Using Pivot Points | Trading Futures

good morning everyone there's the bell and welcome to another fantastic week of education with td ameritrade i'm john mcnichol and this is trading futures we're going to do is we're going to talk about pivot points how they may be applied to some index futures talk about trade setups in the week ahead so stick around [Music] all right hey it's great to see those you that are with us live here on a monday morning i hope you enjoyed your weekend we got sandeep uh we got the beck uh be back tony tm edward we got uh bovee ricardo mary and everyone else mr ken rose is helping out on the chat any questions i am unable to get to uh he'll be more than happy to help with us today you can see my twitter handle on the screen if you wish to follow myself and other fine instructors such as ken rose it's just our first initial last name underscore tda as you can see uh jay mcnichol underscore tda is mine that's where hopefully you can learn more about our instructors coaches here at td ameritrade education as well as a little more about the markets let's take care of disclosures folks and we'll get right into it content is intended for educational information purposes only not investment advice or a recommendation of any security strategy or account type options not suitable for all investors please read the previous provided copy of characteristics and risk standardized options and keep in mind you're encouraged to practice what you learn here today with tools such as the paper money software however it is for educational purposes and successful virtual trading during one time period does not guarantee successful investment of actual funds during later time periods market conditions change continuously keep in mind futures futures options trading is speculative and not suitable for all investors as well as the futures and futures options trading services are provided by td ameritrade futures and forex llc those trained privileges are subject to review and approval not all clients will qualify commissions do apply in the case of futures and should be considered when evaluating any trade now wallace webcast may discuss technical analysis other approaches including fundamental analysis may assert very different views and as always folks all investing involves risks including the risk of loss now if you're new to this webcast uh welcome this class may be a little more uh intermediate although sometimes we dial it back a bit but if uh if you are new to futures my good friend ken who's helping out in the chat does have a kind of a getting started futures basics and beyond webcast later in the week so keep an eye on that schedule and as you can see uh if you're unfamiliar with me been around with the organization as many of the instructors have and have quite a bit of extensive background uh in the markets particularly in technical analysis let's look at an agenda folks our agenda we're going to talk about pivot points applying pivot points on some of the index futures practice trade setup and then we'll uh with the time towards the end there uh see how things may be setting up for the week we start still are in earnings uh economic reports which can impact the market and shorter term on the futures uh more news on the inflationary front uh expected as well and uh for those of you that are listening in uh ken just posted in the chat to his futures basics and beyond classes every thursday at 12 p.m eastern time so great follow-up webcast uh to what you're learning up here today all right let's go ahead and go to the platform uh as uh we are opening up here uh you know s p uh starting off um as far as on the cash index there a little on the flat side but there has been some activity uh overnight uh we kind of zoom in what we're looking at we have a daily chart here on the left and we have a five minute chart here on the right if you're following along particularly if you're new there is a shared grid template for thinkorswim if you go ahead and transcribe that i'll also go ahead and paste that code in the chat make it easier but you can always uh copy and paste that or transcribe it and for some reason that did not work let me see if i can try that again uh whoops looks like i made a little bit of a faux pas there let's see if i can get that in there again all right looks like i had a little bit of an error and i lost that code let's see if i can go ahead and reload this here bear with me a little odd issue with my uh copy and paste there we go that may be a little bit better there and see if we can do that again i'm going to go ahead and copy that and see if we can go ahead and paste that into the chat all right i think we're back on track keep in mind it is case sensitive so caps or caps lower case is lower case if you go ahead and plug that by just going to the setup in the upper right hand corner of the platform click on setup open shared item and then go ahead and transcribe or paste that field in thanks for sharing that as well ken and then once you bring that up there is an import function it may ask you to overwrite if you have an existing grid that's similar and when that pops up it should look something similar to this and as an example starting off looks like it has the the s p micro contract uh future but you can plug in whatever future you want an example of a daily chart and over on the right a five minute chart with the pivot points which is our topic here today so i'm just gonna go and close this out since we already have that uh also when we're on the on a grid chart you know i can go ahead and right click on one of the charts and maximize that so we can get a bigger view of pivot points and what they are now what pivot points are is essentially a calculation based