Bear Flag and Combination Orders |John McNichol | 11-19-19 | Swing Trading Days to Weeks

Bear Flag and Combination Orders |John McNichol | 11-19-19 | Swing Trading Days to Weeks

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Good. Morning everyone, John McNichol, here welcome, to Tuesday morning. And it's, time for swing, trading days two weeks we're, gonna discuss some bear swing, setups we're, gonna also discuss, a, combination. Type order that, one may utilize for, some of their swing trades so stick around. All. Right appreciate you those you had to hear live Michelle, Ron Terrence everyone else that's coming online as well, as those you that are listening to the archived session, do, appreciate you being here today you, can see my name as well as my Twitter handle, on the screen feel, free to subscribe, if, you'd like to follow on what. We're teaching. And, some. Of the little. Reviews. On the market as well as technical analysis, and also. Learn a little more about myself as, well as our fellow instructors here at TD Ameritrade education. Let's take care of her disclosures, and get, right into it. Options. Are not suitable for all investors as, these special risks inherent, options, trade and may expose investors, potentially rapid and substantial. Losses carefully. Read the previous body copy of characteristics. And risks of standardized options, spread, straddles, and other multi leg option strategies can entail substantial, transaction, costs include, multiple commissions also. Advanced. Option strategies often involve greater more complex, risk than, single leg option trades investors. May also wish to consider contact, and the tax advisor regarding. The tax treatment applicable, to spreads and other multi leg option transactions, now. In or demonstrate, the functionality the platform we will be used in actual symbols keeping in mind TD, Ameritrade does not make recommendations. Or determine, a suitability of any security or strategy, for individual traders any investment. Decision you make in your substrate account, is solely, your, responsibility. Now. Transaction. Costs commissions, and other fees important, factors should be considered when evaluating a trade and those zero commissions, applies to online u.s., exchange listed. Stocks ETFs, and, options trades, 65. Cents per options contract fee applies to option, trades now. We have a demo account that we're utilizing looks like a real account but it is not you. Have the ability to practice what you learn here today by, using paper money that software, is for educational, purposes only and successful. Virtual trading, during one time period does, not guarantee successful.

Actual Funds of actual. Funds during a later time period as those market conditions change continuously. Remember. Past performance, of any security or strategy does not guarantee future results nor, success and as, always all, investing, involves, risk including the, risk of loss now. This webcast discusses. Technical analysis, other, approaches, include fundamental, analysis may have served very different views and a, stop-loss order will, not guarantee an, execution, at or near the activation. Price once, activated they, compete, with other, income. And market, orders. Alright. Mr.. Ringo Mike thanks, for joining us. Mike, says he had a good time at the workshop this past weekend in Northbrook Illinois, Illinois. As. I did, as well a great. Time at. The, technical. Analysis. And. Options. Workshop, just. North of Chicago there. Great. Group of people and a, lot. Of learning and interaction. There you know if you do want. To attend, a live workshop, keep. An eye out you can. Go right to the education, tab on on the thinkorswim platform and. Through. The thinkorswim platform. Go. To education, you can also access this, through the TD Ameritrade website by going to education, and look. For the link for, live. Events, or. I should say in-person, events, and, by. Selecting, on that link you. Can see the schedule which. I believe you can see the schedule out for the rest. Of the year. Yeah. Things will be slowing down a little bit with the holidays but. We do have a, advanced. Concepts, workshop, in New York with my good friend Mike, Follette and. Similar. To the session. That we did in Northbrook the technical, analysis, and, option. Strategies, workshop, and Atlanta. Coming up at the beginning at December and looks. Like we'll be rounding, off the year with an, advanced concepts workshop, in Westlake Texas. Keep, an eye open we'll, probably start seeing postings, for the next quarter and that's. How you can keep up to date on, our live sessions, all. Right so, if you point your attention over, to the left-hand margin, our. Discussion, today really. A bear swing setups. Part. Of the reason we'll take a look at that is the market, is in about the seventh, week of an advance, we start in the week off in a seven weeks of advance but I believe we're pulling, back, in. The morning there. So. We may see some opportunities on some of the weaker stocks there will focus on we're also going to apply, kind. Of what we may, refer to as a combination, trade, maybe, you have a. Strategy, where you enter, a stock and have. Two potential, not. Only two potential exits but two potential, targets. So we're gonna do a trade, that will enable us to enter in and then, have two separate. Exits, there so. By the time you get to the end of this session our, learning objective, for the, day will. Be once. Understanding. A swing set up being, able to enter a, combination. Type trade, on your. Thinkorswim paper, money account, now, if you have any questions feel free to type that in the chat would, certainly love to hear from you so let's go ahead and we'll, get right into it and. By, the way let's, go ahead and just. Take. A quick look at the market at the opening. And. We. Are opening. A, higher. Than. We did on Friday but notice the, candle, as, I try and zoom in a little bit starting. To go a little negative. From. Sunday. Evenings, opening, a. Lot. Of drivers on that home depot I believe, came, out with, a Miss today. Discretionary. Stocks had been relatively, weaker, going into the end of the week so. Our, earnings hit on Home Depot also. Kohl's one. Of the other retailers. KSS. Also. Gapping. Down significantly this morning, also. Probably continued, concerns, over the China trade and therefore. So that's, kind of where we currently stand. So. It's talked a little bit about, some. Potential. Bearish. Setups, we. Can look at, you. Know there's a lot of emphasis on. You, know bullish traits well that's what the the. Market, is doing we're seeing, a good, overall trend. Prices. Are making higher highs and higher lows. But. One still may want to familiarize, themselves with some bearish trades and this may be a, new, concept, to some of you there and. By the way if all of this is new to you we do have a getting, started with, technical, analysis, my good friend Cameron May on.

