Having a Plan Before the Entry | Swing Trading (Days to Weeks)

[Music] [Music] hello and welcome to swing trading days to weeks my name is james boyd i am not john mcnichol john mcnichol is out today not feeling uh above support today so he asked me uh to stand instead and to teach this class i used to teach this class probably two to three years ago so it's uh kind of going back the whole time so we'd like to welcome all of you here here today uh george texas we also got vj sundeep uh and many others we also have a fellow instructor here as well ken rose in the chat so you if you see the initials kr just know that's ken rose many of you know him as well you can find john ken rose all of us instructors on twitter we do post educational content throughout the day and throughout the week uh uh also a reminder as we actually discussed this a couple quick disclosures the content is intended for educational informational purposes only non-investment advice or recommendation of any security strategy or account type options as we talk about those here today are not suitable for all investors especially risk and heritage trading options and also remember that when we actually talk about swing trades because they are short lived instruments weekly options require close monitoring i think that would actually really go towards swing trading as well also when we actually discuss uh examples using options we will actually mention the option greeks know what those are in a reference to and then we also realize that we will be using the paid money account here as always now also as we talk about short-term trading also remember if someone's going to trade more actively there's transaction costs should review that and say is that something you might consider or do you maybe kind of want to do a different type of trading so you got to include transaction costs when you really look at doing more shorter term type of setups so with that actually said let me actually go ahead here and uh just kind of talk about what we're gonna look at here today so first off i thought it would be helpful to actually really kind of bring up what are what what are some of the major types of swing trades okay second i want to talk about strategies of swing trades the third thing i actually want to really talk about here is bull and bear setups okay using swing trades so i'll just kind of take just a moment to take a quick look at where the market is some of you have not seen it ah well it's actually at the high of the day i know you're shocked but if we actually take a look at kind of we uh on my twitter page i i showed a picture of a boat breaking in half talking about the vix now i'll be the first one to say that that boat breaking in half of the vix was long overdue okay probably a week late okay but if you actually look at this we are seeing the dallas trying to get back above the 10 period moving average the last time we actually were above the 10-day moving average was on the fed day where they actually cut by 75 basis points the next day it pushed down but we haven't really seen a closing price above the 10 period moving average it's been a good solid about 10 days or so one thing you actually will notice is many stocks in the nasdaq were above the 10 and the 30 many of them the most i have seen in about a month okay now that's of interest because when we talk about swing trading if we're talking about bullish swing trading we would like to actually see the vix falling so if the vix is dropping down that creates an environment for bullish swing trading or maybe trend trading etc maybe buying stocks on a ball back but when an investor is trying to buy low and sell high or buy high and sell higher they would like to see that vix decline like we're in right now so with that said let's kind of talk about uh some of the things when we actually talk about the types of swing trades now if i were to ask you that question what are the types of swing trades what would you say and this is actually i i think we kind of maybe sometimes just assume oh we're going to talk about swing trading today so maybe everyone knows what that means do we well let's kind of draw it up just briefly as we look at our examples here today we're going to look and see kind of how this relates back now the first thing when i think actually about let's say uh in general let's say swing trading i think the most first thing that we probably should really learn and know well okay is channels channels could actually be where they're kind of more diagonal in nature they could also be where they're more sideways in nature now we've all heard this little saying before that says buy low okay sell high and so when the price is kind of zigzagging back and forth right and that price is going up and down the investor is trying to time the entry with the price bouncing off support buying or near the support and then trying to sell it up near resistance now i don't care if you know that i just want to see the last example you did using that okay same thing with x now this would be the first on the left would be a diagonal channel an upward trend and we're talking about bullish examples here okay so we could call these bullish channels the second one would actually be maybe a horizontal channel we're seeing many of these and what you're going to notice same idea is where the kind of the stock has maybe a flat horizontal level support with a horizontal level resistance now when we actually look at these the investor is trying to get in near the support area that's a buy limit order a buy limit order is really saying buy if it gets to that price or less okay and the second place the investor might try to get in is if that stock were to break up through resistance