Active Trading Strategies | Ken Rose | 11-19-19
Chloe. Dressers, and welcome to our web, here today on active, trading so. One of the most popular, technical, patterns, for active traders, are flag patterns, both flags and bear flags how. Do we find them and how, do we trade them. You. So. Investors my goal here today is we'll all have a better understanding. Of the flag pattern, how to locate these flag patterns, and do it in an efficient, way then also how to trade them an example, this pattern here would be on pep boys notice, that the pricey underlying security, has moved to the downside, price. Centers flying security has moved to the upside and moving, down is created a lower low in rolling, over here if indeed it does roll over it's going to be rolling down off of a lower high that's. Just one example of, what would be considered to be a bare flag pattern, again, we want to have a good understanding of, the pattern itself, and then some of the different tools that we have available to us when trading this pattern in order to accomplish that goal or agenda here today will include a quick, review of the flag pattern, a little bit of what we just did well, look at finding stocks that are exhibiting these patterns, we'll, talk about the average true range and the part of the average true range plays, when we're looking at trading these patterns, then, we'll look at entering in a trade that's conditional not, only on price movement, of a completed pattern but also using, volume and also and, also implementing, the average true range within that given, time we also might want to look at a couple of of earnings trades on both target and lows their earnings are coming out here soon but, before we get too far along let's go ahead and run through our disclosures. Yeah. And just in way of disclosures, here. Just. Reminder investors, that, in. Order to demonstrate the functionality of platform, we need to use actual symbols however TD, Ameritrade does not make recommendations. Already term the suitability of any security or strategy for individual traders and the investment decision you make in your self-directed account, is solely, your responsibility. In. Here we do use the paper money application. This software application is, for educational, purposes only successful. Virtual trading during one time period does not guarantee successful. Investing of actual funds during, a later time period. Also. Just a reminder that options, are not suitable for all investors a, special, risk inherent options, trading may expose investors, potentially, rapid in substantial, losses, spread. Straddles, and other multi leg option strategies can entail substantial, transaction, cost so, you do want to keep in mind those transaction, cost before you trade. All. Righty these are the Greek's lady that I don't know that we really get adoptions, but there's a possibility we're looking at doing a a bear, flag that we might touch, up on options just a little bit here let's go ahead and and run through run through our processors so we wanted to do a little bit of a review. Of flag, patter so I'm just going to step, back here to our to, our larger screen here so we take a look at an example here of a bear flag of. One, of these flag patterns, and again this is on PEP. Let's, just let's take this off here for just a second this we can talk about flag patterns in general so. Flag, patterns consist of two things they consist of a pole and they consist of a flag if, we're talking about a bullish flag patter then you're usually looking at a stock that's in an uptrend. Going. Like this I'll just take that off I got a little bit of a double drawing they're. Just. Kind of getting. Used. To using our UST isn't our TV here so this would be considered to be a stock that's currently in an uptrend as it's, moving in an uptrend where.
We Have these moves to the upside. These. Will all be considered to be poles. And. Where. We have these moves to the downside. These. Would all be considered to be flags. So, so. In essence if we're lucky about, both lines we're talking about an uptrending, stock where, the pole is moving to the upside the, flag is moving to the downside. Now. The completion, of that pattern entails, when we, have an upward move like this we pull to the downside then, we start to bounce right here to the upside right in here, we. Start we, start, to head back up and one, of the keys with regards to trading these these these these back. Of these flag patterns, is to, catch the stock just as this starting to bounce to the upside for a bull flag or just as the starting to break to the downside with, regards to a bear flag now, the question, will frequently come up well, how how do we confirm that with. Regard to that with regards that potential move to the downside well, that's that, that's actually where the average true range comes, into play notice, down here I have this study down here I have the average to range right here and this, this is a value that moves along like this and what the average true range is telling us it's, telling us it's giving us an idea the volatility, the underlying stock you, know what, is the range that it tends to create on a day-by-day basis. Between, the highs and the lows another. Nice thing about this indicator, is it does take into consideration, gap so it gives us a nice overall. Conceptional. Measurement. Of the volatility underlying, stock for. That reason some investors, will use the average true range they'll, look at maybe maybe, with regards to confirming, a. Confirmation. Of a completed flag pattern they'll use a percentage, of the average to range maybe, it'll say that the stock needs to for example in a bull flag it, needs to be trading, above, the high of the previous, day by, 50% of the average true range by. Doing it in this way we take into consideration the, individual. Volatility, for each set for each underlying, stock, now. We, talked, a little bit about a little bit about bare flags to just second ago we'll go ahead and review those again today we can do this with with PEP here actually notice. That in. A Bear Flag situation, the stock is basically.
