Trading What You See? How? | James Boyd | 6-5-20 | Technically Speaking: Advanced Charting
All. Right hello and welcome to advanced, charting, techniques, my name is James Boyd standing. In the stead for John, McNichol standing in the stead for Patrick. Mullaly, it's, great to be here with everyone here today hopefully, you've had a good day, the, market kind of went bang, to, the upside we'll talk about that in just a moment and. All. Right so, yeah we like to welcome Len Jeff Michelle, Denise, Mary. Kingdom. Roofing and rich. George, Texas Jill W Jenni and many others here today we welcome you hopefully, you also have some good weekends weekend. Plans I'm gonna go up to Park City let's. See I've been, married. Well, at least eighteen years so we're gonna celebrate that this weekend, so that's always a good marriage, always, a good thing to focus on the marriage and that is one of your bigger investments, for sure and that's, the value. That has a lot of worth of course a little fun there so, just real quick let's. Before we get started remember. That if when we talk about options here today options, are not suitable for all investors special. Risk inherited trading options make. Sure that you have read the previously, provided copy of the characteristics, and risk of standardized, options, also, in order to demonstrate the function of the platform we're going to use actual symbols. Okay past and also current and, also remember that TD Ameritrade is not making you make any recommendations, determine. Suitability of any security, or strategy it's up to the investor decide what they want to invest in and also what type of strategy, and, also remember the Delta terms as well now. Today what we're gonna do is we'll take a quick look at the market, won't. Be much to say because it just kind of went up okay, we'll, talk about that number, two we're, gonna now when I first got started investing, they said, to me hey you, need to trade what you see and I remember I telling, the guy said well how, do I know what. I'm seeing I don't know what I'm really seeing and so. I asked, the guy if he could explain to me maybe visually, on the chart where, his entries, were over the last year on certain stocks where did you potentially get in where, did you get out I grew, up in so I've. Grown up in a scientific family, my dad's an animal scientist, my grandpa was a soil scientist, I'm, a big fan of actually, seeing it okay, I want, to see his three I want to see the present, I want to see how an investor can actually also potentially, use it in the future so, today's going to kind of be I'm, gonna slow it down and, I really actually want to kind of show you how an investor, can set their chart up to, see the potential entries, pros, and cons of different types of entries and also. Likewise, that of exits, okay, now. We will also talk about how to establish that, on a market. Tab. As well talk. About new positions, but our learning outcome here today is to, really learn the. Entries. And the exits, the approach, and I, from today I want you to kind of consider would. You keep the same settings, or might you kind of make the settings a little quicker or a little. Slower per your liking, so, let's go ahead here and just quickly take, a quick look at the SPX. Haven't. Changed anything on the chart, do. You see anything different on the chart, well. What you'll notice is again, same, Fibonacci. Hasn't. Changed and you're, gonna see that today the, SPX. Splashing. Okay. Right. Above that 78%. Retracement. Oh Mike, came.
Look And what. You're seeing what, are you seeing this here is now. It's like wait is. 31:39, the, new potential, support and now, at. Least kind of gets, into that question is. 3385, the next, potential, level resistance if, there, are bearish. Investors, they're not probably hitting it with a lot of firepower because. Once the price really broke through 61, it, was a 45. Degree angle price. Action straight, up and by the way think. About it was 45 percent straight up even. With all the extracurricular. Activities, last week in the. Country, okay, not just one place now. Take a quick view it let's say whoops the Nasdaq, the Nasdaq, did poke its head above the 9 excuse. Me the 97. 16, area. Today, on the Nasdaq, a brand new high and also. If you look at the Dow Jones what's, really led today by quite. A bit to start the day you're, seeing that the Nazz is also now up near its 78, percent retracement. As, investors. Are buying, into. Some. Called the v-shape recovery, some just call it maybe. A semi. Return, to somewhat, normal not normal, just somewhat. Normal I think the only thing normal, of 2020, is it's, not hasn't, been normal, so. That's why I said maybe, return to somewhat normal okay, all, right little fun there so let's, up take, a look now, it's. Something I by, the way are there any questions, now. It looks like Harold. My goodness Harold I guess I gotta say something Hera. Harold actually says hello from Bowling Green Kentucky home, of the Corvette so. Harold I grew, up I actually went to green or high school in Bowling Green my. Parents will actually live in Alva Tim I went to Greenwood high school and so, Harold, hello to you, yeah. That's great fantastic. Nice. All, right so, just real quick are there any questions, regarding, the indexes, let me know and I'll see if I actually can't answer that all right so, perfect, all. Right looks like a cup of you were celebrating also anniversary a lot longer than mine that's, fantastic. Okay all, right now let's kind of go, into the next second. Point here and I will see if there's any questions on the market will swing back so. First off what I did is write. On Twitter today earlier, today and I'll bring this up so. I won't bring up I'm going to talk about this right here okay so remember the comment that the gentleman made to me