Swing Trading (Days to Weeks) 4-2-19
You. Good. Morning, everyone, John McNichol, here and welcome, to swing trading days two weeks April. 2nd, 2019. Hopefully. No one was fooled too much yesterday on April Fool's. It's. All the various shenanigans. And false reports, that came out. Good, to see you basil bharat, ron michele scott and everyone else whether you here live or listening to the archive session, do, appreciate you being here today let's. Go ahead and take care of her disclosures, and we'll get right into it there. Remember. Options are not suitable for all investors as, the special risks inherent, options. Trading may expose investors, potentially, wrap it in substantial, losses carefully. Read the proofs invited copy of characteristics. And risks of standardized options, I'll, spread straddles, and other multi leg option strategies, can, entail substantial, transaction, costs also, advanced option strategies often involve greater and more complex, risk than, single leg option trades and investors, may also wish, to consider contacting a tax advisor regarding. The tax treatment applicable. To spreads and though the multi leg option transactions, now. In order to demonstrate the function of the platform we need to use actual symbols, Haverty demerit rate does not make recommendations. Or, determine, the suitability of, any security or strategy, for individual, traders, any, investment, decision you make in your self-directed, account, is solely your, responsibility, now. We'll be utilizing a, demonstration, account it's, essentially, a paper money account that looks, like it's a real-time account you. Have the ability, to practice. With. These trades as well utilize, in paper-money, that application, is for education purposes only and successful. Virtual training during, one time period does not guarantee successful. Investing, of actual, funds during a later time period, those, market conditions change continuously. As always. Past performance, of any security or strategy does not guarantee future results or, success, and all, investing, involves, risk including, the, risk of loss now while this webcast discusses, technical analysis, other approaches, including fundamental, analysis, may assert very different views likewise. As you go ahead and possibly, practice, various. Strategies, you may utilize tools, such as back, testing or, probability. Analysis. Those. Tools theoretical. Nature not guaranteed, and does not reflect a degree of certainty of an event occurring also. With back testing, keep in mind no guarantee that the same strategy implemented, today would. Produce similar results. There's. Your Greeks Delta, Gamma theta Delta. Gamma Vega theta, demonstrating. The impact of price volatility, and time, on an, option, position. As well as option pricing, something. That you would need to know, this. Class is. More. An application. Based man that being a little, faster pace and possibly more intermediate, to advanced for, some of you if. You find that to be the case certainly, follow along the best that you can but would encourage, you to take a look at some of our introduction. Courses. For. Instance technical, analysis, course which is accessible, in the education. Tab also. We have our getting started webcast. Series on. Monday. We have a camera, in May with, getting, started with technical analysis, and chardon, essentials, where, he does a lot of the things that I am utilizing, on, the thinkorswim platform also. Barbara. Armstrong, on Fridays. Has a session. Called getting. Started with options. So when we do, potentially, do some practice option, trades if you need to learn more about the basics, that's on Friday, again. Monday. And Friday at, 11:00. A.m. Eastern. Time all, right let's go and take a look at the market see what we have going on today.
Any. Questions. If. Anyone has any questions feel. Free to go ahead and utilize that, chat, window there good, morning your crafting craft, and Tiffani Wendell, thanks for being here with us Ricardo, looks. Like everyone is here let's go ahead and bring up the desktop. Let's, see starting, off the day. Markets, are a, little flat they were setting open up close. To the highs from yesterday. But. As we point your attention over to the lower. Left. Here. SP. Off just, about a couple of points the. Russell, NASDAQ. And Dow, off. About the same dal. Is probably off a. Little, bit more there as we. Zoom in, on. The. Charts, here so this, class is swing. Trading days, two weeks the. Idea, is to try, and capture a shorter. Term momentum. Type. Trades those. Trades may last from, days to possibly go on on the weeks as. Contrasted. With trend, trading which. Is looking at price action. Capturing. Overall, trends, versus swings those. Trends may have a tendency of a current going over not, only just days and weeks, but going on from weeks to possibly months. James. Boyd does, that I believe on. Technically. Speaking trying. To thing on what day it is we. Changed. The schedule a little bit there and my apologies for not writing that down but. That is accessible. By the education, tab on the webcast, so. Looking, to try and capture some shorter. Term swings now there, has, been a swing. From Friday going. Into Monday, and, a. Lot of cases this. May be a little atypical. Where. There's. A breakout which. We had going into the end of the week and with. A break, in the weekend, notice, there was a bit of a gap and. Prices. Had gone higher now. This. Is where, some of the momentum that some. Active traders are looking to capture and this is what we'll be reviewing, here today on as many examples as, we can now. A successful outcome on a swing is, taken. Out a previous. High. And as, we look at the Nasdaq and, K an example the MDX. Prices. Are attempting. To go up to that high as we, open up this morning, you know little, indecision, as we're opening, in the range of yesterday. Let's. Go ahead and remove that. Now. As we look at the S&P 500 SPX. The. SNP has had a successful. Swing. Being. Is it that the price action is generally, in an uptrend. Being. Supported, by some. Moving averages. With. A 55 period moving average representing. The intermediate, trend. Shorter. Term moving averages such as a 5 into 13 indicating. Some shorter term trends. And. The. Swing trader is essentially, trying to capture. Swings. Going from lows to highs. Or. Potentially. Breakouts. Of. Resistance. And. A. Successful, outcome for, a swing, is again taken.
