Bull and Bear Swings with Long Verticals | John McNichol | 11-26-19 | Swing Trading Days to Weeks

Bull and Bear Swings with Long Verticals | John McNichol | 11-26-19 | Swing Trading Days to Weeks

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Nicoll. Here and welcome, to, swing trading days two weeks we're. Gonna discuss some bowl setups. As well as some bear setups, as, we go and continue, this Thanksgiving, week so thanks for being with us. You. Okay. Thanks. For being it looks like we got live we got basil Jason. Ricardo, Dom Mike. Michelle everyone, else that's joining us thanks for being here as we, take you through another week of swing training days two weeks let's take care of disclosures, and get right into it options. Are not suitable for all investors as, the special risks inherent to. Options trading may expose investors, potentially rapid, and substantial. Losses carefully. Read the provide a copy of characteristics, and risks of standardized, options, spread, straddles, other multi leg option strategies, can, entail substantial, transaction, costs include multiple Commission's which may impact any potential, return also. Advanced options strategies often involve greater and more complex risk than, single leg option trades investors. Should also consider contacting, a tax advisor regarding. To tax treatment, applicable, to spreads and as a multi leg option transactions. Now. In order to demonstrate the functionality the platform we will be used in actual symbols, keep, it 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 on your self-directed account, is solely, your, responsibility. Now. Transaction, costs are important factors should be considered when evaluating any trade that zero Commission applies to online us, exchange, listed, stocks ETFs and, option trades that. $0.65. Per options, contract, fee applies. To option, trades now. We're utilizing a demo account for, our practice trades you have the ability to practice what you learn here today as well, by, utilizing paper, money that paper money software, is for educational, purposes only and successful. Virtual trading during, one time period does not guarantee a successful investment, of actual funds during, later time period as those market conditions change continuously. Now. As always all investing, involves risk including, the, risk of loss and while this webcast discusses, technical, analysis, other approaches. Include fundamental, analysis, may serve very different views now, a stop-loss order, will. Not guarantee, an execution. At or near the activation, price once, activated, those, orders will compete with other income, and market orders. Alright. Tarrance. Appreciate. You being here happy Thanksgiving, you as well Bruce let's. Go ahead and bring up the, thinkorswim. Platform let's. Get into our agenda for today. Point. Your attention over, to the left-hand, side where we have our little. Scratch pad there we're gonna talk about the bull swing, set up, we'll. Also take. A look at a bear, swing set up as there, are still some out there even though looks like the Bulls have been gobbling up the Bears over. The last week and we'll, go ahead and look, at a practice, trade, as well now if you have any questions feel free to utilize the chat would, love to hear from you and. We do try to apply. Principles that are taught through our education. If those, are you that are new appreciate. You being here but, keep in mind if one is on the TD Ameritrade website or on, thinkorswim, we. Do have the education, tab and once. There we. Have the. Little education, sub tab there which normally, comes up automatically. And. From. There one. Can attend, some of our various courses a good. Follow up to this webcast as well as our other technical, webcast is the. Stocks. And, stocks. Technical, analysis. As. Far as webcasts, a good, friend Cameron May every Monday, does a getting, started.