In. A downtrend like this once, again the stronger. Moves right here in this. Case these moves are going to the downside. These. Stronger moves these would be the poles. And, then, these moves to the upside now. These. Are going to be the flags. And, they ended and the potential, trigger with regards, to a bear flying pattern, is just, as we're breaking, here to the downside, and. How, much how much of a break do we need below bull the downside well again we could incorporate the average to range we could look at the current value here the average true range it looks like here on on pet, boys or, PEP, it looks like the average two ranges is pretty, close to a dollar sixty, so. When looking at a potential, trigger. Here we, could say okay we're, moving up here we're actually starting to move down here today, so. If we've moved down and got down below yesterday's low. And. We're trading below yesterday's low by perhaps perhaps. One average to raise or 50% of an average true range we, could use that as a trigger. Now. Another consideration is, what is volume doing, because, the ideal thing if we're if we're looking at if we're looking at flag patterns, or some sometimes. This is actually. Possibly. Possibly. Ignored. But, but it is a good thing to take into consideration it. Can be beneficial is that. As the, stock is moving up in this case with regards to this flag right here as the stock is moving up in that Flags going up then, a lot of times we'll see volume moving, to the downside now in this stock it looks like volume, was pretty, much stable, but sometimes you'll see volume move to the downside or possibly, be stable, when, we get the trigger day right, here on that cattle, on the trigger day would like to see a nice little pop, up in volume, now. The challenge. That you have here, is that, stock, could be trading, and giving us that trigger amount in, relationship. To the average true range early. In the morning it. Could occur mid day it. Could occur towards the end of the day if we're. Looking at the volume for that day and we're comparing it to the average volume and. Right here on our volume bar right here we have this average line right here if we're looking for that volume to be greater than the average volume well. If, if we get the price trigger early in the day a lot. Of times we can't, really expect the stock to have above average why because it has the remainder, of the day to trade, so. One of the things that we can do we do in a relationship to that is when we put together our or, we. Can have a volume trigger, that instead, of looking at an entire day we, can use minutes, with regards to our aggregation period, we could use like a three-minute aggregation. Period. So we're looking at three minute bars here and then we're looking for a volume bar that goes significantly, above that with regards, to the volume and we'll do and we'll discuss, that a little bit as far as how how. To set that up for a potential, order so, we've been looking at Pep Boys here. Let's, see what else we got here. Let's. Take this guy off of here for just a second, we'll sweep that off and move. That often. So. Here, we have pet boys this this just basically zooming, in on pet boys we can see things we. Can see things a little clearer this, allow me to get over here a little bit looks like so notice here there's, our there's our flagpole and here's our flag move to the upside we're just zoomed in here a little bit here on pet boys yeah, if, we want to look at some bull flags here I believe we've got a couple examples of bull flag so this would be a potential. Bull flag here on caterpillar.
Let's. See what this one's looking like so I can't a pillar then you. Can see that we. Have this move up here to the upside, now, flag. Patterns, are not always really, pretty, you know they don't always just go straight up and straight down sometimes. They'll go up the last late a little bit and then then they'll move to the downside so this would be considered to be a flag pattern, on on. Caterpillar, but, it's not real symmetrically. Pretty it comes over here gaps little bit to the downside and swimming down here so we're still looking here though with, regards, to movement and a close above the high of the sometimes. Referred to as a close above the high the low de right there if we, look at another example here, let's. Pop this off here for a second, and see. What else we got here so this this is caterpillar, zooming in now one. Of the things we haven't discussed here that we also want to discuss and this is one of the reasons that a flag pattern, is is, rather popular, with some technical investors, is because, a flag pattern not only gives you the the, technical. Pattern to look at but it also gives you potential, targets, with, regards to a bull flag a potential, target to the upside with regards to a bear flag and potential target to the downside, so. Looking right here on caterpillar, what you'd want to do in, assessing, the target, here you, want to look at right, right here we actually have a little bit of a let's. Try that again. If. You look right in here I actually have a a. Bull. Flag pattern, here pulled down here and, then it broke out notice, notice how much of a strong day we had right here a. Very. Strong move to the upside this is where it comes into play where sometimes it can be beneficial to catch, these patterns, as they're completing, rather, than waiting till the end of the day now, that now the drawback on that is you may catch these patterns, as it as its completing, during the day and it may not fulfill at, the end of the day may actually pull back so you don't have a valid. Pattern but you could be in the trade and possibly in there a little bit early well, done today here's will play the part of the aggressive, investor that would like to catch some of these bigger moves here, in. An effort to get in and catch the catch all the potential move during the day well then we came up here, we're. Kind of moving along here we've ratcheted, it down here, we, came down here it looks like we may have had a little trigger in there it's hard to tell with, the ATR we're kind of moving down here still it's, now we're looking for a bounce the upside so what. What would be our target here, on a bull flag pattern of this nature, well. Let's sweep that often let's, just look at two things let's, look at the flagpole, it. Comes up here. Let's. Look at the flag that's coming down here, if. We got a bounce and we broke when we started to head up here we, would take the height. Of. Our, flagpole right here and we, would extend it. Up. Falling. A breakout I'd. Also like you to notice something here with regards to what I've done on the with regards to assessing, this target here notice. That when I ran the target, I didn't, just draw a vertical line going up like this I took. A line here that was that was meant to be it's not perfect, it was meant to have sort of the same slope as the, pole that, preceded, this flag, because. This is something else that can be beneficial when we're looking at both flag patterns, particularly. If we were looking to película, if we're looking to trade options around them and not, only both flag patterns, but bear flag patterns as well. You. Can use the slope of the pole to, estimate, not only the potential target move up here.