Out A previous. High. In. Case of the S&P a. Successful. Swing now, this, started again looking at the pullback that occurred. Last. Week. As prices. Pulled back. They held a previous, low. Now. Prices, have taken out, previous. Lows that can indicate a change in. Direction. In. This case the SP, had hold more. Of an inside, day. Now. This type of pattern. Where. One sees a smaller. Candle, inside, a previous, day, Western. Terminology, referred to as an inside, day. In. Japanese, terms for, candles a whore ami. Some. Of the script that we've shared with you in the past that is over. Here on the, far left. Here the. Cold, script. Attempts. To find some, of these colds, whether they're recurrent at. A. Support. Or resistance area, one would have to look at the charts to determine, that. Direction, in this case since, over ami has occurred at a low in an, uptrending, stock that, is potentially, a setup. For. A bounce. Or a. Breakout. Dependent on the situation, in this case a diagonal, breakout, some, traders may consider this a bounce as well when, prices trade above the. High of that low day or in this example and inside. Day. Whatever. Is the better entry. Previous. Day was the low day so. A possible entry, would be trading above the high of that day. So. They can get a little better annotation, here. When. The next day prices. Were more inside. Than. An entry may be potentially. Adjusted. To enter as price goes above that inside day that. Occurred on Friday. Follow-through, on Monday, and a, successful swing now. Notice. What's occurring right now in, the case of the SPX, although this is not predetermined. That this will be the formation at the end of the day but. Prices opened, up a little bit higher and coming. Off of the opening, our trading. Down into. That previous, range. Now. A example. Of a bearish candle. Would. Be if prices were to trade, in to that previous range. Looking. At about midway, in to that candle. Mid. Points of candles, can act as. Support. And resistance. So. If price action was to trade down into, the mid part of that candle that formation is referred, to as a, dark. Cloud, and, a. Bearish. Candle formation, could, be an indication, for a swing, trader to exit, the trade. If. The price has whether hit its target which. Could be a previous high or. Measuring. The distance of a previous, swing. Which. Going back. Could. Be looking at previous consolidations. And. Looking. At swings, some. Swings could be bigger than each other, and. Looking. To basically target. A. Similar. Area. There now. Notice in this case you, know a candle, formation, potentially, bearish forming as prices. Are close to that target a, common. Approach on money. Management or profit, management is if. Price. Has made at least half of its move is to, consider, adjusting. Exits. To closer to a break-even or. Possibly. Scaling, out of that position. All. Right so example. Of a successful. Swing on the. SP. I. Believe. The Dow did. Something similar looking. At djx. Notice. Looking on the candle formation, for today. Again. This is just at the beginning well to see how things pan, out during the day the, price action is inside, that previous, day, as. Prices. Had tooken out a previous. High. Some. Traders selling, into, that. Strength, and, with. The inside day implying, at least a consolidation. And, once. Again potentially. An exit, for swing traders. Francisco. Says would, you put more weight on the clothes below the low of the high day or, a dark, cloud cover at a new, recent. High. So. When one goes ahead and considers.
