Pullbacks to Diagonal Resistance | Technically Speaking: Trading the Trend
[Music] [Music] thank you hello and welcome to trading the trend weeks to months my name is James Boyd we'd like to welcome everyone here today hopefully you had a great day so far my day's been wonderful if the afternoon is good as the morning be incredible alongside with me my good friend Michael fairborne in the chat and we'd like to welcome him remember you can follow him or any of us instructors on Twitter we do Post educational content there daily check it out I also want to give us a quick reminder that this class is on trading the trend weeks to months so if we looked at a weekly chart we should be able to at least see some bullish upward momentum to the upside or a trend on the weekly chart that is in an upward Trend and or above support so that's going to be our focus and we talk about stocks and we talk about auctions as well the options we'll talk about could be things like cover calls uh could be long calls cash secured puts short put verticals things like that nothing Advanced okay kind of more of the basic options and we'll use that with stock so just real quick as we're getting started I want to give us a quick reminder that the content is intended for educational informational purposes only not in uh not investment advice or recommendation of any security strategy or account type options are not suitable for all investors special risk and active trading options and also remember if we talk about creating Futures and uh Forex that involves speculation not suitable for all investors and also when we talk about Futures and Futures opportunity if we do understand there's a separate disclosure for that uh prior to trading Futures take a look at that and there's also a separate disclosure for trading options characteristics and risk of Standards options I've read the whole entire thing I think you should too there's some good material in there check it out now just real quick when we talk about the paid money count we're going to be using a paper money account for educational purposes only and when we do that we will be also talking about past performance just because maybe something worked in the past doesn't necessarily mean it's going to work in the future when we talk about options remember that options uh we'll talk about things like Delta gamma Vega Theta and how they apply to the options strategy so with that said actually let's go ahead here and uh hop right in so first off I want to actually talk about just briefly the quick Market view remember on Tuesday when we actually uh we talked about a market routine given the trend condition whether it's one through five we talked about that if you didn't watch the class from uh Tuesday check it out I want to talk about uh kind of where the market is I want to talk about kind of preparing for that next step the last time I checked after one comes two and two has some very easy routine steps that I want to talk about and uh I'll piggyback off what we did at the end on Tuesday and then we're going to talk about using doing application of a trend routine steps for condition number two of the trend and then what we're going to do is we'll do some quick portfolio management stocks and options in the paper money account so with that said let's go ahead here and just hop right in and I'm going to go ahead and actually pull up uh the platform just briefly I'm just going to bring up SPX Mickey D's I I'm not saying anything I'm just saying it was just right there so we'll just have to stick with that now let's take a look at the SPX now if some of you are kind of lost in terms of I don't understand what you mean by the trend condition that language I'm just saying where's the stock in relationship to the moving averages if price is below both moving averages well that's called a number like we call it a number one okay and there's certain things that we might consider given that type of trend situation which I'm going to tell you and we might want to consider those now if we kind of take a look at the last couple days we have fallen down this 3903 and there has been some neutralization of maybe the Bold versus the Bears you kind of seeing maybe a little range being built and then today we actually came right back up to let's say the 10-day moving average now what I want to do is when you take a look at let's say the NASDAQ pull this back up if we actually look at this zoom in on this we went up to the 10-day moving average kind of faded off the high a little bit but same idea maybe trying to get above that 10-day moving average now there was a question and I responded on Twitter some you asked James why is the big money account showing kind of like the four examples of bullish trades that I did yesterday well remember what I said is you know you will get stocks or you will tend to get stocks that break out ahead of what the indexes do that's because investors tend to cherry pick or they try to buy some stocks that they think might have some relative outperformance they don't always wait until the indexes go up before they start buying some of their favorite stocks okay that should make sense the last one watch you take a look at is Dow Jones and you'll see that that looks very much like the s p maybe a little neutralization volatility if we actually take a look at that now this is a good sign or a bad sign is volatility dropping down below the 10-day moving average a good sign or a bad sign you got to remember this okay if the vix is above its 10-day moving average then that probably means stocks are below their 10-day moving average if the starts to fall below its 10-day moving average Falls below that probably means that stocks are probably having a higher likelihood of getting above their 10-day moving average meaning if this breaks support probably stocks breaks or break resistance which by the way that's not a bad thing now I want to kind of just uh just kind of go back to this something just real quick and I want to kind of talk about this as we actually