S&P Futures with Fibonacci | John McNichol | 10-21-19 | Trading Futures

S&P Futures with Fibonacci | John McNichol | 10-21-19 | Trading Futures

Show Video

Good. Morning, everyone John McNichol, here and welcome, to, trading futures hope. Everyone had a great weekend, I know I did out in Denver, Colorado thanks. Once again for all of you who attended the technical. Analysis. And option, strategies, workshop, had. A great time out there of course it's great to be back home let's. Go ahead and take care of her disclosures, and we'll get right, into it. The. Final presentation, is for educational purposes. Only and. Not a recommendation or endorsement, of any particular investment, or investor, 8/2 functionality the platform we will be using actual, symbols, keeping, a media risk disclosure for futures and options that link is provided for you at the bottom of the page futures. Accounts are not protected by security investor, Protection corporation s IPC, and futures, and futures options trading services, are provided, by TD, Ameritrade, futures and Forex LLC, those, trade privileges are subject, to review and approval not all clients, will qualify. Options. As well or not suitable for all investors as, these, special risks, inherent to, options trading may expose investors, of potentially rapid and substantial. Losses carefully. Read the previous provide a copy of characteristics. And risk of standardized, options, spread, straddles, and other multi leg option strategies can entail substantial, transaction, costs include multiple Commission's which, may impact any potential, return advance, option strategies often involve greater and more complex risk than single leg option trades and investors, may also wish to consider contacting a tax advisor regarding. To tax treatment applicable, the spreads and other multi leg transactions. Transaction. Cost commissions, and fees are important factors and should be considered when evaluating any trade, also. We're. Utilizing a demo, account for, our practice, trades looks like a real account but it is not you, have the ability to practice what you learn here today with, paper money that software, application, is for, educational purposes only and successful. Virtual trading of actual. Funds during a later time period does not guarantee. During. A later time period successful. Investing does not guarantee successful, investing during, a later time period as market conditions change continuously. Now. Over, the weeks we've discussed various different asset classes. Asset classes and asset, allocation, and, diversification. Does not eliminate the risk of experience in losses. Transaction. Costs are important factors should be considered when evaluating, any trade a, lot. Of you are familiar with the Commission. Changes, there. Keep. In mind that does not apply to futures, as their Commission applies to online US exchange traded listed stocks ETFs, and, option trades $0.65. Per option contract fee applies to option trades. All. Right what, are we going to do today well. I think a good. Ticket. Time as we're going, into earnings season what, we'll do is we will take a look at the SNP. Futures. Contract, representing. The S&P, 500. What, we'll do is we'll apply. Technical. Analysis. Utilizing. A Fibonacci tool, Fibonacci, will be a bit of our focus, here today, and then, we'll see if we can do a trade, set up based, off of utilizing.