With. Technical, analysis. That. Is actually, every, Monday. At 11:00. A.m. Eastern, Time you, can go to webcasts, at the appropriate, time or a couple hours later you can go into the archived webcasts, and see. That there again, every Monday getting. Started with technical, analysis and charting essentials. Your. Morning you Jack Texas, John alright, so you know we're going to review some Bowl and bear swing setups our learning, objective, for today. Is, once. We get through this session here one should be able to recognize, a bowl. Setup as well as, a, bear swing, setup and then also being able to place, a practice. Trade with, an entry, potential. Target, as well, as a stop, or, define. Risk, on that trade so, let's go ahead and get right into it. Let's. Go ahead and bring, up just, as a starting point, looking, at the S&P 500, those, of you that may have joined me in some, of the webcast. Yesterday. Made. Comment, that Monday. Would have been a good. Time to. Discuss. Swing. Set ups there you, know as we go ahead and look at the S&P, 500, you. Know one of the benchmarks, there we can actually see some of the characteristics. Of a. Swing. Trade. One. Identify. The trend, so. As we, go ahead and look and we're seeing that a series, of higher highs and higher, lows. Defining. That uptrend. So. Looking, at higher, highs, and higher, lows. Another. Tool that we can add is that fractal. Indicator. By going to the pattern tools on the, charts this is a good teaching tool for those of you that are new on trying, to identify those, highs or lows go, to patterns, make. Sure the show, patterns, is selected. And then. Go to select, patterns, once. You see that whole list go, ahead and select. Candlestick. That candlestick, sub, menu, there and from. There you. Can scroll down. Or. Just look, for Williams. Fractal, we'll go ahead and toss on that Williams fractal, indicator. There. And. Click. OK, and then. One will or should be able to see I'm not sure why that reset, like that let's. Go ahead and bring that out again a. Little. Bit better there will, zoom in one, can see the little caret points on the price action. Now. The other thing that we have on there is moving, averages, some. Moving averages can help, firm that Trent, swing. Traders, very common, to have an intermediate, type. Moving average maybe. It's a 20. Day well, 20 day can be considered to be shorter term but maybe like a 30 day or a 50, day we have an example of a 55. Period, moving average representing. That intermediate. Trent and as, you can see with the S&P 500 that. Intermediate, trend has been up for. Some time at least going back to the end of September, beginning. Of October they're. Zooming. In and looking at those fractal, points notice, those, fractals are continuing, to make those, higher highs and higher lows. As. You kind of highlight those and that. Has continued, up to this date as, the market even at the open making. A new high as we, speak, so. What. Is a bull. Swing, set up well. As we can see a trend notice, that prices do not go straight up, they. Have a tendency of zigzagging, a bit so. When we go ahead and look notice. From some examples, price. Swinging.

Up And then. At times one may see a, bit, of a retracement, or. Pullback. Do. I tell you I am struggling. As far as being able I. Don't. Much not have enough to electrolytes, as this touch screen is not working well for me today so let's go ahead and go back to the main screen here. I'll, let that reset, see if it's able to do that and. Go. Ahead and identify some, upward swings. And at, times you'll see that there'll be a little bit of a, retracement. These. Could be one. Day pullback they, may last into. Several, days what. We're doing is we're trying to capture the upward. Swings, that are in the trend these. Pull backs that. May occur are the. Potential, setups. In that. Trend. And. When. We mean by setup, is what is the stock need to do before. Why. Looks. To enter, or potentially, enter into the trade the more recent, setup here. So. You allow me to do it now as we, go ahead from. A broad market perspective is this. Pullback that occurred, from. Late. Last week we. See a strong, swing, in price and then. We see a pullback of several, days in this case about three. Days and. Looking. For price to trade above the high, of the, low, day or close, above, the high the low day now. Technically we pretty much as we zoom in, on this. Looking. For that low day. That. Occurred on the SP I believe, on. Wednesday. That, was a low, day. Correspondent. With that low and, then. You can see there is the high, of the low day now, what happened the, next day. Notice. Price action was inside. That. Previous, day. This. Is what traders, would refer to as a whore, ami now. Her Ami's can, be a very, important. Pattern. Very, important price pattern, that, some traders may look for for, that swing set up because what it implies, is, that, downward. Momentum or, that pullback, has, slowed, down by, being inside. That previous. Day may. Point towards, some. Indecision. And that. May translate into, a, bounce, or a reversal. Now when we see an example, of that inside day one, may look instead, of price trading. Or closing, above the high, of that low day is look. At that inside, day and look, for prices. To trade. Or, close above, that, inside, day so. When we go ahead and take a look at the next day on the, SPX, and, again, now, it's working just a little too fast. As. We. Looked at Friday, notice. The high day. We'll. Go ahead and identify that, as a little bit of resistance they're. Now. Price traded. Above and probably. Closed just, about at that area now. Swing traders may or may not enter, into a position going, into the weekend as you know, things can change you. Know whether it's trade talks you know things in Hong Kong overseas. But. When we looked at Monday. The very next day. So. Try and go forward here, and. It looks like we're going a little bit back. We. Can see in this case price. Traded, above the. High of the low day not only did do that very, strong move in the market on that swing as prices. Took out that, previous, high and then. We're seeing right now as we go into today. Little. More of an upward momentum as, prices trading higher now, what traders may be looking for now as far as a bullish swing is, since.

