Using RSI to Identify Bullish & Bearish Ranges | Technically Speaking: Trading Stocks & Options

[Music] [Music] well good afternoon everyone welcome to our webcast on technically speaking trading stocks and options i'm connie hill i'm happy to be here with you today and i'm glad that you are here as well now how many of you have been hearing some of the buzz in the marketplace oh the market's over but we're too far extended this rally's been going on too long if you've been hearing stuff like that yeah i've been hearing that too well what if you had a tool to help you assess whether that's just noise or if it is something you really should be paying attention to we're going to talk about that today as we use a particular indicator called the rsi and we'll get into more details about it later but good morning actually good afternoon i should say we're most of you are in the afternoon to john robert todd ganesh bj el diego mary osborne krishna mia sarah tony oh my goodness wayne mike mia i'm glad you're all here we also have joining us today in the chat barb armstrong she does such a fabulous job and i always appreciate it when she's here she's a great resource for us to be able to have accessible so as you have questions go ahead chat them in the chat area and either barb or i will try to address those the best that we can now if you're listening to this as a week on a recording which many of you do and if you have questions put your question in the comment section and throughout the day as coaches we go back we pick up on those comments try to answer you as soon as we possibly can hope you enjoyed a good education day yesterday i saw many of you there and so i hope you were able to pick up on a few nuggets as you yourself are preparing for retirement well let's do this let's get on with our agenda and our disclosures and set out for business here what we talked about today is for educational and informational purposes only is not investment advice a recommendation of any security strategy or account type options are not suitable for all investors as the special risks inherent options trading may expose investors to potentially rapid and substantial losses probability analysis results shown such as the probability of an option expiring in the money are theoretical in nature are not guaranteed and do not reflect any degree of certainty of an event occurring while this webcast discusses technical analysis other approaches including fundamental analysis may assert very different views past performance of any securities strategy does not guarantee future results or success very good all right our agenda today is going to be as follows uh number one we want to look at a trade we placed last week and i want to do that first thing because we may need to make to some decisions about it as it's happening i did one of the trades before our classes uh alive or going live but i want to do the other one with you and then we're going to talk about our main topic today using rsi what rsi can help us with we're going to use it to identify divergences as well as bullish and bearish ranges we'll get into that and then of course we're going to have a trade example or two as many as we can squeeze in there all right let's start out let's jump over to our thinkorswim and i want to bring up for us let me collapse this for the time being we don't really need this watch list either let's do that let's go over to our monitor tab and the first trade i want to talk about here is open so let me just bring up open uh open door technology is what they're called and we just got into a trade on this last week and we did an option trade we did a stock trade and maybe let me just zoom in here a little bit closer last week we talked about having choices to identify targets do we use the choice of the height of a flagpole to identify our potential target or do we use fibonaccis and we kind of did a combination of them in our class so last week this is where the stock was uh it had just broken out from a pretty decent flag pattern and what did it do man it's continued to go up since then hasn't it now we had seen our peak and with the fibonacci we had identified that the high point there was 1994 and so one of our targets that we were using for this trade was when it gets back to 1994 or maybe just a skosh below that all right so look what it did uh let's zoom in just really tight so yesterday it got as high as 1979. that's pretty close to 1994. today is squeezed out even a little higher the high went to 1984. 10 cents lower than where we had projected or put a target at and what we did in this we did a target at the at the high point here 1994 and then we did a second target and the intent was we were going to exit part of the trade when it hit the first target and part of the trade as it hit the second target so here we have this is so close when you are that close what do you do maybe you've been in this situation before do you adjust your target do you adjust your plan well some people might and it doesn't mean everybody will or that everybody should but some people might say you know that is close enough for my first target that maybe i do want to get out all right maybe that's what i'm interested in doing and so here where we are so so close to the first target we are going to go ahead and get out of our stock trade now i have to tell you earlier today i was obviously looking it open i