Fibonacci. We'll go over some of the concepts, of that what, it is we'll, apply it to, the futures contract and, then we'll in turn see, if we can put in a practice, trade for that now if. You have any questions please feel free to utilize the chat would certainly love to hear from you if you're new to this webcast welcome. Although. This class at times may, be a little fast pace if, you're very new to futures would, encourage, you to check out my good friend Barbara Armstrong, on Tuesday. Mornings, at 11:00, a.m. Eastern time with the getting, started with, futures, class it's, only a 30-minute, class so. Easy. To get in there also if you haven't checked it out on the education, tab we have a futures, course now all you have to do click. On the education, tab on the, left hand side select, futures, and that'll, take you right there alright, so let's go ahead and we'll. Go ahead and take a look at at the. ESPY, this morning and let's. Go ahead and so what we can do all right now. Your learning, objective. For. Today, is, after. Being, able to look. At the, ESPY future, or any, other futures. Contract, to, be able to look from multiple. Timeframes from. A longer, to, a shorter timeframe and be, able to apply Fibonacci. Which. Can give, you the ability of looking, for bounce, types, of traits and, we'd encourage you to practice what you learn here today as well, now, let's. Go ahead and probably should switch to the chart so we can bring that up. Bring. It up the thinkorswim platform. And. What. We have we have a grid chart on the screen right now now I point your attention, over. To the left-hand margin. Within. The. Scratchpad. One. Thing you can see my twitter handle there, if you like to follow, will. Go ahead and actually put. Out examples. Of charts utilizing, technical analysis, I do, a lot on the futures as well as on. Individual. Stocks that we may cover, in our, various, webcast, so. You can learn about tools. Such as Fibonacci learn. About price patterns, and all that also I have a shared, link. On there, as well probably. Need to make a little, correction, onto. That there, as. Looks like the script. Just. Kind of ran into, my. Explanation. This. Is a shared, grid chart so the chart that we're looking at today both on the daily and intraday if. One goes ahead and. Can. Select, that. That. Script. And. If. You go ahead you can actually plug it in let's. See if we can bring that up again. By. Just going up to setup in the, upper right, hand corner of the platform select. Open shared. Item and once. That occurs you can go ahead and type in that seven character. Identifier, and, it'll bring up that grid for you and then. From there, you. Can go, to the, upper. Right. Hand corner, of the chart where, one would see little two, square boxes, and you. Have the option to go ahead and save that grid, so, that way you can go ahead and reference it and in the future you can go ahead and click on that. Link. Little. Touchy here today let's try one more time all. Right doesn't. Like my left hand let's even elects my right hand here and. Looks like we, lost a little action there it's okay. All. Right well we'll. Try that again later so right, now we're looking at the SP. Futures, this is a daily. Chart so what we're gonna do we're gonna work, down into some of the intraday. But. Starting off into larger timeframe. Comes. A technical analysis, being able to respect, multiple, timeframes a good. Analogy that a lot of us uses, is the, tide and the waves you, know what you're trading, consider, that to kind of be the wave and then. The larger. Timeframe you. May be trading, with that or against. It traders need to be conscious of that if, you're actually going with the tide so to speak or if you're going against, it so, by looking at the larger timeframe we're trying to get an idea of the you, know overall, tide. Of, the market, and a, lot of discussion on this we, can see that overall, this. Trend has been a bit more sideways, over the last couple of months what. We can do it let's see if it allows me to zoom in let's, say I may have to make a correction on. The platform here because this doesn't seem to allow me to. Work, with some of these tools here we'll get that fixed in just a, moment. And. I may have taken care of that I. Think. Part of it was I had something pop up on the screen which, didn't allow me to do a couple of things so I think we got that fixed, all. Right. So. Now I should be able to left-click and drag.

Over. An, area. On the charts so we can zoom, in and get a better feel for what. The ESPY futures are doing that, symbol, is. /es. And. We. Go ahead and identify, potential. Areas, of support and resistance what. We do when you take our drawing, fools. And. What. We're gonna do, we're. Going to select a. Trendline. And. We can go ahead and start from one, point and. If. It allows me to. It. Looks like we're having a little issue today but that's alright we'll continue working. Through this here we're, going to go ahead and connect off the highs their. Intraday. Highs and we can see a couple of times the SP is rallied, up to approximately. That 30:25 mark your. Resistance. Kind of hanging, out more horizontal. If, we look at support. Look at the lows and connect, off of some of the lows we can see generally, speaking that those, lows, have been rising. Kind. Of forming more of an ascending, triangle. So. That's kind of what we're looking at at the overall trend now in between, there one, can see. Some. Of the other highs. Where. We had more of a bottom, and formation, kind. Of bisect, in that a bit and. So, now we have a bit, of an understanding, of some, of the highs and lows, as, we look at the overall trend. Now, notice, when we see price. Action move back and forth it. Doesn't go straight up doesn't go straight down has a tendency, of zigzagging. Now. Fortunately this zigzag we've. Been seeing more equal. Highs and we've. Seen you know some pretty strong, retests. Of previous. Lows but. As lows. Have been tested, they seem to be making you know slightly higher, lows which, is has, a tendency, of being more bullish with, the trend. Now. Another indicator, that one can use you, know to anticipate. Or possibly. Look for. Support and resistance, areas where bounces, may occur is Fibonacci. Utilizing. Fibonacci retracements. Now, what it is it's a drawn tool that we have almost like drawing tools here we'll, go back to the drawing tools and select. There's a percentage, icon. Which. Represents, a Fibonacci, retracement. Now. What, one would do is, draw. This, tool with. The, trend or with the direction that, one's trading, so if one is bullish. They're gonna draw from, lows to highs if one, is bearish, they're, possibly, looking for resistance. Areas, they're, gonna draw from highs to, lows so. For our example we're. Gonna draw, with. The, prevailing, trend and identify. Some, of those support and resistance, areas it can also give, you an indication. On you know how strong, is that, bullish. Trend, and with. That we have that selected we'll go ahead and we'll start at a low, into trend. We'll. Go ahead and click on that and, then. We go from the low and draw, it up to the high. And. Then. Put that in place now, you'll see multiple, lines come up on the chart and, these. Are percentages. So what's, the deal with Fibonacci well. Fibonacci, it. Was a Renaissance, man. Had. A lot of free time was. Looking at rabbits, and, watching rabbits breed and it. Was interesting as far as the production of rabbits, they, came in to certain ratios, a lot. Of these patterns seemed to occur in nature as well such as a spiral, in the shell actually. The dimensions, of a human being as far as from the. Length of their arms outstretched their, torso, all, of, these different. Series. Seems. To come into play a, Fibonacci, number. Series. Starts. Off with a 1, -, 1, + 2 is 3 and, then you add the previously, two numbers, for the next one so for instance 1, 2, 3, 5. 8. 13. 21. 34. 55. And, so, on some. Traders may use these series, and some of their technical analysis, well, when you take the numbers, and divide, it by the previous.