bring this up see if I can't oh it's right there too many screens my bad okay so I want to kind of talk about this so there was a question in chat and I'm gonna just kind of hit this right now so when we talk about we just kind of label this trend condition and don't worry we're not going to spend too long on this but I think it's important to kind of recap and I'm just going to label one two three four five okay and the last time I checked there's uh there's not a copyright on on saying one through five okay and as an investors you can categorize information how you like okay you can think for yourself okay just like I'm gonna do for myself right now so what we're actually looking for is if we say Trend condition number one we're saying price below the 10 and 30. now I wouldn't even get like thinking in my mind like what is it the EMA or the asset forget it we could just say price below the 10 and 30. make it simple okay price above 10 but not the 30. this is bullish
momentum okay now in this type of situation if we started getting trained condition number two this probably means that we're seeing a break of diagonal resistance foreign last match it 10 times at least if you were to look at people that probably do better in the market over time the ones that probably do better are those investors who probably look for stocks in Trend condition number one to get in and I'll back up for just a sec but they try to buy stocks in Trend condition number two when the stock gets above the 10d moving out why because that's when the stock has more bullish than men now I want to go back to number one just real quick so when you get stuck below both the 10 and the 30 that means that that stock could be falling down to maybe I'll just label it as a support level and I don't care if you said it's a horizontal diet I don't care support level okay when you fall down to that support level there also might be a bullish Matty Divergence now the whole purpose of why we as bullish and metrics care about number one is this actually has an interesting backdrop and the interesting backdrop is higher volatility okay when we kind of take this column out now if you're not writing this down or at least really paying attention well it's going to take you a long time to figure it out okay if you understand these Trend conditions then you can kind of think about what type of strategies might you do what type of actually uh duration of Trades might you consider what type of sectors might you consider now so number one is interesting because it's kind of like a stock Pickers Market at that point because things have been sold off and they've been falling down to support when you fall down to support you might start to get some bullets might be divergences you might also get start to get those W patterns as we talked about yesterday now number two if we start to see the price above the 10 but not above the 30 this is when we get that sling in terms of or I should say in terms of bullish momentum this is the first step of actually making higher hives First Step you break the diagonal resistance that's the first time we've actually been making higher highs and if you make those higher highs you could get those higher lows now if you all of a sudden they actually get higher highs and higher lows okay price above 10 and 30. well what do you actually see here this it price broke through okay diagonal resistance and when you make when you broke through Diagon resistance does that means you made a higher high and if you get above the 10 on the 30 that probably means you have higher highs and higher lows okay now my gosh when you see higher highs and higher lows this is bull flag Mania okay bull flag Mania BFF I'm actually kind of feeling like a hat coming on here bfm bull flag Mania okay now when you if you were to ask someone when you tend to do the best in the market it's probably train condition number three when the stocks are above both moving averages that's the common denominator and when you have a stock that's above the 10 in the 30 that's when you tend to see higher highs and higher lows now the last second last thing we'll say is just price above 10 okay and 30 bought up near an area of resistance okay that's four and then five label is opposite of two now two was what type of momentum two was what type of momentum well two was bullish momentum so what would be the opposite of bullish momentum well bearish momentum okay bearish momentum okay now you might be thinking to yourself well James I don't have the skill to be able to really read this well I'm not asking you to if you use the transcript that's actually just right on my Twitter page you could actually just steal it and it would tell you what trend condition it most likely is so when we talk about five we're talking about the opposite of two it's bearish momentum okay this is when the price is falling okay price falling down to an area of potential support but let me ask you something here okay let's just let me give you a quick quiz if there was a time where the investor says I probably don't want to buy they would probably say hey James I'm not really thinking about buying here because that might be the falling knife and the price hasn't fallen down to an area of support if we said where might the bullish investor look to get in what trend condition type it in now if you don't type it in it'll tell me that you don't understand it okay I'm speaking English okay I'm writing it down for you I'm slowing it way the heck down and now what you're going to notice is this is so stock like it's kind of a joke right we haven't said option I haven't said anything about options this is just straight stocks this is technical analysis welcome to the world of technical analysis so if we said what is that maybe the earliest time where the investor might consider maybe looking to get in well the time you consider to get in is in number one right because those stocks have fallen down to support level they might have a bulls back in the universe a little W pattern and there's