James trade, what you see and I said well how do I know what I'm seeing okay. And I don't know how many of you have ever been there and so. One of the charts that some investors like to use is they'd like to kind of maybe put their potential, entries are, right. Where they can see them on the chart, and/or. The, market, watch quote. Tab. Okay, so, what I'm going to do is on today's tweet about two hours ago I put. A chart out okay, and what. You're gonna see is it looks like as follows, now let me just kind of explain to you what it's really showing here and, what. You're going to notice is I'll just kind of walk, you through so. What you're going to notice is the blue line as its yes or States, it's. Really a 20 day hi now that's not new you, guys know and, gals know, that we talk about 20 of the highs all the time you. Guys and gals know that we talk about 55, day highs all the. Time it's, one of the setting, or one of the columns. On the market. Watch that, we have okay so, what you're going to notice is this example, of being let's say visa, what. You're going to notice is when the stock was actually going down what. You're going to really be noticing, is the price as it was falling, falling falling falling, and falling and falling what. You're going to notice is it took about almost, till April, to, come up and touch the, price did touch, the 20-day high and sometimes. Investors, use the 22 hi and we'll talk about the settings in a moment as a, potential. Breakout. Entry, so, think of the 20 as a shorter, term breakout. Think. Of the 55, which what you'll notice is over time and touch that a number time so it touched the 22, high a number of times there but. Then it took about another, month for the price to come up and touch the, Green Line now, what is the Green Line the, Green Line is a 55-day. High okay. So, let's think of it as a longer-term. Breakout. Ok, so just real quick 20-day. High what's the purpose think. Shorter, term breakout number. Two think. Of the 55, day high such. As the. Longer, term now, are those numbers, can you vary those yes. We're. Gonna start, with those numbers and we'll kind of show some pros and cons now. What is the investor, really, wanting, to see what the price. Well. The investor, for, a potential, entry they're, wanting to see does the stock come up and touch that blue line does, it come up and touch that blue line does.
It Come up and touch, that blue line and does, it also come up and maybe touch the 20 in the 55, day maybe, even together okay. And what, you'll really notice in this case is whenever the stock comes up and touches those lines it's. Really saying short-term, breakout, short-term, breakout, short-term, break, long-term breakout long-term, breakout each, time, it touches the line doesn't guarantee. How. Long the stock will go up no it. Doesn't, now, I know what you're thinking boy I sure hope it goes up a lot yeah I think a lot of people feel like that but. It's not a forward-looking, in saying man if it touches this guaranteed, to go up or it for, sure 2 weeks it'll be solid, to the upside none, of that it's not predictive, all, it's just saying is it's touching, the 20-day high what, it's saying is it's touching. The 55 day I meaning. It just meets that criteria, now, on the bottom side what you'll notice is if an investor, takes an entry. They, might be thinking about where, could, a potential. Stop, be. Well. Let's say the investor, takes a potential, entry right there and, for. Example they, set a stop at that yellow. Line which is and you'll see that it's, the 10-day low so. What you'll notice is maybe, and, we'll take a look at this more the, stock might have come down and really touched that 10-day. Low about, right, there and that, might have stopped out then. The price comes back up to the 22 high so I might view that as a potential entry price, pulls back doesn't touch the yellow line runs, back up pulls back doesn't touch the yellow line the, yellow line might be a spot, potential. Where, an investor, might consider, having. The, stop and if that line for example moves up that. Line moving up is really showing where the investor, might if. That line is actually going up like it has been lately that's, visually. Showing that, the investor that the 10-day low has increased, and the, investor, can evaluate. Hey. You might consider raising, up the stop now. The, red, line the, 20-day. Low what. You're going to notice is well, that's. Just going to be a lower. Stop, so. Think of that as maybe more longer-term. Okay. Now. What I'm going to do is I'm going to kind of show you this so I kind of just evaluate, so we. Talked about the two upper lines which those we call really more shorter, term and long. Breakouts. The. Purpose, of the lower lines, is to show, when an investor, might visually. Have. A stop, if, the investor, was maybe in that currently, but, it would also show, historically. Where. The stops would have been overtime, if, they're, using, attend, a low or. If, they were using a 20-day. Low remember. When we talk about a 10 20-day low it's not guaranteeing, that the price will fill it exactly that price level if, that's where the stop was you, still have to see where it would be filled, ok, now, what. You're going to notice is at the bottom here I wrote. There where it says chart, start. Script, and what, you're now going to see is ice on, the circle, this okay, now, this is where James, is going, to go real, slow. Now, some of you want to see that I'm sure ok, and now, what you're going to see is I'm just gonna kind. Of talk about how. Could an investor, put this chart, on their. Paper, money account so let's show, this we're. Gonna need those let's, see seven, letters okay, and numbers. Remember, it is case-sensitive. Alright, now. What you're gonna see is if we now, what I did do ahead, of time is, I.
