoeRoss joined. | |
| JoeRoss | Where is everyone? |
| Joy | Don't know... Joe... maybe some are late and some did not realize you were back to the chat today. |
| JoeRoss | I think Susan sent out an announcement, but maybe not. |
| Joy | She did Joe. I am the lucky one to wait for your chat every week so I am here. Others may be busy trading? |
| JoeRoss | Could be, |
| JoeRoss | Now is your chance to get a private tutoring |
| Joy | Yeah! I will save the questions about your trip for a few minutes so others can see your answers. Is the creek not flooding? Did you have bad weather? |
| JoeRoss | Weather is fine. Puffy clouds and temperatures in the 90s (30s for the Europeans). |
| Joy | Ah... I thought you had local flood warnings - 90s, that is hot for late May. I have a long question – but start with the short one: |
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| JoeRoss | Hi quester |
| JoeRoss | Hi Sparrow |
| Sparrow | Hi Joe |
| Sparrow | Everybody in europe is going to bed early? |
| Joy | Hi quester and Sparrow! |
| Joy | Joe: First thank you for answering my question on the Methods. I am curious why the bond methods outperforms the emini so much. |
| JoeRoss | Joy: They don't outperform all the time. |
| Joy | It is volatility in a more predictable pattern? |
| quester123 | Hi Joe and all. |
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| JoeRoss | Hi Lola |
| Lola | Hello Joe, hello everybody. |
| JoeRoss | Joy: All methods are based on one thing only: Statistical probability. |
| Joy | Joe: Thank you - I guess they were just doing better over the last 4 months. |
| Joy | Hi Lola! |
| Joy | Joe: Bear with me on this one: After reading your last Chart Scan on Crude Oil, I studied the July CL chart, 15 minutes, for Friday. Without being redundant (a few people have asked about it at the forum), I wonder if you can comment on my quick questions. |
| Joy |
While the decline started at around 10AM Friday, once the price started to approach the Thursday low, it gapped down and showed 2 long, declining price bars. What I find interesting is how quickly the price reversed back, formed a 1-2-3L, and then consolidated into little action. Is the quick reversal due to a short squeeze or Thursday’s low forming a support level? |
| quester123 | joe the bonds broke multi-week lows today would it be an indication that the stock indexes are going to rise. |
| Joy |
Joe: Also Friday being the last trading day before a holiday weekend and Thursday being a reversal day, I am curious why the early hours of the market actually went up and showed a nice 1-2-3 L pattern with Rh before it started to drop. Is that a normal pattern during a light holiday-hour market? Is it just a difference in market dynamics between electronic and pit? |
| JoeRoss | Joy: I did not watch it. Since I returned from Italy, I've been playing catch up. I believe it was nothing more than profit taking. |
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| JoeRoss | Quester: Most of the time bonds go opposite the direction of stocks. But there have been plenty of times when they both have moved the same way--even for extended numbers of days and weeks. |
| Joy | Joe: OK, I understand . Thank you! And how is your trip and what were most interesting you found? |
| JoeRoss | Hi dwhitey |
| Joy | Hi dwhitey44, long time no see! |
| dwhitey44 | Joe, what % of your capital per trade should you not exceed for a $30K size account? |
| dwhitey44 | Hi Joy |
| JoeRoss |
The trip was a last minute crisis situation. We were supposed to do a video conference, but the quality was not good enough to suit us. So at the last possible moment, I hopped a flight to Italy barely in time to get there ahead of the seminar. The live trading went well and I made about $1,500 in around 14 seconds, in the ER2. |
| JoeRoss | dwhitey: No more than 8% if you are trading spreads. Less if you are trading anything else. |
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| Lola | Joe: I was wondering which book of yours I could read to learn more about trading the law of charts and in particular trade management when trading LoC? |
