Swing Trading Days to Weeks | 11-5-19 | Ken Rose CMT
All. Right investors, it looks like we have a little bit of a sound issue there I'm going to do a little bit backtracking, here just so that we can have our our, sound to go along with this so again do want to welcome you here to our swing. Trading day suite hopefully the sounds coming through okay now my. Name's ken rose and as always it's great to be here to discuss investing, in the stock market, so, where. We at with regard to the stock market well we're, we're marching along as some of these all-time highs looking here we got the opening bell here it looks like we opened up just a tad above where we're at yesterday so maybe after that strong to the upside then, a pulled down in the market and then a bounce to the upside right now we have this strong movement to the upside but we don't have that movement to the downside of course there are a lot of stocks however that. That, don't necessarily, follow the market and there may be stocks that are actually bouncing, up today with, the market after pulling down we'll take a look at some of those with, regards to with regards to our swing trading here but my my goal here today investors, that everyone, will, have a good solid understanding. Of. What. Basically. What's what swing trading is some of the key characteristics you're looking at in relationship. To that. And. And also. The part that that targets, play and also volume, and some of those things as well just. A reminder you can follow me on twitter at @, KR ose underscore. TDA on twitter, i do post things related, to not, only swing trading but in addition to that price patterns, and also things related. To the market in general and wave, descartes's your investors, just to reminder, that that paper money applications that we use here it is for educational. Purposes only successful. Virtual trade during one time period does not guarantee, successful. Investing of actual funds during a later time period as market, conditions do change continuously, also. In order to demonstrate the functionality platform. We need to use actual symbols over TD, Ameritrade does not make recommendations, or determine the suitability of, any security or strategy, for, individual. Traders, and always keep in mind that there's, always risk, of loss in these things when, one word when we're trading in the markets we realize that we realize that that's sort of a sort of one, of those expenses.
Related. To doing business we just don't want those expenses, to be so great that, we don't have any profitability. We. May touch upon options, here just a little bit here's a little bit of a review here, with regards, to options the Greeks tell the Gamma theta Vega and. Theta. On those options, so just reminder that you also do remember that options. Trading is not suitable for all investors especially. Our special, risk inherent to. Options, trading, let's, go ahead and get on our way here then so, in order to accomplish our agenda here today in, order to accomplish what would like to accomplish here today our, general could we'll talk a little bit about price movement, related, to swing trading we'll, talk about volume. Related. To swing trading we'll, talk about targets. Related. To swing trading we'll talk about using the ATR. As a tool to aid us in relationship. To swing trading we'll. Talk about a customized. Column, that you can use to identify stocks. That, perhaps are exhibiting some, of those characteristics, of, a swing trade particularly a column that goes out there and alert, and searches, for stocks. That are currently giving bull flags, touch. Upon a little bit upon building a momentum watch this then we'll look to possibly do a paper trade, time. Permitting, as well alright. So let's go ahead and get underway here with regards to price movement, here ok I'm. Just gonna pull. Up something here quickly that will aid us in this discussion here, should, have it up here momentarily, so, you know generally speaking when you're looking at price movement, as it, relates to swing trading I'd, say that I'd say that many technicians, are looking primarily for, two different things one. Is what's called a bull flag pattern, and the, other one is called a sideways, channel because. Both of those both of those price, movements. Are those price patterns, provides. An opportunity for, a swing trade and provides, an opportunity for a swing trade that can be measured. Hey. And we'll, just let's. Let's start off here by by just kind of showing this I'm right, now we're on SPX I want to pull up a stock here we'll pull up Adobe here it looks like we well, look at Adobe, looks. Like possibly we have some positive news here for Adobe this we have this big gap to the upside so this this is actually a completed, bull flag pattern, we'll talk about that it, may be considered, to be a little bit on the extreme side but. Nonetheless a, bull, flag pattern, just. Grab a little drawing tool here for just a second we'll look at it in relationship, to this. So. What are we currently looking at okay. No. Thanks Matthew appreciate, it so. What. Are what what, are we currently looking at with regards, to swing trading well. Actually, we we have a couple of samples here with regards to Adobe usually. We're looking for a stock that, is. Trending. To the upside. Going. Like this and notice. This is trending to the upside if we look at the peaks that are created, also. Sometimes, referred to as high also, sometimes, we refer to as resistance, it's, giving mine Peaks highs, resistance. Three. Different words for the same thing and, also, notice down here these troughs. Right here also. Sometimes, refer to as support, also. Sometimes, referred to as as, a. As. A as, a support, level as a trough as a, as a bouncing, area you know those those types of in areas these these, are all troughs so usually.