Also Put, that script, right. There and if, you don't mind not so, I when, I say right there on the, left hand side and the scratchpad you're. Gonna see this as chart and that's. The script that we're gonna use right, now in other words how, does the investor, put that on so. Let's do this so, all I'm gonna do is I'm just going to take those seven. Letters and numbers and, what. We're going to do is going to go up to the very top where it says set up and then. Open, shared. Item so I'm going to go real slow here okay so we're going to take those seven, letters on the left-hand side top. Right go to set up open. Shared, item, now, I'm imagining you mall so might watch this on the recording, you might, be listening and also trying to do it at the same time so. We went to the very top right set, up open shared item we're good now. We're gonna just do is just type those in November it is case-sensitive now what, you're going to notice in this case is we just typed those letters in so I think everyone here could type it in even if you said James I have, to kind of do one finger at a time that's okay type, it in and at. This point we just now want to see or in other words preview. So. We're going to click on where it says preview, now there. It is now it'll give us a little snapshot, of what, this chart, really, looks like okay, and now, what we're gonna do is say yeah that's the chart that I want to see let's. Go ahead and just open this. Now now. What you're going to notice is it gives us a chart, a small. Chart so we could kind of open. This up and I'll do that you're gonna see that gives us a small chart let, me kind of open this now. What it does kind, of interestingly on, this, computer didn't do it on the other computer when I was doing this it. Gives us a kind of a different color on the background, well. If we, actually take a look at this we're going to click on the gear if you said James I don't want that white background pink, background, black background, let me just show you one way to quickly, fix, it. It's what you expect if you're. Thinking about changing, a setting, go right to the setting so let's do setting if, we click on setting, right there and it's. Pretty, much what you'd expect James, this is more of an appearance, thing right so. We're going to go right to a click. On the, setting. And then. Go to appearance now. If you click on appearance. One. Of the things that what you see is it will ask us what background, color do you want well for this case I don't want this Rose, color, here so, in this case I'm just going to change this to right where maybe it just has a white, color, okay. And there. It is and if you don't mind so I just changed the background and I, don't mind so you could see it better I'm, also gonna select, the fill up okay. In other, words where it checks, that right, there, okay, so, checkmark, on both those alright that's the chart set, it up that's how simple it is so now, if we want to save. That we. Can go right up to where it says what you'd imagine is, go right to star and if. We go to style right, there you. Can just go to where it says save. Style. So. Let's work with this a little bit let's just kind of see historically, kind, of what happened, let's. Kind of see what happened, over time and then, where some of these are now to see, kind, of how how, it could work and also, some pros and cons now. What I'm going to do is I'm going to first bring up some of you might be thinking James, let's. Maybe use a stock potentially. Even something like Apple. And what. I'll first want to kind of show you is here I'm going to bring this up is this is going to show you down this is really looking at on, November. If. The stock, is hitting. The. 20, and. 55. Day high you're. Going to notice that both, of those lines you notice when I put my cursor on it it goes green it. Goes blue green. Blue. Right, what, you're going to notice is it's saying James the, chart, is hitting, both, so. What I kind of want to show is let's. Say the investor, was in the stock all through, here the, investor, saw. Potential, entry they're in well. If the investor, was for example using. Let's say the 10-day low which. Is that yellow line, so let me remind us ten day low the yellow line the. 20-day. Low the red line now, let's. Say that that stop was right about let's say 258. Ok, now, what you'll notice is the yellow line drops, down is it. A good idea to. Move. The, stop down. Because. What you'll notice is in this case if the stop was about let's say I don't, know 262 or so the, stock kept, below. That, and that, most likely would have been filled at a lower price okay, so, let's say the investor, gets stomped out the, Ambassador says well I'm looking for another short-term, or longer-term.