Mondays, At. 11:00, a.m. eastern time you, can feel free to join on that webcast which by the way all of these are on the trader talk webcasts, so, when you're on YouTube there there is a subscribe. Button and. If you click to that you, can also turn on notifications as, well and be, informed on, some of our upcoming trading. Webcasts. So. Let's talk about a, swing. Set, up here on the, bearish side. And. We'll. Go ahead and look at a few examples here. For. Instance right, now we're looking at a chart. Of Pepsi. PepsiCo. I should. Say and. Notice. What's, different from this chart than what we saw with some of the previous. Market. Action fact we probably go to the big board on this one here you. Know it's been a little bit I. Pin. Spent a lot of time on the road over the last couple of weeks in fact I don't think I had a true, day off since. I think October 25th, between, going to Vegas for an investor's conference, doing some military duty going. To Orlando, and. Finally. Ended, up in Chicago there over, the last week I think we'll be home for a little bit here as we go in the holidays, but, let's go ahead and look at this setup for. Pepsi on what's happening, right now so, notice. Looking at the chart previously. We, had price action that was making those higher highs and higher lows. Indicative. Of that uptrend. Those. G that have followed. Me as. Well as some of our other technicians. Like, James Boyd Ben Watson you, may see a common, use of moving averages, to help identify the trend. We have an example of a 55 period moving average kind, of more of that intermediate, trend and, we can see how that trend generally, had been up until fairly, recently. Notice. When, trends change you know moving averages, may begin to fall confirming. That the average close, is fallen, and that's. What seem to have occurred with. Pepsi. As it was making not. Only lower, highs. But. Started, making some lower, lows thus. More of a downtrend, so, just like with the tide if the tides coming in swing. Traders without intensive, trading, those up swings, once. There's more of a downtrend. Where a correction. Some, traders may look, at the tide, going out and, then, trading, the down swings, so. When. It comes to swing trading you, can go ahead and trade both from a bullish perspective, as well as from a bearish. Perspective, and, when. We look at this potential, set up on PepsiCo, we can also see some of the principles, of technical analysis, how broken. Support. In. The case of that moving average as well as with price action that broken support, is potentially. Acting as new, resistance, as price, on an interactive basis, or intraday. Basis, you know kind of went ahead and, trade. It up, not. Only to a moving average which can act as resistance, but, also looking, at, price. Action which. We had previous, support. And, now. Acting. As new. Resistance. At intraday price basically, going up and hitting, that. Now. Today we're not necessarily, seeing a bearish. Bounce so what would be a bearish, bounce, traders. May look for the bounce off of that resistance so as we zoom in a little bit more. What. We're looking for here is a high. Day. In that, retracement. So. As prices, were retracing. And going higher. We. Can see each. Top. Of the four. Of the candle, formation, not. The body but the shadow, the. Very top of that candle, representing. The hi and, there, we can see the hi day there. And. Then with traders may be looking for is looking for that bearish bounce which, will be defined as price.