When You're looking at at swing trading you're looking for an uptrend, like this where we're getting higher, highs, and higher lows, or. Looking. For a downtrend like this. We're. Coming down and we're creating, lower. Lows and, lower. Highs. And, from a swing traders perspective, with swing traders looking for they're looking for this pattern these, patterns, right here, are called bull flags if I. There's. One bull flag pattern, right there. And. Then here's the second bull flag pattern. Right. Here here's, a third bull flag pattern. Right. Here and here's a fourth bull flag pattern. Now. Down down, here we we have what we have what are called bear flags. And. This would be our first. Bear. Flag pattern right here so, so. What are we looking for from a swing traders perspective, well. We're. Looking for first of all the pattern the bull flag right here then, we're looking for an entry and, typical, that typically, that entry will occur as we're. Bouncing, off that support, level when, we're in an uptrend or as. We're. Breaking. Down. From. These resistance, levels, when. We're in a downtrend. So. This is this is the essence, of the. Pattern, we're looking for the visual pattern, there, is however another important. Consideration to. Keep in mind here and that's, what is volume doing, in relation, like. Because. Volume can have a material impact on, the effectiveness. Of the pattern and the, likeliness, of the pattern to hit its target which, we'll be looking at momentarily, here as well so, what are we looking for when. The when, this part of the pattern is forming this is commonly referred to as the pole so. The movement to the upside here, is. Our. Pole. It's. Usually considered, that under, normal circumstances. It takes it takes more volume. To, push a stock, up than, it does to push a stock down that that's that's just that's just what would be considered to be somewhat typical there. Are times when, a stock can be moving down on, very strong volume. And if a stock is moving down on stron very strong volume, it usually doesn't represent a, pause. With. Regards to the overall momentum to the upside which does happen usually. Represents, something materially. Weak as going on with the stock so. Sometimes, when volume, is increasing, as a stock is pulling down sometimes. Those may not make the best, of the, bull flag patterns, because there could be some underlying material, weakness and you may not get the bounce with a stock find support, so, as the pull develops, what do we want for him to be doing as, a pull develops right here we, want volume I'm just gonna come down here in our volume graph here. This. Isn't perfect here okay. But. Is this pole right here. It's. Developing, would, like this move would like the moving average line in volume. Whoops. I'd. Like it to be moving up like this it doesn't doesn't have to be moving up they. Excuse me doesn't, have to be moving up in a dramatic, way but, would like to see a little bit of a slant, to the upside. Then. As the. Flag develops, which is right here. You. Know these are little flags right here that's that pull to the downside. As. Those Flags develop, what's the ideal situation from a volume perspective, as a as, a flag develops what like thought would like the moving average line. To. Maybe stay sideways, or maybe just drift down by a touch, and. Then. When we get the bounce when we when we bounce we start to head up like this. Did. That bounce we're going up like this what would, we like volume to do would, like volume to would like to have a nice little pop, in the volume bar will actually like to see a volume bar on the, day of the bounce would like to see the volume bar to, move above the, moving average line, right here that, would be the ideal so, what are some of the key things to keep in mind with regards to volume, if you're looking at if you're looking at bull flags right here well.
You'd. Like to see volume. Increasing. With. The pole. Then. You'd like to see volume. Decreasing. With. The flag, then. You'd like to see volume. Increasing. On. The. Bounds. So. You can keep that in mind if maybe I'll spend some time and try to figure out a kind of a catchy acronym. For, this pfb. Isn't yeah I don't know that I don't know that I don't know that that is a great acronym all right now. When you're in a downtrend, things can be a little bit different here. Because. As I mentioned stocks. With regards to moving to the downside they tend to move down just fine without an increase in volume. So. Slowly it's a little bit it's okay it's a little bit more of a challenge, when when things are moving to the downside, with regards to assessing, what volume should be doing now. We would expect we would expect when the stocks moving up like this, moving. Up towards that resistance, level for possibly volume to be a little bit higher because. We are moving up and. We're, also because, we're moving down here would like to see would like to see volume maybe, maybe. Maybe, be, somewhat neutral here but, in either case whether it's a bullfighter whether it's a Bear Flag we. Would like to see volume pick up as we're. Breaking and moving to the downside. So. Those are some of the key, characteristics, to take into consideration with, regards to volume, notice. Here with Adobe. Looking. At Adobe here let's just see, we're looking at here with Adobe, I'm going to get rid of these guys on Adobe. This. Would be our flagpole. This. Would be our flag and then, there's our breakout, right there I would, suspect because, of the size of this move right here it's a little bit early in the day now to know what's gonna go on with volume here but I would suspect there's a reasonable. Possibility, that we could have a pop. Up here to the upside when, it stock gaps as a result of news. Can. Look at the gap and see because it's. Actually not unusual for a stock to gap as part of a completion, of a bull flag pattern, now, let. Me also bring up this because, I just noticed this with with regards to Dobby what's it Dobby doing. There's. A law, there's. A high there's. A low there's. A high there's. A low there's. A high Adobe. Is in. A downtrend, enchant. So. When we're moving up here, okay, when. You're when you have a downtrend, you wouldn't be looking at this as a bull flag now this, little formation. Here came as a result of our little formula. Over here which while. It can be helpful it's it's it's. It's not going to be perfect, you know as its you know we could add some things with regards to trim we like to keep it simple because, of this this, because. We came up here though because this high right here.
