Using Scripts to Evaluate Trends | Technically Speaking: Trading the Trend
[Music] hello and welcome to trading the trend weeks to months my name is james boyd great to be with you here today uh we also have alongside with me my good friend michael fairborne in the chat fellow instructor uh you'll see his initials m uh f now just real quick like to welcome richard annette amun joe afez orlando neil bill remy monique and many others welcome now just real quick as we're getting started want to give us a quick reminder we do post educational content there daily on twitter check it out also want to give us a reminder that this class is really talking about trading the trend weeks to months we talk about how wednesday is trend thursday trends are super important even if you said i'm a day trader i'm a swing trader um kind of like maybe in between a swing trader and someone who tries to trade the trend finding trends is critical no matter what time frame you're really actually looking at okay even a day trader will be interested on being able to identify the trend now just real quick as we get started remember with what we discussed here today options are not uh suitable for all investors special risk inherited trading options may have exposed investors to potentially rapid and substantial losses also remember that trades involving minimal potential benefit okay can also be impacted significantly impacted by transaction costs and we're going to demonstrate the function of the platform we're going to use actual symbols remember that td ameritrade they do not make any recommendations determine suitability of any security or strategy and also remember that any investment decision you make in your self-direct account is solely your responsibility and also remember that as we get started you should review the transaction costs okay now what we're going to actually do here is just make one more mention is when we if we bring up options if you have questions on options feel free but remember that when you look at options and try to understand how the options move we look at what's called the option greeks and there's the terminology for that we'll show application of that now as we get started here today i'm going to start a little differently sometimes there's not a whole lot to say about the indexes and sectors they are what they are they have been there they are currently what they have been doing right so i'm not i'm going to skip that first six minutes okay i think it's a rehash okay the next six minutes is critical we want to kind of talk about scripts and really kind of talk about the way to search i've had a lot of people reach out or comment on twitter regarding kind of just uh using scripts and talk about the various different ways an investor can search we're going to show that okay and it's also in our recording so you can go back and review that as well and have it as a nice resource manual or guide we're going to talk about examples of intermediate and short-term trends then we're going to talk about past trade examples and then go to questions now no further ado let's just hop right in now first thing what i want to do is write on my twitter page let me slide this over i want to make sure you know where i got this okay so if you scroll down what you're going to see is right at the very top it's going to show a pin tweet okay you can click on that and it shows any script scripts are a way to search that's going to be on the market watch tab okay underneath quotes and the list of stocks we use tend to be the dow the s p 100 or the nasdaq 100 just because we're typically talking about stocks that might have liquidity in terms of their stocks and their options now if you scroll down a little bit more if you said well james i don't have that list okay we broke down the index of the nasdaq and the s p right there you're going to see that i post that about 13 minutes ago and then if you said well how do we actually break down and how do we read it and you considering using it that's what we're going to talk about now now i could actually click on this picture for the nasdaq or i could click on this picture for the down the s p but i want to kind of blow it up a little bit more and so let's kind of talk about this just briefly i'm going to watch the time so when someone for example is let's say considering investing in the short term or intermediate or longer term this right here that we're looking at this is really the dow jones okay so the dow jones now what you're gonna notice is this is not my list okay we're using this as a sample this if you say i like penny stocks then have edited okay we're just going to use the dow jones to start with okay now when you take a look at let's say the percentage change the week percent the month percent the year to date this is simply looking at price performance now when you talk about price performance that's not just you can't just say the week return is this because you could have a strong week but a negative longer term trend okay but if for example if we look at this list and say wow the weekly percent is up 6.7 the monthly percent is up 8.19 and the year-to-date percentage is up 37 do you think that there might be a trend there just take a wild guess you think there might be a decent trend there week is up month is up year to date is up do you think that that might be some type of trend okay so that might kind of give us an indication now if i went down and said well what about a stock like disney let me show you the opposite example disney well if i actually look down at disney disney has a negative weekly return look at the i'm drawing the negative monthly return and it also has okay down here it's negative three uh down three percent do you think that actually that would actually have a positive trend if on all those different metrics negative returns on all of them guys and gals why do we make this hard okay when you start looking at weekly monthly and year-to-date okay if those are all positive or nearly all of them there's a pretty good chance that those are probably where those intermediate to longer term trends are now here's the 500 million dollar question how do you know it's going to continue