You. Know this would be our target. But, also. The. Time. The. Potential time to get out to that target and with. The thinkorswim platform we. Can basically we. Can go ahead and and we can create a channel that, is indicative of our poll right here we can copy that channel bring it over here we'll do that as a sample here momentarily. So. That's just a little little, review of the bull flag pattern, we're going to shift gears here now I'm going to share my desktop here with you. Yeah. So what have we talked about well we've talked it we've done a little review of the bull flag pattern, now, we want to talk about us we want to talk about finding stocks with flag patterns. To. Do that I'm going to come back here for just a second, but. Over over here to pep boys well you know look looking at pep boys this a little bit of a cleaner flag. Pattern here just, to follow up with regards that earlier discussion, we had on polls. I'm. Going to draw a channel right here on pep, boys. I'm. Just using the channel tool that we have here okay so, this is a channel. Notice. That the top top of the channel is is right here it's, the second line down here and here's the bottom of the channel right here I can, take this channel, and I. Can duplicate, it and I. Can move it over here now we, actually don't don't have a trigger just yet right, we. May get a trigger but but we don't have a trigger just yet and and. What would the trigger be well the trigger would be for. The price to move down, below. The low the previous, day why. They pay a percentage, of the ATR now, if you'd rather just keep it simple say hey I'm just looking for 20 cents below below. The low of the, high day as, far as a bull as far as a bear flag we could do that you want to be a little bit more specific, and take into consideration. The, underlying movement, of the underlying security, then we may want to go a little bit more with with. With what we have going, going. Going down in this area here, okay. So. In, in doing this then we. Have a target let's, take a look at our target so here's our channel right here, and we, notice that the, top of our channel, is right here and the. Bottom of our channel is right here, so. This gives us a target down in this area here, I'm just gonna, this. Is our Bear Flag target, right here and where's. That target, that target. Is let's. Get a number on here we'll say show the price let's let's. Show it over here on the right. So. You have a target here of 128, 54. I'm. Going to go ahead and I'm going to right-click on my channel here and I'm going to extend, it to the right so. It comes down here it intersects so, we're looking at a target here 128, 54, on or, about. December. 4th. With, the completion do we have a completion, at this point we don't have the completion, okay, I'm. Just kind of looking at a little bit here I'm just going to make a note here. On. December. 4th right here ok on. Or about provided. We provide. We get a completion now why, do I want to keep in mind a potential, target date here well, if, we're looking at bare flags and perhaps we're looking at maybe a strategy, perhaps, selling the stock short, or something along those lines, then, then then then the date would still be handy, but it wouldn't have as much importance, as if, on a very, situation, we're looking at using a very strategy, for example just, buying a put option for. Looking at buying a put option we have a target and a date then we can use the analyze tab to give us a better picture of what, the potential profitability is with regards to that particular strategy, and that particular movement. Nope. So, we have this a measurement. And we also have the time right there part, of what we wanted to discuss though was finding, stocks with flag patterns, so. How do we do that well one way to do it is to have a watch list I have a watch list over here this, is a watch list of stocks that we, actually use in my in, the class that I have for advanced option strategies, we, also use it in some of the other classes I think I think I think it fits well here with regards to active trading as well this is a listing of stocks that, has that. Most of all these stocks provide, weekly options for options traders. The. Liquidity on the underlying options, tends tends to be fairly fair. Fairly good. If, they also the options are generally quoted in penny increment, as well and, I try to have representation. From from all the major sectors now. If you look at my list right here you'll notice that I've got some, shading, in here, and I've got these little squares here on an. Apple computer you have squares, here if we, were on a on, a on a on, a night on a Windows. Type computer, using. A Windows operating system. Rather, than squares, would have emojis, there some. Of those emojis, would be pointing up in some of those emojis, we'd be pointing down, now.
Notice On my listing here I've got a listing here stocks I've got, about 66. Stocks in here. But. Notice at the very top of my list, I have, PEP which is a Bear Flag I have h al, here it looks to me like that could be a bull flag and. I've got several structures so very, quickly I pulled up some potential, candidates, there's, a couple ways that we can look for flag patterns first of all we can bring up her watchlist and we, can just start going through the stalk so let's come down here we'll. Start down here at the bottom. And. We can tie our watch list in two I'm going to go ahead and tie this chart. Here, momentarily. Now. Let me do this let's. Come back over here. To. Caterpillar. Yeah. And, I'm gonna tie this into, our. Listing here I think you do just come through your it comes through your listing here. And. Let's. Give a little bit longer timeframe here enough time so we can see things unfold, and. We, can look for some flag patter so this one here doesn't, look like it has a flag pattern here I'm. Not seeing a real clear flag pattern there this, could be a bear. Flag pattern however notice we came up here and we're trading above this the, the, top of the pole here for a bear flag that usually invalidates, it okay, we could continue, to go through our list here and possibly, find some candidates, here, is one potential candidate, here in Garmin most, we've moved up here we pulled down or gate we're getting a little bit of a bull flag bounce right there that would be a potential candidate. We. Could continue to go through our listing are listed in this way okay. Or, another, possibility so, that's one, ability and and that's that that's something that's that doesn't. Take a whole lot of time if you have your charge set up if, you want to if you want to do something that may get you there a little bit quicker at the risk of possibly, leaving one or two stocks out you, could use a custom column. A custom. Column script that look specifically, for flag, patterns, this is one that I put together and again, in a Windows environment you'd. Have emojis, here there's, our caterpillar, stock there's our movement to the upslide now pull down, there's. Swk. Yes again. Again, not not super, symmetrically. Pretty but movement, to the up siding to pull down notice, that notice that these are flag patterns, without, completions. Okay. A pull. Up here and a pull down there axp. Notice. Our pull up here I'll pull down here so these are these are without the completions, but this allows us to do it, allows us to play contingent, orders on there, we.