Trading. Below, the low of the, high day, so. Right now what we're seeing is more of an inside. Day and. We're just starting off today as the price action is, inside. That, previous, day, now, those her, Ami's, again. Otherwise first as inside, days are. A slowdown. Of that upward, momentum and it is likely to occur at an area of support and, resistance so. Potentially. A resistance. Bounce could. Happen today may. Happen tomorrow may, not even happen at all but, this would be a common. Type, of setup. This. Bearish swing when. We look at the patterns. Traders. May refer to it also as a bare flag. The, opposite. Of the bull flag that a lot of you may have learned this last weekend, in, Chicago or. Certainly, each and every week on the swing trade when we look at the bullish. Setups, so a Bear. Flag is when one has a sharp, move, down and we're. Seeing a retracement. Price. Going. Up forming, that flag, so kind of an upside down pull, with, the price, retracing. Up. Now. Also remember we have a tool if you, do struggle with identifying. Some of the possible, primary, highs. And lows in the trend we can turn on that Williams fractal, tool, by. Going over to patterns, on, the. Thinkorswim. Platform, within. The chart, make. Sure the check, box is checked for show patterns, select. Patterns. There and then. Once we're there we can go ahead and take, a look at the, different patterns now the Williams, fractal, is actually part of the candle. Patterns so we want to hit the candlestick. Tab there and then, from there you can type in williams, fractal, or in, our case there since i don't have a keyboard right in front of me here we can scroll down there in alphabetical, order, and find, Williams. Fractal, and. Apply. That then, click ok and with that we'll, see little carrot points at or, should. Looks. Like it may not have worked at that time let's try that one more time we're. Gonna candles. Scroll. Down. We'll. Find the waiting fractal a double. Tap that there it, appears over, on the right-hand, side and, we'll. Click OK. And. Looks, like it did that now let's go ahead and, refresh. The chart. For. Some reason here, we go. So. Now as you go ahead and take a look you'll see some. Of these little fractal points representing, highs as, well. As lows. Actually. A couple loads kind of appear in there and some traders may measure, the. Distance, from one, high. To, a low to. Get an idea of that pattern in, fact there's actually a relatively, smaller, bear. Flag here that even I didn't pick up on notice. The hurrah. Me that inside, day a one-day. Pause before, prices, went ahead and swung down even. Lower. Okay. So example, of a bear set, up there let's, go ahead and actually put. In a potential. Practice trade to. See if. Maybe, this will trigger and then, also have, an exit. For. A different couple scenarios so actually before we do that let's, actually kind of talk it through on the chart well. One consider. In a stop. A where, does price need to go, before. One may determine that they no longer want to be in the trade so, if we're referencing that this. Is the, high day and, we're, looking at least for today seeing. That prices are able to trade below the low of the, high day that. Could be our trigger to get into, the trade so, we have our potential. Entry. And we'll go ahead and talk specific, on the prices in a moment when we set the tray but let's just get the visualization, here. So, potential. Entry, some. Traders may look for it to trade about 20 cents below the. That day, as. A matter of a setup whether they look to entering early in today or, possibly. May look to see if those conditions are like. That towards, the end of the day trying, to minimize kind, of more the whipsaw or, that intraday, volatility. Now. As far as potentially, putting a stop one. May go ahead and set that a percentage.