Is. Would. Actually like that to be a little bit higher than this okay, and it. Looks like we're, about equal, ideally. If we're taking a bull flag out of this I'd like to pull to come up break. Above this previous, high before we pull back in a bow so this this isn't a great solid. Bull. Flag type type of a formation that we would typically see okay, if, we're just looking at this area, here and ignoring the trend, we. Do have a movement, to the upside. Flag. And then and then a break up here and then and then again the gap the movement up there up, there to the upside now. Because. We had the gap and, the. Gap is significant. Some. Some traders will hold off a little bit on that they'll look at that gap and they'll correlate. That to the target, related to the bull flag so. What is our target here, well. Our target is typically going to be let's grab a little drawing tool to look at that. Our. Target. I'm, gonna grab a little square, here for a second. Our. Targets typically going to be the height of the pole. The, height of the pole extrapolated. Up I'm gonna duplicate. This. Extrapolated. Up from the breakout point. So. Here's our target notice, on the gap here how close we've come to our target. That. This is where a gap now we're actually sliding back after the gap but, we've. Reached we've reached about it'll, be interesting to see where we closed today but, we're already more than, three-quarters. Of the way to our target and in relation to the open but we're also fading, so. The fact that where we gapped up 3/4 away and now we're fading that also would make it not particularly, an, attractive. Bull flag type of a situation. But. We do want to keep in mind with regard to our targets, that, the target is going to be the height of the pole extended. Up from, the breakout, point of the flag itself. Now. This is a bull flag pattern, notice, over here what do we have going on here with Adobe, I. Basically. Have a sideways, shadow where we're moving sideways, and when you have a sideways channel, you. Measure the height of the channel now this this would also be considered to be swing trading because, remember. That swing traders, typically, aren't aren't in it for they are not in it for the trend they're, in it for that initial, swing. Okay. And if we have a sideways, trending stock like this we're, basically looking for a break to the upside or a break to the downside. Or. A break to the upside it's, give us a target up here, and a. Break to the downside. Would. Give us a target right here, notice. That we broke to the downside, we moved, down and it, took us a little while we kind of we came back up here but eventually we did hit our target to the downside we didn't get a break to the upside. So. What is a swing trader interested in doing. Once. We break down below here they're looking for the trend, to, stay in place and for. The stock to come down here and hit that target once, the target is hit and the stock starts to show some bullish movement a swing. Trader is okay to get out of the trade at that point in time just a. Little bit of a heads up here with regards to our bull flag discussion. Here. What. Is the swing trader looking, at looking to do the swing traders looking to enter.
Enter. Here, with, the first sign of. A, bullish movement, following the pullback and they're, looking to. Exit. Here. Looking. The exit here with the first bearish, sign after, hitting the target, okay. First. Bearish sign after hitting the target or if there's a very sign before then they're okay entering that as that as well but, once they hit the target that's going to be the ideal but, if we're if, we're expecting, a target up here and we, start to get some weakness back here that, would also be considered to be a swing. Exit, so, a swing trader they're, not interested, in, trading. The trend here they're. Interested, in trading. The. Swings here. Actually. It's probably more of a more, of a swing to the downside, here right, maybe, we're swinging to the upside here something along those lines so this so that that's what the swing trader is looking. To accomplish. With their swing trades so, we've talked about price movement, we've talked about volume. We've, talked a little bit about targets. I'm. Gonna do here I'm going to skip a little bit ahead of time here because we want to look at some examples here, as, far as looking at the ATR, and applying the ATR, and. One of the things you can do with regards to looking for some possible trades, is you, can pull up a watchlist. Here's. A watch this right here, you, pull the watch this and you can just maybe, maybe sorted, by percentage, change. Here's. Percentage changing, then go through and look at these percentage, changes, and look for some bull flag so this, is nice because BBY. Right here this has given us a nice bow flag right a, nice. Full flag we've moved up here to the upside we pull down here we're bouncing to the end we're bouncing the upside now, because. Of the nature of swing. Trading a lot, of swing traders, they're, looking at things primarily. From. A short-term, trading perspective. And as, a result of that, frequently. They're going to be looking to trade options and we're not going to get too far into options I'd, like to spend a little bit of time though and, talk. About building. A momentum. Watchlist. And. When I say momentum watchlist in essence what I'm saying is building. A watch list of stocks that, tend to lend themselves, well toward. Options, trading, and. And. And it's it and it's it is not super difficult here okay let's. Come up here I'm going to come up here to the scan tab and just show you a couple of tricks with regards, to doing something like this well. Go into scan here, and under. Scan I'm gonna go into stalk hacker here, I, want. To delete whatever I've got here, so we're net. Change volume, percent, changed I will take those off here I. May. Actually have a sample here that we could load up load scan query. Personal. Let's. See we got here. Perhaps. I may have spoken a little bit too soon. Yeah, let's see this folks well this what, would this world we're. Okay starting from scratch here we have time so it's, not an issue of time so. I'm in stock hacker the, first thing I want to do is I want to I want to look at a specific, subsection. Of stocks and those.