probably higher volatility when you have higher volatility that's where the investor might say could I maybe sell an option and maybe actually apply what's in the online course well that'd be interesting wouldn't it now if someone said James well where's the first step of kind of a stronger sign up more bullets matter well if I read what I wrote the first sign of the bull is momentum where the investor might say James I'm going to start to actually buy some stocks here maybe based upon breaker resistance the first sign well it's number two and if someone said James what's that confirmation of the trend where they actually making higher highs and higher lows well if I read what I wrote It's actually number three now so this is all wonderful and great but wonder if I can't really read it and remember it well fine you don't have to if you actually went back to what we actually talked about and the reason why we have this if I actually look at this the color here and if you don't mind you're going to see that the color of the candles aren't they resp they're related to the trend so number one I just label it as a red colored candle and you'll see that over here on the left hand side when the price is below both moving averages is red when you actually see a number two we kind of think of it as like a springtime color okay like green and then we actually think let's say number three well we just think kind of like darker green and then we actually think if we're in number four I like to think about like the fall like where things might start to turn in terms of the weather we label that as really number uh we orange okay leaves are changing which probably means Colder Weather could be coming and then if we actually said what's five well five is just kind of where the things maybe turn a little purple okay and so those right there these colors are actually now related to what you actually see on the chart okay so if you knew what the colors were and why they matter then you actually understand what I wrote and then what you see on the chart okay now if you said I don't actually have that could you share this view on the chart I would love to share it because I'm a sharing person okay and if I actually did this I could actually put that right there and actually let me go ahead and put this right here now one of our agenda items is we wanted to talk about the the quick Market view we did we wanted to also talk about kind of recap the kind of what type of routines might the investor consider in Trend condition number one see a lot of times people ask about routine steps but I don't I used to think that you had the same routine steps every day and and I don't I don't do that in my personal life if today is Saturday I have different routine steps than I do on Sunday if it's Monday I have a different routine step than I might do maybe on Friday based on what's going on so when I look at the market the first thing I do is I ask myself what is the SPX showing so I'll pull up the SPX and the reason why I use that is the barometer if I look at the SPX okay and I look at the color of the candle and it's red and I go back to my little sheet and says price below the 10 or 30. okay it lets me know that when I look at probably 60 to 70 percent of stocks it probably tells me that many many stocks more than not are following what the s p is doing now does that mean that all stocks are showing the exact same thing of the SPX that's not true but it's a minority okay now what happens if the SPX actually turns into number two well that probably means that there's more individual stocks that are starting to be there that have been correlated and they're moving with the svx okay so what happens if the SPX goes to two and then it goes to three then that means the likelihood of us finding bullish examples we could probably close one eye and still see many many examples on the chart okay now I want to kind of recap where we finished off on Tuesday because Monday was Labor Day and we talked about on Trend condition number one we said consider maybe a number two entry let me actually go back we said step four consider your maybe a potential number one entry is selling strategies why well because you have higher volatility okay selling strategies would be like what what would what would the selling strategies be well selling strategies might be like cash secured puts whether stocks down your support it also might be short vertical puts now we also said maybe consider I'm doing those on maybe higher beta stocks it doesn't have to be but those might be the ones that let's say might be down near this area of support first and diverging now we also said maybe consider maybe looking for some stocks that are breaking up through diagonal resistance so if I said but I don't know how to find those James well we would say we could just run a basic search and said I just want to see stocks above the 10. if you did that thing by itself you would be plucky those stocks that are sure are starting to regain that boss momentum okay and then number uh six we actually said consider pending orders on the BuyBacks of covered calls because if the investor does not want to cap themselves out well the biggest actually thing is they might want to try to set the buyback of the call that way if the stock were to kind of re-go back up they're not tapping themselves out okay now that's kind of the conclusion of what we said on Tuesday and I want to now kind of talk about what might be some routine steps now the reason why I'm just beating this routine step is because when you watch many many people on the internet they're talking about the market they talk about the market but it's just all over the place it's random and if someone actually had a routine steps it wouldn't be as random would it it would actually be a methodology a pattern a system steps whatever you want to call it so I'm going to talk about two and I'm going to show the application now first step I want to talk about is identify how bullish you are we did something on Tuesday