Breakout, Well, after. Being stomped out day 1 day. 2 day. 3 what. Happens, on, day 3 the stock actually goes right back up and what. You'll notice is it's hitting the twice, tea day hi and. 55-day. Hi James. Why can we not see, the two different lines because. They're hitting. Both twenty. And fifty, five D highs now. How many of you might, be a little. Emotional. At that point thinking look James the. Stop-out was right there I don't want to get back in because I just, got stomped out well. The job of the investor, is to trade what, they see. No. James I want to tell you how I feel. That's, not technical, analysis. Feeling. Is behavioral. Finance not. I'm a behavioral finance tamo, trading. What the investor sees three. Days later it gets an entry point so let's kind of follow it so, the next actually couple days the stock kind of sits there said said said since, notice. That over a couple days hits hits. Doesn't. Hit touches. Touches, touches. Touches. And, touches, again so all through there if someone is actually looking for a shorter term breakout. They're, getting, multiple. Signals. Or. Potential. Entries now what, you'll notice is on the bottom, there the yellow line now I'm going to quiz you just real quick what. Does the yellow line, represent. What. Does the yellow line represent. What. Does the yellow line represent, type that in and number. Two what. Does the red, line. Represent. Type. That in now. What I'm going to do is going to go forward and notice. What you'll see, is if the stock actually goes up that, yellow, line, is increasing. Why. Is it increasing, well, because the yellow line, represents. Answer. The. 10-day low and if. The stock is actually going up higher and higher the. 10-day, low will increase, and, what you'll notice is in this case the, 10-day low is increasing, the 20-day, low is increasing, and what, you'll see this over time is why, do stocks. Keep, going. Up, well. Sometimes. These stocks can just be like momentum. Where the stocks keep. Bakery. Short-term. And/or, longer-term breakouts. And just. Kind of like an avalanche but not down but, up its. Avalanching. To the upside, okay. Breaking. Through orbit and the. Stock just kind of carries, momentum now, if we go forward here now what does the investor see on the right-hand side well. If the investor, was actually setting, a stop using. A 10-day. Low, well. On this day what you're gonna see in this case is probably, right about 308. That. Stock, so what you're going to see is the highest, point. Of the yellow line was, probably about 308, and, this. Day this, day being. 127. You're gonna see that it went down at the low and touched, so. This would actually be, if the investor was using a shorter, term stop, they. Could have, been triggered, out on, that. Day. Now. Just. Type in does that make sense, now. If the investor was maybe using let's say a 20. Day low as a potential. Exit, the. Exit, had the criteria. To exit was, not met because. The price is not down to that red line okay, now. What you're going to see is if we go forward a little bit let's gonna see what happens now, what you're gonna see the bearing two days later the. Stock after getting stomped out goes up and touches that line again, one. Thing that you'll recognize from. Evaluating. This over time is when. The investor, gets stomped out it's not infrequent. Or. Unnormal. To, see reentry. Potential. Very. Quickly, right. After being, stomped out that's, not unusual okay. Now. What you're going to see in this case if we go forward now, what you're going to see is if the investor let's say took. An entry and this was the day after earnings. Okay, that's. Why you see it right there but let's say the investor took an entry and what. You're going to notice is that stop, they probably would have been stomped out again that was making an assumption, that the, investor, was going to trade right. All right, earnings, within hours okay. But nevertheless we see the point okay, so there was a touch there. Was a touch there's two times where, that stock, comes, down to that line and touches. Now. Think of this as being warning, signals. Because. Where are the exits, well, now if you actually go forward now what you're going to see if we go forward a couple more days the, stock actually see that these two lines now.
Start, To converge, the. 20-day. Low and. The. 55-day, low excuse, me the ten-day low and the, 20-day, low they're, the same so, let's watch this so. Now what we actually see as we go into this you're gonna see that the stock. All. Of a sudden kind of goes more flat. The. Stock actually right on to 24 breaks. Down, okay. Now, let's watch this and we're gonna look at some new examples, so, if the stock actually starts to break down if, that stock, is touching, the ten and twenty day low, the. Question has to be where are the investors, exits, the. Investor, knows that the stock is in trouble because it keeps hitting, the. Lows either. Or and if. You take a look at this we know that there's not entry signals, or setups. Because. It's not going to touch the 20, or, the. 53, 55 be high. Nowhere. In here, is the. Price touching the 20 55 be high let me tell you something very important. Knowing. When, not to, get. In is, just, as important, as when. To consider, entry, so. And. Being, patient, is, critical. Because sometimes, when there's not a potential, entry signal there's, not, a potential. Entry signal okay, let's, go forward here let's. Kind of keep going so the stock actually goes down there's nowhere near now. What's kind of nice about this, is if we were looking at this hard right edge and someone. Said hey James is there. A potential, entry using a 20-day, high well the, current price is right here and that. 20-day, high is right there so. Did. It meet the criteria. No, it didn't okay. So it's kind of you could see yes or, no it, doesn't, meet the criteria at that, moment in time if, we go forward a little bit fast forward when. Does it actually meet the criteria, when does it actually hit the 20-day high well, the price actually on 4:13, does come, up and touch. Really, that, 20-day. High again. Kind. Of go back to that comment trade what you see well how do you trade what you see if you can't see it okay. And then once you get in how, do you evaluate where, the potential stops could be what's. Interesting is on the, far right hand side you could see where the highs and the lows are. But. Also you could go back historically and, then, see how it would have worked over, time, and. What the pros and cons were so, if we go forward now what you're going to notice is let's say the investor takes an entry and let's. Say the investor says James I'm going to set the stop at a 10-day low so. What you'll notice is over time we're just evaluating, did the stock go down in touch so, let's say they take the first entry hypothetically. They, take the first entry in that entries right there let's, say they actually said James I'm gonna set the stop right at the 10-day low what. You'll notice is the price over time did not come down and touch the 10-day low or, fast forward in time fast forward, and you're, gonna see that that 10-day, low was never. Touched. Does. That make sense. Now. What you're going to notice is some stocks are going to be better than others in terms of the consistency. Of the. Trends, okay, now. I want to stop right here and I.