| JoeRoss | Hi Paola: |
| Joy | Joe: We remember your crisis trip - fortunately you work like a CIA agent with passports and visas ready to go in a safe. |
| Lola | Hi Paola |
| Joy | Hi Paola, I don't think our friend Fabio is going to join us. He is not here yet today - must be busy with work. |
| paola | Hi Joe How are you? I'm fine. |
| dwhitey44 | Thanks Joe. |
| JoeRoss | Lola: There is no book like that. But a lot of what you want is in the TLOC online seminar. |
| JoeRoss | paola: I'm doing fine. |
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| JoeRoss | Hi Zendre |
| Lola | Ok, I bought your Futures Beginners Course and I like it a lot. Trying to apply what I learned. |
| zendre | Hi Joe and all traders. |
| dwhitey44 | It seems the more you get involved in the spread trading the more you go back to one of Joe's books to look up something you remember reading but are not quite sure of the detail. |
| Joy | dwhitely: is the 8% you asked about contract size or risk amount? I am sorry I did not get the question clearly. |
| Joy | Hi zendre, long time no see! Did you see Joe's post on Liquidity breeds stupidity - reminds me one of the chats on the Fed we had. |
| dwhitey44 | Has to do with the amount of capital you risk per trade where a trade could be one or more lots. |
| quester123 | Joe, do you think the increasing oil price will deepen and prolong the recession if the US is in one? |
| Joy | Joe: What happened to your SF option? If you can remember after the trip and so many days in between. I think it went in the money that Friday, expiration day. |
| JoeRoss | quester: The US is already in a recession, and the price of oil is making it worse. |
| zendre | Joy, it is nice of you remembering me . I will read that one. |
| JoeRoss | Joy: The option got into deep trouble. I had to day trade my way out of the mess on a 5 minute chart. |
| dwhitey44 | The knowledgeable politicians realize the strength of the dollar is the only thing that can drive down the price of oil. Most of them are playing the blame game on why it is rising. |
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| JoeRoss | I was $13,000 in the hole, but ended up with a very small loss, which I made back on the trade in Italy. |
| JoeRoss | Hi Tatiana |
| quester123 | Oil has gone up fast within a short time. What would indicate to you that a bubble is developing? |
| Joy | Joe: Wow! You are a master and could trade out of the troubles. But any lessons learned for newbies like me? |
| Tatiana | Hi, Joe and everybody. |
| Joy | Hi Tatiana, I am new in this chat and have not 'met' you before. |
| zendre | I read an article on changing the inflation cycle to a higher level. in the last 15 years it was very low in the world, but it is due to change. |
| JoeRoss |
quester: If a bubble is developing, it would be because of the hedge funds driving up the price of oil. They are borrowing inexpensively in Japan, and plunking some of that money into oil and other commodities. So the hedge funds are partly responsible for the bubbles we are seeing. |
| Lola | Hi Tatiana |
| Joy | Joe and zendre: Liquidity breeds Stupidity: something Joe wrote about “rise in margin” made me wonder if we small traders will be squeezed out of the market. |
| zendre | No way, somebody needs to feed the sharks. |
| JoeRoss | Joy: Great Lesson! Never be short an option during Gamma week (the last week of an option's life), unless you are a capable day trader. |
| Joy | zendre: I think in the US we experienced 10 years-worth of inflation in 1 year: price doubled.for many products. |
| JoeRoss | Joy: You are already being squeezed out of the market by high margins. |
| quester123 | Joe, as a general rule do you enter option trades during expiry week. |
| dwhitey44 | Joe, some of the US politicians think higher margin requirements for oil will reduce the ability to drive up oil prices - less hoarding. What say you? |
| JoeRoss | quester: I do quite often enter positions in gamma week, but as I mentioned, don't do it unless you know how to extricate yourself by day trading. |