Number You'll. See different. Ratios, come into play a one, of them is the. 60 1.8. Retracement. Other. Levels, that have a tendency of coming into play in a trend is the, 50%, which is not a Fibonacci, number but, it does support Dow, Theory. As far, as trends at many, times in prices, rally up they, have a tendency of retrace, and upwards of 50%, now. When it comes to an. Overall trend, trend. Traders would certainly like to see that 50% and that 61, percent retracement. Hold. If. It, is a stronger. Trend in a, lot of cases you, may not see prices pull back much more than a third and in stronger, cases, a quarter, those. You that are familiar with flag. Trades strong. Flag, pattern, positions, typically. May not pull much more than a quarter, or a third, when. It does pull that half or two-thirds that. Is going to be more of a deeper, pullback, in that trend I just, want to keep an eye on make sure we. Have the questions. There. And. If. You can't see the script we'll certainly bring that up later there, and. So. You know notice as we look at this. Rally from a June going, up into the summertime the. Pullback. The. Pullback came, down. Below. That 61, point 8 retracement, in fact it came all the way down to that 71, point 8 that's, a pretty deep cut in a, lot of cases if that Fibonacci, level, fails to hold the. Tendency, as that prices, may come, down and retest, previous, lows. Now. Even though there was some penetration. You know intraday. Because this is a daily, chart. Notice. That it didn't stay below it very long if I kind of zoom in on this, kind, of more of a triple bottom, formation. Notice, that prices, kind of gravitate, it to that area and there, was actually a bullish candle on those, days we, see examples of kind of a Pierson, line you. Know hammer now again this is the 61 retracement, look, at the. Types of patterns, that have formed around there, we have an inside, day or rami some. Traders may call that a morning. Start as. Prices. Were formed in a spinning top at that support, price, reverse the next day another. Pearson, line so, you know at through, this point in the late summer even, though there had been some volatility, looks, like the market wanted, to hold that area. Then. As we go ahead and go forward. Prices. Have. Came up now notice as we'll go ahead and zoom out on the chart again. It. Should, zoom out not zoom in. You. Know we can see that, prices. Have retested. Those highs. Now. We can also go ahead and redraw, the. FIB by, looking. At some of the more recent periods. So. I'm going to min again. As. Will. Get more recently, again. Drawing. Fibonacci. From, the low. To. The high. And. Then, notice that this period here, as I, was mentioning flag.