We Have. That. Mark there let's try and go forward here. Right. Now we're seeing a little bit of. Little. Bearish. Candle, as prices, are kind of hanging in the upper part of the range now after a long range day it, is typical. For one to possibly, see that, little bit of at least a hurrah me or an inside day or look, for that, price to potentially, pull back, and that, would be the next, setup here on a swing. Trade after an upward swing, looking. For that, potential pullback, may. Only be a day maybe. Several. Days and then once again looking, for that price to trade above the. High of a potential, low day. Alright. And. We're seeing that across the board with some of the other indices, there. Russell. Of note was up. A whopping 2%. Yesterday. Really exploded. After lagging. The market a bit and. Notice, we're seeing that little bit of that inside, so, there's her Ami's. Can, pretend, a little bit of a pullback or any, type. Of reversal. If it's, happening at a high we may be looking for those prices to pull, back that. Would be an example of a full, swing, set, up. All. Right let's. See let's look at a couple of individual. Stocks. Someone. Was looking at prior, to the market, open although there may be some other ones showing. Some of the same principles. So. Here's a VI. VI. A V. Now. As, we go ahead and take a look at this, example. As. Far as on the trend, notice. Still staying above more of the intermediate, trend here. Finding, some support. Now. Over, the shorter term there has been a bit of a pullback, there. But. Notice as far as looking at the price action on the major part of the trend has, been making higher. Highs and, higher, lows, over. The shorter term it has been making some lower highs and lower lows which, may break. Down this, overall, trend. Notice. As we zoom in take, a closer look from yesterday's, price action we, have a low day and, price. Trading. Above or closing. Above the high the low day and right, now at the opening we're seeing a little bit of an inside day much, like we're seeing with the rest of the market. So. Some traders may look, for that bounce and attempt. To target a, previous. High, assuming. That trend would continue to trade, higher. So. Get a couple other ones here. Some. That may be in some stronger trends, here. Here's, STX, 4 Seagate. Now. Some traders that have a tendency of trading, flags. Both. Flags which. Are commonly, stronger. Trending, stocks some, of the characteristics of, where one may look for bull flags is when they do have multiple moving averages, is seeing. Good. Overall intermediate, trend whether, that's like a 30 period, or in our case about a 55 period, and if, they have shorter term moving averages, maybe. Like a 5 at 10 a 20, notice, that those averages, are rising as well and notice, are how they're kind of going parallel. Like railroad tracks that. Indicates, a stronger, trend and notice. In this case we'll. See some strong. Swings and we'll, see relatively. Smaller. Pull. Backs and these, smaller, pull backs over the course of a couple of days or it may be only about one. Or two days one. May see these flags or pennants. Appear in now. Is it kind of fast forward to where. We're at right now. We. Can see again. Characteristics. Of that swing sometimes. As fractals although, not on the most current data but. At least as far as testing on some, of the swings one, can measure the distance from one fractal, to another, from. High to low to. See the. Potential, move of that swing, then. We have a bit of a retracement, pullback. Here over. A few days. And, traders whether looking for a breakout of this pattern or prices. To trade above the high of the low day now, they did occur. Yesterday. As prices pulled back form in a lo day prices. Traded higher notice, again today, a little, more of a pullback there, and with. That traders, may be looking for again, kind, of a breakout, above those. Highs and then. From their project. In the, previous. Move as a potential. Target so. With this example we, have from. Around, 57. Let's, bring up a different, color here. Around. 57. The. High, around, 60 and a half so, that's potentially looking, at about a. $3. $3, plus move and. If. We were to go ahead and again measure that distance let's, do it on the regular screen here. We. Can go ahead and utilize. A drawing, tool and. Measure. From the low. To. The high. Now. Notice when I do that let me do it one more time. Drawn. From the low. To. The high notice before I click. On the next high it's. Actually giving you a little bit of data that's about a five point four move about. Three dollars and, 11, cents. So. We mark that there, then. You could go ahead and right click on that line. Maybe. Create a duplicate, and then, project. In the target, will, identify the, low, of that. Pattern or, that flag. And. We'll go ahead and point, it there and then. That will give us a projection, for. That next potential swing now that's assuming that, you.

