When Do You Add To Your Winning Trade?   This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse.

 What Does Risk Management Mean To You?  I generally tell people that the reason people lose money in commodities is not due to the fact that they are bad at predicting where prices are headed, however they are bad when it comes to losing trades and refusing to take a loss which results for heavy monetary losses that are difficult to come back from.

With more than 2.2 billion contracts (valued at $1.1 quadrillion) traded in 2007, CME Group is the world’s largest and most diverse derivatives exchange. Building on the heritage of CME, CBOT and NYMEX, CME Group serves the risk management needs of customers around the globe. As an international marketplace, CME Group brings buyers and sellers together on the CME Globex electronic trading platform and on trading floors in Chicago and New York.

LONG CALL---Maximum Loss Equals The Premium Cost

When to use: When you are bullish to very bullish on the

market. In general, the more out-of-the-money (higher strike)

calls, the more bullish the strategy.

Profit characteristics: Profit increases as market rises. At

expiration, break-even point will be call option exercise price A +