Patterns. Going. Up into the. Mid part of September. You know we drew from the low, to. The high. So. We can get out of that there, we. Drew from the low to the high and then. Notice you saw more of a flag pattern, forming, above. That. Quarter. Retracement. Above. That quarter retracement, there that's, right one more time. There. We go. Now. There's no guarantee that that pattern would break, out but that's what some bullish, traders were looking for as we're consolidating up, that 30 27, level now, let's go a little bit forward here, and see. What occurred. Price. Pulling back. Notice. Still, holding. Around that third retracement. Still relatively, buh-buh-buh. Right away run away a, little. Static. Static electricity, they're, taking, over let's, go and zoom back in on this. And. A. Little fast forward to where we're at, it's. Almost Man Overboard there. All. Right. So. This was looking at here, and. Price. Still holding that third but notice a bounce never really got going now some traders at this point would. Be looking at resistance. Because it is a flag. Drawing. From off of those highs and. Waiting. For that breakout. Well. The breakout never occurred now, we see it pulling, back. Pulling. Back and notice. That in this example. You. Know a deeper, cut these pull backs continue, to be relatively. Deeper, you know shaken off both bullish, and bearish, traders, alike this is what happens when price has a tendency, of being more range bound and this, could be kind of a clue. For you if you're, saying. Penetrations. Well, beyond, 50. Percent, and the, 61, percent, it's, pretty much more of a confirmation. That you're in more of a range, bound. Market. Or in this canoe, or in this case the rain bound future which represents, the market so. 16, 1.8 retracement, but, then again if, I go to the next, day, there's. Another bullish, candle, so you know the Bulls still, have been resilient, on trying, to hold up the, market, at some, key technical, levels even though intraday. They've traded below that we've seen that bounce there okay, so this. Is to the current rally, actually. Not quite the current rally go. Forward here. Notice. Another kind of consolidation, almost like a double bottom before. Prices rally up to where they are now. Now. Traders can do the same thing with this last swing, up in the market, so. If we go back. And. Redraw. That. Again. We can go ahead and draw from the low to the high now some traders may go to the next lower, high preceding, the breakout. That's. A personal decision. Now. Chuck says is this type of analysis, as, stock, or as a different, if so how if. I, understand the question Fibonacci. Now analysis. On a, future versus. In equity. Technical. Analysis of universal, it can be applied to any, instrument. So if you're looking at individual, stocks you. Can certainly apply this and we do do that, when. It comes up in, our technically, speaking class which, is at. 2:00. P.m. Eastern, time today so. Here's, what we're looking at on the daily chart right now. Going. From this last swing now. For those of you if you feel challenged, on identifying. Highs, and lows in the trend particularly. For some of your beginners there's, a nice little gadget, that I've shared in. Various classes it's available under the pattern, tools in the upper right-hand side of the chart I'll. Go in and click on patterns. There's. A checkbox for show patterns, you can go ahead and have that selected and then, click select, patterns. And, what that will do is it'll bring up available, patterns such.

As Some of your common, price patterns, that are taught in our technical analysis, course but. This one's actually part of the candlestick. Tab, so if I select the candlestick. Tab. Over. Here and scroll, down to the bottom, of that. List. You'll. See a tool that's called Williams, fractal, if I go ahead and select that should. Highlight it and then, we can click Add selected, that'll move it over, to, the right hand side and we'll click OK. Now. With that and it. Seemed to want to go ahead and redraw. My chart. Let. Me go ahead and select. That. There and let's go ahead and see we can get this chart back. Izu. Min out. Okay. So here's a daily. Chart I'm going to zoom into that Fibonacci, area that we just drawn and you'll, notice. When. You look at the. Low that I drew the Fibonacci from to the high there's. A little fractal, point with. The fractal point attempts to do is identify some. Of the common, reversals, so, that could possibly be a good guide, on, how, you may draw, your, fib levels now, notice as we look at the daily chart to the. Last, few days have been more consolidation, notice. As I mentioned earlier, you know a lot of those flags. Those. Inside days, have. A tendency, to possibly, hang around that, quarter. Retracement. Possibly. Not going back much more below a third. That. Would can give, more of a confirmation, at this point that you know this swing is still intact and you know, since we are flagging at or near resistance. Some traders may be anticipating. A breakout, to new highs or retesting. Those highs big. Driver that is going to be earnings, okay, so. Now that we've identified how. The markets, looking you, know certainly examples. Of being more range bound but we can see from a bullish perspective, the. Bulls are trying to stay above some, of those key retracement, levels and possibly. Stage in for a potential, breakout let's. Look at the intraday. Charts and see if there's anything setting, up here today, so. What, I'm gonna do is I do, have that grid chart this is expanded, right now I'm just gonna go ahead and switch to our other, chart which is a five-minute, chart and.