Francisco. On. That discussion point on you. Know what's the most important. Signal. If. It's price that's trading above a previous, day which may indicate a bullish bounce or if prices trading. Below the, low of a high day which. May indicate a bearish, bounce or potentially, a bullish exit. Versus. The actual close, well, the actual clothes would be more of a confirmation. Of that pattern. Since these are, examples, of daily, charts, the. Clothes would, be the most important, representation. Of price for. The day however. Candles. Represent, the relationships. Between open. And closes. There so, once the bar is closed. Well then that pattern, is locked, in now, whether that ends, up being a successful, pattern, or there's follow-through. To that, bullish, or bearish pattern, would be determined. Pros. And cons, active. Traders may have a tendency, of triggering. Based off of intraday. Information. As prices, are trading. Through. The. Pro with that is if there, is momentum one is capturing, that momentum, as it pushes forward the. Con is as I'll, actually show as an example with, our practice. Trade we did last week on Apple. Prices. May trade, higher but, then go ahead and basically fade down potentially. In the same day so. Is there a middle ground to that will. When. One places, orders. One. Could put in a time factor. Into. That where that order would be submitted in the, afternoon. Possibly. In the last, hour of trading so if prices are demonstrated. In that condition in the last half hour. Increase. In probability. That that condition, may stand going, into the close okay, and again there's pros and cons with these different types of orders but, hopefully that helped out there Francisco, also. Scott says when calculating the midpoint of candle do you include the wicks or just, the body now, that may be a personal, preference. There. Scott. What. I typically, have done in, demonstrating, is measuring. From the high to the low which, includes, the, shadows, or, which. Some traders commonly refer to as wicks so. In the example of the SPX. As. I, go ahead and try and clean. This up here let's go ahead and bring up that chart. So. In the case of in. The djx, here. Let's. Go ahead and actually bring a BES px since that was the example of the potentially. The dark cloud is. Putting. A cursor on the candle looking, at the R value which is the range, and. The. R value is about twenty, point. Seven seven so, about half of that is about ten. What. 10.35. Let's. Just say it will just say ten point four points. So, if I take ten point four subtract, it off the high which. Is, twenty. Eight sixty. Nine point four let's. Just say that that would be. 28:59. Approximately. So, if we go ahead and. Mark. That at. 2859. We, can draw a horizontal line, you, can right click on that line. To. Edit. And. Put in whatever exact price you want. So. This is what some traders may look, at for the day let's. Say if one was at a swing trade and. You. Know are not quite near their target but are willing to risk a little bit of a pullback they. May go ahead and adjust their, stop to a. Position. Below that midline maybe within about 20 cents or so, now. Keep in mind as far as stops are not the guarantee to be filled at a particular price but. This would be that potential, setup. Of a bearish. Dark, cloud if prices were trading, below and stayed below that, midpoint. Yep. Wendell thanks for sharing as far as intraday. Let's. See L Reza says and great questions by the way doesn't. Necessarily mean a downward, upward signal, has to be countered, or, continuation. Of the ladder signal, in this case cold, happen, after, the, Pearson, pattern. I'm. Not sure if I fully understand. That question I'll Rize there. Maybe. Possibly rephrase, that there may, be a little early I didn't, get my caffeine for this morning some.
Candle Patterns. Would. Have some type of confirmation. Where. You. Know if you look at low days. And. It's trying to get a better. Representation, here. You. Know kind of three, bar formations. Where prices, may come down form. In a low you, have a low day and price, trades, or closes, above the high the low day that would be a candle reversal, this, is an example of more of a Morningstar. Other. Cases like an inside, day. Where. Prices are inside, that previous, day. Ones. Looking for prices to break one way or the other if. This Romney is occurring at resistance, and may be looking for a breakdown if. The price is at support, they may be looking for the price to break the opposite, way. Likewise, with a. Dark. Cloud, you, know price was too close lower. That. Could be an exit. Signal. As. I'm trying to get, it drawn here. Now. Some traders may look, for a little additional confirmation and look for price to actually go below. That. Dark. Cloud pattern. Yeah. There's pros and cons there's, not a perfect, approach, to it but. All of those are different options there. Okay. Great feedback folks do appreciate that now. Since. We've seen examples, of, successful, swings, in the SP in. The Dow. The. Nasdaq, just, a little short and looking. At the Russell. And. We've been discussing this time and time again on the Russell being. Relatively, weaker, still. Have yet to have, a successful, swing. Since. Going back to February each. Swing, which. Marriage successful, swing is looking to take out a previous, high, this. Bounce prices, trades, closes, above failed. Prices. Bounced. Again traded. Above and closed. Above highs, a load a rally. And up. Failed. To take out that previous high even another little bounce another little fake out failure. Now. This. Is a, relatively. Strong