Above, The high. Day, our. Example, will use a 1 percent so. If the price goes one percent above the, high. Then. That would be a possible, exit, not a desired outcome but. Something, that we have relative, control over now keep in mind that. Trigger price there's. No guarantee that it would fill at that, trigger price, prices. Can we'll be competing against, other, market, orders whether, it's a stock or an option, now. Let's talk about targets, and this is where that combo. Trade, can come into play is. There's. A couple of targets, that one may have as far as a swing trait one. May be a previous. High or a previous. Low a previous, high for a bullish trade a previous. Low. For. A bearish. Trade so, when we go ahead and look at this, we have, the. Previous, low that, could be a potential, target. Likewise. One can measure. A previous. Swing. We'll. Take a look at the more, broader swing there and then, project, out a similar. Move to, the downside. So. In this case that was about a seven eight dollar move maybe project, in another seven, to eight dollar move so, we have one. Potential, target and two. Potential, targets now, some traders may pick and choose on, which target, that they want but, we, can also do. A combination, trade. And maybe, sell part of the position, when, it hits the first target, and then sell another. Position, or the remaining if it, was to reach that full target, while, also considering, as far as the stop on possibly, adjusting, that down, as. Certain. Targets, are met. If. They're not already cancelled out okay, so let's go ahead and actually set this up on, the platform and we'll go ahead and we'll walk through that and we'll see if we can do another. Setup or two okay so, once, again appreciate everyone here and if you do have any questions go ahead and type that into the chat here. Paul thanks for being here. And. Before. We enter this one, I'll. Just go, through a couple of other. Stocks. That may be showing, some similar characteristics. What. I was using was used, in some of our. Practice. Script. Going. Through stocks whether, on the nasdaq 100 or. Looking. At the penny increment, stocks looking at stocks that may. Be more widely traded. For. Those yet or unfamiliar with it here's.

Some, Of the shared script right there, if you'd like to practice. With that on your own I was generally looking for stocks. That were, head. Of tensity of being more down trending or. Negative, under moving averages, and then. Looking at the charts to see you, know if there were some, potential, resistance bounces. So, here's. One on again. On PepsiCo. Kind. Of keep the cola wars going. Coca-cola. A similar. Set up as well, notice. Support. Broken, support potentially acting, as new resistance, now, you know if the market does take. More. Of a fall you. Know some of your staple stocks may. May. Not fall as fast. They. May even relatively, hold up so don't, be interesting to see on how, this plays out if the market, continues. To pull back. Now. Also keep in mind even though we're doing some. Bearish. Setups at the, moment, you know the markets still in a good overall trend, you, know traders, if they see some. Of the stronger stocks pull back over, a couple of days you, know maybe looking, for a bull. Flag, set up okay, but those conditions, aren't setting up at the moment but, something to look out for. In the coming days, all. Right some of so other. Potentially. Bearish patterns. HSBC. Holdings. This. Is more I believe of, an ADR you. Can see that there are some gaps. That's. From overseas. Trading but. Kind of a a similar, set up you, know price is making lower highs. Lower. Lows and, kind. Of that broken support. Potentially. Acting as new resistance, so, just kind of give you a couple, examples. That. You can look, at and see if you can find similar, patterns, in other stocks. Expe. Expedia. Group. This. Stock had, gapped down after, earnings and. In. The. Context, of a, bounce. Since. Prices with, the gap, kind, of constricting, that price let me see if I can. Adjust. This a little bit you know notice on the right-hand side of the chart you. Can left-click and drag the numbers to try and stretch the price out there and then. Under your drawing, tools there's. A bit of a panning, tool that. You can use. To. Kind of zoom, in. Or whatever price action. You. Know this is an example of a bearish. Bounce as well, although. It looks like it started to happen on Monday. Identifying. The high day. There's. The lower the high day and. Looking for price to trade. Or. Close, below the low of the high day right, now we're seeing a, trade, below below, of the high day so, another potential. Setup there. And, these are from some various areas of the market you know some staples. Some. Discretionary. A. TVI. So. Just kind of showing you a couple examples of, similar. Setups, and kind of a consistency. On. What. Some traders may be looking, for, let. Me go ahead and change the drawing tool back. To the arrow so. I can left-click and drag on the area, kind. Of similar to what we saw on. On. The Pepsi and on, coke, examples. Of stocks that have broken, below, support, no.