Can Also modify this somewhat, here's, a movement up here to pull back here and then here's PEP. With our potential bear flag going on right, here. Another. Thing we could do is same thing type of thing is you could come over here let's look at Garmin Garmin. Is actually a bull flag with a completion today. You. Can do a custom column, that has completions, in fact let, me just give you a little bit of a heads up here let's come back over here for just a second investors. And. I'm going to take. This little drawing right here and we'll edit the properties because I want to add something over here and, that's going to be. Right. Here, okay, so just, a little bit of a heads up and that is that, you. Can follow me on Twitter, and my. Twitter handle is at KR, o se underscore, t da the, reason I mention this is is. I'm going to be posting a, a. Custom. Column, that. Is going to that will that is just going to look for completed, flag patterns, you know technically, completed, flag, patterns, which, would be looking like. Garmin. Here we have the pull up notice, we're currently trading above the high of the load a right here if we, zoom in on that a little bit moving. Up here pull back in a bounce which, is which is going to be 5 some investors some investors are just interested in what's, going on at the end of the day and looking for this well some investors, we're, playing the part of the investor here today who wants to have the pattern without the completion, so, you can put in a conditional, order related, to that okay but, but I did want to mention that to you if you're. Interested in more of the completion thing that you may want to come, in here to Twitter and find me on Twitter because, I've had a couple of notes I've already posted this one on Twitter. And. So you'd be able to find that one on Twitter as well so if you don't have it by seeing if you've pulled up on Windows you instead of seeing boxes, here you'll see these nice, what, I think are really cool emojis, going on okay but. But. On Twitter I'm, also going to add another one that's going to have completions. There rather than just the pattern itself well, now so. So, how can you do this then when we're talking about talking. About finding stocks with flag patterns, well one. Thing you can do is you Sisson to use this you can use you can just take a screenshot right, here of this link with.
This Link you, can you can quickly build, a column, that has the emoji that's showing you both flags and bear flags. The, key part of this link is actually the last seven digits. So. If you want you could write this down I'll repeat them to you the last seven digits are its uppercase, K uppercase. T uppercase, X uppercase, P lowercase. Z lowercase. E and, uppercase X those. Are the last six digits with. Those with those six digits, here we. Come in here and I'll edit our properties, here I just want to copy these last six digits here. You, know maybe it's not going to let me copy them. But. I can do this another way I, should still have this, in. The computer's, memory so once, you have this okay, you just come up here to setup click on setup come, here to open shared item and in this box either tape in tape, or paste in here, the, link so there's the link so if you want it you can just use the whole link which is what I have here or you should be able to just type in the last seven digits the same thing then. Once you have this then just. Click on preview. Click. On open. What. It'll give you a rename you definitely want to rename it you want to give it a name, going to call it AAA here. Test. But you want to call it something else. The. Reason I'm calling an AAA test, here is because I, don't. Need it I just want to be able to find it easier so, I can go in and actually delete, it at another time okay. But, you want to type in flag or something along those lines then, just say ok then, when you want to bring up and use that custom column when you're looking at your watch let's just do a right click on symbol choose. Customize, then, over here under, available items, it'll. Be right here under the name you gave in fact if I scroll down here and find my AAA there's. Mine okay. So, if I wanted to move it over here it would just be another column. Giving me the exact same thing as what I'm having here so I'm not going to do that. Okay. What I did, want to show you that in fact. If. I can I like to delete it you know the problem, is it gets a little bit tricky to leading these we won't go, through that process here. Let's. Just say cancel, and. We'll say cancel, then. Once you have it loaded up you can just sort by it again, you, know Windows environment, you get emojis if you do use an Apple computer you. Might want to send me a direct, message on, Instagram and, say hey I use, an Apple computer have. You got a version doesn't use the emojis I've got that as well and I can send it I can just like in direct message on. Twitter. And send that out to you as well ok so, that's. So these are those so those are some ways of finding stocks with flag patterns we talked about the HR a little bit earlier what it represents. Entering. Conditional, orders. With. Regards, to price. And. Volume. How. Would we do that now that we've discussed some of these things. Well. To. Enter in a conditional, order then what would we do. Well. Would. Want to note where. We're at here, let's. Pull this up a little bit, and. Let's pull this up a little bit what, is our ATR value, first, of all how do you get your 8 ers on your charts right here, well. When you have your chart up just come up here to study click. On study click on edit studies and then, over here on your studies. You. Tell you just type in er you'll get yer a chair and this is just the standard ATR study right here so. Click on it choose add selected it comes over here on. These studies if you want to see what they do when you're looking at them over here just click on the question, mark right here. Looks. Like it's not coming. Up in our Windows environment, you click on that question mark it will come up and describe it how. About here can we click on it there no it's not going to give us anything there, that's. Ok we've. Already we've already talked about it basically we're looking at is we, had looks at the price movement over. The last 14, periods if you use the default value, right there looks, at the price movement over the last 14 periods and it, gauges, the volatility. From highs and lows on on each one each one of those days ok. So. We have that added, notice I also have volume, here we, talked about the challenge, of volume, if, we wanted to have we. Wanted to incorporate volume. In our mix here then, we would also want to look at not.