| zendre | Back to the short option-day trading topic: I sold X and SF options recently. I had to daytrade both to protect them. It was quite exiting, and dangerous, because I was at 80% margin load. |
| JoeRoss | dwhitey: I don' t think it will work for very long, but they definitely are doing it. It may keep out some of the little guys, but they don't matter very much in the big picture. |
| Joy |
Joe: That is terrible to face the shark and the high margins. But do you know my local oldies radio station (translation = target audience is retirees) is now running brokerage commercials for retirees to invest in commodities and options. Can you imagine those poor investors feeding the shark with the needed liquidity and risk their retirement savings? |
| JoeRoss |
Joy: They are always looking for new feeding grounds. If they can suck in the retirees (they have money) they will pluck them like you pluck a chicken. There is no fool like an old fool is really true for retirees. When you are stuck with a fixed income and inflation is soaring you have to find a way to make more money. So you either take risk or you starve. |
| zendre | Quite disgusting. |
| zendre | Next target group will be children financially backed by their parents.... |
| Joy | Joe: these poor retirees are being squeezed by the government too, by fake low inflation rate, as you said in the article. |
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| JoeRoss |
Joy: Yes they are. They will use their savings to try to keep up with inflation. Back in the early 1990s, there was a huge white-collar jobless situation. Qualified men and women were over-qualified for the jobs they wanted. Some sent out thousands of resumes, but received no answers. Wives had to go out to get jobs to help out. After many months of trying to find work, some of their savings began to flow into the futures markets. Our monthly seminars were often 50% attended by desperate men and women, hoping to make a living through trading. |
| JoeRoss | Hi YV |
| YV | Hello everybody. How are u Joe? |
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| JoeRoss | I'm fine, YV |
| JoeRoss | Hi Lola |
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| Tatiana | Joe, do you recommend to work with gold spot if spread is 100$ per contract. |
| Lola | Hi again. |
| zendre | Let us make some money! |
| nathan | Hi and welcome back! |
| Joy | Hi YV and nathan: I am new in the chat - nice to meet you! |
| zendre | What about that option writing newsletter? |
| JoeRoss | zendre: I had someone in mind who I was going to train to write the option letter. Just this morning he backed out. He said he would rather try day trading and he just wasn't comfortable with the options. |
| YV | Joe, can u talk a bit about risk vs reward? |
| nathan | Hi Joy, have fun and ask! |
| Lola | I guess I shouldn't switch tabs in my browser. |
| zendre | I can only recommend options ending in the money :-). |
| JoeRoss | Tatiana: It sounds like a good idea. I've never done it that I can recall. |
| YV | What i mean is if i have a setup that work 70-90% for 5 ticks , but i need to risk more than 10 ticks. Is this logic? i know i make money but still the drawdown is much more. |
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| dwhitey44 | Looks like the lean hog spreads are coming back that Andy had in Traders Notebook. Lost on the live cattle. |
| Joy | Tatiana: Do you mean the spread between bid and ask? I am sorry I am new and don't always follow the questions. |
| paola | Hi Fabio |
| JoeRoss | YV: I hate that term risk vs reward. I don't know how to figure it. I don't use it. Remember, I don't do math. I am dyslexic and cannot see numbers. |
| fabio.it | Hi all. |
| Tatiana | Yes. |
| Joy | Fabio my friend! |
| Joy | You made it!! |
| Joy | Paola is here too! |
| Lola | lol |
| fabio.it | ::smile hi Chris. |
| paola | Yes! |
| fabio.it | Ciao Paola |
| JoeRoss | YV: How often do you win or lose? You have not told me enough. |
| Joy | Joe: You cannot see numbers? So you are truly studying the charts only :-) |
| JoeRoss | If I risk 30 to make 10 and win 90% of the time, then I'm making money. |