bounce, in still. A downward, trend this would be more of a counter swing. Traders. Looking for prices to break above that resistance, which could be another, example of, momentum, still, has failed to do that and as we look at the. Russell, right now inside. That previous. Day and. Trade. In lower, some. Of the semblance of that dark cloud so. Really mixed, signals, from a, bullish. Perspective. When it comes to the, market and this could be a bit of a conundrum for. Swing traders, as when we look at some of our practice, trades. Some. May work. Out well others not, so much there's not a consensus. Whether. From a bullish or a bearish, direction, on some, of that momentum as far as the broad markets, concern. So. Let's go and take a look at some of our previous trades, and then we'll go ahead and we'll put on some practice, ones for today, what. I'm doing is I'm going to the. The. Monitor, tab and, go. Into account, statement, this. Is where we can modify. And look in number of days back to look at some previous trades, now. Again this is a paper, money, account, these are practice trades. You. Can see some from other classes that, I, teach in here our. Last class was on the 26. And. These. Were some of the trades, that we had practiced, with. With. One, of them being. Let's. Go through a couple of these here. Conoco. Phillips, Co P now what we can do here is we can also type in the symbol up at the top to isolate, those, trades. On, 3:26, we, had bought 300, shares. And, it was a buy stop of, 68, 75. And. If. We go and look at the orders. The. Most recent one, we did we also put in a, stop. Order had, to make some adjustments here. Where. We had targeted 71, dollars and, had. An initial stop of 66, 20. If. We go ahead and look at the chart on this see, how this is panning, out here. This. Was going off of the. Bounce, on the 26, as price was breaking, out of a diagonal resistance. Now, this. Was intraday, it was during the day and if. We look to see what happened prices, did trade higher but then faded, at the, end of the day that's some of the cons. Of entering, in earlier in the day if things, do fade. Prices. Did, pull back kind of blew back in the pattern we're, consolidating at. That resistance. Now. Price hasn't stopped out because the. Potential. Stop again. I believe was at. 68. 20 now. Remember 68, 20 is the trigger, price if the price trades down to 66, 20, it, would create a market, order and close, at the, next available price now. If price went ahead and gapped down at the, opening, and was. Below, that level then, this fill could be significantly, lower, now. We position, size this. To. A point with. 300, shares. Basically. Risking a. Relatively. Small percentage of the account however, if the stop does go, well below that the. Loss could be a bit, larger. I believe. Based off of the size of this account. You. Know our entry was at around 68, stop, was at around 66. Let's on average about $2, a share times. 300. That. Would be about 600, some dollars. That, certainly. Is well within and, less. Than half a percent I believe of this. Practice, account when it came to risk, okay. So not, necessarily desired outcome at the moment but prices, haven't stopped out, if. We go ahead and look at. Some. Of the other ones here. We. Also have practiced with ATR. Average. True, Range where, we basically looked, at the average range, on the, day using that ATR, indicator and, set, a target based off of one level above the, entry price and set, a stop one, level below that, and in.
The Case of Apple. As, I mentioned to you this. Is an example of. When. One enters an order earlier. In the day and this can happen in the afternoon as well if prices, reverse. One. May be stopped, out of the trade on, the same day if they're utilizing, those. These types of orders now, that, could be an issue, for, some of you if, you have a smaller, account. Typically. One needs to have over twenty five thousand, dollars. Of. Equity in an account to, quote. Day trade now this wasn't intended. To be a day trade but if one gets into a trade and gets. Out of a trade on the, same day that can count as a day, trade so imagine if he entered multiple, orders, and for. Some reason the market reversed, against, you whether up or down one, theoretically, could, be stopped out or, exited, out of trades on the same day or even. A desired result if the price went up that. One ATR, and hit the target in and out at the same day that again, can be considered, to be a day, trade so keep that in mind I believe. There's. A limit as far as I believe for, trades. Within a five-day, rotate, and period, if. You have any questions on that you can certainly talk with the trade desk or make, sure you have a, reasonable. Amount of equity in there, okay. So. Hopefully. You found that helpful there. So. In the case of Apple we, had bought, a put. For. Nine dollars and thirty cents. We had a conditional. Order as what we had done were. Basically we use the one ATR and if. The price went. Down to. 180 828, it, would go ahead and close it out that would be at a loss if. The price had traded up to, 196. Then. That, would have been. A desired. Outcome. Now. If we go ahead and look to see what happened with, Apple. AAPL. Again. This was on the, on. The, 26, this, was a bit of a, little. Bit of a fake out, where. And. So to min, here. Let's. Try one more time. And, for some reason my screen is not working here. So. As we were looking at this, this. Was the 25th. This. Was the load a Apple. Pulling back pretty, strong trend, we'll. Go to the, next, day. Now. You have to visualize this at the opening, the.