now what type of order would that be well if the investor is saying i want to get in if the stock gets at or above a certain price that's called a buy stop okay so a buy stop now here's the deal when the investor actually does a buy stop they're actually saying look the stock is getting above the top of the channel and the investor thinks that trend could continue the investors doing swing traders swing trades should know both should feel very comfortable using both a buy limit order and a buy stop okay now just real quick yeah now by the way this could be days to weeks okay we know these channels are not always just going to be days if it was just days it's probably not a very wide channel yeah this could be days to weeks here now what i'd like to actually do is let's kind of look at kind of just i'll bring up the second second kind of category is i'm going to call this momentum momo we'll just kind of do for short momentum and we would actually kind of label these as kind of more like flags okay and so uh when we say flags we'll also mention this could be like bull flags bear flags right let me just kind of draw this is where the price goes up the price actually pulls back and then what it actually does if it goes back up the investor is trying to target maybe kind of that prior high many stocks are in that situation right now if the stock is purchased okay let's kind of say right there as it breaks diagonal resistance their goal one of them would be to swing back up to the prior high that is called target one if that stock for example were to let's say go up even higher and the investment said james i had a higher price target i was looking for that stock to extend that's what technicians really call target two now again i don't care if you know this i don't care if you read it in the book show me the example where this investor practice it that's totally different okay we would actually just kind of say in summation here is when you take a look at this if we kind of did the bearings pull the rally same idea okay on the right hand side that's your bear flag and the bear flag is really where you had a lower low and a lower high the stock hits an area of resistance and that stock actually well falls back down to the prior low and maybe even extends to what we call target area number two now i think those flags john is actually covered very well okay i think the one thing that we could also say when you're talking about flags okay i think this is where we could really bring in the fibs a lot okay now james why are you going over this well because in our examples i'm going to reference these i'm going to say which of these patterns should we be aware of and then show me how to swing trade them all right now the last one i just kind of want to make quick mention of is obviously if we're talking about swing trades i'm going to really label it as price patterns okay i'll just call price pat for sure price pack but we know that means price patterns well when we actually talk about price patterns we know that that could be like double bottoms tilted up bottoms where we don't go down as low slanted down bottoms many stocks are in these in this situation right now but we also talk about price patterns it could be like an ascending triangle it could be a descending triangle a symmetrical triangle many stalks are also doing that as well and the last one but not least might be like an inverse head and shoulder or just uh head and shoulder okay where you kind of get more of a sideways move these would be the main patterns a swing trader they need to know like if they close one eye they could see it now wonderful but let's see some examples now okay you ready you're ready to buckle in so first off let's kind of go back and kind of take a look at the first example and i want to pull up a stock like the dow now when i say the dow i'm talking about dow chemicals now if i were to look at this right here what type you know let me kind of zoom in just for a moment of what we just saw that i drew up what type of kind of example do we see with this one okay and so here's the chart right and then let me go back to the sheet kind of let me kind of help you cheat a little bit so if i went back and said is it a channel diagonal or horizontal is it a flag bowl or bear or is it maybe like a price pattern tell me what you see okay now this is kind of what i love because it's so easy when someone else is doing it but then when you have to interpret it it's like it's a little tougher well let's kind of talk about this we could actually take a look at this and kind of say well in the short term you kind of really see maybe like a horizontal support there and maybe a horizontal resistance there so this kind of really looks like if we're looking at just kind of in the last month or so you can kind of say it looks like a uh a horizontal channel now vj actually says that kind of might be more of a diagonal channel i think it had a channel there for a little while and then it kind of broke above that i think vj might kind of be looking at let's say this and let's say something like this there was a diagonal channel and then what you'll notice is it broke above that use what was the old area of resistance and that kind of turned into the new support area now if an investor were to try to buy the stock in the bottom of the range what type of order did we actually say that would be hey i'm going to try to buy the stock if it were to go down at or below okay to 65.90 well the 6590 if the investor said what type of order that's a buy limit order right if the investor said james i'm going to set up an order to try to buy the stock if it were to break up above resistance what type of order is that it's a buy stop order