shouldn't say obviously but i was looking it open okay and i put in an order to close out we had a synthetic going we have a long call and a short put and it was quite profitable back let me show you what happened with it we have our six contracts and that was our net debit was 70 cents when we got into the trade and today about 9 22 that would be mountain time so that'd be like 11 22 eastern time i saw how close it was and i was like man we need to capture those profits that was like over a 300 percent gain just in that synthetic so pretty decent profits on it so i went ahead to close out the trade and in the meantime i forgot something i totally forgot that i had split them apart to get out at three contracts at the first peak of 1994 and the second three contracts at uh the the second target that was higher based on the fibonacci right the second target is in the neighborhood of 2187 maybe that's enough on the screen right up here that's where the second target was i forgot we had the second target i went in and i closed all six contracts here and when i did after i did i was like oh i forgot we had them separated three and three so what if you did something like that all right what would what is the right thing to do well the right thing to do is go clean out those other orders so if i come over here to my working orders you're gonna see in here as we come down to open look i still have that synthetic sitting here broken up three at the first target three at the second target do we want those in heck no we do not want those in why didn't i cancel them when i went in and overrode the trade the reason that it didn't cancel is because i went in and i closed it and saw six contracts it didn't recognize it as three contracts uh what i should have done is come in here uh for the contract that was to get out at 1994 that's our second target so this would have been our first target at 1994 i should have come in here and done a change all right a cancel replace order but i didn't so we need to do a cancel order on both of these all right we've got to clean this mess up that i created for us in an effort to block in our profits now what about the stock so we've got the stock sitting here the first target looks like maybe i typo that i put it in at 1997 rather than 1994 and we've got the second target up here at 21.90

well this is the one we're gonna change okay uh based on the authority invested in me i am going to change that as i have the mouse all right but as a class what we're going to do is we're going to say you know that's close enough for our first target let's bank that profit at least half of it how much profit is it it is as we come down here right now we've got about 412 dollars so we would be banking half of that all right so about 206 dollars now i know it doesn't seem as much as the option trade that we did but the principles still hold as far as hey if we were doing a shorter term trade we're just aiming for that target happy about that right now we're up on that trade 11.62 percent on a stock in a week all right so that's a pretty healthy gain on it so back here we're going to go to the working orders i'm going to go to the one that is i think we decided it was this top one here all right we're gonna do a cancel replace no that's the wrong one i want the one okay i guess it's the bottom one i thought it was the top one let me 1997 that's the one we want to change let me get rid of this one the top one we're just going to go with the one i just selected what's the current price 1974 1973 something in that range we are just going to get out at the current price i'm going to hit that lock it should allow the price to flood in here for whatever reason it's not so we're just going to put it in 1974. is that a good year for anybody maybe some of you weren't even alive in 1974.

let's go ahead and hit confirm and send and really this just should be a single order now we'll go ahead and hit confirm and send off it goes we're locking in the profits on the first part of the trade now that should execute for us pretty quickly here i know the numbers are bouncing around a little bit it might have only wanted to give us 1973 so if it doesn't click in for us i'll go back and change it all right just checking to see if there were any questions along the way that i need to address it looks like we're good for now okay so we banked profits on our synthetic boom we just banked profits on our first target using the previous high point and using the basically the fibonacci getting up to that 100 uh retracement level and then the last one we have on there is for the extension so we're going to watch it we're going to leave that order in place if this if it goes there then over the next week it'll execute for us automatically we're not trying to catch it all right that's one of the things i've been trying to stress in my classes is putting on that closing order with a target or a percentage of the gain that you're happy with and then letting the system execute it for you where you can be out having a walk or you know doing something else that you're looking at in the market all right now let's sketch where i want to spend most of the day here today and that is talking about the rsi indicator so we come over to the charts and let me bring it back to spx and let's kind of zoom out here on the major indices you probably have heard the buzz right to maybe the market at