Price Had, opened, right, here pretty close to. That previous, day's high price. Did go above, that high about. 20 cents and triggered. And order. But. Notice prices went ahead and faded, at the end of the day now as I mentioned earlier. For. Some traders you get practice with this is and. We'll put in an order. For, this condition today, is. Put. In a time condition, that the price needs, to be above that level in that, last half hour of the day. In. This case and that's no guarantee against, a loss but, in this example, the. Momentum had changed and price. Actually went down, more. Than, its average true. Range. Now. Let me go back to the other chart if I had ATR on here right on here. Let's. Maximize this chart. Believe. When we had looked at that the, ATR value, which is down on the bottom was, in the $4, range is, about four and a quarter, now. As I put my cursor on this day. We. Had a range, of. Eight. Dollars, and 30 cents so that was actually twice, the average range, it's, a little more volatility, and that, ATR, trigger. Had, exited. Out as. We. Look to where we are right now. Not. Much follow-through a bit of indecision and, prices. Still, are staying, below the. Low in this high day now. That can also imply. Possibly. Change the momentum and some, traders that may be anticipating. More, of a bearish, move down or a failure on prices. To move lower now. Since the trend is a bit more sideways, here some. Traders may actually look for a breakout. On. The. Downside. And. That in case maybe looking at some, of the previous, lows. Moving. Averages can act as support and looking for a breakdown of that pattern now. The end result was it. Was a loss but notice it was a manageable, loss. It, stopped out it was closed out at 690. So. That would have been a loss of let's. See, -. About, two dollars and 40 cents per. Share two. Dollars and 40 cents, multiplied. By 200, that was about $500 okay, so manageable, loss. And also. Defined risk because, worst case scenario, with, that option we. Position, size that nine dollars and 30 cents per share. Times. 200. That, would have been $1,800. The absolute, worst scenario, with that trade would have been, $1,800. Which. Certainly. Falls well. Under, 1%, on, our practice account so. It's one thing we have control over we don't control over outcomes one. Has some, reasonable control over the amount of risk that they're willing to take. Now. There. Were some positive outcomes. Go. Back to the. Rest. Of our positions, here and. For some reason I can't clear this out let's try this one more time. Go. Back to the. Activity. And positions. Wow. I'm. Not sure what's going on here but let's see if we can reset. A few things all right. Okay. Let's. See go, back to account statement. Let's. Clear this out. And. Believe. The one we did have a positive outcome on was. An. F which. Was I. Believe. Abercrombie. And Fitch. This. Was an example of a successful, swing, as prices. Were trading, above the high the low day not only did it trade but it closed above the, high the low day and. Prices. Went ahead and took out that. Previous, high. Now. Notice as Sousa took out that high there. Was a little, more of a bearish candle, what. We refer to as a hangman. That. Occurred on April 1st, and. Prices. Have pulled back today. As well so captured. It's the, swing selling, that into strength that is the desired, outcome for, this example. And. This, one also actually. As. We let's, bring this one up and F. This. Was 500, shares at, 2561. Sold. It at 2650, for. Which. Actually, this was a 180, our trade basically, sold, it on the same day now, if we didn't use the ATR and just did more of a discretionary, trade this would actually been even more of a potential profitable, trade as we would have targeted closer, to the high of 27. Now. Another. Thing that could, have done if. The price had, not hit that ATR, was, to remove, the. Upper limit, and then just raised, the stop. About. 20 cents, or. A little, portion below those highs. Until. The price went ahead and pulled back but, even with that not. Too far off from where our exit was at. Now. Reason mentioned. John. If I remember correctly expressed ATR in general works in Reverse to, the price trend a power signal. Yeah ATR. As far as volatile. Volatile, 'ti may, come into play we used it as a representation. Of price. Action. Where. As those of you that, may be practicing, trades. Is. Practice. With a concept. Of whatever. The ATR, is. 90. Cents in this, example if one, entered a trade set. A target 90 cents above it and a. Stop, 90, cents below it and. You, know do as many of those as you can on a practice, account it does a few things when it gets you comfortable, with utilizing, the platform. -. It. Gets you into the rhythm of placing, trades and look at different outcomes, both, from a positive as well, as a negative and seeing what, your overall results, are a. Lot. Of people are concerned, about being right.