So I'm just kind of connecting, some of those fractal, points some, previous lows broken. Support acting, as new resistance sharp. Move down. Retracement. Look up, a couple of days. Traders. Potentially look for price to trade below the. Low. Of the high day. Here's. The highest point, now. Keep in mind with fractals fractals. May not, illustrate. The most current, higher low until. The. Price may actually trade, below that so. Don't always look, for that. Most recent, pattern, it knows today. It. Flagged, it because price did trade. Below the low of the high day notice. It's not necessarily. Closing, below there kind of came up off of that but, if some traders we're, seeing that prices were trading, below, the low of the high day that, may be a trigger for a bearish, trade. Let's. Say bring up a AMT. AMT. I believe, is. Bring. That up American, Tower corporation. Kind. Of the cell, towers there. Again. Kind of looking at that broken support potentially. Acting as new resistance now those price is still trading higher we have more of an inside, day we. Don't know if it's gonna break higher or break lower but, some traders may look for that resistance, bounce and look, for prices to trade lower, if. Prices were to continue trading higher. Above the moving averages and making higher highs and, higher lows, that. Would be a bullish, reversal, the. Summer I talked about in more detail on, our Monday session, on, technically. Speaking breakout. And reversal, patterns. And. I think that was just a few of the setups here oh one more, let's. See let's bring up a eBay. And. You. Know post earnings, you know eBay has been struggling, since going back to September being. Below and, intermediate. Average notice how that average is acted as resistance. Still. Making some, lower highs and lower lows I live from a very short-term. Prices. Did go above. This high. So. Some traders may look for that reversal, look, for that breakout, to the upside. But. With the prices still making lower lows they, may, look for that bearish, bounce and seeing, prices are able to trade lower. Alright. So there's, a few of the setups there so let's. Go ahead and plug. In a couple of these. Let's. Go, let's. Start off with Expedia. Since. It is trade, and lower now some, traders may consider, shorting. Stock. However. With that that, would, be on a margin account, also. As far as equity, would. Require a bit equity it's a ninety six dollar stock. So. I mean for instance on. This. Practice account you know if I was to right-click and, select. Sell. You. Know to sell a hundred, shares you. Know based off of the equity, and the buying power you, know that I would reduce, the. Amount. Tied. Up in the trade to. Around. 70, what. Hold on give me a second here. To. Around. Seventy three hundred dollars, now, what. We have done and we, can use an option, to, attempt a profit, from that move down so let's go ahead and do that, so. We're gonna go to the trade, tab. And. We. Can go ahead and select an option that we, believe as far as an amount, of time needed. To be in the trade. Let's. For our example. Go. A little further out, some. Traders may consider how. Much or how much time they need and possibly. You know add a month now. Since. This is days, to weeks. Looking. At less. Than 30 days may. Not be enough time if we're looking on adding another month so let's. Say we look at January's. Options, with 59, days and. Then. We look at the put, side of. The application, so. Looking. At our puts. Also. Looking at some of the deltas possibly. A starting point is looking more at the money. Some. Traders may go a little more into money if they're trying to intrinsically. Capture. More. Of the stock move, if, there are forecasts, in a big. Move in the stock they, may look to take, the benefit of a, lower, Delta option, which. Has a cheaper, or less, premium, but. Less probability. As. Far as trading. Deeper. Towards. That target. Let's. Go ahead and actually map it out here and then we'll go and we'll do an. Option, trade with, kind of bit of a combo so first let's, go ahead and look at the potential, stop, so, and. What I'm gonna do here may help since, we have the moving averages on there I'm going to I'm, gonna remove the. Studies there which will help. Possibly. Limit the impact of that gap I. Mean. Not so much, and. Then. We'll go and look at that high day put my cursor on that that's a high at 90, 623.