to go up you don't know that how do you know disney won't bottom and start to reverse we're just saying at this point in time this is what it's showing could that trend continue now when you look at the 10 period moving average in the 30 the purpose behind that is have you noticed in the last two weeks that when the prices are above the 10 period moving average it's just kind of nice there tends to be momentum and if there are down discs if there are they don't tend to last as long now it doesn't mean they can't go down but at that moment in time there's what we call mo or momentum now the biggest actually thing is if there is a green color with the number one you don't have to see the one but just look at the green color that is saying at this point in time double check for accuracy this is actually saying at this point in time that that stock is above the 10 period moving average and if we see for example let's say a red color okay i just circle that in black that is actually showing it's not above what moving average what's not above the 30 period moving average now check that now remember if the stock is above the 30 momentum at that point in time if the stock is above let's say for example the 30 period moving average there's a trend okay there's a good chance to see a trend now this stocks for example that are down here where you see they're both i'll put an x down here okay the stocks that are below the 10 signified by the red background and then are below the 30 boo those would probably not be the ones that are have bullish momentum and those are probably not the ones that would actually be the ones that would be in an upward trend now if you look to this dow list and say well james there's more stocks that are showing that are above the 10 and above the 30. would that be a good thing well if your bullet sheet is yeah now let's go over here and look over to the right hand side now if we look over here on the right hand side what you're going to notice is this is looking at relative strength now this relative strength this is actually compared to the smp 500 okay so it's compared to the s p 500 simply it's what you would think this the background where there's a darker color green that means it had a stronger performance relative to the s p that would be that dark green color that i just put x on the color like the light or green for example that still mean outperforming the s p okay still good and what you'll notice is gray is kind of more in line with the s p lighter color red would actually be underperforming the s p and that darker red well it's underperforming now just like price performance you can't just say relative strength there's a finite number of days always it never changes everyone here might have a different time frame if you said james i'm a short-term type of trader you actually might say uh james i really like to kind of see stocks maybe in this window of five to ten days now five to ten days would be like one to two weeks there's some investors here that say james i really like that one to three month window there they might be looking at 21 42 and 63 which is one to three months now if someone said do you have to use one of the other no we've talked about this we said we could actually look for stocks that are maybe showing a little rotation example given one of those stocks that's really been rotating from red to the greenish color has really been the apple example that's not a recommendation but that one has been rotating now you could take the opposite of this and say what stocks for example were strong and are now maybe weakening that i just circled well you're going to see chevron now chevron might be doing that because it's going into that area of resistance okay so when you look at relative strength you might be looking for something that has been strong over time over multiple different time frames or something that might be for example strengthening over time both of those could be used now sometimes you might find something that maybe has been down and might start to work its way back up but if you kind of said percentage of the time you might start at the bottom and then look for it to actually go back up that might be less than finding something that or is already in a trend okay so that might be an outlier that's an option but typically investors are looking for something that's been semi-strong and then getting stronger or something that's been strong just over time and it probably has more of a gray light green or a darker green background now over here to the right let's just kind of finish up here and i'm going to just i'm going to take a break here in about 30 seconds but when we take a look at this this would be what we would call a bounce okay that's a bounce setup okay coho close above the high the low day okay heard that before the chg is where the stock closed higher yesterday and it's gapping in the morning now what you're going to notice is cohold cohold cohold cohol cohol cohol cohold so without actually looking at each individual stock we can just look in one column and actually say which stocks currently can change are showing maybe a change or which stocks are actually meeting the criteria of showing a hold set now the last uh last one here and i'm going to check questions is this really would be viewed as a potential break out i'm going to put a little question mark there so how do you know if it's breaking out well typically if you actually see a stock breaking out maybe of a couple week high or maybe a month or two high right the stock breaking to a new high you define the the number of days that would be a pretty good indication as far as hey could be a breakout a horizontal or diagonal well so an example given when we actually take which stocks in the dow are actually hitting the the 20-day high this one this one this one this one this one this one and which one is actually hitting not only the 20-day high but also the 55-day high okay now if rg if you said i want to know the formula i want to kind of know what the range is what you can simply do is you can right click on the column heading if you right click on the column heading and say i want to edit it will show you the