In A, lot of cases then versus being profitable, and that's a big difference. One. Can ethically. Have, more, losing, trades quote, losing trades than, profitable. Trades yet, still may be profitable. If their gains certainly. Outweigh, those, losses and so, paper money is one, way of being able to practice these things all, to keep in mind there's no guarantee, that that, result in, the, real, market as those conditions, change alright, let's go ahead and actually, do. Some other examples, for. Today since, we are seeing a little bit of a pullback, let's. See if there's any, possibly. Some bearish. Ones. To, potentially, look at and what. We'll do is focus, our attention, over, on the lower, left and. See. If I can go ahead and get, our drone tools working a little bit better here. Over. Here on the lower left we can bring up a list of stocks here's. Some of our script. Which. We've shared in the past. The. Moving, average crossover script, which highlights, stocks that, may be trending. Up or down based off of their moving averages and then. Also the cold, script which may illustrate if, prices, are. Demonstrating. A potential. Bounce, whether. Bullish, or bearish that. Shared script is over, here on, the. Left. If you wish to use. That you can do that and, certainly. Make it your own we. Have Ken, rose on Tuesday. Afternoons, will be later on today actually 5:30. Does. A half hour class on. Scripting. Studies on thinkorswim, and you, can learn about some of these very same concepts, there all. Right so, I'm gonna go ahead and bring up a list. Of. Penny. Increment, stocks it's, available under, your public lists, I, put, one in a personal, list and try. To clean it up a little, bit. One. May actually put together a list of stocks that. Are stocks, that means they may look to trade again and again in. In the process of experience, some, stocks may be more. Liquid, when it comes to options. So. A few things to consider along that line. Let's. Go ahead and bring this up a little bit. And. Let's. Start off I'll sort, by the cold. List. Here and look for stocks that, maybe, demonstrated, a potential, bearish. Candle. Pattern and it, would be no surprise. Looking. As we looked at the market today that there may be a few that are showing those characteristics. A. Good. Number of them are showing that and by. Denoted, in red there. Are some stocks that may, be showing some bullish, bounces, and then. The, rest of them not, showing any particular pattern, on. The. Day, now. If. We go in and look at a few of these let's. See well. They're COP we already looked at that a BSF, Boston. Scientific. We. Had done I believe a previous, trade on this I'm, not sure if I did it in a swing trading class let's see if we can bring that up. Go, back a little bit, more. In here. Yeah. It looks like in a class I. Think. We still have this this would be in the vertical. Class. Which is tomorrow. We. Talked about long, and short verticals, on the, 18th, we, did an example of a. A. Bare. Foot. Spread, which. Basically is directional.
Looking. For price to trade. Down. To. At or below the 36, level, paid. 69, cents for it and. Basically. The maximum gain would be that, $2 spread, minus. 69, cents, so that would be a buck, 30 I believe. So. Go back and look, at that position. And. We'll. Do another, directional. Example, on that. You. Know it's going out to me there's still 45 days out. Price. Right now. On. Boston Scientific is, is 38, so it's still above that spread. But. As we look at it right now. You, know another technical, setup noticed, price had broken below, support. Broken. Support, has, a tendency, of acting as new, resistance. And. With. This example. Prices. Did rally up over the last week but, notice we're seeing let's remove this strong here. Price. Is trading, below. The low. Of, a. High day and, that's. What this. Script, over here. Attempts. To do now keywords attempt, nothing's perfect but certainly, high laying that the price is trading below below, the high day we. Talked about the candles, notice. And I'm just guesstimating, here the, mid-range of these candles can act as resistance, as well and notice. That. That mid-range candle. Prices. Have failed to get back above that distribution day, faster. Moving averages are fallen, indicates shorter term mentum now, the intermediate. Trend is certainly a bit more neutral. As its kind of flattened out. But. Remember moving averages also, do lag and. We're. Seeing essentially, a resistance, bounce so. Let's, go ahead we'll attempt to do a a. Swing. Trade on this, one here, we'll. Utilize a, foot, and. We'll. Look at an example of. Targets. Here, now. Looking at some of the different ranges on. Prices. You. Know the previous pattern between support and resistance, more, of a rectangle. Now. Not a huge. Notional. Range there. As. Far as looking at prices, breaking down. I'll, reference that move an average there on possibly. Trading taken out previous, lows at around 37, and, you. Know around 36, in the core it's only about a $2 move some. Option traders may look for larger moves but, we'll do this for illustrative purposes I'm. Gonna go to bsx. Well. Go ahead we'll look at an option, as far as selection.