off of previous price action looking at highs and lows you know open and closing areas over a particular period and plots uh potentially support and resistance areas based off of that previous price levels now uh one can go ahead and and use multiple pivot points as we are using in my shared example uh to add the indicator uh we simply go up to the beaker uh on the uh chart click on the beaker and uh you can see i already have these indicators added but if you were and if you use the shared grid chart i sent you they should already be in there as well but if you were to create these on your own uh make them your own you can go ahead and search for the indicator and list just by typing it in and just start typing in only type the whole thing and you can see a series now uh we're going to utilize the standard pivot points but there are variations from you know other technicians that may have made some tweaks on the indicator simply if you look over to the right to the indicator there's a question mark we can click on that question mark and when we go ahead and click on that question mark we can go ahead and take a look at that indicator and let me click on that bring up and on the help there as we scroll down you can go ahead and see on how some of these areas are calculated as far as the definition pivot points to study its purpose is to provide three key support and resistance levels whether using a daily weekly or monthly time frame now in our discussion here today we are using pivots derived off of daily periods uh as well as from a weekly perspective okay if one wanted to you can certainly apply more of a monthly if you're looking for more of the larger view as we scroll down and i may have to pop this up and down a few times there uh you can go ahead and see that breakdown now if you want to take a deeper dive if there is more information if you scroll down there is a link that says more details and if i click on more details that'll take us to the learning center uh the learning center folks is a very underutilized uh aspect of the thinkorswim platform and not utilized enough i guess a little bit of a faux pas here as uh for some reason it's not loading up i don't know if i just had an update uh another way of getting the learning center you can actually uh google learning center as well let me see if i can bring up a web-based version of it that's two minor little hiccups here this morning but you basically just uh google for uh thinkers uh think or swim learning center uh the website's actually tlc that's a nice term there tlc.thinkorswim.com uh when you come here again another underutilized portion of this is the search function and it's a little shaded out here but it's usually in the upper right i can go ahead and type in pivot and notice i didn't even get that far in but there's pivot points and this would be the page that it would take you to uh on thinkorswim on that more information and you can see how it's calculating some of that information based off of previous highs and lows to plot this information there and then if you want to take a deeper dive on looking at some other variations like such as persons pivots uh you can feel free to do that as well and the levels uh that'll come out you know will be what's referred to as a a pivot point kind of think of that as kind of a a center point so to speak uh for that particular period you know as far as possibly overall bias uh for that period of time you know price action is uh more above the pivot that may be more of a bullish bias whereas with the price action if it is below the pivot you know maybe along the lines of being a little more bearish uh reference there okay and then uh the beyond that point one would see potential areas of support below the pivot as well as potential areas resistance above that pivot now typically as far as the default settings uh usually it's the first two levels that are plotted uh the third level is hidden but you can go ahead and turn those on we'll show you how to do that so when i come back on the i think or some platform and go to the charts go right up onto that beaker when you add those indicators you can basically just add them twice if we're going to look at two different periods so you know just double clicking or highlighting it and click add selected notice we can move those indicators over here if you want to remove them you just put your cursor on it and x them out and as far as modifying them since the default setting is day you can simply go ahead over to the gear on the application clicking on the gear and you can make that time frame whether the default daily weekly or monthly so we adjusted the second one to a weekly when you look at the pivots you know here's your pivot settings down on the bottom pp for pivot point your r levels and s levels uh notice as we scroll through these you know there's the r3 as i mentioned uh its current plot is hidden if you actually wanted the extra line on the chart this would be something to consider if there's a strong move whether to the upside or the downside where prices move outside of the r1 r2 level one may come back in and turn that on otherwise uh you know just to kind of save some space or real estate on the chart you know some traders may keep that hidden you can also change the colors however way you'd like so a contrast that i did on the weekly chart is i made the weekly pivot gold to contrast with the daily pivot which is actually a purple and so that way we click ok and click apply and we look at this five minute chart we can glean a little information uh as far as currently on today's price action uh right here is the daily pivot notice how the daily pivot is currently acting as resistance we actually did have a pop a break uh just at