formula or where the brackets or the ranges are for those numbers and what the what it's benchmarked against so remember what we kind of always said which is when in doubt what do you do you right click same thing here all right now are there any other questions okay now there's some investors that don't they don't run searches okay they use scripts as a way to run multiple searches on one sheet of paper okay so if someone said james i'm looking i want to see kind of price performance look on the left hand side if you said james i want to see not only just price performance but i really want to see relative strength maybe compared to the s p okay middle of the page if you said james i'm looking for the stocks that are maybe showing potential bounce setups that's the holder the che and if you said james i like more of a breakout okay so don't need to run a search got we got a script for that and if you look at that we can see the bounces and the the breakouts are on the same page okay now if you said james i'll be honest i just love moving average crossovers okay the moving average crossover that is showing here is really the whole moving average now that can be customized you could say i like a different type of moving average you can customize that but we'll see the stock for example that's crossing up right there we'll see a stock that crossed over two days ago that's why it's x plus two x plus one is a crossover a day ago and the red is actually saying the shorter term moving average cross below so if someone said i like uh moving average crossovers don't need to run a search per se you could but if you said i like it on one sheet this is what the platform offers okay now if you said james i am a big lover of flags higher highs higher lows and then a breakout to the upside or vice versa stock makes a lower low to a lower height and then even falls back down this will look for a bull flag or a bear flat so if you like searches you don't necessarily need to run a search you could just add the script to the column and whatever your heart desires probably pretty good chance you could probably find it the only thing is off to the right hand side i won't mention that this is really the bearish version of call hold and chg okay so let me slide that over this right here is really the bearish version now i don't know about you but your time's valuable right so some people will go out there and run search for bull flag run search for a bounce run a search for a breakout run search for price performance run search for relative strength how come you can't just put it all in one this is like the leatherman of searching now you can do what you want you don't have to look at the dial you don't have to look at the s p if you want to take three hours and run the searches individually have it but if you kind of say i like that one unified approach to kind of see technically what is actually going on well you can actually add those now i'm going to now shift my comments now okay now we're going to go back to if you said well how on earth would for example someone put that those scripts on we'll mention that in just a moment but right at the very top anything that is in that blue color is the script of how to put those columns on now if you don't mind okay do you mind do you mind if we look at some examples using those scripts do you mind now one of the stocks that for example and i'm gonna use exactly what i just showed you okay so i'm just going to take the list and i'm going to say you know i want to go back to something one of those stocks that's actually kind of been showing maybe some potential strength example given i'll circle in orange okay circle a couple times is nike now nike for example is on the weak percent on the month percent and on the year to date percent they're positive prices above the 10 30 day moving average you don't have to use the 10 you don't have to use the 30. have it whatever your heart's desired if you want to actually change that to your time frame what do you do you right click you're going to say anything besides right click no that's because you can right click and you can change it to whatever you want now what you're going to notice is when we look at kind of the relative strength over time okay when we look at that relative strength over time it was red okay i'll i'll kind of delete some things there around it so we can kind of see so there we go so it was red and i'll point to that it was red okay then it actually goes gray and then it actually goes green that was on the one month then it goes lighter green and then it goes green now when you look at this and say hey is it showing a potential bounce setup well when we actually take a look at this it does but again the scripts aren't guaranteed for accuracy we want to verify and then if we look at this chart it is also showing a 20-day high as well now let's just go take a look at it okay we want to verify what it's kind of showing here now if we take a look at this and if i went and looked at let's say nike itself i'm going to pull it up let's kind of take a look and see what we have now if we zoom in on this the first thing that kind of catches our eye if we're trading the trend is probably really kind of just hey it's a recent moving average crossover now if we zoom in aggressively and kind of say hey what do we see here what's the lowest most recent red candle well the lowest most recent red candle is right there now if we looked at this right there today's price action if the price were to close here it would be closing above the high of the low day if it were to close here now what you'll notice is the stock really went up and then it kind of plateaued the plateau is where the investor might say you know i'm going to consider setting a stop below this support area what i'm going to do is right on the chart so we could all follow along we're going to type in 156.46