Would Be stocks that number, one have weekly options available to them if you're not familiar with options, don't don't, don't worry too much about it we're not going to get that, that deep into it this this class is considered, to be somewhat. Of a of. An intermediate, class hold so we'll touch upon some different, areas okay it, is assume though that you do have a basic understanding of, trading, stocks and options that's, not the case, hey you're more than welcome to stay here I do try to craft is so beneficial to everyone if you do start to feel a little bit overwhelmed at times I'd, also suggest you may want to attend our, getting started series okay. That's at 11:00 a.m. Eastern, Time it, goes Monday, it. On. Monday, on. Monday its technical, analysis, on Thursday, its talks and on Friday its options so keep, that timeframe in mind our, getting started series, 11:00. A.m., okay. Eastern, Time webcast, just like this on Monday technical, analysis, Thursday stocks and Friday. Its options, but, let's scan in I'm going to come over here and I'm going to I'm, going to come in here to public watch list I'm going to say I want, to scan in the weeklies so, that gives us some additional versatility. That I'm going to say I want to intersect, that and again, I want to come in here to our public watch list and I want to come in here and I want to say penny increment options this, is gonna look for stocks in that have weekly options and those options are quartered, in penny increments, that's, that's going to give us some. Somewhat, of a subset here would, also typically, like to have a minimum, price with, regard to event and pricing and also some some. Some decent volume, so. We can do that as well we, can come up here and. Let's. See we. Want to. Add. A filter here we'll go stock. Let's. Let's let lets let's start with addressing, the volume. Okay so. What you study here, I'll. Come over here and we're gonna come volume, and we're gonna come average volume. 50-day. Average while I'm let's say that we want it to be is this a million share, one. Two three four five six let's go ahead we'll leave this at a million shares okay. Then, we want to add another filter here. And. This, field was gonna be stock. And. We. Want it to be the price, we. Can use I usually like to use the last. And. Let's say we just like to stay away from penny stocks and looking for stocks at our, tree particularly, if you're looking at from from, an options perspective, stocks are trading at at least $24. Okay. There you have it see. So that that's, that would not be considered to be particularly painful for. The show here I'm gonna change this from 50 to 200. I don't know that we'll get 200, would kind of surprise me running. The search before but we may we'll see what we get then just go ahead and run your skin like this. And. It looks like we got 68 stocks then. You come over here and you can save as a watchlist. We won't do that here because we've already gone through this process save. It as a watch this give it a name and once you've done that, over. Here, where. You have your watch so I just call mine $1 wide like what a $1 wide because I also look what I'm looking at these I look for there to be one dollar increments for the strike prices when, you have your watch this saved though you bring it over here is a gadget start. Here at the bottom come. Up here to trade and. Open. Up may. Be going out 10 to 15 days I'll open this one right here from, where, you have your strikes rather than all I just go with 10 and we're just looking for the slippage between the bid and the ask we're also we're also looking at the distance between the strike prices it's. Nice if you have the disagree the strike price is 50 cents to $1 not mandatory it's kind of a personal preference and also, on the slippage here you'd like that slippage, to be ideally. Somewhere in the neighborhood, of possibly. A nipple, or less as the but you're not always going to get that and then.