the pre-opening but went ahead and faded in fact looks like we had what we would call a kind of fade the gap where price action briefly even though is down overnight uh retrace back up to that previous close and in this case basically faded versus kind of moving into a positive territory this is another strategy we'll probably teach you in another session called fading the gap but notice how that daily pivot again looking at previous price action uh it has been acting as some resistance now if we scroll down a little bit you'll see the gold line gold line representing the weekly pivot which is looking at more the last five days of price action price is still above it so this kind of give you uh you know at least an initial bias as we start off the week you know we are starting off a bit negative as we are below the daily pivot reference in late last week but we are still above the weekly pivot uh which implies you know from a larger time frame you know still an overall bullish bias now if prices were to continue breaking down and let's say go below that weekly pivot that may shift that bias even more okay uh but notice how you know price action you know may have a tendency of trading within those ranges that could create opportunities you know for traders to trade in between some of these different price levels okay if we go back and just kind of learn a little more on some of the dynamics on these notice that these pivot points are recalculated daily and you'll notice as we look back over a five year of correction a five day period we can pick up some information for instance just focusing on the weekly pivot okay is where has the price action primarily stayed above or below that weekly pivot point right yeah above okay um so you know positive week with the s p you know it's been making highs and for even from a micro level here looking on intraday we can see how that's supported uh you know if that bias was to change a shorter term we may end up seeing a break below some of those pivot points in this case on the weekly pivot now also notice another thing here is notice on some of these days we can see kind of an expansion of these pivots where the difference between those support and resistance areas may be wider and in other days where they may be more constricted this is kind of and you know whether it's a uh a fault or a feature of the indicator it's just something to keep in mind um is when you have longer range days you know this will be example here looks like tuesday right kind of more of a trending day after uh you know opening lower you know traded up through the rest of the day notice kind of a reversal day just turn around tuesday uh where price got above uh the pivot point and basically held through the rest of the week so kind of a reversal but more to the point as uh attempt to explain is notice on the next day uh the pivot points were expanding so think of it from a standpoint of almost like uh volatility let's go uh see if i can go here and kind of go full screen to make the point is when there is a larger price movement those pivots will expand when it's more of a let's say a consolidation day where prices may be a little more constricted those next pivots will actually become a little constricted so keep in mind when there are wider pivots and we're thinking about targets maybe we're not necessarily looking to capture that full large move but maybe a percentage of that likewise if we see price constricted over a period of time we know we may have those outside days where prices may break there may be an expectation where prices may not only hit one but possibly multiple pivot points and so that may be considered in some of the trade management there okay all right so uh you know we're looking at forward slash mes uh you know if i look at the main uh the my mini contract uh forward slash es you know notice regardless of the the index or or stock whatever you're looking at you can see those pivots being applied and so we're still seeing the s p rejecting uh that daily pivot and you know in this case this would potentially be a trade uh where if uh prices trade up to that resistance looking for a resistance bounce you know we may look for in this case a short where one may look for that bounce and looking for the price to trade back down to that pivot now we do have a news event coming out in about 10 minutes so i'm kind of holding off uh on that i believe we're awaiting the jolts report which is the jobs opening uh as well as the uh labor and my mind just went blank on the last one but basically also the quits rate uh as far as a number of jobs that are open as well as the number of people that have quit their jobs as well um and seeing how that lines up with unemployment so we're gonna wait up on that and see what the impact is on this and we'll continue on this discussion uh on to pivots uh if we go ahead and let's say bring up forward slash rty uh which is the small caps you know you can see from a pivot point perspective intraday you can see that how the uh the russell which was below the pivot let's get the right color here one more time we can see that uh from last week you know the russell's struggling being below that weekly pivot you know kind of form in a little more of a base and a double bottom you know back here on thursday here is the daily pivot we see a breakout of that daily pivot which signifies a potential bullish reversal and then we had a follow-through uh as price got back above the weekly pivot signifying a reversal notice how that momentum kind of changed there and that's something actually carried over uh into friday afternoon now as we're uh looking at the small caps right now and possibly some rotation notice we're seeing a bounce on the russell uh at that