its top maybe we're starting to we're in for a big pullback some people are saying we need at least they would like to see at least a five percent pullback some people wanted ten percent or more pullback it probably really doesn't matter what we want or what others want the market's going to do what the market does but the rsi can give us a clue as to what might be happening now some of you may be familiar with the idea of a divergence and a divergence simply means that the price of the stock is doing something opposite than what a technical indicator is doing okay so for example i'm going to zoom in on this period of time here this was a fairly bullish time for the s p and it kept making higher highs and higher lows but what i want to point out to you here is when it made this high here this was the high point on the rsi and then as it went to a newer high up here here was the point on the rsi and it was actually lower than instead of going higher like the indicator and that's why i drew in this little line here so that i knew there's a little bit of a divergence happening there now what does that mean a divergence it just means something might be changing it's kind of a yellow flag that says pay attention but it's not guaranteed anything is going to happen in fact many times nothing will happen but it's just your way to be able to say hey better pay attention here wait for confirmation that change is actually coming don't see a divergence and get all upset about it and think oh i've got to cancel like say in this case i should go cancel all my bullish trace that's not necessarily the case they could be just fine okay but it's just a little warning signal and so we can see it happened here again this was in february it hit a high and this is kind of where the hari was on the rsi and then it what did it do it made a lower high a lower high and so these peaks here on the rsi started getting a little bit lower which was actually consistent with what the price was doing all right so in that case there wasn't necessarily a divergence because the price was actually dropping hopefully that makes sense to you well what does it look like right now all right we're going to kind of zoom ahead here um i do want to mention that the rsi uh it was something that james or not jane jay i think it's jay james wilder maybe i'm messing up his name we'll call him mr wilder okay forgotten his name uh he did several indicators uh and this is one of them that he published in a book i believe it was in 1976 that he published his study and his information about this oscillator that he had created now it does have overbought and over sold areas so the overbought area is 70 the over sold area is down here at 30. so if it goes below those thresholds that's when we're looking from you know if it's been overbought it means it's been strongly bullish and we watch for it to come out of that overbought zone to see if there's weakness moving in now there's another thing that we're going to use here that our rsi ranges and i've typed them out here to the side so that it could be easy for you if you want to take some notes here all right and that is the tendency for rsi to trade in bullish ranges and bearish ranges and that too can give you a little bit of a clue as to what's going on because maybe you don't see a divergence but you see maybe that the rsi is trading in a bullish or bearish range so let's take this right now uh we've got we're down below 70 and let me get rid of that my marker there i want to see where these little peaks are what the value is where you see the value was right here okay in the rsi field so right here we had 66. another high here was 66 and change next high here was 49 and change and we had 52 and then right now we're at 51.

so the question is okay if we just looked at the highs on the rsi and the s p were they in a bearish range or a bullish range we're at over here to the side i say well if it's in a bullish range the highs are about in the 80s and 90s if they're in a lower range the highs are in the 55 to 65 kind of that range well as we looked at this there were several that were in the 50s weren't there in fact right now we're at a 51 52 as far as that rsi goes okay that would tend to put us at least for the highs in the bearish range well let's see where the lows are okay so if we come in here and look at a low we have a low here uh that number is um 49 and this low is 47 this low is 44. the lows recently are at 33 and another 33 and change okay well that really starting to sound like we're in the lows as well for the range and so that can give us a clue as far as okay maybe it the rsi isn't ranging up in the high range anymore maybe it's starting to range as far as the highs and the lows go in the bearish range that can give us a clue let me to take a quick look here at your comments um cash out a question here back when we were examining our over trades uh tessa is there such a thing as as a as adjusting rolling a losing single leg like a long auction trade uh like the way you would create a losing short option for credits let me make sure i understand your whole contacts here taz or do you just take the loss of the long option tandem actually and maybe i could have spent a little bit more time on this on that particular aspect uh taz on the synthetic both positions were positive the long call had gained in value because it went up from the purchase price