now the other comment from seattle michelle is james this could also be like a double bottom and i think so i think if we said is there two of these setups that we really see yes i think if we kind of said there's only two answers we would say there's a double bottom i agree with seattle michelle and i would disagree with her if i thought it'd be appropriate but it's not appropriate here i completely agree second there's a horizontal channel okay now what's the trade idea okay so i kind of look at it as there's two trade ideas number one is the investor could say look i'm going to try to buy the stock and if you really think about what swing trading is swing trading is trying to find an area to get in where it sets up a sweet reward to risk setup but what's the problem with that it takes forethought you've got to think ahead so if you invest and so this is why it's so important with swing trading is that you you're very good with seeing trends you're very good with seeing support resistance the basics of technical analysis so trade number one idea would be a where the investor says you know what james i want to set up an order right click right around about that 66 price level right click i want to go to buy custom and i want to do with an oco bracket i'm going to set up both orders here okay so order number one is if that stock were to pull back down to the bottom end of the range and if we said the bottom of the end of the range might be let's say 66 and a quarter limit that's the most it's willing to pay and go gtc now tell me kind of how you emotionally feel having an order sitting there to get in i know what we're thinking right is that we're well how do you know it's going to go back up you don't know that right you're you're counting on where did investors get in historically you're thinking to yourself could that trend continue okay now let's kind of take a look at this so it's trying to buy the stock at 66 20 625 i want to talk about the stop so when we actually look at that stop if the investor said james i want to take 65 90 okay 65.90 less three percent that would actually get to for example a target excuse me a stop of 63 92 day to gtc now let me kind of tell you what i've seen is people just don't set up orders ahead of time they don't do it they count on them always being there to actually put the orders on a swing trader is actually trying to set up or have a plan ahead of time now when you know joe we know john has a military background john spends a lot of time with his fellow uh army uh uh troops uh where he actually kind of has a plan ahead of time of what they're going to do and so it's it's not a surprise that he actually teaches a swing trading class where he likes to think about playing ahead of time if we're actually talking about a target a the target could be to go back up to the 60 69 39 or the target could be if the investor said james i think this stock could actually try to break out of the resistance well that width of the channel is about 4.56 so if i added let's say 450 on top of this it's gonna be about a price target of about 74.90 or so right in there

so if we add that we're going to actually put this right here 74.90 now we could also now how many of you are actually thinking well james wonder if the stock doesn't pull back is anyone actually thinking that james wonder if the stock doesn't pull back see this is saying only get in if the stock actually pulls back down to the support area but wonder if it breaks out how do we change that order you can change the order let's let's go ahead and actually do that so i'm going to write down 66 and a quarter okay but let's say that stock gets above let's say 70 75 which is above resistance well how do you actually make it conditional to buy it one place or the other well just go back to limit to a market okay go over here to the gear and we're just going to say symbol down method we're going to say greater or equal to we're going to type in a number of 70-75 okay so if that stock gets a 75 buy the stock but it has to be that price or higher or dow mark less or equal to now what you're going to see in this case is it's going to be say 66 whoops 66 25 so it's really going to be buying in one of these areas okay so if we actually take a look at this it'll say wait until the following condition is satisfied okay what's one of the following conditions if the stock goes to 6 70 75 it's trying to break out of resistance if the stock actually goes to let's say 6625 do what by the shares of the dow okay so there you go so now what you're going to notice is in this case it's going to be one or the other and and i think sometimes as an investor we're always kind of counting on oh i hope it pulls back but wonder if it doesn't so now we actually have that order on top to say look uh get in if that stock were to breach resistance now remember when we kind of said which of these trades has the sweeter reward to risk ratio clearly if it's if the stock actually pulls back this is why it's so important is that when stocks pull back emotionally you kind of are feeling down right you're thinking but you you got to learn to kind of go against that when people are mentally down you got to understand those could be the opportune times to get in okay let's say you want to buy another house well right now in many places you're probably not going to get a phenomenal deal but if things were to pull back economically a recession you might get some motivated sellers that are willing to take the price that you want to give okay so understand that is we want to kind of use that down pull back in the price as the opportunity as long as we can see a clear level of support so when we go back to kind of our diagram and said which of