So. In ninety six twenty three what. We'll do is we'll go ahead and figure. Out a stop, above, that, level, up take that back yeah ninety six twenty three on that day we're. Gonna bring up a calculator. Switch. Gadget. Select. Calculator, so, we'll take ninety six point, two, three and what we're going to do is we're going to multiply, that by a. Dollar, three. Basically. Up, correction. I'm. Thinking three percent. Ninety. Six. Point. Two three. And. We'll. Multiply that, by a. Buck, and. A. Penny basically. A one hundred and one percent, that. Should give us a stop one percent, above the high. Above. The high of that day. So. I can go ahead and take a drawing tool. We'll. Go ahead mark that. We, draw that line you can typically, right-click, on it you can put your exact price you can change the colors around however way you'd like, so. We've got 97. 19. I'll. Go ahead and make this red. Represent. Our potential, stop. And. Then let's go and figure out a target, no. One trader may go ahead and measure the. Distance from, a. High to the low now. The gap you know may be a, relatively. Larger. Move down. You. May look at that inside, day and, go. That low. And. I, can go ahead and right-click. Well. Do a duplicate, drawing, and. As far as on the flag, trade, you, know looking at the the. High of, that. Small flag, that'll. Be the starting point and the, potential, target, would. Be at. The bottom of the flag now, kind, of looking at this example that, was approximately 88, 33, so, I'm gonna go ahead and right click on, our, previous line we'll. Do it duplicate, drawing, and. We'll, go ahead and left-click and drag that down. And. We can go ahead and again right click to. Edit, that. With. The big mouse pointer I gotta be a little more exact here right click. Well. Edit, that I believe. It was 88, 33. I'll. Make that green for our target now. So. That that was the swing target, now now. This is not exactly a big. Flag. Here. So. Some traders, you know trying, to target that previous, low you, know we're kind of already up on that so you, know as far as that first target. Not. Necessary it's textbook, on what, some of the other swings, may be but we could do is. You. Know target. Half of that move so. If we. Have a move from around 97, 19 down, to 88. Let's. Say I go ahead and subtract. Difference. 97.1. 9. -. 88.3. 3, will. Hit enter that, would be a, in. $88. An $86. Move, let's. Go ahead and divide that by 2 we'll, cut that in half, so. I'd be about 4 dollars and 43 cents, from, that high. So. If we go ahead and take. That and subtract that from, 97. 19. And subtract. Four. Dollars I think there's four dollars and 43 cents I may be off a couple of cents but illustrate. That that. Would be a target. Of 92. 76. So, what we can do is, possibly. Set that first target. About. Midway through. Which. Is not a lot, lower but still a little bit lower than the current price. Right. Click set, that target, 9. To 276, and. We'll, make that. Well. The first targets, there all, right, so. Now with that in mind we. Can go ahead and place this. Practice, trade so let's go ahead and do that. We. Can go ahead and go to trade tab and. We're. Looking at some, of the January options, let's. Go for. For. Our purposes, we'll, focus. A little more at the money here. And. I'm. Gonna right click and. We're gonna go ahead and select. By. Custom. And. What we'll do is we'll do it with. We'll. Do a buy custom, with stop now this combination.

Since It's on an option. We're. Actually going to do two conditional. Orders so, what, the plan here is we're, going to go ahead and create in order. To buy the option, and then, attach to it we're gonna have to, sell orders with, conditions, in both of them with, the idea being if the price goes down to the one target it'll sell part of the position and if it goes down to the other target, it will sell the remaining, position. So. It's almost kind of like we're doing a bracket, order. Embedded. Into, that conditional, order those year that were with me last. Week we, did go over those conditional, orders so would encourage you to take a look at the archive, from. Last Tuesday okay so. Let's go ahead and run through it. So. What I'm gonna do is I'm just going to change. The. Stop order to. A market, and, we're, gonna make it GTC. Remember, market orders are going to compete against, our, other. Orders, and so. A market, order would. Be the next available price and. If. We're going to do a condition, it would compete against, other, income. And orders so. I'm going to do is I'm going to right-click on, this. One I just change the market GTC, now. Before, I right-click, on it I'm going to come down, to. The bottom notice right here it says first. Triggers, all. What. I can do is I, can. Go ahead and. With. This this, enables, me to actually add an additional. Order, there so. What I'm going to do is I'm going to right-click on this, one and, I'm. Going to create a duplicate. Order. But. Did, not want to do that. First. Triggers all. I'm. Gonna do this a little bit differently give me one second. Right-click. We're. Gonna do a buy. Custom. Wit. Stop. I'm. Going to right click and create a duplicate, order that's. What I wanted to do. And. Then let's go ahead and change both of these sell orders to market. GTC. And. Then what we're going to do is we're going to use the condition, if notice as I move my cursor on, top of the orders, there's a little gear that appears. So. Let's, go in position, size first, how many contracts. Can. We buy. Or potentially, buy with. This now I'm going to actually position, size these to a maximum, loss. Even. Though the, stop more than likely will. Still have some equity, in that option, but, this is one way of planning for a best, worst-case, scenario.