Looking, At the number of days typically. If one is long options, may. Want, to be looking at at. Least. Beyond. The front month which, would be more than 30 days. Time. Can always be sold back. But. One would be paying more of a premium the more days they go out. If. We go ahead and take a look well we'll stick with the may, options here we'll. Look at the put side. And. Let's. Look for an option. Once. You go a little bit. Let's. Focus let's. Focus a little bit more. In. The money for this example. Since. I do have a spread on there I can always go ahead and buy an additional put. At the same strike price but, just. To get away from. Some. Confusion, there so, we'll. Do the 39, which, is at close. To being at the money I'm. Going to go ahead and, we'll buy. The. Option well. Position size this to a maximum loss I'll do 10 contracts. That. Would. Result in risk. In. $1,650. Which. Certainly, is well under 1% of this practice, account maybe a little more than. About. A half a percent. And we'll. Go ahead well we'll, send that off now, what I could do is I could also put in a an. Order. To. Go ahead and close out the trade. Now. Another. Indication, what some traders can do is since. I already position size to a maximum loss went. Ahead and basically. Define. The risk already. If. I wanted to I can right-click on a previous. Low and. Go. Ahead and create an alert and. If. The price goes ahead and hits that area I can evaluate, it, and then, possibly, close out the position at that time now notice that order triggered because when I went ahead and, created. That alert it, defaults, to a door above I want, to make this at or below. And. Go ahead and do that now. Another, thing we can do too is. If. We wanted to define. Some. Well we already defined the risk but we wanted to kind of limit that risk possibly, a little bit more we. Can also create an order to sell the, put if the price goes above that, high, day now.
Let's Do it by about 1%, so. If I put my cursor on that high the, high is $39. We'll. Take 39, and. Multiply. That. Bring. Up calculator, will. Take 39, and multiply. That by. One. Point, zero one. Space, one hundred one percent that. Would be one percent above that high which is 39, 39. So. I can do is go back to, that position. Let's. Go ahead and find that here. Is. Right there. And. I'm gonna go ahead and move this to our swing, group. And. I'm, gonna go and right-click on that and. I. Can create a closed in order. To. Sell that option, but. What we can do is when you do a conditional, order this is one of the things we did last week, with one of the other trades we can make this a market. GTC. And. Then. There's a gear, to the far right where we can add those conditions, we. Can click on that gear and. Then. Go ahead and put in that. Price, which. I had already forgotten, which. Go back to the chart right, actually it's right there on the calculator, 39 39. So. Click on the gear. Brings. Up that condition, and, right. Here on the, first box we can click the. First box it adds the symbol automatically. Method. Mark which is the last price now. Since, it's a bearish trade we're, saying if it's greater, than or equal. To. 39. 39. Hit. Enter and. Click. Save and. Then. Confirm and sent. So. Basically the way this swing, trade is currently set up is we position size to a maximum, loss on a paper money account if it goes 1% above that high it, will close out and preserve some. Of that potentially preserve some of that capital if the. Price goes ahead and trades down to. That previous low it, will not do anything but, it will pop up an alert if, I have my mobile phone or, are. Logged in you'll be alerted to price hitting that level and then go ahead and make a determination whether. A close, it out since, let's hit that target be. Possibly. Adjust, the, stop closer to a break-even. Possibly. Even close, out part of the trade and then. Go ahead and adjust a, stop, to the high, of the, day and continue. To trail that down. So. Hopefully kind of showed you a few ideas with, that on entering. A swing, trade and managing, that. Now. If you do have any questions now is. The time to ask we'll be wrapping up here in a few minutes here, and. Let's. See if we got anything else here that, we can look, at. And. Still having a few issues here on our drawing tools have to try and troubleshoot, that. So, there's anything that's a potential. In the bullish side so Apple, is showing a cold. As. Price. Is trading above. After. Consolidating, there is now kind of training above the high of the low day now let, lets do. I'm. Gonna go ahead and do a an. Option, on this one, but. We're gonna trigger, it based off of looking, at the. Closer. To the close of the day let's show you how to do that. So. I'm gonna go ahead well we'll stick with we. Have Apple. We'll. Go ahead we'll look at it may as well 45. Days out. I'm. Gonna go ahead and right. Click. Will. Do closer to at the money for this example. In. Other sessions we may go a little further out of the money if we're looking at a larger. Potentially, larger move, and. I'm. Gonna do a a bi. Will. Do a buy custom, with stop starting. This one off and. I'm. Gonna make this a, market. GTC. Actually. I'll make a market, day we'll just put in and in, order for the day I'm. Gonna go ahead and click on the gear and. We're. Gonna say if, Apple. Goes let's, make, one more adjustment here. Let's. Go ahead and look at the weather condition, is we're. Looking for price to go above the. High, of. This. Low day here and. If, we look at that high that's gonna be, 190. 308. 193. 0 8 let's, say 20 cents above that 190. 338. 190. A, little. Pulling on. 193. 0. 8 is what we'll say now. Notice today price, has already hit that at 193, 0 8 so, if we go ahead and put this right now it, will automatically, trigger. But. Let's say we want to see what the condition is at the end of the day kind. Of prevent a fade that we saw before, well that's not necessarily gonna be the. Best, outlook, but we'll, we'll see, so. What, we'll do is go back to that, order. We'll. Click on that gear so. The condition, is if, Apple. Goes a door, above. We're. Greater than or equal to and we'll. Say. 193, point zero 8. We'll. Hit enter, and. If. You look at the condition, here, is a time, condition, here where. We can click on submit, and then. Specify, the time, now, this is going to be tied to your clock. On the, platform, here, so. Make sure you note that so in my case I, can. Put this in let's say. 1330. Which. Would be a half hour before, the close. See. If I'll take that there. Alright, and. Then. I can click Save and. We'll. Go ahead click Submit I'll do two contracts, on this one.