and we said very simply we said we're going to go to the monitor page and we're going to make sure we're on the old layout and the way you go to the old lab is if you click on the three lines we just said old layout is right there and all we want to do is we want to actually just look down at the bottom and we want to look and see how many shares and or Delta do we have and it's 900 and we said we wanted to take that number and we want to divide it back into what number uh the account balance so if oxy on that sheet of paper we just want to for example take that little 900 now notice this is where we were on Tuesday we had 677 Delta now if I said the Delta now is 900 is this account more bullish or less bullish Are we more bullish if I have more shares or Delta am I more bullish or less bullish oh we're more bullish okay now if I looked at the account value and said what's the account I got 134 374 and now we see what is the percent bullish this is just taking the shares or Delta divided by the account value that percent is telling me how bullish we are okay now the question got asked and I'm going to kind of hold this just real quick okay now let's hit it right now okay so let's kind of let's look at this portfolio and the question was asked about well James could you talk about the adjustments we talked about well remember we mentioned we said we want to look down the table and we want to look for anything that maybe says negative so in other words if it has negative Delta is this a bullish position or bearish so if we exited this position of Halliburton well that would act if we exited it would it make this number down here less or would it make it higher it would make the number higher so I'm actually trying to account for that if these bearish positions were let's say stomped out or we exited them what would actually happen to the portfolio so if I actually said the protection or the hedges uh in this case would be 91 what you're now going to notice is the overall portfolio will go from 900 add the 91 back and now what you're going to see in this case is it's going to make the portfolio have a higher number of shares and or Delta which means on a percent basis it's making the portfolio more bullish why do I care about the percentage well because what happens is if you're not watching the percentage you're probably underperforming the market okay now let's actually go back so that's what that's what I'm doing there just looking down the table and saying are there any stock or option positions that for example are negative if I exited these positions by exit what happens to that bottom number it increases by because this not negative 91 is subtracting off that number and that's what's making it less if I actually bought it back it adds 91 to the bottom that's all I'm doing okay now let's actually go to Let's kind of talk about how we might consider being a little bit more bullish now step number one we actually talked about identify how bullets we are we just did number two review them if you took off defensive positions like short calls long puts bearish positions how much more bullets would it make your account well we could actually see we really if we're talking about a stock or option position we would go up a little bit we'd go up about 91 shares or Delta it would go from 0.67 to about 0.7 now if I said my
goal was to go back up to one percent I I want to kind of look at this and say how many shares would I need to get to one percent now let's kind of let me write this down if the goal was one percent how many shares or Delta would I need and this is actually astonishing when you actually see this you're like wow it's not as many as I thought well if I did this I would really need about 300 uh excuse me 300 1343 shares so if I'm sitting here about 900 I'm going to look to try to add about 400 more shares in or Delta now what has positive Delta what has positive so if I say language like positive Delta that's really like saying long calls long stock right uh long synthetics short plus any strategy that is bullish okay so our goal here today is we're going to try to take this 900 and we're going to actually try to get this number to about 1344. so if my ball is one percent of the portfolio balance to be bullish we're gonna actually try to raise that Delta now number three it actually says on the Delta uh on the Delta breakout the goal is to add potential new positions so I'm going to be looking for stocks that are down near an area of support and maybe some stocks that are breaking out now do you think we could maybe find some okay now what I'm going to do is I'm going to actually pull back up the platform and I've got I've got a little stock here let me kind of see if I can't maybe look at a stock I'm going to bring up an example and the one I want to really bring up is I'm going to bring up a stock for example like uh Morgan Stanley now I want to kind of go back to uh something I wrote on Twitter earlier today and if you didn't see it well sad for you now the thing is I can write stuff and post stuff on Twitter but if you don't look at it then then you kind of miss some of those insights they're not recommendations that I write and I probably Post 10 or 15 things a day in terms of the markets or retweet things so if you're not on Twitter today's the day to get on it now what you're going to notice is if I zoom in on here on the right hand side let's look at the color of the candles as simple as it gets we know that if the stock is going up green candles are our best friend ever okay because that's when the price above both moving averages when we actually see orange purple red you don't need someone on TV to tell you the Market's pulling back because you could actually look at your own chart and say yeah no kidding Sherlock right that's what you're probably thinking in your mind you're thinking if those candles are orange purple red especially with the red you know that it's pulling back you know that those sellers in control at that time you know that even though you might