these diagrams did we actually just really discuss well number one was a channel it was a it was a horizontal channel and the big thing about these channels is we want to measure the width in dollars of those channels that give us the price target second part of that is in this channel we actually saw that it was an example of really a double bottom okay now in this first example i just chose a stop position okay but maybe when we look at the next one maybe let's kind of compare and contrast in option position but let's kind of look and see are there any questions with uh with what we discussed so far and as we do that what i'm going to do is i'm just going to kind of go back to my screen real quick let's see what the orders are there's not a commission right there's not a commission and it's going to say buy if it gets at or above or below target price stop price sell that stock goes to that price or less there's not a commission just the capital involved okay now are there any questions with what we just talked about okay now the real proof that you understand these things if you said james i could show you an example two or three of them in the last week or two where i applied this practice that's how you really know you're starting to pick it up now if if we talk about sending that order now you're going to see that it's right there how come it hasn't filled well because it hasn't gone either down to the support or up above the resistance why are some people not good at swing trading they don't have a plan where they've committed to what they want to do they haven't put the orders in or the alerts why do you say that well because i used to stink as far as setting up a plan so i know about not being good at it the investor is committing the order is actually saying buy if it goes here or buy if it goes area above the investor is committed it's not an alert it's an entry to get in okay i don't see any other questions so let's kind of go to the next example now one of the examples i want to kind of do now john is not with us and i feel like he would only be uh you know really i think we need to do this one for him okay and what i want to talk about is fibonacci john mcnichol is the fibonacci godfather i'm kind of more like the fibonacci apprentice or the male secretary you can laugh at that i'm fine with that uh but if we actually take a look at this this is actually a stock and i think one probably other pattern that we could also include in this i'm ashamed that i actually i did not include this but it it does kind of come up in something we brought up before it's where you have like a u pattern and it's actually where the stock actually pulls back and then continues now this looks very much these two look very much similar they are well we would actually call this more like a cup and handle okay that right here where it actually drops down pulls back but doesn't pull back as far and then the stock extends now when we actually have that that is classic fibonacci material okay so where the investor what they're doing is they're really measuring where was the prior high or resistance where was the base of the cup and or support and if that stock were to get above where might that extension target be so let's do this one for john okay so now here's the deal when we're when we're kind of talking about do we take the higher the low well if you take the high you better take the low if you're going to use resistance then you better use support i like to actually look at resistance and support i don't like to look at just a high and a low i think you're looking at extremes i want to see multiple touches is where we draw the lines from so we're going to actually go to one of the tools here we're going to go up to where it says percent for the fibonacci then what we're going to do is we're going to draw the fibonacci now notice i'm not as high as maybe someone might be if they're using a high okay now again again james tell me why you don't like to take the high because i think you're looking at an outlier or an extreme data point okay the reason why i would go a little lower than that is we get more touches more observations okay more data points if we click on that right there that james are going to go down to that very low i'm not i'm actually going to go down to where we actually have more support level more touches and we're going to really draw down to about the 72 85. so when i kind of look at this kind of different types of swing trades well this would actually be kind of more that cup and handle which you could argue might be like a tilted up w pattern okay we can also call it a cup and handle now but if we looked at this as of lately was there any type of price pattern that we saw on this as of lately if this was the price graph right here what do you see well i think when we actually look at this we would say james wasn't this like an ascending triangle so remember when i kind of said this is like this is the needed tool set to be any good at swing trading if we can't see the ah ascending triangle horizontal resistance higher lows that creates a diagonal support and then doing the stock actually if we can't see that then we're going to be late we're going to take more risk and have less potential reward that's not the point of our session here today okay so if we take a look at this it breaks out and it retests it wicks right kind of back down near the area of resistance new potential support and then that stock actually kind of goes up a little bit there's two days now i want to look at this the the 98 43 that really now becomes the target okay now when we actually look at this when i see higher lows i do a very simple pattern okay i just circle the red and green candles side