You Can just go through and, if you don't see what you want over here you can hit your delete key then hit your up arrow key and go through these relatively, quickly and then, if you want to you. Can add a few, just, so you have some representations. From some of the primary sectors, so. That's that's a little bit of a heads-up with regards to building the watchlist now we're, looking a little bit earlier here and we had we have BBY. Okay, so, what's going on here with regards to BBY, as far as a sample, trade. One. Thing to note here is this is a fairly good bull flag pattern, right if, we map it out right here. We'll. Come in here we'd come up here. Right. There that's, our pole. This. Is our flag right here notice. That we're right here, sometimes, what investors are gonna look for with regards to a signal they'll, look for too close above, the high of, the load a what. Would be the load a it looks like it would be right here looks like yesterday, we, just about got it not quite there but now we're bouncing and we're moving up above it so, what would be our target here for this trade. Well. We. Could do this we can measure the height of the flagpole and I'm gonna use the highest close here. As. The top, and. I'm gonna come down here to the lowest close here's the bottom. And, so there there's our height to our flagpole then, I'm gonna duplicate, that, I'm. Gonna move it over here I'm gonna put it on our, breakout, point right here you know here's today, you. Want to measure it up from the breakout point and that. Gives us a target. Right. There and, what. Is that target, well we can come. In here let's just say that we want to see our price we'll put it on the right here, so. There's our target, 1656. So. We're currently at. 1450. And our target is up here 1656. So what, kind of a percentage, move is that well, sixteen. Point, five six, divided. By. Fourteen. Point. Five three. Equals. This we're going to subtract one and to, get our percent movement so we're talking about it almost we're. Talking and. Then what will they say well they'll say you know what I'll, stay with the trade as long as I stay as long as I don't drop out at the bottom of this channel in other words as long as the trade continues on with the same energy so. This can be a potential, exit. For. 80 for a swing trader to. Take that pole and duplicate. Now one thing I would suggest so in doing this is.
Kind. Of assess the strength of this pole here and one, way one way to look at this is you can look at it as. A. As. A long-distance runner. Just. Catch this right here, and say activate, our drawing, I'm. Going to since we're done with this I'm going to remove that because we have our target. But. But one way to look at it is kind of look at it from the standpoint of, a long-distance runner you. Know if you're starting to run a marathon as, you as the marathon goes on your. Running will maintain some consistency. But eventually you're gonna get you're gonna get tired you're gonna go whoa whoa I'm getting I'm getting tired here so. Depending. On the on the angle. Right here some, traders will just take a little bit off of it, like. This, just. Just and and notice, notice that I just did that visually, if you wanted to get super scientific about it you can measure the angle here. Maybe, subtract, a sir apart from that angle and do that that actually would not be a bad idea because. By by by integrating. Some science, some scientific, some, scientifically. There sorry about that okay. I kind, of butchered that but it by in by by, putting some science in here that's another move that yeah it takes away some of those emotions. Let's. Now extend it to the right say okay as long as we're staying above this perhaps we'll stay in the trade we realize this is our target so. If we're up here and we have a closed below the low of the high day then. Maybe we're looking to possibly exit, that particular point in time that. Would be our target where, would our stop-loss, be on a trade like this. I'm. Gonna I just, want to duplicate this line so I don't have to go to the drawing tool again I want. To come down here and find our bounds, there's our bounce right there we bounce it 1339. So. What's that that is support, so. What some investors, will do is they'll look at that support, level and they'll, give this some room. Okay. I'll give it some room and I'll give it some room below that support level so we, can go with the channel here okay what, if we start moving down here though before we get out of the channel some some channels are going to be wider than this this one's our this one's a relatively, thin channel but. What if we start moving down towards, the support level, before breaking, out of the channel is there, a point where we say okay, hold. On I. May. Want to exit this or maybe or maybe we just want to give it a lot of room we have a very volatile, stock we, feel like we need to give a lot of room we come down here we can use this support, and we can use the Average, True Range right, here what. The average True Range is, it's, given us an idea of the range of the stock tends to trade in on a day-by-day, basis.
Now. Every, stock is gonna have different levels of volatility, and every stock is going to have a different, average, true range as, a percentage, of their current price you. Know the higher that average true ranges as a percentage of their current price the more volatile the stock is now. If you want to you can use you, can just say I'm just going to go 20 cents or something like that with regards to this you could do that but, but, this, is nice because it customizes, it for an individual, stock, so. We'll do is we'll play the part of the investor, and. Is okay giving. This giving, is 180 are, below. That support, level that ATR value is currently. 0.68. So, I'm just going to make some notes here with regards to putting this this. Little trade here together. So. We're support, then support, is at. $13.13. That's the point where we got our bounce right here and I'm, going to subtract, from that our, Average True Range which is point six eight five I'll round that up to just point six nine. Point. Six, nine and. So. That gives me where I want to put a stop. Loss on my trade which, is going to be at twelve dollars and seventy cents, hmm. Hey. And then. I could also have something to give me an alert when I hit my target here, or. And, this and and, this this is important, this is this is this is this is this is this is quite important, actually you, can put an alert here to let you know when you hit your target it's usually a good idea though to come in and check your position at. Least once a day because. We're, using daily, candles, at. Least once a day just to see where we're at in a relationship, to our channel right here. Now. If we're using weekly, candles, it can be gut-wrenching, at times but, it's usually a good idea from a purely statistical standpoint, to. Check your positions, on Friday don't. Get don't get all wound up with all the emotion, that goes on, Monday. Through Thursday, now. You. Know if some cataclysmic, thing, happens with the market, and the, market just starts to trash and of course you're gonna want to go in there amid we can check it but if it's just kind of the usual ebbs and flows you know usually there's, some of the usual news and those types of things it's, it's usually a good idea from us from a from, a and, from an emotions, keep your emotions out of the trade from, a statistical standpoint, just to stay away from it and just to check things on Friday okay. But. Here, we here, here we have our stop loss that so, where's our entry going to be it looks like our entry is going to be about a 14.5, 6-3, we can wait till the end of the day to ensure that we close above. The high the low day or we could be a little bit more aggressive, an entrant at this point in, the interest of time here we'll play the part of the investor, that's going to be a little bit more aggressive, by nature. Okay. So. I'm going to just come in here I want to put that as our stop let's.