be brand new now if we start to see a green colored candle what is that maybe starting to tell us perhaps now let's go back to kind of what we wrote down when I go back to that of that yeah there it is when we start to see a green colored candle I'm thinking back of my mind what does it mean what does it mean what does it mean well that light color green it's priced above the 10 but not above the 30 we're potentially regaining boss moment let me go back to the chart and you notice yesterday that price closed above the 10 but not above the 30. huh interesting and then today why is the color of the candle green well the color of the candle is actually green because why the price is above the 10 and 30. so this is where we might start to really well the price is actually breaking up through diagonal resistance we could be starting to get into the some of those higher highs and higher lows well I want to start thinking what type of bullish strategies might the investor consider now this class is on trading the trend weeks to months so when you look at this we might be looking for some not just short-term type of bull Flats we might be thinking about something that might be a little bit longer term this flag is probably something like this or this bull flag is probably something about right cheer now remember when you get into Trend condition number two that's when you're probably seeing the stock really break out of diagonal resistance and load and bold I mean do you realize you probably wouldn't even have to draw a diagonal resistance if you just had this transcript on here it's kind of interesting kind of helps you see and by the way so the color of the candles also tell you something about support and resistance and I think it does and I can talk about that now let's say the investor said James I think that the price might try to go back up to 95.61. maybe that old area resistance
now this is actually where the stock fell down from okay now let's say the investor that she says you know what I want to do is I want to try to buy the stock okay and I want to buy the stock only now if we buy the stock only what's the Delta if we buy a hundred shares of stock remember Delta is the sensitivity to direct profit loss so if we buy a hundred shares of stock well the sensitivity to direction would be a hundred meaning if the stock went up a dollar and we had 100 shares then we'd be upper we'd be up a hundred dollars on realized profit stock went down a dog we had 100 shares we'd have an unrealized loss of a hundred dollars okay now what we're going to do is we're going to set that Target right around that area of 95 I'm going to say about I'm going to go about one percent below that 94 80 or so I think that's probably about one percent below resistance I'm going to go data GTC we got a data GTC and then when we actually look at this when we actually go to stop we're going to take this old area right here maybe this little line and we say this little line can we draw that and kind of get a little plateau of support and what you're going to notice is we're going to put a line right about 84 and a half let me take my calculator four and a half last two two to three percent we're taking two and we're going to set that stop right here 82 81. okay 100 shares in stock now remember we said our goal was we're trying to actually get okay we're trying to go from 900 to 1300 okay so trade number one okay that is really going to be a hundred shares is really going to be Morgan Stanley okay now I'm going to bring up a situation in just a second okay that is probably going to be very common so if we actually look at this if we go confirm and send remember it says with stop orders there's no guarantee that this execution price will be equal or near the activation price what is the activation price well the trip wire is the stock price of 82.11. this trips to be sold at this price or less stops can be filled at a lower price we understand that we're clear crystal we're actually now going to send the order there's not a commission just the capital and we're going to send it now there can't now I know this has never happened to you okay never happened to you but Mike and I know some people friends of ours okay even outside office where sometimes maybe the investor might not have a lot of money left to buy so this is where those options come in you know anyone that maybe wants to buy but they say Dad government I don't have that much money okay now but they still want to really trade the Trinity so in this next example what I want to do is I want to look at a stock like met now what I want to do is if I look at a stock like net one of the things I posted earlier on Twitter is on many of the charts that we're seeing we're seeing so many inverse Head and Shoulders I mean it almost made me want to buy The Head and Shoulders shampoo or conditioner whatever you want to call them turn it upside down because there's so many of them now James literally now I'm just having a little fun with you okay now what you're going to notice is I'm gonna actually draw this so if you say I can't see it we're seeing kind of this drop down fall down in price run back up fall back down run back up so if we could have had to draw a line and say where are we kind of getting maybe the neckline that neckline is probably about right help me out 68 or so right about right there now we might say now how many of you know someone that says I'm not going to get in until the stock breaks 68. you call them back up and say man you got here because the stock got above 68 and they're like no I I didn't get in I just was saying that so you would stop uh pushing me right so the question is is someone really saying they're going to get in at 68 are they really are they just saying that okay now I don't think the proof of really uh focus is application and maybe setting alerts or pending orders now what I'm going to do here is one way if we said you know what James we're kind of running a little low on Capital I still want to have bullish exposure but is