Know The swing will make a similar, move some, traders may go back and look at other swings, that. May have occurred and. Get. An idea on average. On how much that price may move, if. It bounces. More. Jack thanks for being with us here. So. We got an example of a price target. Looking. At the highs and what we can do is you can use, your horizontal lines on your drawing tools and go. Ahead and plot that if. You're trying to plan out a trade. So. Let's say we got about six to twelve there as a target you. Can go ahead and right-click and color code these as well. Likewise. Look to see where your potential stop, would be now remember stops are not guaranteed at a particular price. But. Will reference the, low, of that pattern and as, we look at that low. And. For some reason. There's. A few, things going well, quirky here today. Put. My cursor on the, bar in question, as far as where that low is and we, can look at the data. OHL. See represents. Open high low close. That. Data is available up at the top here, open. High low, we. Go ahead and look at the low, of that day. Which. In this case was, 58. 90, and. Then. A trader may set a stop a dollar amount or percentage below. That level for our example, we'll, go ahead and, utilize. Our calculator, and, take. That low price, which. Believe was 58. 90.9. Well, multiply that by. 0.99. Which. Would give us a stop that would be 1% below, that low 58. 31. So. Again we'd go ahead utilize our drawing tools here I'll right-click on that previous line we'll do a duplicate, we'll. Go ahead and slide, that down. And. You. Can right click on the line. To, put in your exact number this will do 58 31. We'll. Go ahead and make this red. For. A stop. And. What we're doing is visualizing the, trade here. And. Then also we can look for that potential. Entry, now you, know currently we did have the, bounce if someone was looking at this yesterday, they, may have already entered going, into the close but, notice price has pulled back a little bit what we can look for is looking.

Essentially For a breakout, we, can look for a breakout, above this. High, here, so. Let's, say as an example we'll put our cursor on that. The. High of this period is. 59. 98. Let's. Say we determine, a dollar amount above, that. So. Let's, say about 20, cents. Above. That high that would be 60. Dollars, and 18. Cents. So. I'm going to right click will. Create another, drawing. From previous, one. And. Would go ahead and right click and edit that. Make. It sixty dollars and 18 cents. I'll. Just go and make this you. Know orange for potential, entry. And. There, you go it's. Also where some traders can go ahead and you know plan out, you. Know the idea of kind of reward, as. Well, as risk, now. You, know looking, at. Where. The potential entry is, versus. Its target. Versus. Its risk you, know right here looks, like we're risking you, know somewhere along the lines of. $2. Or actually in this case yeah about $2, a. Little. Bit less than that to. Potentially, make a little, under $2, you know that'd be a one-for-one. Trade. Some. Traders may be looking for setups, that may give them at you know at least one. And a half times or two to one that. Gives them potentially greater reward, for, the that they're taken. Now. One other consideration is. If. In. A scenario like this, you. Know instead of buying a stock or, doing. A single option, trade you, know some traders may look at a spread, where. They believe that the price may, stay where it's at go. Higher maybe. Move just a little bit so let's kind of do an example of one of these if you want to learn more about verticals. You, can join me tomorrow at. Believe. It would be 3 p.m. Eastern, Time, for, trading verticals, but let's. Go and do an example of one I'm. Gonna go to the trade tab and. It's. Not much more of a stretch then from you know buying a call as we've done in some, previous sessions, we. Can go ahead and select a time period period, in time. Whether. Over. The next month or a little bit further. Now. On spread trades a, lot. Of traders may be looking at more of a. Little. More closer to, expiration, and. Some, of the strategies, looking, in that 20, to 50 day time frame. So, we got about 24, days out going. Into, December. And. We're. Gonna it's going to be a little more of a directional trade, so.

We're. Looking at a bounce, we're. Looking at calls. And. You. Know if one was you know strongly, bullish they may buy a single. Call option, expect. Them that the price may move strongly, up and watch. That. Premium. Expand. But. One. Of the drawbacks, on this strategy is time decay. So. One. Way of mitigating that, and also. Potentially. Look. For a trade that may be slightly directional. And. Define. Risk is we, can buy, one, option, and, let's. Say we're, looking at the 60 strike kind, of closer to at the money. Which. Would cost about a buck fifty three, and then. We can go ahead and sell a cheaper, option. Against. It. Let's. Say in this case. Maybe. A 61, or possibly even going. Out to a 62, now, what will happen is it'll actually reduce, the cost of the trade so, let's kind of do this as a scenario, see what happens here I'm. Going to right click and I'm, going to do by. Vertical. Now. By default it's going to go to the next. Strike. Now. If you want to kind of construct, a specific. Spread that's. Relatively, easy as, well for, instance if I want to buy this, at the money option, I'm. Going to go ahead and just click on the ask price. That'll. Bring up that single option. Then. I can minimize. This. Order, here by just clicking, this. Down arrow. And. Then let's say I'll, go ahead and I'll take a look at a. I'll. Take a look at a $2, wide. Here, well, one, of the determinations. Is on the one you sell is how high do you think the price is going to go, do. You think it'll be above 61 do, you think it'll be above 62, the. Higher the strike the little more directional, that you are so. Let's say if I did do the, 62, as a starting, point now, what I can do is I can hold on the control key and. Actually. Click on the bid to sell and that'll go ahead and match up this order so we basically have a $2 wide. It's. Gonna cost 80 cents, per, share for this trade. And. If I hit the confirm in sin. This. Is going to give you the maximum, loss which. Is going to be the, premium. That. Was basically. Bought so. And the option if, one buys the option most that's lost is whatever, the premium that was paid so the net cost for this trade is going to be $80. Per contract, the. Maximum gain is going to be a hundred and twenty. Dollars now to reach that max gain price, would have to be at or above that. 60, two-strike over, the next 24 days okay. So. This is one way of you, know mitigating, the risk of a single leg option, if one. Forecast. A moderate, price move they, may be able to profit from this and notice.