Only The price coming. Down below here, and we'll use half of an ATR what's. Our ATR our 80 are here on pips is. 151. Our. Movement, today is about 16, inches 16. Cents. So. If we went with 151, after. That's going to be about 0.75. Cents. And. That's. Going to be below this candle right here I'm, actually going to set this order up for, tomorrow and. I'm. Going to look for it to be, half. Of an ATR below, today's, low just. Because we're a little bit late in the day here it doesn't look like we'll get a fill here okay, so I'm going to put it in for tomorrow and I'm going to give it I'm going to actually give it two days to. Get down below this low right here now it may go up and, in that case I may want to go in and adjust the order okay, no. Initial e we'll set it up to. Set. It up to give it two days to get down below this low here. So. Looking, at that then, how. About our conditional, order look like well because, we're moving to the downside, we, want to make some notes on, some of our numbers here. And. That's going to be what's what is our trigger going to be. What. Is our target and what. Is our target date and then. What do we want going on with volume, okay. And. So. Our trigger then half, the ATR, is 0.75. Let's, see if we can pull up a calculator, here and see we got. Good, we're playing the part of the Ambassador that's looking at things towards the end of the day today and so it's looking to be at 0.75. Below, today's, low which, is currently, at one, thirty. Four point oh seven so I'm going to take one. Thirty-four. Point. Oh seven, and. I'm going to subtract, from that half. Of the Average True Range. Neveress. Your range is about 151, so I'll subtract from that, seventy-five, cents. Point. Seven. Five and this. Gives me my trigger so I'm saying hey if. The price drops two I'm just going to make a note here folks let me make. A note here she can see me while I make it my note. I'll. Call this trigger. We're. Looking at it as a trigger from the standpoint of the. Of our example, here that's just this is just an example here. Just, just for our example, here an example trigger, so. If that occurs and what are we looking to do well we're looking to purchase something that will benefit, from downward. Price movement. And. One. Of those possibilities would, be a stock option. Now. With regards to using a stock option here let me just back, up a little bit here folks and say that there's, this session it's, it's it's assumed this is considered to be an intermediate, session. So, it's assumed that you do have a basic understanding of, investing, and what's a stock what's the dividend.
What. What is an option, what's a call option what's a put option not necessarily. A lot of the more complex, option strategies what simply is a call and simply as a put if, you feel a little bit weak in those areas by all means continue to join us here today love having you here today and. I'll try, to verbalize, things so that they so that you can understand, them okay but, you also might want to if you feel a little bit lost on some of these things even our technical, stuff here that we've talked about a little bit loss on them I'd encourage you to attend some of some of our getting started sessions. Or getting, started with investing, sessions, and those, are on those, are those are those are at 11:00, a.m. Eastern, Time, one of the ones is getting started with stock investing, by Connie Hill she does hers on Thursday, to, have him on Mondays Tuesday, don't, we we kind of skip it on Wednesday but then we have them on Thursday and Friday 11:00 a.m. Eastern Time we have my technical analysis, getting getting getting start with technical analysis some of it some of these other key areas so so you might want to check those those, out as well okay. But. Let's, look at it from that standpoint then so we have a trigger at. 132. 133. 32. I just, want to jot down our, target, have. A trigger then we've got a target price here, of. 128. 54. This is a target, for example we don't know if we're going to hit that you know it looks like on the way down here we could we'll have we have a support level here to run into as well and, we in, a situation, like that we may want to get a heads up in the event we run into this in fact let's. Do this let's come over here I'm, going to duplicate, our, target. Line right here. Activate. This and. Move. It up here to our support level right here I, kind. Of have a couple of targets couple target dates okay I'm going to go ahead and use this as. Our as our target date but. We also might we also might want to have an alert in here at about 130 162. But target. Of 128. And. What's our target date I'm going to come to the outside of the channel, here, even. May even go over a little bit further and say 12, 4, is our day. So. How would this order, look like then and we also want to squeeze in a volume, confirmation. On this as well. I'm. Going to take this I'm going to take this step by step because this is going to get a little bit complex. But we'll just take it step by step it looks like we have plenty of time here to put together this order so. We'll come up here to the trade tab. And. We want to be on pep. P. That's. Unlike this so we got some access here well. Do. Too - are you gonna get some access. Well. Let's try to get it another way right now we're look, like we have a freeze going on here why we got a freeze going on here folks. -. - well. We may have to draw some things out here, hmm. Let's. Go back over here to our charts. Yeah. And I'll try this. Here. We have Garmin. You. Know what. You. Do have a complete freeze out here don't we. Trade. Over here. Unlink. All. Righty that's always a special, special. Event occurring here isn't it. Let. Me look over in the chat window to see what we got here anybody, got any suggestions. Yeah. So Francisco, I'm not, sure about fixing those emojis, on windows oh I. Will check into that you. Know there you know perhaps we can have a perhaps we can have an Apple version I'd like to have that because I do I do enjoy using Apple computers. But. The current version I don't have that but. Monitor. Analyze, hey. Maybe we can use the analyze tab to, put, in some orders here. Analyze. Tab at simulated, trades, we. Don't want to do Garmin. Really. Try. Another mouse here maybe we got some. Well. Folks that is a, bit. Discouraging. I guess you could say. We'll. Figure this thing out though. Oh. I don't. Want to waste waste all day there so what do we want to do here well, let's. Do this. I. Really. Wanted to I. Had. A I had a plan here that I think would be great. Hey. Butter folks I'm going to log out of this baby then I'm going to log back in. And. We'll give it a shot this way because I like to do this if it's at all possible, hate. To burn up some extra time here but. So. Far we do have time. If. You'll bear with me bear. With me here for just a moment we'll. See. If we can get beyond our little roadblock here. We, may not have all the goodies we had on the other screen but. It. Looks like so far so good. Trade. It. Looks, like well that looks weird. But. I'll take it. Okay. So we, have our date in mind which is December, 4 so this is where the day comes and it comes into play first if we're looking at doing an option. We.