there a way to leverage the trend well option number one is to buy a long call that is the most basic thing to do the second way we could do this is like what we talked about yesterday we can really do what's called a long synthetic which sounds so complicated until we really think about it we know one of the first things we learn in basic options is two types of options are bullish if you talk about single-legged options long call and a short put if you combine those you create a just a more bullish position now what I'm going to do is I'm going to pick the October expiration and you know what I like I'm going to go down to November and you know why I'm going down in November because there's more stinking open interest right there 4600 tighter bid ass spread 20 cents 10 cents on the put side you got 13 000. oddly enough the backdated months November they're higher than this than the Octobers so we'll just kind of shut that down and we'll say We'll look at October novemberists don't typically see this but what we're going to look to do is we're going to buy the 65 which is a bullish trade and we're going to also sell that 65. so we're going to right click on that buy go right down to where it says color synthetic and then what we're going to do is it gives us that what the debit is the debit is what it takes to get into the trade Cash Wise but we need to also include the buying power effect the buying power effect is the money that's set aside for that potential obligation to buy the shares at 65. the short
option now uh Michael I'm going to come to your question in just one second because that's actually one of the routine steps that we actually just that I wrote down okay we're gonna hit that now the one thing what I want to do is I also want to kind of see can we set a Target in a stop we're going to come up to where it says first triggers scq we're going to actually right click on that green line just like we did yesterday and say uh create opposite order and we're going to put the Stop and the target so if we said where might the stock actually go up to now the thing is we can't just say 67.88 because we're thinking that the price might try to break up through resistance so if it broke up through resistance we're thinking where might it go up next well if the stock actually broke up through 68 we might be thinking could that stock try to go up to 67 60 what 73 excuse me and if we said well what might be a little plateau of support well we might kind of be thinking 60 40 64 86. so let's look at this so what I'm going to do is on this graph I'll leave it there I'm just actually looking at what the stock could be and I got about 63.56 okay so here we go let's let's strap in here so let's say the investor says James I'm going to set a Target now by the way look at this look at the high look at the high look at the high there's a lot of highs if I said am I going to take the highest point on the chart well you could and you could be wrong but if you're saying where do other investors probably see it and how would we know the answer that well where we get more touches that's where they probably see resistance so I'm going to take my 73 and I'm going to put it down a little bit lower and I'm going to say that Target might be in the vicinity of let's say 72 and change if you take the high you're really counting on an Easter Bunny Santa Claus scenario then it's going to go up to the highest point okay you're looking for something perfect which might not happen okay now what I'm going to do is I'm going to put a 72 Target and a stop at 63.56 so here we go we're gonna actually come back down we're going to go to limit Market dated GTC just like we did yesterday on the cars and synthetics class we're going to click on that gear and then what we're going to do is we're going to actually come to where it says met method we're going to say greater or equal to and we're going to type in the number 72. so
if that sockets is 72 it's going to exit those options if we said well if it were to go down where well if we go down to say 63 56 or whoop oh or lower okay we're saying exit the position okay and we see that the numbers we typed in here match here you have to make sure that says that if it says 0 down here and zero here you did not type in the number and press enter okay save now wonder if we did two contracts now let me just kind of throw this in here for a little fun if we did two contracts let's go back to our little sheet of paper here so if we set trade number one with 100 shares of Ms in our example and we said look trade number two was 200 Delta of example given uh met now wait I thought we were trying to go from maybe like say 900 to 1300 ish that's 400. so in two positions 100 shares of Morgan Stanley which takes more Capital Stock and Two two contracts of men this now gets us how many Delta in two positions how many positions well I should say how many Delta do we get based on just putting on two positions how many I'm going to tell you right now people I've done this for 25 years most people have not a clue how bullish they are no one ever explains it to them no one ever explains that maybe if they want to get back up what might be a target range that's comfortable for them okay that I talk about on Tuesday that I'm talking about again today when I show people this I explained that I'm like you know what Now by the way I'm going to add one more piece to this if we all we did was we said you know what we just want to get up to about one percent if we put on trade one of Morgan Stanley trade two have met and we said hey our trade three uh we saw an exit of hallibur which had negative 90 Delta do you realize that we would go back up to about 400 Delta based on three positions that we could have put on in five or ten minutes people don't have really uh a focus or a clue that so few positions sometimes can get them back up more bullish in their portfolio I didn't say 33 positions if we took two positions and we had an action of the marriage position it would get us back up about almost 400 