| nathan | Joe, is your book spread trading and seasonal spread trading the right thing to begin doing spreads? |
| YV | Honestly i win 90% over the last 2 months, but still i feel uncomfortable with the twice or more ticks that i use for stop. |
| JoeRoss | Hi Fabio. |
| fabio.it | Hi Joe. |
| dwhitey44 | Nathan: It is a great book and includes excerpts from other books. |
| nathan | dwhitey: thanks, enough for beginning or need some preparation for that? |
| JoeRoss | Joy: I am almost 100% a chart man. I wear a cape that says "chart man" and I have a big CM on my shirt :-) |
| YV | I know i am making money but since the market is never predictable i lose all my wins in a few trades that go against me. |
| Joy | Joe: You make me laugh so hard. |
| fabio.it | I prefer to risk ten and make ten, because i hate to lose thirty knowing i need 3 trades to recover my money.... but it is my behavior. |
| dwhitey44 | Nathan: If you need additional information, Joe references in the book which other one might be helpful. |
| JoeRoss | nathan: Our spread traders are doing very well. They are having much success. |
| nathan | Thanks, what's about Traders Notebook? |
| JoeRoss | Read the book, Nathan. |
| Joy | dwhitey44: Is it the June LC vs. LH trade you referenced earlier? |
| nathan | Yes Sir! |
| dwhitey44 | Andy Jordan is a very bright guy at targeting spread trade opportunities. |
| JoeRoss |
Nathan, you need Traders Notebook, too. Of those who read only the book, only a few succeed. But those who read the book and take Traders Notebook have a much higher success rate. They actually keep subscribing to Traders Notebook, even after they are making a living trading spreads. |
| Joy | Yes and Andy would answer any question on the forum promptly and graciously. I was really surprised how soon he answered a basic question I asked. |
| dwhitey44 | Joy: That trade is doing very well even today it ticked up more. |
| nathan | Joe, you are right, trading outrights only is very volatile - so i need to add spreads. |
| Joy | dwhitey44: thank you! I have been practicing those spread recommendations on paper to learn. Andy is awesome. |
| fabio.it | nathan... don't believe spreads are not volatile. |
| JoeRoss | nathan: A lot of people end up trading only spreads. At the seminar in Italy we had 8 traders who are making a living from trading and they trade only spreads. |
| JoeRoss | They repeat the seminar every time we give it, and learn more each time. All of them are devoted Traders Notebook subscribers. |
| Joy | Joe: that is impressive! I used to think spread profits are lower but are steady eddie - you just proved it otherwise. Very encouraging. |
| nathan | Most of the time up to now I was searching new methods and doing homework - interesting that spread traders are more successful. |
| zendre | Joe: are those spread traders doing seasonals? They are a bit corrupted nowadays, are they not? |
| dwhitey44 | Joy: Spread trade profits are less or more depending upon which commodity you get into. I am conservative so I have stayed with meats only for now. |
| JoeRoss | zendre: They do the spreads Andy puts in the Traders Notebook. This includes seasonals. Not all seasonals are corrupted. But you have to know which ones are and which are not. |
| nathan | fabio: do you mean the psychic issue is comparable? |
| zendre | I am subscriber also, but I always choose the wrong ones. |
| fabio.it | Joe, do think meats electronic markets volume will grow up in the next future, as other markets? |
| Joy | dwhitey: That is both interesting and useful information! I just started learning and don't have the full grasp of the big picture across commodity groups as you do. Thank you! |
| JoeRoss | fabio: So far it hasn't happened. I can only guess about the volume in meats. Your guess is as good as mine. |
| dwhitey44 | Joy: It seems you can make more in the soybean trades (meal, beans, oil) but it is too much volatility and risk required for me. I noticed that some of Andy's trades earlier this year in the metals yielded big profits. |