Want It we want to give ourselves enough, time to hear our targets we're looking at hitting our target on December 4th, we. Want to give ourselves more than enough time so let's come out here to these December, 13, so that's now, this this is how long that option contracts, going to go this is a put option contract. The, put option contract, gives us the right to do it gives us the right to sell the stock at the, strike price. So. Think about if you buy a put option contract. You're, buying the right to buy the stock of a certain strike price if the price goes down you. Still have the right to sell to the existing price when you purchase that option contract, price, goes down that option contract actually increases, in value. Let's. Go in here then and we, just want to have the right to buy it at today's price which is $134. So, here's one hundred thirty-four dollars it's, one hundred thirty-four twenty, the, closest we have here is $134. So, let's go with this we're gonna come over here we're gonna click on ask. To. Buy that option contract. Well. We want to buy the option contract based, on price, movement, and also. Based on something going on with volume. So. How are we going to do that, well. Here. We have our option contract, let's, come over here we're going to click on our gear, here, when, you click on the gear this gives you the ability to trigger an option contract based, on price movement, plus other parameters. Click. On that I'm just looking it looks like my heads getting chopped off here if. I go down little bit let, me let me come down I'm just gonna grab a chair here folks, so. I'm not getting too, far out of the screen for you. This. May make me a little bit low though. Yeah. I think that's probably a little bit better you seem a little better ok so, here. Is our here. Here's, our option, order. Screen. Right here. Now. Down. Here we, have conditions. This. Is where we can put our conditions, in both, related to price and also related to volume. Let's. Come over here I'm going to click on symbol right here it says it says PEP. I'm. Going to tab over it. Says mark that's going to be the price of the stock not the option PEP mark and we're, looking for it to actually be less than or equal to right I think. It automatically, fills in less than or equal to because this is on a put option screen rather than something else well. What do we need that price to be. But. We need the price to be at our trigger price which is 100. $33.32. So. Let's tap out of that and it's a little hard to see on this screen hopefully. We. Get everything on that. Okay. What we'll look at it we'll look at it in a little while to double check it there's a way we can double check it here so, that's one condition we also want a second, condition. And. This condition is, going to be related. To volume. Okay. So. Let's, hit this and, where. It says mark here. I'm. Going, to come. Down here and I'm going to choose study and. Then for study I'm going to come over here and choose edit. And. We, should get a little etta box coming up here here's our in a box. And. I just in, doing this I just noticed, something here folks notice right here says submit. When at least one of, the following conditions is, met we, want to submit it when two, of the conditions, are met so that, basically means we're going to have to do a little bit more work here. So. I'm going to ask you to follow along with me okay. I'm going to go step by step I'm, going to click on on our on. Our add, condition, right here so let's say out of condition. At. A condition and, the. Condition we want to have is going to be related to volume. Volume. Is found here under price I believe. Let's. See. Volume. So. We want the volume to be greater than, and. Over here we're going to choose a. Study. Which. Is going to be average volume. Or. Possibly, volume, average. Right. Here. Well. You may have region, for the late here on the volume average I'm going to go with 15. And, how we do it on this we good. Well. Let's put on here save so we, want volume to be greater than average what I'm gonna go ahead and click on save here notice, my time frame here is D for day. I'm. Going to change this to 3 minutes. This. Makes it so now we're now looking at more of more of an intraday. Spike. In volume then. We've come up here and click on our think script editor, right. Here notice I have this this, little sentence, in here, a little, bit hard to see I.