Want To ask if, there's any questions. So far. Do. You understand, what we talked about. Any. Questions, so let's take a quick moment and just kind of see if there's any questions. Okay. Now, one thing to also kind of bring up is when. The investor, is looking at a stock let's say they actually said James. Could. You evaluate. Facebook, if the. Investor, says James let's evaluate facebook is it. Hitting the twenty, or fifty five day high someone. Could bring it up and actually. Say well based upon the, current price and the criteria, you're talking about it is not touch, the, 20 or 55 day high it's. Right there the, current stock prices right there if someone, who is using a 10 or a 20. Day low as the criteria, for exit the, stock has not gone down to that. Low point yet it has, not met the criteria that. Make sense so, it's just kind of interesting when, you kind of hone it in like that you. Start to kind of recognize what, is the strategy, now. Stella. Actually, says can you actually set up stop. At the 10-day low well let me kind of use, a quick, example, okay so. What. I'm going to do is in this case I'm going to use a stock, for example, I'm gonna go back to maybe a stock. That we've never heard of called Starbucks. Alright. So, let's, take a quick look at this so I'm going to ask you a question tell, me if the stock is actually hitting, a, 20. Or 55, day high say yes or no or. You could say James meets, the criteria, okay, so, is the stock of Starbucks. Hitting, the, 20, or. The. 55. Day high and you, might even say James it's meeting, both, criteria, now, what you'll notice is sometimes, if that stock is really going up in the shorter term yes. It could be touching both, of those lines in it is, all. Right so let's say the investor, says James is it possible, on, a stock, trade, to, maybe just say look I'm gonna actually buy the stock, now, what you'll notice is on, 6-3. Did. The stock go up and touch those lines and met. The criteria did. The stock uh yesterday, go, up and touch those lines it met, the criteria if, we, look at it today did it go up and again touch that this is the third day in a row did it go up and touch that it met, the criteria so. If the investor says you know what James I'm gonna take uh potential, entry I'm gonna right click on the chart drop. Down to buy custom, and go with. Stop. Now. First thing I want to also mention is another question here is does. It have to be. Bring, back up okay I see what it did does, it actually have to be a stock, trade, maybe, if the investor saw doing, that maybe the investor wants to do a long call a long. Synthetic. They, want to do a short put a short. Put vertical the. Answer is there. Those are all bullish trades so, if the stock is actually hitting short-term. Or longer-term. Highs, we're time at the 20 or 50 five-day highs the. Investor can pick what. Type is strategy it's not just stock spoke. A where is that stop and, let. Me go back to something just for a quick let me bring that up there. We go so we're up, don't. Actually see, bring. Back up Starbucks, where, is that stop well that stop or that I should say the ten-day low if, the, investor was setting that stop at the 10-day low. 76. 56. So. If the investor, says you know I'm gonna set that stop right, there. Bring. That back. Bring. That back up so I got this overlaid 76. 56, there. It is stop, day, GTC. Okay, so, there it is so, there's the potential entry price it's a limit order that's the max the investor is willing to pay a stop.
Is Saying if it goes to that price, or less. Sell. The stock it could, be filled lower, yes. So. The other thing I really want to bring up here is from, a routine. Standpoint. So. If the Ambassador said James I'm in let's say Starbucks let's, say they were using a 10-day low as far as a criteria. They, went to work that day they walked the puppy that day they played with the kids that day what, they're evaluating. Is are those, lines increasing. And if, those lines are actually increasing the, investor, gets to pick well. What they could do in this case is they could raise up the stop based, upon, the tenth the lows. Increasing. Over, time okay. So, you can visually. See the, lows, are increasing, the line is just plotting, for you where. The, ten-day low is, okay. All. Right so, let me kind of go back let's kind of just put this just. Real quick back on so. Let me kind of show that let's kind of use our box as the first example so, this is 100 shares of Starbucks 8201. 75. 56, stop. GTC. Now. If you take a look at this if the investor goes confirm and send, memory. Transact. The the cost. Of the order including Commission, the, capital, buy the shares the, Commission is zero okay. And now. What you're going to see is if that's okay what the Ambassador remember we talked about the stop let's. Say the investor says send. The order, now. One, thing I also want to kind of impress upon your mind here is James. Are we saying that does. The investor, maybe have to go through a stock. At a time, in other words does the investor just have to say. Hey Home. Depot hey I am, hey, ah. It. Could be a ticker. Of Gd, whatever. They. Don't have, to just. Pull. Up individual, stocks and see. If the stocks might be meeting, their criteria as far as a hi to consider, potential, entries they don't have to do that now, remember right on the page that we've always talked about one other thing I'll quickly mention here, is you're. Going to see about, half, an hour ago I posted this you're, going to see that also, right on the market, watch quote. Page. You're. Going to see that if now I'm just using the Dow Jones as. An. Example, so. What this is doing is imagine, that this was a list, of a watch, list of an investor, and they. Said hey James I would, like to evaluate do. Any of these stocks, meet. The, criteria. Well. If. We just said this was someone's watchlist, not Dow Jones well. Yeah you could go over here and say well the stocks that are actually hitting 20, day highs or, the. Stocks for example, that are actually hitting the 55. Day highs. Anything. With the one caught, that one excuse, me though it's gonna show one with, a green background that's. Really saying it is meeting, the criteria of, a 20 day high the. 55. Is with green is also saying it's, mean. Bacteria of actually, Haley with 55d hi what if it says zero. Well. And it doesn't have green that's, saying it is at a twenty day high but. Not, a. 55-day. Hi so question, here might be does. It have to be both, well.