by side red and green candles side by side these represent so here's a higher low here's a higher low and so if the investor is actually trying to get in they might say james i'm going to try to set up an order maybe near that area if the investor said james i want to get in at a little bit lower price than where we are now what type of order is it what type of order now notice what you're going to see is when we talk about swing trading many trading days you have these larger candles right and many times what investors will do is they'll put the or their order to get in at the middle of the large candles now so we got this large green candle we don't know what next day it's going to bring but many traders will actually say i'm just going to put a buy limit right at the middle of yesterday's range a lot of times you'll see the stock it should come down to the middle of the range look at this large green candle guess what it did the very next day came right down to the middle of the candle and bounced up big fat green candle what did it do the very next day rallied up came back bounced at the mid section of the of the channel mid point of the candle excuse me so a lot of investors are trying to do that to try to sweeten the reward to risk so let's kind of take a look at this let's say the investor said james i want to try to get in maybe like a quarter above that 91 53 or 50 cents okay now if the investor actually said now i want to actually answer just a quick question okay so let's let's question from hf says how can these principles apply to a longer-term trend trader well so first off whether we do we were doing it as a shorter term type of trade or a longer term type of trade the entries could be identical reading the trend seeing the support and the entry points those are identical where the difference could actually be is what the investor is actually using as a potential target a swing trader might actually try to maybe have a profit of 6 8 10 double digit percent where maybe a trend trader might say look i want more than six eight ten double digit percent i'm looking for 30 50 percent their holding period is longer they're trying to hold as long as the trend is intact i think the exiting is different okay and i think the stops when i say exits it could be the target which is probably higher for a trend trader and the exits might be the stops might be looser when they allow the stock to kind of vacillate more etc now let's actually kind of go back to this so let's say for example the investor says i want to put an order right near the middle of the trading range again here's something a lot of people kind of know the middle of the green candle they call that s1 i'm not asking if anyone knows what s1 is they call it s for support who had the order set up that's the question right it's it's taking what you know and actually practicing it and that's what i like about swing trading it allows someone to practice principles and practices more frequently to learn faster now if we take a look at this we're going to right click right kind of near that mid section of yesterday's range going to go to where it says buy custom with osceo bracket now let's say the investor said okay but could i maybe do like a call and let's kind of look at a call option in this case now first off i want to kind of answer this question when someone does a swing trade do they only have to do stock absolutely not when i think of swing trades i think of any strategy that would probably have a delta greater than 30. okay so let me kind of draw this quick diagram we know that if someone really had a delta when we say delta think of sensitivity to direction when i think of something like what has a delta of 0 to 10 per contract i'm thinking in my mind it's probably like an ic an iron condor that is not going to be a swing trade when we actually look at maybe something that probably has a delta per contract typically of 10 to 20. that could be probably a vertical okay vert and it could be really like a s p v a short put vertical it could also be like a long call vertical maybe you could actually do that as a swing trade but still not very sensitive to direction when we start getting somewhere right about that 30 to 40 delta okay 30 to 40 delta and when i think of something like that i think of us a cash secured pet now this actually starts to become more sensitive to direction where the re where we're actually making the trade based upon direction okay it's more sensitive to direction that's what the swing trainer is really wanting give me some something if it moves in my favor where there could be a bigger reward when we actually look over here these are not about so much about direction they're really more about time okay now so in our examples of swim trading we're actually looking for cash secured puts the other one i would also include in this would actually be like a uh a long call l c okay let's say that delta was maybe let's say 50 to 60 what else might have let's say a delta 50 to 60 i would really say in this case a buy right okay a buy right bw not ben watson could be not in this case a buy right buy right cover call okay buy this whoa buy the stock sell the call okay so buy right covered call now we know in our first example if someone buys a hundred shares of stock the dealt is a hundred we know that is a very sensitive trade to direction if you don't know that by now you had not been investing in the last month okay we saw that right stocks actually take the most amount of capital and if you get the direction wrong it can get ugly the only other thing we'd probably throw in here that would be similar is probably a long synthetic so as a as a swing trader you want to know these like the back your