What. We have on the chart is some, pivot points I discussed, this in some other, webcast. Will probably hit this again next, week, pivot, points simply. Are calculations. Based, off the previous day previous. Week or previous month that, will identify. Potential. Support. And resistance, areas for, that day. Now. The short story is we have examples, of a daily, pivot and a weekly, pivot, currently. As we look at it. The. S P so. I get my drawing tool back and. We'll go ahead and bring zoom, that up. There. We go. Cole, asked the question can we use any study, to predict what may happen to. That, sp500. Chart. Pattern. Well. When it comes to technical. Analysis. Cole. Predict. Is not the operative. Word you, know when it comes to technical analysis, technical. Analysis, isn't meant, to be a predictor. There's. No way. Of predicting, with certainty, that, a certain, event will occur, what. Technicians, do is they will look at previous, patterns. With. An expectation that it may repeat. Those same patterns in the future. But. To short answer, to your question, yes, technical analysis, is universal. Consider. It is really the analysis, of human behavior, so, whether humans, are trading, stocks. Equities. Or options. Futures. You. Know various instruments, that are out there currencies. The. Principles. Are still the same and these, patterns, seem to occur, regardless. Of what, type of position one may be looking at so. Again we're, back looking, at the ESPY. Futures the shaded. Area represents, overnight, trading. And we, can see that from, the close on Friday. To. Where the price opened, up on, the, equities market has been higher we. Can see on the 5-minute chart generally, more of an upward bias. Traders. Can go ahead and draw support and resistance, off of that as well. Whether taking a a trend, line or look so you have a price channel so let's see if we can identify a, price, channel here so, I'm drawing and connecting. Off of the lows where, you start off the highs are the lows that is up to you our traders are looking for are the tuchas and let's. See if I go ahead and be a little more precise. Here on the chart, so. We got connecting. Off the lows there's, a parallel line and here. We are looking. At the highs now, I do see like three possibly. More touches off the highs I'm, gonna redraw this off the highs. So. He identified that and. Then. Go ahead and come, off the Lowe's recency. Has. The tentative coming into play there and. Also. Remember sport and resistance, are areas. There, so. There's an up channel prices. Were making higher highs and higher lows now. As we zoom on, it right now. You. Know notice, we're seeing some retracement, off of, that. Resistance. Now, what traders may do is use Fibonacci in this case as well a price. Channel can be a guide to that, we'll. Go ahead and take our drawings, drawing. Tools and we'll take that Fibonacci, retracement. And. What. We'll do is we'll draw it from the low. This. Allowed me to do it. Maybe. Not there. We go go. From the low and we'll, take it up to the high.