Not Necessarily maybe, the investor is saying look I'm looking for any breakout okay, it could be twenty it, could be that it's hitting the twenty and the 55, but. What you'll really notice is when it's hitting a 20-day, breakout a lot. Of the time not all the time it does also tend to be hitting also at 55 D hi imagine. That this was someone's watchlist, and you're, going to see that most everything, that, actually, has a 20 B high also, has, a. 55-day. High alright. Now. If someone said well James can, the market watch even state. Do. I have to go look on the chart where the 10-day low is and where. The 20-day, low is well no you're. Going to say that I'll say 10 L for the 10-day low and the 20-day, low so if the investor says imagine this was someone's. Portfolio. And, they. Were evaluating, saying you know James I own a stock called Cisco and the, stocks at $48. We can see that and instead. Of going one by one by, one by one the, investor, could say look the stocks at 48, what. Are the options. For potential, and, potential. Exit, if the. Stop, was, set at a 10-day, low well, stop. Number one example could, be. 44. 12, so. The investor would say is, $48. Lower, than. 44. No, it is not so it hasn't breached the 10-day low and that would obviously mean that if it hasn't breached the 10-day low then. It can't be breaching the 20-day low and you're, going to see that the current stock price is above. Okay. Both. Those lows which means it's, still, in an upward trend so, someone, could just bring it up on the market watch tab and just say hey if any. Of those stocks are below the lows could you let you know by showing, a red color and it. Could do that okay, now how does the investor, actually put. This on their page if they so, decided. Well. If we take a look at this on the left-hand side let me bring this up okay. Bring. That up right there so if the investor said James I like to come in maybe instead. Of looking one by one for. Potential, Bullis entries, or exits. Remember. How does the investor, put this on let's go through this last one here and you're. Gonna see if you go to where, it says ah, and. I'm just gonna copy this I'm. Gonna go right back to setup, okay. Go, right back to open. Shared, item. Remember. Case sensitive. And all, we're gonna do there is we're just gonna say we're. Gonna type in there but where are those letters those letters, and I, label it as market, watch market. Watch quotes. And, now. What you're going to see isn't going to put it right there and if. We click on preview, what. You're now going to show is it's going to really be showing that really the work space and it's if the investor goes to. Market, watch and, brings, up a list those. Column, headings should really. Be matching, what. Was shown. Here. Okay. So, that's if out and. I. Could lend, I could take a look at that I did, double check that but I will take a look at that okay. But. That's what of that you should be showing is if you bring up let's say just, start with a smaller list, okay. Look. And see what the column, headings are and we're looking at what page well. The page that we're looking at is the market, watch, okay. So, the market, watch tab market, watch and then. We're going right, to where it says quotes. So. If the investor, says hey James I want to take a look at let's say a sector, list.