| Joy | Joe and Fabio: Even something like corn, I was surprised to see how condensed the trading window is for both activity and price action - it seems still driven by pit hours. |
| Joy | dwhitey: THANK YOU! What a great lesson you shared! I am writing it down in my notebook :-) |
| nathan | Is spread trading calculatable at the beginning? Or is it sensible just to learn from Traders Notebook? |
| nathan | My beginning in futures was painful... |
| JoeRoss |
Joy: Be thankful they still use pit hours. Just because the greedy exchanges want to keep the markets open all night, doesn't mean the traders want to trade all night. |
| fabio.it | joy... in corn, wheat, soybeans you can find good liquidity from 9.30 to 13.15 chicago time; this means you can see better bid/ask spread |
| JoeRoss | nathan: You have to learn spread trading and get used to it, same as you would anything else. it is different. |
| Joy |
Joe: you are right! I am a night person but trading at 3am is easier for you the early bird than me (the sleepy eyes) Thank you for reminding me :-) |
| nathan | Well, that's good and fascinating. It never gets boring... |
| zendre |
nathan: spread trading is a good start. Just you do not have to believe that if a spread was not below -35 for the last 40 years, that does not mean that it will not go below this year :-) |
| Joy | Fabio: That is a great tip! I have not really looked into the bid/ask spread like that. My, today's chat is full of golden nuggets for me. |
| YV | Ok, Joe good night to u and have good trading. |
| YV | Good night all. |
| Joy | Good night YV! |
| nathan | Thanks Zendre - that was one painful learning step in the futures for me. |
| Lola | Bye all. |
| paola | Bye all. |
| Joy | Bye Lola and paola! |
| JoeRoss | You guys are letting me off easy. We still have 5 minutes. |
| dwhitey44 | Enjoyed the info exchange today - bye all. |
| JoeRoss | Bye to all those who said bye all. |
| paola | Bye Joy and Fabio |
| zendre | What do you people do? |
| fabio.it | Joe... your risk 30 make 10 is referred to hourly and 30 min charts mainly? |
| Lola | lol |
| Tatiana | Joe, thanks for your books. They help me much. |
| zendre | It is 4 more minutes :-) |
| fabio.it | ciao Paola a presto. |
| Joy | Joe: You are just back and we are being considerate. |
| JoeRoss | fabio: It was just an example. However I did that in the ER2 in Ravenna last week. |
| zendre | I have to ask about the markets in the night :-( |
| JoeRoss | You are welcome. Tatiana |
| zendre | e.g. lean hogs. |
| zendre | gs |
| zendre | Joe, I hope today's sandwich was OK :-) |
| Tatiana | Good night for all and big profits. |
| nathan | Joe: What should the ECB do? |
| fabio.it | Night tatiana. |
| Joy | Bye Tatiana - nice meeting you. |
| nathan | Bye tatiana. |
| JoeRoss | nathan: hold or raise interest rates to fight inflation. |
| nathan | That means stock markets have less potential? |
| nathan | And bonds also? |
| JoeRoss | It's time to say ciao, and servus, and good bye, and any other way of leaving. |
| zendre | See you in the night. |
| paola | Ciao Joe! Bye Bye. Thanks for this chat! |
| Joy | Joe: THANK YOU for all the time and wisdom! Hope to see you later in the US chat. |
| Lola | adieu |
| JoeRoss | adieu |
| nathan | Bye Joe and thank you and bye everyone - thank you all! |
| Lola | tschüüss. |
| fabio.it | Bon soir lola. |
| Joy | zendre: Are you joining the U.S. chat? I want to hear the question on the night market and Joe's answer then if you can remember asking again. |
| JoeRoss | Bye all. |
| JoeRoss | See you next week. |
| Joy | We love you Joe. Bye! |
| fabio.it | Bye Joe. |
| Lola | Sure. |
| zendre | Joy, which one? |
| quester123 | Thanks Joe, bye all |
| Joy | zendre: you started talking about lean hog and gs... |
| JoeRoss | Joy: if you want to trade the night market stick with European contracts. You don't want to trade the meats during the night. |
| Joy | Joe is so nice - he answered the question! |
Next EURO Chat with
Joe Ross:
Wednesday, June 4, 2008
Time: 8:00 - 9:00 P.M., European Central Time (Berlin, Paris, Rome)
COME BACK WITH YOUR TRADING QUESTIONS & COMMENTS!