less 2 to 3 percent and what that is going to give is in this case 156 46 less three percent it's going to give a stop of 151.76 now let me kind of just speak to just because someone knows about options does not mean that every trade they do has to be an option trade i would never agree with that okay there's a lot of stocks where someone just wants to own the stock they want to use their capital they want to maybe have just a higher delta they want to maybe have exposure to the dividends etc right now if we click on let's say okay now we're going to see what that stop would be now the pay money account is going to go to the chart right click on the ask price buy custom and now go to where it says with osio bracket now i am not saying that someone has to set a target okay we're going to show a target just in case if someone had a question about setting a target let's show that as well so the paid money account is really looking to buy the stock pretty much at where the stock is now the stop which is on the chart let's minimize that the stop is actually sat at right about 151 76 now day to gtc now the target above might be the prior high maybe there's some resistance area above that let's go back and take a peek well if we go back and kind of say well do we actually have let's say a prior high on the chart maybe could this stock ever break out of diagonal and maybe try to go back up to this maybe prior high area well yeah maybe the investor says i want to set a target maybe 173 now we're not saying the stock can't go higher but if the investor says look i want to try to buy the stock on a diagonal breakout setup sell the stock into horizontal resistance that is a trade setup okay now if we look at the percentage return i don't know if it's 10 but it's close okay now if we take a look at this we're now going to go ahead and say confirm and send and now it's just buying the stock 100 shares of stock selling those shares of stock at 173 and then also right there is to stop at 151.76 okay i'm going to leave that right there so we can kind of see that the comment came in from d g says looks like a great class tomorrow with the cboe that is correct myself and actually uh henry from the cboe will be talking about a tomorrow will kick off the first of a three-part series of the class or the webcast tomorrow morning at 9 30 a.m eastern barbara
armstrong normally teaches a class called trading a smaller account well what we actually thought about is maybe could we actually talk about options maybe index options etc about how investors might use verticals with indexes so tomorrow okay which a lot of people have had questions on so we have tomorrow morning okay 9 30 a.m eastern henry from the sibo and myself will be talking about those options and it's always great to kind of have someone in the industry with that type of experience sharing with investors their insight and that will be tomorrow now wait wait is it recording yes but obviously you know watching it recorded versus live it's a little different because you might not be able to get your questions answered on the spot so be there live tomorrow at 9 30 a.m eastern now if we take a look at this and we're now going to go ahead and say send that now and it fills now i'm going to go back to just real quick are there any other questions now fias actually says nike could also be an inverse flag well so here's what's kind of interesting okay so in one respect we're looking at if i gave you this time frame we would say ah ah bear flag but if we back the chart off we might have to say wait is it a bear flag or is it a bull flag okay now if we were to look at this and kind of just back it off a little bit more and if we were to use classic like fibonaccis go down to the lower support go up to the high resistance and if you kind of take a look at this well kind of really you could also say in the shorter term it looks like a bear flag now by the way any flag would look like a bear flag if you do not look at the longer term chart so that's why if someone says there's only looking at the shorter term chart they could be doing bearish trades into intermediate or longer term bull flags now james do you know anyone that learned that experience yes and definitely learn the valuable lesson even if someone is a shorter term trader to look at the longer term charts because in the short term you think bear flag but actually in that maybe intermediate weeks to months time frame it's not a bare flag it's more of a bowl flat now if you really want to verify that if we go to the three year weekly chart what you'll really notice is let's go back and look at this chart does this look like a bear flag to you fez or does it look like a bull flag what does it look like bear flag or bow flat well if we were to kind of draw this up first thing we might notice is a horizontal area of resistance it checked back to where the old breakdown was this is that old high becoming new potential support and now what you're going to see is it really breaks out runs up to a brand new high ch whoop checks back and it checks back now down to the support and starts to bounce now i don't know about you but usually when stocks are really holding above longer term resistance levels that's not a bare flag do not get trapped and it is a trap okay ask short sellers have they ever been short of position or bearish on puts on something that's been going straight up and the answer is sadly yeah okay they get trapped because they're only looking at short-term charts zoom back out see what that longer-term intermediate trend is all right now what i want to do is i will also want to go back to now tim's question is once i set up the search with all the columns how do how can i bring it up later again okay so first off let's kind of if we went to let's say the market watch and let's say these are the columns i had how do i save the columns uh we're going to go up to the very top right where it says setup and once we go to setup we're now going to go to where it says save workspace as so for example like this view that you're seeing here this is like our fundamental view like price to earnings sales etc right but if we said look i kind of want more of a technical view where if i want to look at more technicals the columns will change for example you know by the way if i did that what you're going to notice is it'll kind of blank for just a second it'll go back to market watch and you'll say where did the other columns go well i went to kind of a more of a