We'll, Get in position size to a maximum. Loss you, actually probably do about three, that. Would be closer about 1500. Now. On the exit, I'll, make this a market. GTC. And. I'll. Use this example as price. Breaking. Out. Above. This. Resistance here, we, can set a stop a, percentage. Below that breakout point or we could set it based off of the low. I'll. Go and I'll tentatively set it off below that low which. Is 184, 58. We'll. Take one. Eighty four. Point. Five, eight, times. 0.99. That'd be 1% below that that'll. Be 180. 273. So. We'll add a condition, if, it. Goes at or, below. Less. Than or equal to. 183. 180, 273. That'll. Go ahead and close out the position at the next available price, now remember we're a position, size to a maximum, loss so, the worst case scenario has been priced, in and we'll, click Save now if. We want we can add one more condition. Which. Is target. In that previous high. Which. Is at around 198. Or we. Can measure a previous. Swing here and. What. We'll do here is. I'll, go ahead and we'll put in a target for that previous high which. Is. 197. 69. So. We'll go back to that cell order. Hit. On the gear, and. We can add another condition. If. The stock goes greater. Than or equal to I. Think. I said 197. 88 maybe off a few cents, on there. Or. If one wants they can go ahead and put in a price alert when, it hits that level. And. Let's. Say we got that right. 197. Is. 197 69, actually, let's get that in there a little bit differently. So, just off just a few points there. We'll, click Save and we'll. Confirm, and send. Now. Notice. The. Price has better condition, price, is. At. Let's. See actually, backed off a little bit but if it was at 190 308 which it triggered this. Order will not be submitted, until a half, hour before the market, closes and if the price is above that. High then, this order will fill if it, doesn't trade above since it's a day order it'll cancel and then one would have to reset the order. Alright. So it looks like we got an example of both a bearish. Trade for, the day as. Well as a bullish. One the. Bearish one is a bearish. Bounce on Boston. Scientific, and. The. Example. Of a bullish one is on. Apple. There and we'll. See if that. Triggers, today, or not, alright. Well. Hopefully you learn something new today folks. Great. Spending some time with you once again again. This is swing trading days to weeks focusing, on some, of the shorter term momentum trades. Again. Could be a challenge, in the. Current market conditions where, we're seeing indices, doing. Different things, SP. In the Dow more. Bullish momentum. The. Russell, not. So much Nasdaq. You know a little back and forth there. But. There's. No risk and practice, in these things and so would, encourage you to go ahead and utilize, some of the same techniques we looked at today, looking.
For Stocks that may be bouncing. In an, upward trend or in the case of a bearish, trend looking, for prices that may be bouncing, off resistance, we, did example, of those, calls and puts, today as well and as, you looked at some of our previous session we'll do and continue, to do some, stock trades as well. So. We'll go ahead we'll let you go for today but before you, do that there, is a survey I am pushing that out to you right now if you can take a few moments to fill that out we'd, love to get that feedback it's only five questions, and. It's important for management, as well as ourselves to. Know how you, like this session, all. Right and I do not see any pending questions but, do appreciate the comments, Thank, You Michelle Thank, You Cynthia, Rafael, and everyone else as well as those of you that, are listening to the archived session, now remember, folks in order, to demonstrate the function out of the platform we, had to use actual symbols, our. TD Ameritrade does not make recommendations, or, determine suitability of, any, security, or strategy. Through, the use of our tools any. Investment, decision you make and your, self-directed account, is solely. Your. Responsibility. So. Once again folks thanks for being with us coming, up next. Getting started with futures, at the top of the hour Barbara, Armstrong, we'll, see you then take, care now.
2019-04-05 11:30