weekly pivot again this would be an example of potentially a bullish trade as price you know bounce off of in a weekly pivot particularly if there's some support and look to trade up to the next level which in this case could be that daily pivot uh or if one is if it turns into it would be more of a trending day may look to continue managing and trail up uh to see if it's able to trail up to any succeeding pivot areas okay so there's a contrast there between both the uh the russell uh and the uh the s p futures if we come over here to the left and just looking at some of the sectors and seeing how the sectors are starting off the week um you know kind of a mixed bag we're seeing industrials energy industrials materials being down healthcare consumer staples utilities so more of a risk off at the moment we'll see if the jolts uh jolts the market in a different direction also some other factors uh looks like there was a little bit of a mini um whether one referred to as a crash uh in gold in the overnight there was a big position in gold contracts that were sold off uh broken briefly below 1700 and attempting to retrace back up and notice in this case you know below the weekly pivot as kind of the damage was done now gold has been relatively weaker if we look at this over the last five days it's a little more constricted here let's see if i can kind of pull this out a little bit you know the dollar had a great week uh yields went up as well and you can see in the case of gold uh gold's been struggling and staying below that weekly pivot kind of supporting you know that shorter term bias there uh on the downside so if traders are looking for a reversal on gold you know they may look for you know not only a test but you know possibly looking for to get back above some of those pivots now there's a question from uh tony uh since we are on the subject now notice as we you know whether we're looking at gold or or the indices you know we know one of the attractions is they trade about 24 hours a day six days a week uh in the uh lighter area is basically the regular uh trading hours or you know the daytime trading hours and in the shaded area uh you can see the overnight tony ash says should we pay more attention to overnight movement or daytime movement or or it all matters does overnight movement predict anything for daytime well wouldn't say necessarily anything as far as predictability uh but the thing to keep in mind whether for good or bad uh we essentially are and have been moving into 24-hour markets and uh it's interesting when you go back and see you know some major moves that we've seen in uh some of the markets uh and on the indices sometimes a lot of that move actually occurs uh in the overnight um so not saying that you know one period is better than another but keep in mind uh that you know when one sees the the dow being up or the s p being up or down you know whether it's 20 points 30 points you know 100 points uh in a lot of cases a lot of that move may have already been predetermined uh in the overnight think of earnings that come out after market right or earnings that may come out pre-market that information gets priced in international events as well would be priced into some of those moves too you know whether it's some reports that come out on kovid or as far as in china on uh you know energy consumption or lockdowns and things like that all have a place there and uh you know how much do you incorporate that in the analysis well if someone's a very active trader uh and looking at some of these intraday time frames you know we can see how it has a play can we identify a trend when we incorporate not just the regular trading hours but the overnight absolutely and those even in this case you know with something like gold as it just kind of drew that diagonal resistance notice there may be a bit of confluence with a trend break and potentially a pivot point okay now again these tools for pivot points are uh or more for intraday uh trading if i went ahead and switched this you know to a daily chart it doesn't make a lot of sense okay and if we go ahead and pull this out let's go back to a five minute you know basically on any entry day time frame you know one can apply these now if you wanted to get an idea of a bigger picture uh at least i haven't really integrated the pivot points on a monthly but if we want to make it a trifecta we can come back here and go to the pivot points double click on that we'll take that third period there click on the gear we'll change this to a monthly and then let's say i'll make this a green whoop not there we'll leave the other colors the same there with me for a second let's go to the pivot point and we'll make this one green just kind of see how we sit on a larger period there and this is also where i'm slightly colorblind too where i need to try and see if i can even find a green on this chart maybe i should have used a different color um but for some reason uh yeah let me go back and use another color all right that technical difficulty is uh based off of uh my limitation let's see if i make sure i got that right here like that may be a lighter color just change the right color here the plot is being shown now what sometimes can happen too is it maybe overlaid uh on another period of time which is kind of another reason why i haven't really utilized it and for some reason it's not being shown which i'm implying it's possibly underneath that weekly period there so probably another reason why i haven't uh utilized it in some of these examples here okay let's go ahead and we'll remove that there maybe play around that for next time let's go ahead and look at forward slash es we are coming up on the top of the hour as we uh zoom in a little bit here as