And. It, looks like you got a little ran away from us a little. Static, electricity in the room there with the touchscreen I guess. So. I'm gonna go ahead and draw from the low. To the high, low. To the high again one can put in some fractal points if they want to identify that. And. Unfortunately, it. Is not setting, up. From. A bullish perspective, as well. As some, traders may be looking, for so I went ahead and drew from the low, to, the high let, me see if I can zoom in on this portion here. And. Focus on what a fib trader may look for is. Focus. On this. 50%. Level. And. The. Two thirds. Now. As price was retracing. After. The opening there, what. Some traders may look for is look for a bounce. One. Way of looking for a bounce and. You. Know possibly a. Higher. Reward to. Risk trade, that, not to be confused with probability. Of six yes is. Prices. Pulling back into, that. 50%, range now notice that occurred. However. Prices, did penetrate, below. That, 60 1.8. Version it. What. Some traders may be looking, for is a, bounce, in between, this 50 and 60 percent range, and as, price comes. Out of, that 50. Percent level, bounces, above it looking, for that bullish candle, that, could be a potential, entry. The. Target, on this would, be the, previous. High. So. Target, would be the previous high now. As far as the exit. The. Exit, can, be set if there is a close. Below. And in this case since we're looking at a 5-minute, chart a close. Below. That's. Sixty one point eight considered. As a support bounce price, bounces, off support a desired. Outcome if price, rolls over and, breaks, that support that. Would generate, and, potential. Exit, again. Not when, it trades but waiting for a time period to close below it so, for instance if one, did, trade the bounce and. This. 5-minute bar closed below which, an example, this one did that, would possibly trigger an exit, now. How can, one determine. Risk or position. Size. On this well. Even though that one may exit. If prices close, below that, sixty one point eight we, could go ahead and use. The. Previous, low, which. Represents, a hundred percent retracement, as. A. Way of position. Sizing. So. The difference, from, where one enters, which may be somewhere, around that, fifty percent just above it down. To that previous low would. Be the, risk so. That 50%, retracement is at twenty nine ninety eight. The. Previous, low is at, twenty. Nine ninety, four. So. Let's just say twenty, nine, 99 verses 29 94 that would be five points. So. What does that five points mean in the SP futures a lot, of you may be familiar with that that would be a multiplier. Of fifty, dollars now how can we if, we forget how, can we go and bring up some of that information well, we got a great tool now that was just recently added under. The. On. The analyze, tab if, one. Goes to the analyze, tab and, selects. Fundamentals. Fundamentals. Right. There it, will bring up some, of the contract, specs on that future so new features so if you do have a future contract in that quote page here. Are your specifications. Right. There there's a multiplier, or $50, and. We're each tick. $12.50. With. The minimum tick fluctuation, of being a quarter, all, right, now. Unfortunately. The chart didn't set up as well, as we wanted to but let me show you on how one can place an order, based. Off of that and. I'll do this for illustrate purposes, even, though the price has, penetrated. Below. That sixty one point eight. I'm. Going to show a setup, or an entry, if. Prices, get back above this fifty percent area, we. Can use our active, trader. Tool. Here and. That. 84. Active trader that should be a template, on the right-hand side here. If. You. The. Other way of doing it you can also go to trade and select. Active, trader. Either, way that you want, but. We'll have the chart on the screen right here so. Currently. We. Have that. Espy future and we, look at some of the quotes here I'm. Going to go ahead and let's go and switch to our other, screen, here.

What. We can do is go to the. Template, and. Under. The template is we, can create an OC, o Brack, so. Just like in equities, we can, create. An order, that, will get us in and out of the trade simultaneously. We. Can create an no Co. Trigger, with, bracket. Is one of the default settings there. Click. On that this. May be a little truncated, because I have my fonts, larger. I'm. So he can pull it over a little bit here now. There, is an auto send feature in. The. Active, trader something. To consider is to leave that checked, so you can double check your work if you're confident, in your work by, checking on Auto send that, will automatically. Send. The orders there'd be no confirmation. Screen. Now. It defaults, to one contract, now. We can do is position size if we figured that our risk is going to be about six, five. Let, me I'll put in six points, just give a little slippage, there because. One may not get. Filled at us even. Though we may be, we're. Putting in an order. It. May. Not fill at that specific, price, now. I'm going to go ahead and. Utilize. That. Bracket and. Based. Off of our size, of our account I have, about three, hundred sixty nine thousand, so. Let's say risk. Half, a percent, that would be eighteen, hundred, in my. Case. We'd. Go to the calculator let's position, size. Switch. Our gadget, to a calculator. If. I take. That. Five we'll, take the six points, that. Were potentially, risking. Times. The. Multiplier, fifty. That. Would be three hundred dollars, per contract. So. If I take the eighteen hundred, and. Divide. It by. The. Three hundred that, would be the number of contracts. Now. Even though we're looking at the. /es. For. The SP futures, for. Those of you that have smaller. Contracts, or smaller. Smaller, portfolio, smaller, equity, there. Is a, micro. Contract. If. I go back to that analyze. Tab and type, in /m. Es this, applies to some of the other. Equity. Futures. As well. Notice. The micro, is a tenth of the value, of the. Ford, / es each. Point, is only five dollars versus, fifty which means each tick value is a buck twenty-five. So. If one, has a smaller, account, that is unable, to. Position. Size. Effectively. With a larger, contract. One. Can consider the, micros. However. Keep in mind there. Is a contract, fee on each one and so, as, a percentage. If. One's trade in multiple, micro, contracts, those, transaction, fees may, be a, bit, larger. Relative. To how much one's trading. You. Know if I go ahead and bring up the futures you, can see what the. Initial. Margin is. So. On the /es. The. Initial, margin is six thousand, nine, hundred with seven thousand, so, you know six times. Seven. Thousand. This. Would mean I'm locking up about 42,000, dollars in equity. If. You are doing the equivalent in the micros that would be 4200, so. Relative.