So. Let's. Say based off the size of my count we're, at 48. Looks, like those hedges that where we. Practiced with previous. Weeks those you have followed me are working. A little bit better today after. Last week, we'll, see if that continues on this pullback. You, can join me in the trading, verticals, class on Wednesday, and you can, check, that out from last week so. We, got about 348. So. Let's say half a percent of that we're looking at about $1,700. A little, bit more will. Do. We'll. Take a calculator, there and we'll, say. 348. Thousand. Times. Point. Zero. It. Should be a point. Zero. Zero. Five. That, should be a half percent, there. That's. About seventeen hundred and forty dollars so. You take that $1,740. And divide it by the four ten. So. We'll divide that by. Four dollars and ten cents. That. Equate out to be about four hundred and twenty shares or four contracts. So. What. We'll do is we'll, take those four contracts, and then, we'll sell two, of them if they, hit our target, or. Hit the stop and then. We'll sell the other two if they hit the second. Target or get. Stopped out okay. So. Then I can go ahead with. The position there I'm going to change the buy order. To. Four, contracts, and. Then. On the. Conditional. Order and we're gonna add two conditions in a sec we're. Gonna make each of these, two. Each, so we're splitting, this. Order, on the exit, essentially. Now. I want to do is we're gonna go ahead and click on the gear, for, each of these and we're going to put in our conditions, for the first. Half. Of the trade as well, as the second half so I'm going to click on the gear, and. This is going to enable us to bring up our conditions now one thing that can help us with that if I go back to the chart, I can. See our. Potential. Stop or trigger, price should say along. With our two targets, then. On the platform, we, can go ahead and click on that, little. Down. Arrow that's. Where we can click on to bring up the order that we're working on. That's. How you can open and close that there to make some room. Okay. Now, I'm. Gonna go ahead and click on the gear will start adding two conditions, for the one order. And. It, won't allow me to move this around there, we go so. It allows me to make, this a little bit smaller here so we can have everything on the screen. Alright. So. Basically the first part of the order if. We get into trade it's going to sell at the market GTC. For that option but we're in do it conditional. To, what the stock price is doing. So. For instance right. Here is, where. We can add our conditions, I'm. Gonna, click on symbol.

That'll. Go ahead and bring up the stock. Price. We. Can go ahead and click on the. Next one which, would be the mark, should come up and. Then. Right here it says less, than or equal to now less, than or equal to since this is a bearish trade is going to be the target so. We'll plug in that first target, of, 92. 76. 92. 76. We'll. Hit enter now it's a little truncated, here since we have larger, fonts I'm, going to click on the second box below we're gonna add a second condition I'm, going to click on mark in, this case we're going to say greater, than or equal to now. Since this is a bearish trade the greater than or equal to is the higher price that. Is the, 97. 19. We're, gonna go and plug that in. So. There's our two conditions, we're. Gonna click Save now. With, that, we. Went ahead and entered. The. Potential, upper threshold, which, would be potentially, being stopped out as well. As the first target, which was in 92 76. Now. Let's go ahead and select. The other order, on the split and then, we can go ahead and plug in the, stop. And the other target, so with, this we get again hit the. First box expe, will bring up the symbol, click. On the second box that'll be the mark and the. Current one it shows. Less. Than or equal to again. Since it's a bearish trade that would be the target. We're already put in the first target, in so let's go ahead and put in that second, target which, is going to be if. I bring this down that. Be 8833. So. We'll plug in 8833. We'll. Hit enter and. We. Could click on the second box. Clicking. On the second box for our second condition and that may not have kept there we'll, go ahead and double check this, looks. Like we're a little. Little. Locked up there and. I have to go and type in that price one more time. So. That be 88 33. All. Right looks like it's stuck that time and then on the other order, we can click on expe. Mark. And then. This one will say greater. Than or equal to that. Would be the potential stop, where. As a trigger price to get us out as. You see I've been talking a lot over the last two weeks - gotta take care of that voice let's. Go ahead and plug in that. Potential, stop, which. I believe is. At, ninety one or ninety, seven. Nineteen. Ninety-seven, point, one nine. So. It took that time. Ninety. Seven point one nine. Looks, like that took, once. We go ahead and type whatever conditions, that we want, we. Can click Save that. Should bring up that order and then now we can go ahead and confirm and send and see, what we're looking at there so we'll hit confirm and said so, we can double check. Very important to do when you, have multiple orders. Kind, of multiple, moving targets, you know making sure that, you have things set up the way that you'd like so, this is a long, put. Option, looking to benefit from the stock falling. So, we're looking at buying, four contracts, of a, January 95, put and. We'll get that you know close to wherever the market is at. Notice. That there are two sell orders and they're. Both split now this is not a one cancels other they're actually, two, independent. Orders, one. Is to sell two. Of the contracts, under. One, of two conditions, whether. A if the price goes at or below ninety, two seventy six notice. I actually used red but let's, use green because, that is a desired, outcome that. Is a price target or if. It, goes, at. Or above ninety, seven nineteen, which, in that case that. Would or should, result in a loss, now. Again we don't know what the price of the option will be but, guess what we position, size to a maximum. Loss we. Know what the worst case scenario, is the, most we can lose on the trade is going, to be seventeen.