Those. Column. Headings should be changed, with a 20-day, high and a. 55-day. High okay. Now, there's something I want to kind of also. Yeah. I can bring that up yes so, one thing I also want to kind of bring out so I'm going to take for example, stock number two here and stock. Them or two here that I'm going to bring up is I'm going to bring up Ross Stores. Okay, let. Me kind of go to that chart that we had it set up let's take a quick look, and, so, one thing I kind of want to bring up to you is how. Does someone maybe. Dial, in, maybe. The settings, for them all. Of us here today are not the same, some. Of us like to do day trading some. Of us like to do swing trading some of us like to do trend trading let, me kind of show you a quick variation. That the investor, might consider, so. What you're going to notice is the stock of Ross goes from one hundred twenty four all the way down to 56, the. Stock had to go from, $56, all. The, way to almost. A hundred, before. It, actually triggered. At. Something. Where he was saying hey James it meets the criteria of. A. 20, day high now how many of you think that, almost. Getting the stock to double, in price. That. Is a lagging. Potential. Setup how, many of you would agree with that okay and I hope you do because if. Someone's, happened to wait for the stock to double, in price it. Better be a big. Trend. So. If someone said James I'd like to be a little earlier, than late. How. Does, the investor. For example, change. This now, remember we have a little saying that says when, in doubt, right. Click, where. Do you right click well. If you're thinking geez I don't want that maybe that line being the 20 day high could, me invest or maybe alter. This a little bit let's do that right, click on that green line when, in doubt right click. We. Right click on the green line and let's, go to edit now. What's gonna happen is we're. Gonna go in this and actually take a look at this we can bring this up and it's not allowing me to do this on mine here. But, you can also go in and just say look I would like to change this to, really a 10 day low and the other way you could actually really do this is if, you go right to the test tube okay. Right to the test tube. What. You're going to be noticing, is you can click right on the script there and, you could say look instead of let's say a 20, D hi you. Could say look James I just really want to do in this case a. 10. Day hi now. If you win from 20, to 10 what. Would you think would, happen, well, it's something if, the time period, is shorter, it should. Be more. Responsive. So. Let's take a look, let's. Click on now apply so all we did is we took 20, out of there and put 10 apply. Okay, so, let's take a look at this now so. Now what you'll notice is on the stock like Ross you're. Going to see that when that stock actually rebounded. Okay so when it went up you're, gonna see it went from 56, before, I almost had to go to 100 now, the stock, was right about 86. Or so still. Pretty large but. You're gonna see that as you cut the time down it's, going. To be more, sensitive. Okay. And I, this a good way to put it in other words it's, it's gonna give. More signals, okay, now. What I was, you're practicing. This, I think, when you say, James. When I'm practicing. Kind. Of give me some guidance on maybe where to start and I think this is really important okay so and, I've. Practiced. This for years okay, I've. Gone back and kind of tweaked it over time so, one thing that I kind of is you practice. In your paper money let me give you some guidance that you can practice and evaluate, pros and cons so. Number one if you. Get a short-term entry whether it's a 20 day high or 55, day hi either. One, of those as we mentioned, the investor, might use those as a potential. Action as a potential, entry. Signal. If we're. Talking about setting. A stop okay. The. Reason why I showed, you the 10-day low is to. Show you the closer the time setting, the. More probable. It is that. The investor, is gonna get stomped out but I want to kind of show you some examples, where, the investor would have gotten stomped out what. You might find is 10, might not be appropriate from some investors, who, are trying, to ride the trend that. Number, of 10 might be elevated. To 15. But. Maybe, keep it at 15, and then. Maybe in this case also, for the longer-term trend, trader they might still, use the 20 okay, so let me recap that if, the stock actually gets a 20 or 55 day high the investor, could say look I'm gonna say. It meets the criteria I'm, gonna practice an entry in the pay plant account if. You said James what, could I also practice, as far as a potential, exit, well, you might look at the 10-day low and you might say, do. You mind and maybe potentially, getting stomped out more frequently if, that, does affect the investor, the investor might, move the 10 maybe move it down to 15. And maybe. See if that gives the stock more breathing, room to. Trend. Okay. Those. Are the slight adjustments, I think when you're practicing that.
You Might make so not major adjustments, just a slight tweak maybe. Not the 10 on the moving on the stop but. Maybe like a 15-day, low to, allow the stock. To trend now let's, take a look at this one so we're gonna look at Rost and we're. Going to go over here, we're gonna go here to the right hand side and we're just gonna kind of evaluate, I'm gonna ask a question has, the stock as of lately been. Has. The stock asset lately been touching the, 20, or the 55, day high, well. It actually if you go back to just recently it touched it there it. Touched it there, it also touched it here and it also touched it here remember, when you see people talking about investments. They're. Always talking about what's happening, on the hard right edge but. They can't visually, show you where those entries would have been over time I think. It lacks some inch I think it really lacks. Think. It lacks information, here. The investor, can see what happened, from those if, the investor was going to take the exact same entries, how, would those. Entries. How, would they have worked over time and. I think the investor needs to see that okay to, see full disclosure, now, what you're gonna see is that stock is now touching both. The 20, and the, 55, day high now when. We go back and really take a look at this let's say the investor said you know what James I am, going to use the investor says I just want to verify. And. I just want to go back to just yeah so this is actually using the 10-day low I just Rivera, fide that. $91. Is really using, that 10-day. Low that. Right there is still, the. 20-day. Low and it's plotted, for us so, let's say the investor says you know what James I'm, gonna get into the stock okay, and I'm, in this case going to just set the stop right, at, that. Line. So. Let's say the investor says they're gonna buy Rost and they're, going to set that stop right at that line in that line let me go back on that chart where is that line the 10-day low well, the 10-day low is at 90. 180. Okay. So, when we bring back up the chart let's bring it back up. You. Got to minimize that 90 180 I'm gonna set the stop right there about 90.