Make. It bigger this way. So. This is this, is this is scripting, in here okay and. What. This says it says simple moving average. Simple. Moving average. And, volume. Is greater, than the volume average length, I just. I don't need this simple moving average I just need volume, is greater than the volume average, 50. Minute length so I'm just gonna take. That part off of there. Okay. So. Now we have volume is, greater than the average volume, and. I've. Got the average volume using a length or period of 15, but this is going to be 15, 3. Minute bars so. It's gonna look at the average volume over the last 45, minutes. Okay. And we, want the volume to be greater, than that then, comes into play how much greater do we want it to be well. For purposes of our example here we'll use. Will. Use we'll, use 3 percent, and, we're talking about internet charts, okay so. We're not talking some of those huge well we'll go ahead and use 3 per saying you may want to go with a greater, percentage that you may want to stay with that but let's, use 3 percent so I'm gonna put, this in brackets. So. This is greater, than the average volume, that I'm going to come over here and I'm going to put a multiply. Sign. I'm. Going to put. 1.03. So. When this is true that volume is greater than. Well. I'm it's greater than what volume, is greater than. 3% of the average volume for the last 45 minutes now. Because I saw this thing right here submit, one at least one of the conditions is Matt that. Suggests, to me I want, both conditions, to be met not just one so, I'm going to add to our little scripting. Here okay, I'm. Gonna choose and. And. Close. Closes. Closes the current price when, you're talking about things for clothes the current price I don't worry too much about learning things script right here okay because. What I'll do is all I'm going to copy this so, that you can copy and you can just copy and paste it into a thing script editor for any order that you're doing okay so don't worry about you, know why are you doing this hey this stinks for pizza but don't worry about that I'm going to copy it I'm going to make it big so you can see it you can take a screenshot of it then then you can just then, you can just use it in that in, that way okay, if there's, a way to make a link here I'll, also post it on Twitter. As well so. We want the coals to be what we want the clothes to be less than what. Was our target price our target price was, 100. $33.32. That's our target price, okay. I'm, gonna copy this now why. Am i copying it. Because. I might, want to use this same I may, want to use this again when I'm looking at doing another order, I'm. Going to look for wine to be greater than the average volume of 15 minutes 103, I need to remember to set this at 3 minutes probably. Also want to include extended, hours when it first opens, it's taken in consideration volume, that occurred in the pre-market time so. Got that copy now I'm gonna go ahead and say okay here. So. Both of my conditions, are here so I'm gonna go ahead and delete this one, because. I just want to use this when this related both price and time, hey. So, when this occurs, I want I'm looking to purchase the put option what's, that put option going to cost me. Well. If, I leave it if I leave it if I leave that it's gonna then it's going to come in here the way it is right now it's going to come in and say okay I'm willing to buy the put option but I'm only willing to tape a. $209. Per contract, it's moving right now su 10 right, then go with that I don't know what the price of put option is going to be the time I do know that these options are relatively, liquid other words they wouldn't be part of my watch list over here so, I do know that I'm comfortable just saying I'll, just come in and purchase it at the ass price at that time which. Is which is close to the same as the market price the, market price shifts a lot so you're not absolutely sure of getting filled that point how long do I want this order to be in there I want. It to be in there for I, want to cancel you order. Not. At the end of today's trading but at the end of tomorrow's trading, and. Mountain. Time the market closes at 1400, hours so I'm just going to put 1,400, hours in there then. We click on save, and. Then I have my order right here now.
How Are we doing on time it looks like we have a little bit of time here. So. We wanted to get the time I, want. To share that script with you though so they so that you can use it okay and and. And you don't and so you can use it in a way where you don't have to learn things script okay so. Do that I'm going to come back over here to our chart. Okay. We have this in here, I'm. Going to open this up and, it properties, I'm going to put another sentence, in here. Which. Is that script that we just did. We. Move it over here so you can see it activated, the drawing. Okay. I'm gonna have to make it a little bit smaller. So, let's do that. The, properties, and, let's bring the size down and. Get. It on there 36, it looks like maybe so. Alright, so that's so let's the script you can take a screenshot of that. You. Know I don't think there's a problem with me so you can go you can go ahead and take a screenshot. Of this script. Right here I. Don't. Think there's a problem with I send this over the chat window. Let's. See if I can do that here. Let's. Try this so this this is script by the way folks I'm not recommending the, use of this I'm. Just throwing it out there as something that could be used so. What, I would recommend is you go through these steps there, on a paper trading account kick around with a lot of them I'm not, recommending its, use here. We're. Here we'll just shift this around into a bull flat. Duplicate, that I'm going to move it over here. The. Bottom is right here. The. Top is up here. See. Here's the bottom, bottom. Here. Here's. The top top. Here, so we're, gonna go over here and. There's. Our target here and what is their target well. Let's. Show it on here show to the right. There's. Our target so our target is. 120. Let me just I'm going to jot this down here investors target one, twenty five. Forty. It's. Going to be so, so, this is so, this is actually our price target, that's, our price target right there one twenty five forty, and we're looking to be there at. At. About. Eleven twenty seven. Now. There's, one there's one thing that we didn't do in the interest of time on the put is if you can actually gauge the. Value what the value of your option contract, will be at that target day. So. That's that, is, that. Is something else that you can do and to do that you go over to the analyze tab because we have that little glitch, where we weren't able to pull up symbol a little bit concerned about time so I didn't go there but do keep in mind that is something that you can do as well so. What is our trigger here then well. If, we're looking at today and you know one thing you could say is I want to be above the high the low the above the high the low day or, you can say above the high the previous, day it's it's a personal choice I play, the part of the investor that wants to be above the high of the previous day, okay. And that's going to be for, tomorrow's trading that's going to be today and what is that high and, high is gonna be it. Is. One. Twenty. Forty, five what's. The current value, here on a exp. Of, the. ATR. It's. Not interesting, it's almost identical. To what we were looking at earlier it's it's a dollar fifty, right, so, we're going to add 75, cents to this one then to. Get our trigger. So. Let's pull that up here. So. We're gonna be at 120. Dollars and. Forty-five. Cents now we're gonna add rather than subtract. 0.75. That. Gives us a price trigger of 120, 120. 120. 120. That's. Taking you to consider the average to range so. How, would we do this then let's see if we do a little bit quicker and well do is we'll go ahead and use a call option here, just to kind of make it sort of an apples apples comparison, of course it is an apples because once a put in once a call which are totally different options, but an options to options comparison. Okay. So, our target date here again was eleven twenty seventh so we want to come up here to trade. So. We need to get out to, November.