So Different. Different. Calculation, there alright, so now we got this let's. Go ahead and plug in this. Practice. Trade. We're. Focusing on es we. Got our fibs on there I'm. Gonna zoom in trying, to zoom on this a little bit of a lag that's okay. Now. Notice from a discretionary, standpoint, you know there is a hammer that is Foreman, you know at the bottom of the channel so, some traders may just look for the trade to go above that, and I'm going to do this for illustrative, purposes. Looking. For the price of trade above that, fib, level, now some traders may want more confirmation and look for it to trade above the 50% because. With, it breaking, down you, know there could be a swing, failure, so. Again. I'm gonna select the. Template, a trigger. Bracket. And. I'm. Going to go ahead and change this to six. Contracts, and. Then. I'm going to go ahead and click on Buy. Now, with that it. Defaults, to bracketed, by about a point now what we can do is we can edit the order and. Put. In what we'd like to do now since, we're looking to trade above. The market. One. Would be looking at utilizing, a, stop. Whether. A stop market, or a stop limit now if one does a stop market, if that, price. Hits it will trigger at the next available price. If. One wants to have. Control over where, the potential prices, they, can do a stop, limit but. There's no guarantee, that the, price will. Be filled, in a fast moving market, prices. May possibly, move through that so. If. I'm looking for it to be going. Above a. Particular. Retracement. Again for illustrate purposes I'll look at that sixty one point eight it's, currently showing at. 2997. 72. Let's. Say we can put it a tick or two above, that. Two. Ticks above that would be two ninety eight twenty. Five, or, twenty nine, ninety eight, twenty, five so, what I can do is I can make, a stop. Price. And, change. That to. 2998. 0.25. And then. You, can specify the most above, that you're. Willing to pay for it so I'm just going to go ahead and just for, instance, put in a. Limit. A tick above that now. Whether. Utilize, in a stop market, or stop limit, that's a personal choice there's pros and cons for both of them feel. Free to practice either, set up there and then. In the case of the the, trigger. To. Get out on the limit, which would be our target or, get out at a stop, which would be the loss, we'll. Leave that there but we're going to change our. Time. And force for the exits, to good till cancel so, that way it'll remain in effect until, either. Condition, is met now some traders if the good till cancel does not hit they. May pop potentially. Cancel. That. Order and then just close it out at the end of the day. Again. That's a personal preference. There. Now. I'm going to click on the, confirm. And send now another thing is some traders may, put a wider, range, here.

And. In. The case of the SP futures. You. Know we'll put 10 points, now if this is a type of order that you may wish to do again and again. You. Can save this as a template. There, is a little, Save icon right, here and. So. If we're going to do, this on a recurring basis, for a future. Or any. Instrument. We. Can go ahead and click on. That. Little Save, icon. And. Then. Just call it whatever you'd like. Call. It /es. Bracket. Spell. Bracket right. Order. And. Then. You go ahead and click Save now. I'm, going to go ahead and click a confirm, and send here, looks. Like as I was speaking. Let's. Say praises trading above what I'm gonna do is notice, I can actually slide, this down, on. The. Platform, I, want. To go ahead and close out that active trader you, know when your orders are being displayed. You. Can actually go ahead and slide that, down. So. It's actually looking for that twenty nine ninety eight, and a quarter so. I'm, moving it down to, meet that at the price trades above it we may look for that to fill. So. Price is trying to tick trying to get a bit of a bounce now, notice and that went ahead and got filled, now, notice on our bracket order I bracketed, by about ten points I can also go ahead and adjust, this on the. Chart, our. Target. Was, based off of that previous high so I'm going to pull this down, to that zero. Level. Which is the previous high and click. Send in. Turn. We. Position, sized for. Going. Down to that one hundred level which is that previous, low so, I'm going to go ahead and move that right there. So. Now we're in the trade and. Again. We're position size if price goes, below. Let's. Go to the big screen on this one I think we can illustrate this a little better. We'll. Go and we'll wrap things up. Appreciate. Everyone's support here, today hopefully, you're learning something new. So. As we finish off and go to the big screen again. Here's our fib levels here now for. The. More of an ideal, setup we were looking, for a bounce, to go above. In. Between, the 61, and. That 50 and come up above it now, what we did was we basically, pulled, it back to, the 61, and we, can see what the cause and effect of that may be. Really. For this trade looking for that channel. To hold. And. Got. A little tick above their nose that's kind of going back and forth not a very strong bounce at the moment, but, as far as trade management, we already went ahead and set our stop based off of that previous, low. Now. One example profit. Management is. If. You. Have a five-minute close that stays below that's.