The Return on risk on this is actually a bit better than, a. Individual. Stock. Trade as far as from the stop-loss we were looking at versus. The, potential, target. Now. There are transaction, fees there's at a buck, thirty sixty-five, cents per, contract. And. That's. Why there's, a vertical we're buying one and selling one so that's two contracts, that's why that's, a higher transaction. Okay. So, define, risk trade let's, go ahead and, put this one through now, if one one and two you can also compare, that to the. One dollar wide. If. You're going to edit let's say we just make this a one dollar wide. That. Would be a forty five cent debit. Confirm. In sin and you. Can see the. Maximum. Loss versus, the maximum gain. Now. The other interesting thing with, this. Type, of trade is the, break-even the, price does not have to move very far, for it to be profitable. -. Commission's, going. In expiration. In, this case stocks at 59 52 it, only has to move up less. Than a dollar for. This to be potentially, profitable. Now. Again I'm going to go ahead and edit this will do the the 62 strike. Now. If you have any questions are what we're discussing certainly. Love to hear from you. There's. A break-even on this one would be about $60. And 77, cents. Now. What I can do is attempt to buy this spread as the price trades. Higher. So. I'm going to do is we're going to go ahead and, put, in a condition, for this order I'm, also going to position size this to a maximum, loss. Another. Thing may want to do is also increase, the. Amount that we're willing to pay. For. That spray cuz as the price goes higher, it, may be a, bit, of a higher price as well so, let's, say I may be willing to pay closer. To 90 cents for this spread. It's. Very common to look for a one, to one sixty. Eighty hundred, percent return on risk. I'll. Go in I'll change this to. That, price. And. What. I'm gonna do is I'm going to put in a conditional, order I'm going to go in and click on the gear, over, to the right of this order and. I'm. Going to go ahead and say if STX.