hand uh a cash secured put long call by right cover call long synthetic long stock you got to know these these are going to be the tools that you're probably pulling from long synthetics typically have a delt of 70 probably up to a hundred these are mimicking each other one actually requires a stock where the longs and synthetic doesn't okay now let's kind of go back to the example here if we actually said james could i actually do maybe like a long synthetic where the investor maybe buys this the call where there's unlimited upside okay how much is it going to cost what's what the debit is how much can the investor lose what's how much they put in well how could they maybe reduce that a little bit as a swing trader i don't i don't think if someone said i'm going to buy the call by itself we know that if someone buys the call by itself the strike is where the investor has a right to buy but the right ain't free you got to pay for it and if they paid 266 that break even is 95 16. as swing traders you typically don't want to hire a break even you typically want a lower break even so at the end of that potential trade there could be a higher potential profit so the reason why many investors say look i'm not going to buy a college by itself they might say i'm going to go long the call and then sell a pet that might create some premium or does create some premium lowers the overall debit and lowers the break even okay let's imagine you're flipping a house you kind of bought this house yeah we're gonna flip it 30 days from now six days from now they're gonna flip it well you know if you actually borrowed money to do it every day that goes by there's interest cost the longer it takes you to sell the house the more interest you've actually uh paying for that raises up the break even on the house same idea with this okay we want to be aware of what that break even is we're gonna right click on the 92 and a half we're going to go to where it says buy we're going to go right to actually where it says caller synthetic now the investor they could do the 92s on the call and the book but if they said james i do not like that 9250 on the foot side as well because that delta is almost 50. you

don't have to actually do the 92 and a half we could just change it to the 90 which really has a delta let's say 30 to 32. now what that's going to what it will do is it's going to make it where there's a little bit more of a debit remember the investor has the right to buy it at 92.50 but they're paying a buck 22. so we can add those together ding ding ding ding and there's the breakeven about a dollar less than what it was if the investor just bought the long call now but how do you set a target how do you set a stop well let's go back let's change a single order okay let me actually kind of move that off the bottom i don't i whoa easy okay there that's better now click on single order first triggers scq okay now hf says can you be successful swing trader if you don't use options i would say yes to that okay i would say there's there's hf there's an added element of risk if an investor uses options that are time sensitive they're negative theta like long calls and long books i think there's an added element of risk there okay compared to a stock trader okay so i i wouldn't say that someone if they want to do swing training they have to use options else they could not be success i would not say that ever okay if but if someone does like long calls and long puts understand that that investor is kind of under the gun so to say for the time they need the stock to move quickly to get above that break even that's the risk some investors might say well i could kind of offset that a little bit by actually doing a long synthetic but you have to understand when you kind of when there's a positive there's a negative with this trade right here there is the obligation being the buyer the shares at 90. so if the investor takes a position if they do they need to understand that there is the potential obligation of buying those shares at 90 from now until expiration but james i'm a i'm a short-term type of investor irregardless that could still happen but the investor doesn't have to hold on to those shares they could try to sell all the shares some of the shares they're their shares at that point if they were assigned to buy those shares okay first trigger is seq i'm going to right click on that green line going to go to analyze trade now no create opposite order now what we're going to do is we're going to set the target what was the target again well we kind of said that this was the example of where we could go to limit market data gtc now james it kind of seems like you're kind of fanatical about that market gtc uh say that's fair okay the exit to get out for a potential profit or exit to get out at a potential loss or a loss we use that all the time market gtc now let's go back to the chart and remember we were kind of looking at this if this stock we were trying to get in if it were to pull back a little bit remember i think to be a good swing trader you have to be patient pick your spots where you're trying to get in so if we actually went back and actually said okay what is the potential target i'm going to say that target let's say 98.43 now that's if we lived in a perfect world last time i checked i don't think was perfect we know that these targets resistance or support they're an area so i'm going to just kind of shave off maybe about 50 cents you might even take let's say a percent off fine if we actually said james i'm kind of seeing that 88 35 that kind of being the area of support and if we took 88 35 which i'm sitting at okay that stop is gonna be 85.69