Sixty One point eight one. May consider that to be a failed, trade and then go ahead and close out the position and reduce. The loss. Otherwise. From a profit standpoint let's, say the price goes ahead and bounces, and goes. Up. To, some, of these fib levels for. Example, that. 23, level. That. Could be an opportunity, to scale out of the position so since we have six. Contracts, you, know one may possibly, go ahead and. Close. Out three of those contracts, and then. Take, that stop and, raise. It. Take. That stop and raise. It to their, entry, point okay. Now, we're not going to do that right now, we're. Gonna leave it right where it's at. But. If price was, to go ahead and do that, that. Is something that we can do and then. If price goes ahead and hits that previous high that, would close out the, remaining contracts, now if one does choose to scale out you. Do have to modify those orders, because as it stands right now, we're. Basically set up for those six contracts, all. Right if, you. Notice by looking at the chat folks there, should be a survey. Coming. Out. So. If you have an opportunity please go ahead and fill that out we'd certainly love to hear from you as we, try and reset our chart. And. We'll see how this trade plays off on the day. What. We're seeing as we, zoom in you. Know. Just, like any, other type. Of support and resistance. Where. One may have been considering. That. That sixty one point eight can act as support you. Know notice on this five-minute chart is kind of acting as resistance. This. Way some traders call it at make-or-break. With. The price actually being below there you. Know makes a little more of an uphill battle for those bowls. To, gather back up and, again. Very short, into the opening there. At. The very least those 5-minute bars are making higher lows now, it's a matter see if it's able to make those higher highs and test. That area so. There's a survey folks that came across. Hopefully. You learn something new today. It's, going to bring up our slides. So. What we did was we went ahead and applied some. Technical, analysis, on the espy futures, on the week and we utilized, a tool called Fibonacci, retracements. To, look and anticipate. Potential. Bounces. In this, case a bullish, trend. Looking. For potential, setups, that may trade in between, those. Fib levels we use an example that 50 and 60 1.8, retracement, and then. Looking, to target previous. Highs with. Profit, management as it makes a, strong. Move up, to that high we use an example of the quarter retracement, to. Possibly scale, out of that position some, traders may measure half of that move, and then. Close, out part of the position as well and raise, in your stop, up to close, to your entry now keep in mind would stop stops are not guaranteed, to fill at a specific price. Once. That order triggers. It's going to compete with other market orders so there can be some. Slippage, in there and. Particularly, in a fast market, so. Would encourage you to practice what you learn here today picking. Index future or. Any of a future. Contract that interests you that's, liquid and practice.

Utilizing. The Fibonacci. Tool and possibly. Incorporate, that into your trading. Maybe. Go ahead and do a paper money trade utilize. In that Fibonacci bounce and the. Active, trader platform. So. Thank you so much for being with us here today remember. Go ahead and click on that survey, and keep. In mind. That. In order to demonstrate the function out of the platform we have used actual symbols, keeping in mind TD Ameritrade does not make recommendations. Or, determine suitability advantage, security or strategy through the use of our tools and the investment decision you make and your self-directed account is solely. Your, responsibility john, McNichol sign it off and we, have Mr Cameron May at the top of the mouth top of the hour with, getting. Started with technical analysis, so, take care now thank, you.

2019-10-27 18:49

Show Video

Other news