we lead into the jolts you know still staying below the uh daily pivot looks like it's trying to hold the s1 level that's below that you know some traders may use some discretionary uh analysis to identify you know trends or support and resistance so you know coming off of the lows from last night you know we can see you know a little more of a trending bias potentially to the upside as we lead into this report another thing is going back and looking at larger time frames so you know maybe look at an hourly chart if one is intraday trading now in in this example it may make it a little bit easier to maybe go to a chart without the pivots and looking at an hourly chart and then kind of identify support and resistance levels on that larger period so here we're looking at an hourly chart uh i can go to a price level tool or support and resistance go ahead and look at some of these areas so this is where it was from uh friday on the hourly where price went ahead and broke down no simple approach on technical analysis how you know broken support you know may act as new resistance and we've seen some penetration on that uh but we've also seen price reverse off of that um you can see i also based off the five minute you know on the hourly kind of identified a little more of that trending action and you know there could be some minor areas here as well uh looking at some of the you know the highs and lows in this case you know from the overnight and then from there uh when we do go to the pivots you know that information uh could potentially be translated over and we can see a bit of a confluence right uh with what we did on that hourly chart and this could be part of a setup uh on you know looking for a trade different scenarios uh would be if price breaks below this pivot you know kind of more of a rise in wedge may look for uh you know price to trade down and whether that goes ahead and test the previous low or possibly trade down this weekly pivot now since this range is a bit wider some traders may go ahead and possibly split that range they're just bisecting that and i can do that with a fibonacci tool you know 50 of that would be right in this area and notice how there's a bit of confluence with about 50 percent of the way you know kind of lining up with some of these previous lows okay um from the glass uh half full you know if we're seeing more positive stuff on the market whether reaction to the jolts if they react at all um looking for this trend to hold and whether looking for a bounce anticipating a break of that pivot or waiting if the price breaks and holds re-test that pivot may consider looking at a bullish trade um let me go ahead and since i'm assuming let's see if we go over here to the news we can go to live news and see if anything uh basically appeared on the screen if anyone and i can if if you seen any information that came out on on the jolts let me know and i may be off an hour but i thought it was going to be around 8 a.m local time but i'm not seeing anything necessary coming through well let's see here i thought i just saw something there on jobs openings nasdaq composite unchanged u.s stocks hold lower after jobs open report so it looks like it did come out but that's just a headline uh here we here's the headline ah not well maybe a little surprising as people are going back to work but jobs openings and i think this is a record uh 10 million uh versus uh 92 the estimate was 9.48 so basically about another half a million jobs out there for the taken and that's on the heels of uh unemployment uh being constricted so what's the impact of that and and that may tie into a lot of discussions this week on inflation right a lot of job openings great demand to hire people uh unemployment continuing to get constricted heck in utah we're basically at full employment i think we're at like about 2.6 percent 2.7

what do you do if you have job openings and there are drop in openings here as well to get people in there's a lot of incentives that need to be provided wages may need to increase and that can be more of a negative impact as far as on on the wage growth getting rising too quickly we're going to see more gauges of that this week as we go to the economic calendar and you can do this on the thinkorswim or on the td ameritrade website let's see if i can get to it under research and ideas go into the calendar we can come over here to economic events and this summer to be tuned into uh when one is trading very small time frames these news events can have a dramatic impact uh on that trade and likewise making sure that we're uh defining risk there so as we look at august let's see we're uh on the ninth there's the jolts which has been published we go into tomorrow unit labor costs okay this is going to lag as far as with the jolts but uh certainly the expectation is this may continue uh in to the upside and we'll see if there's a negative surprise positive for workers uh maybe not so much on on the business side as we continue into the week wednesday cpi so you know make note of these times and as you look at some of these index futures see how they react and this is something part of the learning process if one's going to trade these intradays notice the impact as these news events occur and what type of volatility comes in producer price index on friday thursday i'm sorry and then on 13 uh import and export prices so notice a lot of inflationary and then kind of the cherry on top is consumer sentiment is consumer sentiment still moving in a positive direction or is kovid going to take part to take the wind out of the sails okay tony thanks for sharing that and everyone else uh dom yeah don point out another uh feature that you may or may not be as familiar with so we have the live