normal center and if i went to let's say the setup right there and i say i want to go back to the fundamental view right there it's going to blink for just a second and what is it going to do it's going to bring up the different column headings so you can have maybe a layout and i teach on fundamentals so i have a layout for fundamentals but i also have if i'm teaching a class on technical analyses we actually have what i just call normal and it just has kind of some columns for some technical criteria how do you once you have the columns there how do you save that click on the gear go to where it says save workspace ads so the workspace is just saving the column headings okay now does that answer that question now there might be one other question so let me just take a quick moment so if someone for example could put on one of these they can put on any of them that's kind of what's fun that's why you're like okay i can do it once okay i can do it once and if i click on this heading if i said james i want that one week percent okay so if i did this and i'm just gonna write down in blue q q a v q m one now what you're now gonna notice is if i can write those letters number down remember it is case sensitive i'm gonna bring it right back up onto the platform and go to where it says setup top right open shared item let's show one of these so all we did is go right back to setup we've been on there open shared item i want to open this script for the one that one week percent if i do that what you're now going to notice is it is case sensitive av q m 1. so now what you're going to see is
that is the script now i think you know you should feel very confident that you could write down that now if i maybe in typed it in missed correctly it's going to throw an error code saying it's not right double check the lower or upper case if i click on preview bingo i typed it in right congratulations james now go down to import now what it's going to do is say what do you want to rename it now when we say rename it we want to know what is the column heading gonna be that's all it is okay so if we go to rename it we just want to know what's the column heading gonna be labeled as i'm just gonna call it weak percent okay so when i go don't say week percent there it is click on okay now remember what i said before when in doubt what do you do you right click if you right click on any of the headings here right click on the heading right click on the heading go down there where it says edit we can we can go down to where it says customize what are we customizing the columns you can put in whatever you want if you don't want cohort don't have to hold put in whatever your secret sauce is and then tell us about it so we can look at it too okay no we're going to right click customize and when you right click i'm serious about the series barbecue sauce if you have some feel free to share and we're just going to go down to where it says that we oh there it is and if we wanted to add that weak percent to the current set totally could do that we'll just say let's add the item and once we do that that week would just be right there so remember if you can do one of them you could add any of those but i don't understand why you put all of them on on why did you put all of those on one page well because i didn't want to actually respond to 10 000 plus people individually on individual scripts so i thought how about we just have what's called the home plate where someone said can i see the menu of scripts that have been created over time someone could just check the menu okay that way i don't have to individually respond okay ten thousand plus times or more okay with all those now uh so that's simply how you put it on now if you said okay once i have that on how do i save it well like we did before go to setup go to save workspace as and now if i said you know what i want to call tony okay i'm going to call it tony so now if i said i'm going to call it tony save now it saves the columns and when i go back i did before it was thomas now i'm doing with tony so you can have a number of different views based upon whether you want some technical criteria or fundamental criteria etc all right so not too bad now i want to go back to for example a couple stocks let's fast forward on a couple stocks and so first off let's kind of just bring up something so first off if we look at the stock like tesla kind of talked about this a little bit did a paper trade on that yesterday on the twitch session which is every wednesday two to three thirty that was a short wide put spread how is it going i don't know it's uh up about when we look at profit loss percent since yesterday this was done right at the close yesterday it was just done on two contracts i mean it has about 61 percent of the maximum gain not 100 but 62 percent in less than 24 hours clearly the price move up helped up so which we talked about and clearly maybe some of that volatility contracting helped as well now the other one i want to bring up just real quick is when you look at a stock like netflix there's been a lot of discussion upon let's say disney just stinking up the trend okay disney's been at the lows and kind of talking about how they've been well their subscriber growth is slowing and that could mean that maybe another business might have the shows or the broadcasting that maybe they're not getting who's getting it where's the viewership going well if we go look at let's say netflix let's go look at trade example number two now i'm gonna go back to what we were looking at before which is can we see here kind of some of the metrics for now again we're looking at now a tech stock so if i went down and let's say could i actually see in this list nasdaq let me see if i can't find it ah there it is so i'm going to actually go down on this and let me kind of draw on this and i zoomed in as much as possible so here i am and i'm going to really write in that kind of maybe the orange color maybe that helps okay now netflix is right there okay now when we actually take a look at this we actually see netflix has a three percent return on the week doesn't guarantee next week but if we actually take a look at the monthly percent