Look Let's look, at what our risk per share is going to be we'll, put in an order to enter this trade at. $14. And we'll. Say what's like we're okay paying, 1457. 1457. So. What's, our risk per share going to be then. We. Find the difference between our stop loss by the way the stop loss is theoretical, in nature we. Don't know that it will take us out we don't know that with certainty now, there's that possibility that, the stock could gap down and died Bend that occurs we'll get filled where gaps down to instead of as it's, moving across our stop bury right here. But. Let's let's let's look at our let's let's look at our difference here, and. I'm gonna I'm, gonna actually duplicate, this as well. Yeah. Let's, see can I put that at twelve seventy boy it's gonna be. Yeah. That's closer now so here's support, and. Here's our stop loss let's put it right at twelve seventy. Just. To be precise. Yeah. And let's bring our calculator, back up here. So. There's our stuff let's find the difference between that and. Our. Entry point which, is going to be 14. 57. Forget, it lower that's fine too so. A. Risk per share is going to be $1 87. Now. From here there's. Two things to look at and that's how. Much real how much theoretical. Risk do we want to have and how. Much is our maximum investment we. Know that this stop loss is theoretical, in nature, what, if Bed Bath & Beyond here what if it had what if some horrible news came out and a gap down by ten or fifteen percent, well. The stop loss isn't going to help us and if we have a huge, portion, of our portfolio invested. In this that's. Gonna hurt. But, dollar eighty seven let's say that we have a portfolio, of a hundred thousand dollars and we don't. Want to invest more than more. Than more than five percent in this particular stock because we would like to have 20 positions get some diversification. Well. So. From, a risk standpoint then. Five. Percent is going to be $5,000. So. Let's look at a $5,000, so we can take we. Just shut down our risk, per. Share is. 187. So. If we take our, $5,000. As a risk number. And. We. Divide that by a, dollar. Eighty seven. Let's. Try that again. Five. Thousand. Dollars divided, by one. Dollar and eighty-seven cents. I'll be looking to get in. 2673. Shares, so. Far so good on. Those shares though if we pay, you're. Talking about 1457. I this is going to be fluctuating, around if we get lower lower price we're okay if we pay. $14.50. And that's. Going to tie up. $39,000, that's gonna be thirty-eight percent of our portfolio rather, than five percent. So. You look at something like that you want to retreat a little bit and say let's just go with the total investment of $5,000. And. To, do that would take our five thousand divided by the price per share fourteen, fifty seven and that's going to be three hundred and forty-three let's. Just go with three hundred shares. So. If we're going with three hundred shares then what's our theoretical, risk three. Hundred shares times. One. Point eight seven. So. We have theoretical, risk of 561. Dollars, and we have a five percent investment in this so. How would we have what we put our order together then well we can do right here from the screen we can do a right click here, and we. Can choose. Buy. Custom. With. Stop. Right. There and. I'm, gonna collapse our right hand side here and let's move this up to 300 shares I'm gonna click on that guy that, that just matches those together over. Here is our stop and. Where. Did we say we're going to set our stop we're gonna set our stop at twelve seventy. There's. Our stop and we'll put it we'll put this good till cancelled so, when you make an order good till cancel that means it's going to stay in the system until. Until. You either go in and cancel, it or there, are certain time limits somewhere the neighborhood about two to four months depending, on the nature of your trade you can't your account those types of things so when you do put a good, tool cancel on there you might want to just give, you a give your give, your broker, a little a little phone call and say hey just want to know what's, the standard here as far as a good tilt cancel order how about how long is it going to stay in there and then.