the short put had shrunken value which is what we want when we sell a put and that's why both of those positions were profitable you can always roll one leg or the other all right as long as it you haven't had an exercise or assigned to you okay so you can do that as long as you still have possession of that leg now sometimes you might do it for a loss sometimes you might do it because you want to extend the trade and maybe you're a little bit down or a little bit up on the trade you could still decide to do one leg at a time that is just fine in that case you might have been thinking why not just cash in on the long call because this is the one that would start to lose time value uh versus the short put if the stock started going a little bit sideways our put could theoretically still be increasing in value i think that's maybe where you were going without taz but since i got the mouse we made the decision to just close it out for that game um let's see kalish had a question here are those two solid what are the two solid green lines yes uh let me just back up a moment here the s p had been trading in a really nice bullish channel for a long period of time and i started drying this here this line was about november of last year so almost a year now and we could see the high end of the range it would go to and the low end of the range it would go to and then this dotted green line in the middle that was kind of the midpoint of the channel and sometimes that midpoint of the channel will act to support or act as resistance and so as we went a little bit further maybe across the summer because this starts about in may it actually started acting like a little bit of resistance uh for the index here you can see how many times it bounced down off of that midpoint spot all right so that's what these green lines were it was a nice channel and the channel icon looks like this if you want to draw in a channel some stocks or indexes are channeling in a diagonal fashion sometimes they're not okay so when they are just nice to be able to see that because this was serving as the long-term support area for the spx so good question i'm glad you asked that all right now the question i asked was where does this sit right now okay uh has the s p made a lower low well technically we had a low point here rallied up past it and then on this day with this red candle it traded below i'm going to try to draw that as straight as i can it's sort of straight right it dips below and created a lower law on this day stock trunked a rally it didn't get very high right so it tried to rally um didn't do so good and then of course made another lower low so here we're sitting with a lower high and a lower low which can be the beginning of a downtrend if we wanted we maybe could even start drawing in a diagonal resistance line even possibly a channel now i do want to point something out that some of you might have seen on the chart here and that is possibly the formation of a head and shoulders pattern which we know is a trend reversal pattern so we've got here we've got this area runs up two that could be considered say the first shoulder all right and then it dips down and then it runs up higher completely surpasses this so that could be considered like say the head area and then we're looking for the formation of another shoulder to get that shoulder we need the stock after it's pulled back to rally this did not rally a whole lot but it still could be the same pattern that's developing there sometimes we actually can get multiple shoulders you could have one shoulder on this side and two shoulders on this side or even three they do not have to match what we are looking for here though is kind of the what we call the neckline and the neckline if i draw this in here is going to be kind of this point here sometimes i'll refer to it as your armpits okay because it's kind of sitting right here although it's very you know probably more mature to say the neckline and so we take that neckline we draw a line and then when the stalk breaks below the neckline that can be a bearish entry or a way to become more more defensive in your portfolio overall if you're seeing that reversal pattern and an entry on it so we did see we saw it break down through it it's run up to it it'll be interesting for us to see if it pounds through it or if it drops down here again now knowing that the rsi is in a bearish range and knowing we've got a reversal pattern and knowing it broke through the neckline all of that combined could say you know we could look for some bearish opportunities we haven't had a lot of bearish opportunities to take a look at because we've had such a strong bullish market for so many months on end uh let me take a quick look here at taz's question uh he says i understand why you would roll a losing short undefined risk trade for a credit but a long undefined risk trade there's no way to save it you're not talking about multi about multi-leg trade [Music] per maybe i don't understand the whole context of your question taz i'm sorry uh maybe barb is better cued into what you're trying to get at than i am because i thought you were going a certain way with that and that obviously isn't the way um because you're looking why you understand why you would roll a losing short right because maybe it has more time maybe you still like the direction and so forth i guess just keep in mind you can roll those