it's up 12 for the month so i mean if it's up i mean could actually have a higher higher higher low need to take a look at it we look at the year-to-date percentage doesn't apply the future but 24 stocks above the 10 30-day moving averages so have some sense of short term and intermediate trend okay now when we actually go over and say well in terms of the relative strength okay and again this is compared to the s p now if you said i don't want to compare to the s p you don't have to if you just right click if you listen to what i said it you can right click on that heading and you could say i want it to the nasdaq you could change that right click on it edit that and you can change take out the spx put in the ndx you can put it wherever you want okay that's what's nice about this as i'm kind of going there and then you can customize to whatever you like now what you're now going to notice is when we take actually look at this want to make sure i'm getting the right line uh if we take a look at this this is really showing a history of that stock really 63 days three months two months one month two weeks one week it's kind of been outperforming the s p for a while now i don't i'm not saying everyone wants out performance but i don't think that's not necessarily a bad thing i don't think anyone says i like to find stocks that have been severely underperforming the s p or the nasdaq or the dow okay i've never heard anyone tell me that in 20 years maybe there is someone so but typically investors say i want something that may be mimicking market performance or if they were going to buy a stock then they maybe are looking at a stock that for example is outperforming or it might potentially outperform okay so this is just showing a track ranker track record does not imply the future okay now when we actually take a look at cohort it's showing a bounce set up if we look at the 20-day high we look at the 55-day high and if we look and say well james there is kind of there a bull flag potential set up now we do not or the investor does not need all things to be green but when you're seeing coho 20 day high 55 day high flag there's multiple sirens going off right something is happening the investor might say i'm going to take a look at that that did the investor run a search did the investor bring up the list of the nasdaq yeah did this kind of the scripts automatically generate did it kind of filter out maybe what the investor was looking for price performance relative strength bounce breakout maybe a moving average crossover and or a price pattern set up isn't that what kind of what is taught in the technical analysis course well let's kind of go back and take a look at this now so here's netflix okay now when it says a flag where on earth is the flag now by the way this class is trading the trend weeks to months so let's not kind of think that everything we're talking about is short term that's not true when you go back and look at let's say the longer term trend the chart has gone from the lower left to the upper right doing to a brand new high maybe could that continue when you go back and look at old resistance you're going to see that it broke out check back to that support and then doing bounce to the upside could the trend continue to rally now when we actually take a look at this and i want to kind of bring up one thing here when we actually look at support resistance this really right here when we kind of take a look at this some investors might maybe measure that with to try to get maybe a projection of where that stock might try to go up to okay feel free i'm just kind of pointing that out now if we go back to a stock like uh for example like netflix the paper money account already has a short putt vertica now he already has one and it actually has 29 days left but what you're going to notice is there's about 31 of the premium that's been chewed through okay so now the investor could try to make the last 50 which becomes harder unless the investor holds the expiration or if the investor says james i actually think the trend could continue to the upside they might say i'm gonna profit take on that 457 dollar and maybe in this case try to do another one now wait you said this is a short put vertical is it really or is this kind of like a short put with bearish protection how do we know that well it's the 605 right 605 short strike and you've got the long put long foot at 500. so that is not typically usual that the spread is that far out so this was really a short put with built-in protection down below to make it where there's not a risk all the way down to zero and less okay uh collateral photo guy says james boyd i wish i had your trading brain no you don't okay i don't sleep it's not easy to sleep you know if you haven't realized by now i like a good joke every once in a while obviously that was a joke okay now if we go back and let you take a look at this let's say the investor says i'm gonna now by the way does the investor have to exit that long put no they could actually say look what i'm gonna roll and by the way when you roll you're buying back what you have and then you're selling another one okay the paperwork account is going to exit the 605 and then what it's going to do is it's going to create a rolling order now someone that's watching me and saying well this is a pass trade no if you roll that is a new trade okay now what's the new trade well let's go take a look together now if we go back to for example the november expiration the investor could say hmm which short put maybe could the investor consider now we know that we tend to look at delta first as that's kind of stating approximately the probability of expiring in the money means the stock is below the strike by a penny at expiration those probabilities are not stationary they change the stock moves less time the stock is more volatile those numbers will change but if the investor says you know what james i want to sell this 630s so what this is doing is it's saying plus one the 605 it's buying that back profit taking on that one and then what it's actually doing is it's saying it's gonna sell the 19th of november now by the way if if james if the paper money account