27th. Here's November 29th, let's come out here to the 6th of December, and, let's make sure we got the right stock axp. Okay. And we're coming out here to the 6th of December, right here well. Just look at the call. Options closest, which is a 120. I'm. Going to click on that and. We, want to come over here and find our gear and we're, gonna come right down here where it says symbol, we're going to tab, over I'm. Gonna come over here and grab our mark we're. Gonna say study we're, gonna say at it. And. We're study yet of box to come up looks like there it is I'm, going to come right in here to think script editor, if. There's something in here like simple moving average we just delete it. Key. That we're gonna paste in what we had previously. There. It is right there we just paste in what we had this, is a bold flag though okay, we're. Going to say volume grade 103, remember, we want to change this to one minute, actually. We said three minutes page. 8 a three-minute the close has to be greater than our target. And. Our target is. 121. 120. 120. Let's. Put that in. 120. 120. And. It'll say okay so. Now that you have this now that you have this copy just copy and keep it in a Word document or you want you just paste it and you'll find the think script editor clear, what's out in there set, your aggregation, whatever aggregation, while we're playing the part of the investment once she's three minutes you'd use whatever you want to then, make sure to adjust your percentage, here if you want it to be more than three percent or less and then, also your target price here call, closes, greater than put closes, less than will, say okay here, okay then. What order we want to trigger we're not sure where it's going to be right so instead of saying we're. Gonna read instead of putting a price here we're saying we, feel good about our watch this we're just gonna go with the market order at that time meaning, that what, do we mean we say you forget about our watch since we feel like there's not too much slippage, between the bid and the ask price on the underlying options, and. How long do we want it to go out well that again. Will be a personal choice let's, say that we're okay, taking. It out here to, Thursday. When the market closes. And. Market. Closes at 1400. Hours. Mountain. Time, so. Go ahead and say save here, and. So. We've got an ask limit. Oh, this. Is something and we actually may have forgot to do this on the foot so I want to underline this over here where this is duration, is that it make, sure to set that to good till cancel, I won't have that to good till cancel otherwise I'll actually cancel, the end of the day I don't believe we didn't do that on the put we did it on the call we also would want to do it on the put if we wanted to stay in there not only for today but then, for all of tomorrow as well to, cancel when we have it set in there to cancel so don't forget to, set this line, here far as duration don't forget to set that to, good till cancel okay, all, right investors, look pretty much wraps it up here for today so, what have we talked about here today. Well. We, basically talked, about both, flags bear flags. Where. To find him how to trade him we went through the mechanics like. Encourage, you all of you to basically do what we did here today you. Know look at look go. Ahead and put it over together a watch list go. Ahead and use the custom column, I'm not recommending it, for use I'm just saying hey go ahead and try a see see what you think about it find, some potential candidates, go, through the mechanics of putting in some paper trays see.
If It's something that that, is that is something that you feel could be beneficial, some traders will find it beneficial some, traders may not and that's fine I also like to encourage it to also. Stick. Around here for our next session which is would be coming up here in a little while that's going to be technically, speaking with Connie Hill we've, talked about both flags and a lot of what kind of talks about is technical, analysis, as well well. With that everybody, then just reminder that in order to demonstrate the function of the platform, we, need to use actual symbols however TV does not make recommendations, or, determine the suitability of any security or strategy for individual investors any, investment decision you make in yourself triggered account is, solely, your responsibility everybody. Best, of success you're investing, thanks for joining me here today it's been great being able to substitute for John here well. Actually I'm not sure if it's John or I think, I'm substituting for somebody else actually but, but great, to be able to be here great to be able to substitute for Pat Pat and, I know the path I know the path is going to be back here tomorrow, I'm sure many many of you miss miss, Pat I know I know that we've missed, him. Here as well look forward to look forward to getting Pat back here everybody, again, hope you have a great week and we'll catch later we'll see you thanks again bye. You. You.
2019-11-25 14:11