news uh but we also have another gadget that is called uh trade flash and if we click on trade flash let's see if this loads up i'll be disappointed this thing doesn't load up because i bring this up all the time there may be a little bit of a lag going on here let's see if i try this one more time but what it does it's supposed to be loading up and you can bring things up by symbols if there's any large block trades that can appear on here options activity as well as uh some of those news events uh may pop up in that arena as well and uh we have to do a hard reboot to see what is uh what is going on with my little platform today all right now let's go ahead and switch back here so let's make sure we're covering down or we said we're going to cover it down to uh discussing pivot points and how they can be applied to index futures and we looked at some support in resistance areas some you know utilizing some principles of technical analysis and one may apply to any trade let's see if we can construct a practice setup here since we're past the news and see we're at kind of interesting we're just kind of hanging around there um so let's do something and gosh this is really it's a little frustrating here we got it all right so we're posting news uh we broke above that daily pivot and essentially failed uh we even penetrated the s1 level so you know as far as building up a case uh for a bearish trade you know we saw that weakness in the opening uh we're post the jobs report and now didn't really create momentum in either direction but looks like we are hanging around uh that uh s1 level so what we can do is utilize uh whether a in this case a sell stop if we're looking to capture as the price breaks down below that pivot if one was bullish they can look for a limit order within a tick or two of that if they believe to be more bullish and look to trade up to that daily pivot um for for my example here i'm going to go ahead and let's look for and it's kind of this is really sixes as we do have a low this could potentially be a higher low so i can see the case on looking for an example on a bullish setup and see if there's any follow through above the pivot or looking for the breakdown as we're seeing that right now and that's what we're gonna do uh so right now the pivot point is showing up at uh that daily pivot you can see the information up at the top here and looks like that's at uh 40 is that right may need to do is just put my cursor on that daily pivots at around 44. just about 44-19 just below 44.20 looks like the low on these five minute bars are at around the uh 44 1975. now remember these are quarter ticks so we're going to round that so if we do it based off of that pivot let's say we look uh two ticks below that level that would be 44 19 25 okay so we may utilize kind of a two-tick rule you know whether if one's doing a bounce that would be about two ticks above that uh if we're looking for a bearish it would be two ticks below that um if i go ahead and right click and create or actually what i could do i can weather go ahead and right and do a buy custom with oco bracket or we can come over here to the active trader click on the active trader and utilize the active trader screen and then we'll go ahead and do a uh a bracket order now there's a template here that we can select i'm going to click on that and there's going to be a default trigger with bracket but once you do that and we've done this in the past as well we can actually customize these with a certain number of points in case of the s p we may make this a minimum of 10 points you know some people just to be safe may make it even a bit wider so to do that you just select a bracket order and then just go ahead and modify the points it defaults to one point up or down you can go and change that to let's say 10.

make sure we get it in there right you know and you can plug and create a larger bracket once you do that do 10 points on either side you can click on the save icon and save that bracket you can rename that you know like 10 point bracket i already created that so therefore i can come here and do a you know bracket 10 points now the other important thing to do too is considering on time and force on making this gtc i think i have that in another setup here and for some reason didn't change that but if we change this to gtc good till cancel and then go ahead and click save that way those orders will continue working for us if the trade doesn't hit one way or the other however uh in a lot of cases on the day trading side or intraday side you know we may look to possibly close out the position at the end of the regular trading hours if one's not looking to follow that overnight so i'm going to click save there okay keep in mind as far as with these futures forward slash es the margin that's required can be significant now if one looks at the forward slash mes that'll probably be about a tenth of that but the multiplier is going to be smaller this multiplier is going to be fifty dollars per point uh if one does a forward slash mes that would be uh five dollars per point i believe okay so one may consider one over another you know based off of account size or what they're looking to do however keep in mind commissions can add up i don't know why this scale keeps resetting on me but we'll see if we can fix that and then we're basically doing is triggering which we're going to trigger right now i'm going to do two contracts and click sell now since we're already breaking below the pivot i'm not even going to do a cell stop to trigger that so i'm going to click that through so we're basically short two contracts now what that represents is for every point to the downside that would be a multiplier uh of a hundred dollars okay now that