Here's Our limit order what did we say we, did our math based on. $14.50. We should get fields, at, a lower price than that of 1445, here that's where we should get filled, and. We got our quantity, here so let's go ahead and do a confirm, in sand would. Review our information, here transaction. Cost in those types of things those are important considerations, I want, to send this over to, this. Account, here I believe it's sort of a catch-all, for different things well. Send it like this and it's gone in it's not too surprised notice we were filled at. 14:46. Okay. Which. Is the. Which. Is which is which is which is a penny well it's actually round, it's actually just rounded up here to the closest penny right there okay, rather, than, 1457, we were filled we were filled with 1447. Let's double check that though here investors, let's come over here monitor, go. In here and look at field orders here. We are right here so 1445. That's, that's, what is to be expected right here okay. Field. Orders well, we'll. Wait a minute. Do. We buy and sell that all in one all in one thing apparently, we did let's. Let's revisit that we may do this we'll, do this twice that, was a little bit crazy. Wasn't, it. Field. Orders canceled orders. Now. Let's try it again, apparently we hit a wrong button let's go ahead and give this another shot why, custom, Wisthoff. Okay. Our stop here oh you know what happens I think this is it folks you always want to set the top price first in your bottom price second, because, when you set your top, price it will it will monkey around with your stock price it looks at a percentage of it or something I'm, not sure why it is it just does it that way so set. Your top price first which, is going to be 14 dollars and 57, cents then, come down here and set your stop second, which. Is going to be our twelve. Seventy. Set, that as good till cancelled. Quantity. 300. Here. We go good till canceled looks like we're good to go here let's. Do a confirming sand we, want to send this over to PEP, let's. Try it again. There. Goes there we go now we just have the bought we don't have the sold so, again keep, that in mind on the platform, here always, put in your, your you're, always put in the pricing, for your first order fur, first and then, for your stop-loss second, otherwise you could run into that difficulty, now, in addition to what we've talked about here let's see we want to do here so we've talked about targets, we've talked about ATR, we've. Talked about building a momentum watch this we actually did a paper trade I do want to share this with you this is this K hold call notice, that this K gold column is not perfect, we had a nice bull flag here and I'm not seeing anything here, okay, I, don't. Not seeing any this this, wouldn't be such this wouldn't be such a great both like here because it's too far along but, in looking at this little one dollar watch list I don't see any bull flags in here but, by sorting by percentage. We, were able to find one and if we came through here we may be able to find additional ones I'm not seeing anything here, initially. Now we now we do have some bull flag patterns, here but they're a little bit too far along we, want to get them just as their bathroom this is a nice bull flag there's, our puller to pull back with notice, we're we're, basically three days along already we. May go from this point here down here we could be very close to our target if, we're using this as the bottom of our pole well. You can use some technology to aid you with this and, here. I have the S&P 500 and, boy, they're just are not a lot of bull flags going on here today because I have one bull flag on the sp500, let's. Take a look at it and that's that one that we were looking at earlier which is Adobe, which is so far out there I'm like. Thinking I don't I don't know if it's that grade. Yeah. We're talking we're talking about Adobe a little bit earlier here but that's the only that's the only owned the only one that we're seeing here okay. So. Insert. Market conditions, this customized, column, can come more into play but I would like to share, this with you in the event you'd like to maybe put it on put. It on a watch list and and and use it to help you now this is saying HFC, just came up okay. So we can see HFC notice that we're just now, trading. Above the high the low day right here this, would be our flagpole, this. Would be our flag and we're just now here so that one just popped up right there that kind of shows, you how that worked the concern I would have here, is this.