Hundred Twenty two dollars half the account this is a great starting, point to consider risk. Management, as you possibly, get better then, you know one may utilize a, different, position sizing maybe, half the value of the option, but, good, starting point you can see the worst case scenario right there, now. The. Other order. That we have is, if the price goes at or below eighty eight thirty three which would be the full target of the flag, or. If. It, goes at or above ninety. Seven, nineteen. Okay so we basically plan to trade trade. A plan let's, go and put this off and see what we got. Now. Remember folks if you do have any questions now is probably the time to ask as we'll be getting ready to wrap up here in just. A moment. Hopefully. You learn something new today, I'm. Going to go ahead and edit let's, just double check the. Price there, you. Have the little chain link or, should say the little lock box there you, unlocked, so you get the more current price and we'll. Go ahead and confirm and send this and. We'll. Go ahead and send that out. And. Interestingly. Enough. I got a little buying power issue here. Probably. From a lot of the trades that I did over, the weekend, so I'm gonna go ahead and clear. Some of this out and we'll go ahead and re, send. That. Let's. Go ahead and take a look at just. A couple of the other stocks, that we looked at previously to. See if they're trading down here's Activision. Which, is trading below the low, of the high day. And. In. The case of PEP. Now. Notice and PepsiCo still, kind of an inside, day. Now. What happens is let's. Say if PepsiCo. Stayed, in the same type of pattern or the inside day instead. Of price is trading below. The. Low of the high day if. There's. An inside day traders, may look for prices, to trade below the. Low of that inside. Day so, this could be possibly, a better, entry. Point for that. Alright, well. Looks like folks are gonna have to wrap things up from, here. Hopefully. You learn something new. What. We've discussed today was, one. Bearish. Setups where, we're looking for stocks, that are generally down trending, maybe below an intermediate. Moving average whether, it's like a 30 period, or in our example, we're looking at some 50, some period averages, they're. Broken. Support. Have a density of acting as new resistance so, we went in and went through some of those setups we. Also went ahead and utilize a, combination. Trade. Where, one, can get, into a trade and then. Have potential. Plans to get out at different, areas so. If, one has a, plan, where they want to sell part of their position, at one area and close, out the position at, other area, utilizing. A combination, trade as we did today could. Be a good way of doing that alright so once, again appreciate your support as always folks and, remember. In order to demonstrate up one, last thing is. We. Need you to practice, this. So. Remember, and. I teach us a lot in the live classes that, knowledge. Without application is, just knowledge if, you want it to turn it into wisdom, you need to practice, what you learn so, we'd. Like for you to go out and look, for a stock, that may, have a similar, setup that. We were just looking at today possibly. Stocks that have broken down below support starting, a downtrend, coming, up to that resistance, and looking, for that bearish, bounce and then, doing a practice trade, on one, of those maybe, choose to go ahead and do the combination, trade, figure, out a first target, which could be a previous, low on a bearish trade or, a previous high on a bullish trade and then, the, second, target which would be the distance. Of that pole or, that measurement, from that support. To resistance, okay. Now. Coming up next folks we're gonna have miss Barbara Armstrong, with, getting, started, with futures, and. Remember. In order to demonstrate the functionality of the platform, we had to use actual symbols, keeping, in mind TD Ameritrade does not make recommendations. Or, determine, suitability of, any security or strategy, through the use of our tools any investment. Decision you make and your self-directed account, is solely, your, responsibility so, john McNichols sign it off take. Care of yourselves and we'll. See you again real soon bye, now.

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2019-11-23 12:04

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