separately okay can roll those separately okay now we could go through each of the indexes uh the spx dow jones nasdaq russell 2000 we could come and look at each of these and kind of decide where they are are they in a bearish range for the rsi and are we seeing divergences we could do that for every one of these we're not going to take the time to do that but i'm going to challenge you to do that as an exercise as a follow-through from what you are learning today okay we're just going to take our cue from the spx but i'm going to tell you not all of them look exactly the same all right if you're studying the indexes and try to keep a good tabs on that throughout the week you'll you'll recognize that well let's do this because we know the spx is a good gauge for the general market let's go ahead and say let's put on a couple of bearish positions if they indeed are also trading in bearish ranges now the first stock we're going to take a look at here is baidu nice chinese stock right you guys are familiar with baidu and it's been struggling for a while all right it's been in a nice downward trend and we see on the rsi let's just kind of zoom in here we can see that it's heights keep getting a little bit lower like here's a 45 43 38 and so forth okay so through this period of time we definitely know that it's in a bearish range and of course the lows uh this one's below 30. what's that a 28 24 22 so it definitely aligns here with the lows now recently let's see how high it went recently it went as high as 57 we've got 58 and then the lows start getting a little lower here's 51 here's 52 right now it's sitting at about 48 okay does that correspond to more the bearish ranges of the bullish ranges yeah this corresponds much more to the bearish range in fact the highs are even lower than where the bearish range is okay so that could be something that might say okay this is looking uh and being a little bit more on the bearish side now i want to point out one other thing here uh the other thing is we have a a reversal pattern that we had drawn out here i don't know if it was in this class or different class or just on my own that i did this but i was noticing an inverse head and shoulders pattern okay and in which case we're having the person standing upside down on their head right so there's their shoulder there's the head and then this area here could possibly be considered the shoulder now what it looks like since i drew this is that maybe it is starting to develop another shoulder here because it didn't totally break through that neckline yet when it does break through the lack neckline i had drawn the height of the pattern from the top of the head to the neckline that gave us the height i copied that i put it out here and it would say yeah we've got a target up here if it does reverse if it does cross the neckline 200 and change maybe 204 but it hasn't been doing that yet okay so there is definitely a case here for maybe it's just still bearish because it didn't go through and break through the neckline yeah i may have another shoulder here and we could extend this neckline to come across and see if it busts through here at some point all right now given that we are seeing with the rsi uh some bearish indication let's bring up the trade tab now for our trades today we are going to use this series of options with 22 days left until they expire typically if you are doing a spread trade many times people will look to buy or to sell 20 to 50 days worth of time when you get to some of your aggressive trading you might get into some of these weeklies some of these weeklies are not as um liquid as i'd like them to be so for example say we did it with 15 days left okay typically we're looking between a 30 to 40 deltas as a selling leg if we're going to start selling so same come down here we've got a 34 and that open interest out actually isn't too bad but to go 250 down and 41 contracts and 22 new ones today doesn't give me a great feeling of lots of liquidity okay and so you might just poke around and maybe you don't even want to be that aggressive poke around until you find one that has a lot more contracts which usually is going to be on the monthly expirations instead of the weekly expirations now implied volatility is pretty common throughout here it's a little kind of into the range of being high it's not super high okay but it's kind of meets the threshold let's see what's my threshold 38 and higher is typically where i'll say yeah it's in a higher range now you might look at that and say well does that do well for selling strategies or buying strategies well i'm going to say due to the fact that we think maybe the s p is starting to move to a bearish range but maybe hasn't confirmed that completely maybe we're just starting to see some recent weakness we might not be totally gung-ho on saying man let's do something super aggressive so what we're going to consider today is doing a short call vertical and we've got some choices here and it's i like to have choices uh just like we talked about last week i like choices of vanilla or chocolate or oreo actually oreo is what i go for now we've got a 37 a 31 and a 26 delta that might be considered here the 26 delta would be the most conservative and and that would be a little bit below a range where some people might want to sell but maybe it might work out uh we're actually going to queue up two different orders