now let's type in the numbers let's go back okay click on that gear now what you're going to see is follow excuse me symbol mark method greater or equal to so when we say greater it's going to be the kind of pac-man going to the left okay go to the left it's greater than if we click on that we're going to actually type in that number where it's 97.93 now where do we get that number we said look the perfect scenario is if it goes right up to 98.43 but we kind of said wonder if it falls 50 cents short of that okay and now what you're going to notice in this case is we just kind of said we're going to set a target a little lower merck mark now remember when it's less or equal to less is going to be pointing to the right okay well my right and now what you're going to notice is we're going to type in that stop there okay and now what you're going to see is 8569 and all we want to do is when we type this in we want to make sure that the numbers that we type here are showing up down there and they are so now we have a target and we have a stop save gonna go to confirm and send now you we could actually run kind of what the math is we could say what is the delta of this trade and we could say well if the stock actually goes up to the target what is the gain per share okay you could say well wonder if the stock actually goes down what is the loss per share it just times it by what the dealt is just like he would with stock if i had 100 shares of stock if i said the stock went from 9312 up to about 98 that's about five bucks that's the gain per share and then i would ask you the next question well how many shares do you got and you said james i got 200 shares well i take a five dollar gain per share times the number of shares another way to say this delta well you got five dollars per chair times 200 shares be a thousand dollar potential gain same thing goes here now notice actually in this case we have a dollar 30 because it's buying the call and selling the put and the same thing as far as the exit now it's not going to sell it it's going to either go go to the target commission or go to the stop or the exit if it gets entered below and it would be a commission okay and notice in this case that if the investor said james could the investor also maybe buy a put on that to reduce the risk and the buying power yes okay and i'm fine with that if you said james i'm just buying a put down 75 for a quarter it makes complete sense okay i'm just not going to discuss that every time we look at the example okay but you know where if we wanted to we could just do that to define the risk on the short put side if we're gonna go ahead and actually send the order there it is now notice that both of these orders that we actually did here is we're trying to time the entry a little bit right we're actually looking to see can that stock kind of pull back a little bit where it gets a little bit closer to the higher low area potential support and sweeten that reward risk many swing traders try to get in on vacillation of price they said orders out there they're almost like fishermen here we have ken rose with this and fishermen they kind of pick their spots and they wait kind of what swing traders do okay now i'm out of my time here today if we had a little time i'd like to kind of maybe take a look at a stock maybe like amgen then it's maybe a stock that's kind of trying to maybe reverse back to the upside i'd also maybe like to take a look at the stock maybe like wdc which is kind of maybe trying to form like a cup slash flag another stock that we might actually take look at that potential bearish candidate might be a stock like kroger could it retest the 10 period moving average which is now sloping down so let's take a quick look back as far as what we covered we mentioned actually here today that the investor wants to be very clear on like what are some of the main patterns we got we need to be very good with seeing channels setting buy limits at the bottom or setting buy stops on top we show the example wonder if you want to set an order to get in at both areas one or the other we showed that number two we actually talked about flags okay john actually covers this a lot bull flag bear flag but the other part of this is we want to be like a black belt when it comes to actually seeing price patterns double bottoms okay triangles head and shoulders inverse head and shoulders but also cup and handles and when you start seeing cup and handles this is where the investor is using the fibs for potential areas of support to set a stop but also a target area so i'm out of my time here today hopefully john won't be too uh well hopefully you feel like i did a good job for him i i'd always i never want to let him down and uh so i thank all of you for your comments your questions and your participation thank you ken and rose also as well for answering those questions in chat uh thank you to all of you for your questions and i try to interject those as we discuss as well my assignment for you is to take really the patterns that we actually talked about i want you to look at some of the stocks that you're looking at and see if you can assess the patterns see if you actually can't actually set up setting up the practice orders and if you say james i'm new to this kind of idea of swim training fine just use stock trades and practice setting up those orders stops and the targets so with that said i'm out of my time here today stay tuned for our next webcast coming up right at the top of the hour and again thank you as well so with that said uh remember with what we discussed today it was done for example illustrator purposes only stay tuned for our next webcast coming up right at the top of the hour

2022-05-20 00:50

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