Delta this should be surprising to you because people think I got a manage so much but actually that's not necessarily true now if we said that James by Hedges are actually 250 well then it would even be even more if you just exited the cover calls the protective puts of the collars if we got in Morgan Stanley got in the Met exited out of the bearish positions or hedges based on three simple baby steps we go up to that target range anyway okay this would make sense if you had a focus this would make sense if you actually had kind of an area in which you were comfortable but no one's explained it the purpose of this week of me teaching this is to where when I drive the car I'm comfortable driving at 55 I'm comfortable driving at 75. but I'm not comfortable driving a hundred and when I manage a portfolio I'm not going to typically just go outside ranges based on my comfort zone everyone here has kind of a different comfort zone and when you track the percentage you find where those Comfort zones are for who for you okay but without tracking a buy percentage you would never catch on to it okay now what I want to do is I want to see there was a question and the question was as follows but before we actually go to that question let me and I'm going to take the rest of time on questions what I want to do is I want to read this order now remember it's a long call short put got a Target at 72 and uh accidentally goes to 63.56 or less two contracts due
to potentially wider liquidity risk of the time of activation this order may may be manually substituted with a limit order upon activation and worked until filled with the intent of trying to get a better price okay all right that might take a little longer though so if we understand that we see a commission of 260 because it's two contracts gonna send the order now one of the questions that I saw before was uh the comment was Michael says uh one of the comments was from Michael about let me let you just go back it was actually you can have a green candle for two days and on the third day it can go down okay so one of the things I wrote step number four was avoid panic on a down day so what I mean by that is when we actually have stocks let me kind of bring this up and I'm just going to use this med as an example right so the stock gets above the 10 gets above the 10. gets above the 10. and oh no Jerome Powell spoke in the market went down on that day but then we actually go back to the basics and we actually say wait did the stock break support well no was the candle red yes stock still above support though avoid actually the Pentagon down days especially if the stock is still above support now what you'll find a lot of times is you can have down days one two three down Days A lot of times but then the stock actually pops right back up even though Jerome power whatever who just sets it and then the very next down day it goes for a down day and then what you'll notice is that is another example of close above the high of the low deck okay oh my gosh someone said something again and the stock went down red candle and what you'll notice is if you just ask yourself the question was it is it a red candle where a broke support and if the answer is it did not break support then the investor who has experience would say you know what it is absolutely likely that the red candles are a part of the trend the red candles are actually what make the higher lows but we already knew that because else how else would you get higher lows higher lows are actually when the stock pulls back pullbacks are red candles the higher lows are the red candles where the price stops going down and the price starts going back up and what you'll notice is one of the things I wrote is avoid Panic on the down day watch for higher lows okay look for potential new ad points go holds this is an example of a cold right there that's an example of a cold right there that's an example of a cold right there and if you said but James I can't see the kaholt don't worry there's actually even dots you can put on the chart that they would actually show you those potential codes right on the chart so everything that I've talked about has scripts that can be helpful in identifying that so don't feel like you have to do it on your own if you went to my Twitter page right at the very top you'll actually see that it even has right on the top of the Twitter page if you want the whole dots right on the chart it's right on my Twitter page remember I said again I can put it out there but you got to do the effort at least going to the page and actually looking at it now I also put even little videos of how to put those on there right on my Twitter page like two minutes or less now I'm out of my time here today we said our goal was to really actually talk about the market quick view we said want to kind of focus on talking about potential routine steps in train condition number two we talked about what those Trend conditions are we talk about the routine steps that the investor might consider in condition number two we also did talk about uh putting on two new example trades as well I'm out of my time here today but I want to thank you so much for your comments and your participation thank you so much I did try to also include many of those questions as we win as well this would be us the class on Tuesday and you look at the class today you might make some notes for yourself on some routine steps that you might consider when we're in these type of situations and what you'll see is it just kind of keeps happening over and over again and each time you see it you want to actually be more a uh in a better position and also kind of maybe more offensive or thinking what tends to happen next how might I put myself in a better position to take advantage of what might happen uh instead of getting taken advantage of at least that's what it seems now with that said remember with what we discussed we talked about doing this for example Illustrated purposes only thank you so much for your comments
2022-09-13 10:08