we're going to do this one that's a 37 delta look at that nice open interest there 9 900 contracts the next strikeout only has 25 open interest today but i do like that we're seeing some extra volume today that gives me a little bit more comfort that those numbers are starting to build so if we did our first first one here and we said cell vertical and i'm going to do a blast all here real quick so we can do a kind of a comparison and let's say if we did want to go a little bit more curve conservative sell the 167 50 and buy the 170 170 has tons of open interest here as well so let's say cell vertical here we're going to compare these two and i'm going to lock them in as far as those prices go because i know they jump all over the place now and some of you this may meet your roles some of you it might not meet your rules at all you might say for whatever reason maybe you want more time and you want to go further out but i'll tell you when you see something that's trending a particular direction it might be nice and some traders will do this to sell a period of time that's appropriate enough to give them a good return but not going out so far that it takes forever for that time decay to start to work in your favor the last 30 days of an options life is when it decays the most and that's part of the kind of the driving aspects of this particular trade is we want time to decay pretty quickly for us all right now there that doesn't seem to be that big of a difference a 12 cents difference in terms of what we might want here all right so let's say this on baidu we've got a 165 750 we have a max potential gain of 77. let's grab our calculator here clear things out which would give us in a two and a half wide spread we'd be looking for what on the law side 1 73 right 173 i think that's right let me make sure sometimes i fell at simple math oh come on minus okay let's try it again 0.77 minus 2.5 okay uh i did that ron excuse me i'm going to try it one more time .77 minus two and a half spread okay a buck 73 i did have it right all right so we'd say here we've got dollar 73 is the max potential loss and 77 is the max potential gain right we know if we sell this our our reward our profits in the trade cannot be any more than that and you also have to recognize you have more to lose than you have to gain and and sometimes how we construct these trades why would we do that we would do that because we have a higher probability that the option would expire worthless and that's what we want so we've got 66 here if we go with that one we've got 72 percent here if we go go with selling the 167.50

right so what would our return here be it would be our max gain divided by our max loss gives us a return of about 44 now some might say well that's healthy and that's nice but maybe i would have a trade-off here to have a higher probability of success and a little bit lower return by doing this second vertical okay so on it it would be 65 would be our max gain per contract and our max loss would be what uh [Music] 2.35 cents no that wouldn't be 235 215 is that right i think it's 215. let me do the math here real quick 65 minus two and a half 185 i went the wrong direction okay it's a good thing i used the calculator there all right let's see what this would work out to be in terms of a percent gain and so we're looking at here 65 divided by a buck 85 is about a 35 gain actually i forgot uh that percent there or that number 35 now there's not a right or wrong here it's going to be more of a preference you know some people say well it is a little bit nicer return here but let's look at the chart if 165 or 160 750 is my short leg where does that put it so 167 750 and i'm trying to get it pretty close and what i should have done let's try this again 167.50 oh it does not want to dry it's just a little bit below this neckline okay giving you a little bit more leeway instead of being right here at 165. right 165 is right here 160 750 a little bit breathing more breathing room okay now you guys might have a preference for your own sometimes it's nice to just be able to compare all right so we don't need to do both of these in fact i am going to delete the one that was the more aggressive one we're going to do this particular one our max potential loss on this could be a buck 85 per contract so that should allow us to do how many contracts here if we are willing to risk 750 so if we're willing to risk 750 let's see if it's gonna be four or five all right our max loss potential would be 740 by doing four contracts yay it's under 750 so we'll we feel good about taking on that kind of risk because we've already determined we don't want to lose more than one uh more than 750 dollars per trade all right let's also let's edit this and we're going to do a first trigger sequential we're going to put in an opposite trade an opposite order this is going to be our buyback when do we want to buy this back so if we say 65 cents we're going to multiply it say we wanted 85 percent of our max gain here okay let's multiply it by 15 cents and that says buy it back at 9 cents uh some of you might even opt for 10 cents all right but we'll go ahead we'll put it in at 9 cents let the system lock that in for us i'm going to put this in our class account trading stocks and options we're going to watch that all right now let's do one other trade here we're going to move through this one a lot more quickly okay