Here's. Our flagpole right, here. Okay. Here's. Our flag. And. We're. Breaking out but, the flag cannot, go down you don't if the flag goes down and, it's a low that's lower than the back part of the pole that, invalidates. The flagpole, pattern. We'll. Come over here and see we got. Now, it doesn't quite. Invalidate. The pattern but it is pretty close, it. Looks like we had another bull flag we just showed up here okay. This. One here's a little bit this this, this one here a little bit cleaner because we, have the bottom of the pull all the way down here, so come. Over here. There's. Our flagpole. And. You can see you can see they were just bouncing, and just, bouncing and starting and starting to head up right here so, so this column can be nice because it runs, in real time against, any watch this that you're looking at and gives, you a heads up as far as what's going on let. Me just share this column with you. So. Right here where we have it in yellow this, is the link that's used so that you can build that column. Now. The key part of this is the last six digits okay and I think what we have here is I think we have a either. An uppercase. O or. The, numeral o let's see if we can decipher that I'm gonna come over here and I'm like, computer. Here I'm going to type in O so that's a no. That. Looks pretty close, this. Is an uppercase o okay, so that that looks to me like a zero so, the last six digits here is zero uppercase, G uppercase, D lowercase. G uppercase. G uppercase. A lowercase. G, with. Those last six digits you can go ahead and build this column but you can also you, can also just copy all of this and you. Know I'd like to be able to send it out to you but I'm not, actually, able to do that but. I can show you how. To use it and and, just keep in mind here it is right here okay so, you can jot that down you, can take a screenshot anything, you'd like to do you. Can do that and then as far as applying it. Let. Me do this folks just so I'm. Keeping that on the screen a little bit longer. I'll. Come down here. Maybe. Here and let me. Roll. This up like this just. So, you can see it'll be better so, once you have it the way that you apply this religions that are not familiar with legs let's come up here to setup click on setup click. On open shared item then paste, the link right here again but. Just because I went through that real quickly set, up, open. Shared item, then. Paste, the link here or. Just. The last six digits both of those should work equally, as well I usually just do the whole link then. Click on preview, and. Click on open. And you'll, get this renamed box you. Definitely want to rename it because if you don't rename, it you, it'll be difficult to find it keep in mind that you'll be able to find it alphabetically. Under the name that you gave it ok, I'm, not gonna choose rename here, or anything I'm just gonna I'm, just gonna click on, OK. You. Know actually I think I will rename it just so I can find it so that I can delete it because they don't actually need it because I already have it ok. And. To do that I'm just gonna call it AAA. Webcast. You want to name it something else by the way you might want to call it K hold close, above the high to low day which is Y which is the name I give to it I also, use the MACD as part of the formula there so I called K hold MACD okay. I'm, just gonna call they put the ace here so I could find it quickly. Then. When you have a watch session you want to integrated, when, you bring your watchlist up just over here at the top where you have your symbol do it right click choose. Customize, and, then it'll, be over here, in alphabetical, order under the name that you gave it, now, if I come down here there's, my. There's. My AAA webcast, I'll actually go in here and delete this but, I call mine kay hold MACD, so. If I scream yeah and you can just start typing it in up here if you want. Ok, oh there's my K hold Macky this this is another k whole thing another, k hold form actually I tend. To use this one a little bit more often, but. But that's how you can that that's basically how you can bring that over and when you have it in a watch this you'll have both flags kind, of pop up and pop, depending.
On What's going on with it with a market, here's. GL so, notice here on K what's happened, we've, slid down so we're no longer above, the high the low day that's why it's no longer showing up that's. Why some investors, were it's kind of questionable they may wait until the end of the trading day to. Make sure that we're getting a close above the high the low day because things can deteriorate, let's. Look at GL here though GL. This this one is not you know visually it, doesn't look great I can, see kind of the thought here we had a pause here and a bounce here but visually it doesn't look great so I think I would I would pass on GL okay. All. Right vest let's talk a little bit about what we've talked about here than today so we've. Talked about price movement, I'd like to encourage all of you to go into a watchlist, and look, at stocks on your watch this from a visual standpoint, and, identify. Stocks that possibly have bull flags. What, so, something that's something that all something. That all attempt to do here today is I, will I'll look at some stocks here as the, day goes on towards the end of the trading day today I'll post a tweet on Twitter, that will beast that will be some bull flakes if I'm able to find something depending on mark conditions but I'll try to post, some bull flags that. Are holding until, the end of the trading day and I'll post those on on Twitter today and again, if you if you want to follow me on Twitter, it's my twitter handle is at k. Ro, sa. Just like the flower K, Rose underscore. T da okay, but, we've talked about price when I'd encourage you to look in your stocks as well and identify. Some stocks that possibly have both lines we talked about the part that volume plays, well. Like would like to see volume increasing, on the pull decreasing, on the flag and then increasing on the bounce, we, talked about targets. Related to bull flags you, know that the distance of the pole extrapolated. From where we're getting the bounce on the flag because we're in a bullish market we focused on we focused on bull flags bear, flags you would just you would just look at things from the inverse, perspective we. Talked about using the ATR, as, far as as far as setting a stop-loss, giving giving the underlying stock some room talked. About the K hold column we also talked about building momentum watch this and we, did do a and, we did do a a paper, trade as well all. Right investors, so coming up following our session right here today we gotta coming up it looks like we have getting, started with barbar but getting started, with futures. With, Barbara Armstrong so you definitely want to what, I what I want, to tune in for Barb's, presentation. She, always does a fantastic, job. All. Right everybody well just a reminder that in. Order to demonstrate the. Functionality. The platform we need is actual symbols however TD, Ameritrade does not make recommendations. Or determine the suitability of any security or strategy for individual traders any, of us for decision you make, any. Investment decision, making your account is your responsibility. Also we use the paper money application, that's also for, educational. Purposes, only everybody. It's been great to substitute, in here today for John I believe John and we'll be back next time I want, to wish you the best of success your investing, I hope you have a fantastic week, love, to see on Twitter as well and we'll, catch you later bye everybody, we'll see you and thanks again.
2019-11-11 05:21