can also translate to the uh downside if the price uh goes up for instance we can see right now this position showing a p l of being down 25 dollars okay now we do have a bracket order that's in there right now at least i thought i did that's very odd or maybe it's not showing on the chart let me go and go to the trade tab here and see what is going on all right looks like i had i'm having a few little technical difficulties today but that's all right i'm going to go ahead and create a another bracket order here let's go ahead and do a 10 point bracket i'll go back and fix it later and notice there is the orders right there i'm going to make this gtc and we're going to go ahead and click sell for two contracts now what you can do you can also go to the edit function if you want to actually see that order and so this is basically creating a sell order and a bracket order 10 points on either side both gtc we hit confirm and send and send and there we go got the fill so i'm not sure what happened on the last one there may have been an oversight on my part but notice the orders are on the chart now i do have four contracts right now but for our illustrator purposes uh we're utilizing two uh now notice here uh 10 points actually looks like goes right to uh that weekly pivot so i can leave that as a target now as far as the stop and let me clear one other thing out here as far as on the stop we're going to utilize the atr average true range which gives us an idea as far as what the risk is now what we'll do is basically take two times that value and add that uh on top of that pivot point so i think we had a pivot point of uh 44 1975. uh two atr here is about 264. i'll just do 266 2.66 points i'm going to go to the calculator and we're going to do 2.66

times five two point six six times five a correction times two two point six six uh times two that's going to be 5.32 points now we'll round to the highest quarter point since this is a quarter fraction that would be five and a half points so we take five and a half points above that pivot uh that is basically going to be times 50. you can kind of do the math on that i believe that would be about 225.5

times 50 5.5 times five zero 275 and we also have about two ticks below that too so this is closer to about a little over 300 of risk per contract so in this case this would be close to about a 600 risk on the trade so keep that in mind as far as position sizing as well as the amount of equity that would potentially be available okay and so as we go ahead and look at this particular practice trade we're still kind of floating around that area but what we can consider doing what i'm going to do is actually adjust this stop down you know to approximately just for illustrate purposes you know about that 2 atr above that would probably put us right about in that 44 23 range there send that through and then for trade management uh notice i made that line on that 50 mark if price goes ahead and trades down and makes halfway move to the target then the consideration is one at the very least adjusting the stop to a break even to the entry point uh that way reducing the risk on the trade two on top of doing that possibly consider selling one of the contracts basically buying back one of the contracts now if one does that they would need to go ahead and cancel and replace the bracket order for instance cancel and replace and then reduce it by the number of contracts that way you don't end up with a net long or a net short position okay so that's kind of how we're setting up there was expecting to see a little more of a move one way or the other uh but it looks like a little bit of a holding pattern here uh around that s1 level we'll see if any momentum picks up again we got additional news coming out this week uh earnings on discretionary standpoint uh front disney's coming out this week a few other travel stocks as well so something to keep an eye on and we'd encourage you to practice what we did here today uh and incorporate maybe some of those news events and see what type of reaction the market may have after that some traders may look to speculate and trade that event whether prior or maybe look to trade it uh immediately afterwards just to see where that momentum goes now remember there's always risks to that and futures are not for everyone so if you are interested in futures you can go to the td ameritrade website to the futures area or just go to td ameritrade.com forward slash futures where you can get access to additional resources as well as steps on how to start trading and seeing if that's right for you you have the paper money platform to continue practicing that and uh i'd like to thank you for taking the time today and i was standing uh some of our little uh little noidy uh technical issues but i think we're able to get through that we talked about pivot points uh on utilizing some of those pivot points on index futures with our example on the s p uh 500 and we went ahead and did a practice trade utilizing some of those pivot points as well if you enjoyed what you learned here today please feel free to click like on youtube and there's also a place to comment below coming up next at top of the hour is going to be getting started with technical analysis of cameron may so stay tuned for that and remember in order to demonstrate the functionality of the platform we did have to use actual symbols keep in mind td ameritrade does not make recommendations or terms suitability of any security or strategy for individual traders any investment decision you make in your self-directed account is solely your responsibility have a great day everyone we'll talk to you again real soon bye now you

2021-08-15 00:47

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