maybe didn't have the position beginning could it do a short put vertical or could it do a short wide put vertical like a cash that could put yes okay so that could be the example too but the paid one account already has okay the existing put from the prior trade now what you're going to notice is it's buying back the 605 and it's selling this 630. the result of that is a new credit net 5.42 cents now remember that credit is not free money there's a little attachment there's a string attached to buying a hundred shares of the stock at 6 30 from now until expiration there's no free money here okay it's a trade now if you click on confirm and send you're now going to see there's the credit less commission and the investor is okay with that they can actually say look they're going to send the order and it's just rolling up in the strike okay that's all it's doing so the new position is selling the 630 okay strike for the november expiration now i want to kind of just kind of quickly take a look at maybe one or two just i'm just gonna verbally uh speak to these docusign we talked about earlier in the week kind of talk about maybe a tilted up w pattern that is kind of continued a little bit recently today maybe yesterday a moving average crossover we also have actually seen the stock of nvidia some of you have been watching the chips of xilinx of amd etc that was also a moving average crossover which by the way if you had that script on there you would have already known that i'm just repeating what was already actually shown on the scripts what you're now going to see is that crossed over two days ago it also broke the diagonal here or here that's kind of more that continuation could that continue crowd it's actually tense it's going to be one that's going to be very interesting where it's had a like a v pattern it took a lot longer to go down than it did to go up which is unusual the steeper the up move the shallower the pullback potentially the greater chance that maybe that stock might try to break up through resistance is this a cup and handle well it's a v i think you could still measure the same idea really from the base of support 240 really up to resistance about 285 so it really kind of does have a width of 45 now the other one that amanda is asking can you trade stocks that are lower price well so here's the deal whether someone actually looks at a stock like ford or whether someone looks at a stock like gm doesn't really have any bearing because the scripts are going to be screening out price performance whether the stock is above the 10 30 day moving average the relative strength so if i actually went back and this is the last thing but if i looked in the s p 100 list okay which i believe ford is in the s p 100 list if i look at this i'm just screening through the s i i put this on a sheet of paper so we could see this okay easier and so i could blow it up but if i actually look in the let's say this list and i'm just pulling this up myself but if i looked at this and said where's ford it's right there and we said okay price performance week month year to date what type of trend do we think we're going to see downtrend sideways probably not so the reality is if we just look at those three columns that's going to give us a general direction of intermediate to longer term trend now it doesn't mean that someone can't go to the bottom and look from the bottom up but i think it's going to take longer okay now if we went over to the right said is the stock above the 10 30 yes has the stock been showing recent price performance of being showing stronger performance relative to the s p 500 yes does that mean it's going to continue we'll have to see if you look at the cold if you look at the 20 55 day high okay what is it showing well the hold is about set up okay sorry for the spelling and the 20 55 day high would really kind of be like a one month high or slightly more than a two month high it's hitting both how's that any different if we look at a two thousand dollar stock or we looked at a twelve dollar stock there's not really any different okay so it's gonna kind of screen the same there now when we actually go back the other question was is maybe docu considered a bull flag now if you don't mind i'm going to go back to the nasdaq and i'm going to look and see now it's not showing so at this point in time docu is right there i want to go back to the chart and kind of say is docu showing that doc kicks the ocu what you're now going to notice is it's not showing necessarily a bull flag but it would be showing as a potential call hold and if we just verify that i'm just looking right now yeah that was actually showing okay it would be showing us when i took this picture okay it was a 20-day high but if you actually look at this also on the chart it would be a cohold and it would also be showing currently a moving average crossover okay so we want to kind of talk about really just how to search for stocks whether someone's a technician you know they might look at price performance they might look at stocks above certain moving averages or moving average crossovers relative strength bounces or breakouts on one paper you could kind of see the summation of all of those which could be a time saver thanks to actually thinkorswim and td ameritrade for actually allowing us to have these tools and to use the tools for free okay so that's always nice want to say that as a provider okay of course now whenever we actually use these scripts verify that it's really actually showing what you think it's showing now i'm out of my time here today i we did two trade examples we talked uh about really a lot about really how to script which is another way to search which is also a way to help us see short intermediate and longer term trends and i tried to answer along the way as many questions as i could again thank you so much for your comments and your participation up at the top of the hour we'll have a new webcast reminder tomorrow at 9 30 eastern james boyd and henry will be uh presenting henry is from the sibo 9 30 a.m tomorrow we'll see you there thank you so much for your comments and your participation and there's also disclosures
2021-10-22 14:40