let's look at the ticker symbol in tes it's a technology stock let's give you a little perspective here it's been downward trending for a while and then more recently it's been selling off pretty sharp as far as the rsi goes the high there is 55 55 49 43 and more recently here 37 those are the highs man that's definitely over here in the bearish range in fact is lower than the highs in a typical bearish range all right could this be a double bottom yep could that be a possible reversal it could be we need to wait for confirmation which wouldn't be until be clear up here around 98. okay so we're going to do the same thing noticing that not only do we have trend but we have this rsi and it looks like today it tried to bounce but it's just not having it right it is uh dropping down here if these candles were a little bit bigger would call it a dark cloud cover they're not quite as big but they have kind of that same imagery so we're going to do the same thing we're going to look at the october monthly options here and let's see some choices we've got a 39 delta a 35 delta and a 31 delta this is in single dollar increments here rather than 2.50 that's nice we can get

closer to what we actually might want here so in this case let's do an 85 85.88 85 has a lot of open interest 88 is down here and it has a little bit more open interest than either of these two we could also if we wanted to spread it out to be four dollars wide and do 89 all right that would be give us a little bit bigger risk and a little bit bigger reward but we'll just do it by three wide okay so we'll come over here i'm gonna grab that uh 85 we're going to sell the vertical and we're going to change this 86 to 88 okay spread it out by three gives us a 72 cent credit all right which is not bad percentage-wise let's see what that does for us if we have a 72 max gain and a max loss of uh three dollars minus 72 cents it's going to give us what 218 right let's go ahead and figure that out we'll clear this out so we've got 72 our max gain divided by our max loss of 218 because this time it's a three wide not a two and a half wide gives us about a 33 return now that can be an arranged that some people are comfortable with some people might say i want to go further out of the money have a higher probability that it expires out of the money higher probability than 68 cents but keep track of your open interest there's got to be some liquidity you can't be the lone person in the market making this happen now we'll do the same thing we'll do a first trigger sequential we'll create an opposite trade uh let's say in this one you would be comfortable if you got eighty percent of the max gain so would take point seventy 0.72 times 0.2 what's remaining we're going to buy this back at 14 cents here and again uh very similarly we could do four contracts there we go oops i went the wrong direction positive four there we go to confirm and send uh our max loss say 912 okay we've got to take it down a contract we can only do three make this good till cancelled there we go notice there's commissions it's below our max loss area and we're going to put this in our stocks and options we are going to track this one as well now the market may not go bearish this stock might not continue to look weak we'll just have to see but using that rsi can give us a little bit more comfort level as far as our analysis skills and what the chart is trying to show us let's see here uh you guys are it looks like you're talking a little bit amongst yourself so that's good i like it when you contribute and help each other out all right let's finish up here we did our trade management with open we talked about how you can use rsi to identify divergences and those bullish and bearish ranges hopefully took some good notes on that we're able to get a couple of trades in here that we'll follow up with now what would i want you to do to just kind of reinforce this information we'll put rsi in your charts and be looking for divergences look in your current positions especially and you can look at your watch list as well to see if you're seeing any divergences and also hey is this trading in a bullish or a bearish range on the rsi and what does that give you insight to as far as your traits go all right that's what i'd like you to do next uh over the next week especially today tomorrow and the next day all right as we finish out the week here i just need to remind you and i think we've been able to catch our questions here uh i do want to thank barb for helping me out in the chat and answering questions remember to subscribe to our trader talks investor insights channels uh i'm at um twitter at chill underscore tda barbs at b armstrong underscore tda would love to have you follow the information we're posting throughout the day now as we wrap up i need to remind you what we talked about today was for information and educational purposes only not investment advice or recommendation of any security strategy or account type have a great day everyone at the top of the hour james boyd is going to be talking about trading the trend uh many of you love that class so get a a drink for 15 minutes and you can be on your way i didn't see a survey out here today but if you liked this presentation it was helpful go ahead and hit the like button on the way out thanks everyone bye [Music] you

2021-09-27 01:19

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