180. So. Here's that potential, entry now why is the investor, considering, entry because it meets the criteria. You're. Now gonna see that's a limit order now. What you're gonna see is there's a stop it's. At 90, 110, now. Member if the investor said James I don't like stops, that. Are that low I am. Opening. Up the door for you, to actually cat to. Review. How. Those stops would have worked out over time if you would have had the, exact, same stops. Using. A low method okay, that's. Something that you could actually define, for yourself you don't need someone else to tell you that you, could look at it and say would that be something that you might consider okay, now. If you take a look at this one oh four oh seven stop, is at 90 180 there, it is stop, day GTC, so. Remember that stop is saying if it gets to that price, or less. Then. Sell. The. Stock, now. If you take a look at this and go confirm, and send now. What you're going to see is in this case it's only just doing in this example, 25. Shares but. You're now going to see a zero on the on the we've, got the cost of including the Commission, remember, we talked about the stop it could be that price or less. Now. What's very interesting. When you take a look at this okay, is when. You go back and really take a look at what we're talking, about is. Does. The investor, have a set methodology. For. A potential, entry now remember we said you can sum up all entries, into really. Two main types number, one close. Above, the high of the load a, cold. Number. Two, is. A breakout and whether. You physically. Say you put, a quote you quantify, and you put a number and say if, the stock were to hit a 22 high or if. A stock were to hit a 55 B high that. Meets, the criteria that, investor, takes the entry what. You're going to notice is the difference between investors. Is discipline. And. Emotion. But. The question, is what is the investor, being disciplined, to if, they. Can't see, what they're trading, then, you wouldn't expect that they would be disciplined, if, the, investor, sells out right, when the market, is at the, bottom, coming, down here why. Does the investor sell out well, the investor sells out down near the bottom because. They didn't know that those stops were already breached a month prior, if. They were using, a low method, and then, they succumb to not a discipline, of a potential, exit that could. Visually. Be seen on the chart they. Succumb, to emotion. Because. They never knew what to be disciplined, to. Per. Their liking, and so, it's one, thing we want to really do here is as we go for now I'd like you to put the 10, and the. 20-day low on the. Chart I would. Like you to also look at some stocks that you typically, look at and I, would like you to go back over maybe the last three six months or so and identify. Maybe just kind of each time the stock touch that twenty or twenty, or fifty five day high I, want. You to imagine in your mind that the investor, took the entry and if they took the entry where, were those stops, visually. If. The stock did, it hit the ten-day low was. The investor, able to raise up their stop, if. The investor, was going to choose a ten day lower what. They may be considering twenty day low does. That investor, want to try to ride that trend, for a longer, period of time that's, up to the investor. To decide but. Now we. Kind of took away some of the major problem. Being. Able to see it what. The actual strategy, is and what the pros and cons are of really taking shorter term entries vert. Entries. And exits versus. Longer-term, entries. And exits okay. So, those, are the things I really wanted to cover here today our learning, outcome here today was learn. An entry. And exit. Signal. Or setup, where. We could visually. See it on the chart okay. And I, think this is actually really important, I wish, when I got started somebody. Would actually gone back and said James let me kind of just show you a set up and what. Would have happened with those setups over, time I wish. That person, would have said hey James you could define or customize, to your liking do you want to be more active or passive but.
I Think from a learning, standpoint it would have really helped me earlier. Okay, now, the two trades that we actually did here is we talked about for example Starbucks. And we. Also talked about the example of Ross, those. Were our two paper traits we practice. Using. Being able to see the highs and also. Practice, setting the stops using. A low. Method, be. Aware that you could go in and change those lows and maybe, customize, those to, your. Liking. Now, remember, with what we talked about here today in order to demonstrate the function of the platform, we, did use actual symbols, remember. That TD Ameritrade, does not make any recommendation. Determine. Suitability of any security, or strategy, it's, up to the investor to decide what, they want to invest in and what. A strategy, and that's kind of actually nice that you can actually have the control of what you want to do now. Quick, heads up coming up in just a short bit my. Good friend Mike Follette will be doing a class on market, Week in Review, Barbara. Armstrong, will be doing a class on called trading, a smaller, account, and also, John Mineko be, yeah. That would be on Monday so two last classes for the day hopefully. This has been helpful for you to visually. See what. We typically talk about but, we just actually brought it to see, it on the chart, I also. Want to actually say thanks, to, the. Chat, thank, you Ken for helping me on the chat as well State, to also be aware of Ken's class where he talks about scripts we. Call a mr. script for a reason, so with that said thank you so much I wish you I stay. Tuned for Mike Fleck coming up just shortly you, can also subscribe, to our channel on trader Tots and or investor, insights and, with that said Mike flat will be coming up just shortly thank you so much take care bye, bye. You.
2020-06-09 17:18