Its. Mark its current price is, greater. Than or equal to and. Where. That. Price. Was let's, go ahead. I'm. Gonna save that there for a sec as I forgot what that price was at sixty dollars and 18 cents. So. If the price goes above sixty dollars and 18 cents will attempt to buy that spread. If. One was anticipating, the bounce they can certainly go ahead and place, that in right, away, now. Position, sizing the most we can lose is going, to be the, spread itself that $90. That we're putting up if I position size this, to. A percentage, of the account. We. Can sell. It or, buy as many spreads, that we need the. Current balance. Net liquidating valleys around three hundred forty three about, seventeen hundred would be about a half a percent of the account, so. I can go upwards. - 17 contracts, I'm just gonna go ahead and do ten contracts, for our example. And. I'm. Gonna go ahead and hit a, confirm. Incent. Alright, we'll see if that fills. So. Example, of a a bullish, setup utilizing. A spread let's. Look at a couple of other examples. The. American Express had bounced yesterday, and. Following. That bounce had. Broken. Out of a diagonal, resistance. So. Some traders may be looking. For that bounce and seeing the follow-through possibly, take out some of those highs a. BBV. Now notice on some of these bounces, that occurred yesterday prices. Are fading, back in a little bit so we may not be seeing any follow-through, and. Another. Example. We've. Been looking at is. Halliburton. Let's. Do this as an example of a. Bullish. Breakout. On the, swing where. Traders may go ahead and look at the size, of the pattern remember swing trading is essentially, trading between support. And resistance. So. When we go ahead and look at this example we, see a horizontal. Resistance. And. We're. Seeing kind, of more of a rise in support pattern. That we call a triangle, we discussed this more extensively, in our Monday technically, speaking class which. Is at, 2:00. P.m. Eastern Time we. Go ahead and measure the distance from that. Support. To, that resistance, you know we're looking at a range from around you, know 19, to, around 21, and a half so that's about a two, dollar and 50 cent move so. What the expectation, is if the price breaks, that resistance, it potentially, could trade up about. A two and a half dollar move. Which in this case would. Be pushing, us close to that, 24. Level looking. Back at that 24, level you know that may have some confluence. With, some previous highs when we have to reach back a little bit on Halliburton. To see that okay, let's, go ahead and do a trade if the price was to break out above, that. Level so, you should be two examples, of a bullish trade. Also. Keep in mind you know on. This. Class is focusing, on, swing. Trades days two weeks but. If one takes a bit, of a larger. Look at it this, could be a potential, bullish, reversal, with. That double bottom. Our. Price target at 24 would be breaking above, that, pattern, so there could be even more momentum. Possibly, after. That breakout, we're, going to focus on that smaller setup here so what we're going to do is. We're going to right click. On, the chart we're gonna do a buy. Custom, and we'll do with Osio bracket, we're gonna do this on the stock so we did an example of a long call vertical now, we'll do one on the stock, will. Go ahead and target, a. Previous. We'll. Target that $24, level try. To right-click and do a duplicate, drawing. So. Going up to approximately, 24. Identify. That as a target. Based. Off the size of the pattern distance between sport, and resistance, we'll. Look at our stop. Now. We'll do a stop a little bit differently on, the breakout. We'll. Do a stop. That's three percent, below the breakout point the factor in that prices, may break out and kind of blow back into that pattern fairly, common, so. If, we're looking at that resistance, at about twenty one forty. We. Can use our calculator and, calculate a. Stop. 21:40. Times. Point nine, seven. That. Would be. 2075. So. I'm going to right-click on that. Will, do another drawing we'll, put in 2075. We'll. Make that red to represent what our potential stop would be now keep in mind if we put it in a stop it's. Not guaranteed to fill at that, particular price that's going to be our trigger price and, what will happen is it will fill, at the, next available price, which.

Could Be significantly. Lower at times if there's a gap so. There's our setup. Again. If we go in and take a look at this from from a bigger picture here potential. Entry would be as price, breaks, above this. Resistance. Will. Do a similar entry, about 20 cents above, that, resistance, so looking at entry somewhere at around 20, 60 on our, practice account, will. Be target, in. About. 24, again that, is based off of the distance, between. The. Looking. At the support. To. That resistance, and. Projecting. Out a similar. Move and. Likewise. Went ahead and put an example of a, potential stop that, would be about 3%, below. That. Resistance, point okay, so let's go ahead and do that we'll use Deo Co for. One cancels other. So. I'll go ahead and right-click it right-click approximately. On where you may enter into the trade right. Click by, custom. With. Osio bracket. It's. Pretty close I. Came. Up at around 2153. Now, we're going to do is by default the order is a stop. We're. Going to go ahead and chain a correction, the the. Default. Order is a limit, we want to change this to a stop, limit. Because. We're not getting in at the current price or better, actually looking to get in at a higher. Price, which. Translates, into a worse, price, so. If one's looking to enter, in at a worse price in, this case in a bullish trade that would be a higher price one, would need to utilize a stop and, I'm, gonna go ahead and place that in, at twenty one sixty. Which would be the trigger price. Now. What do I want happen after it hits that. 2160. As it trades higher trying to capture that momentum. Well. We're gonna put in a limit, order so. Now we can specify on, that limit order what's the most that we're willing to pay for. That stock, and some traders may account for a little bit of slippage, you know maybe add 10 20 cents to that you, know let's say I go ahead and make this 20, 80 now, what will happen is if the, price goes ahead and hits 20 60 if the market is at 20 60 it'll, fill at 20 160 because, our limit order says fill at 20 180, or better so, once this triggers, it may fill anywhere, in between that. Area. Now. We'll, leave that as a day order see if that conditions, met today some. Traders if it is a horizontal resistance. You, know may make this a GTC, for good till cancel where, they may want that order to work until, it actually breaks so. Let's actually go ahead and do that with this example. So. I'll make this a GTC, on, other, trades one mail it that order cancel, if, it doesn't fill so they can reevaluate that's up to you now, in the sell orders we're going to make this GTC, for good till cancel, and that. Good. Till cancel, means that the order will remain working until, it fills or if it's cancelled. Now. The reason why it's called an osio, for. One cancels, other is we. Have two orders, if. One. Condition is hit it'll. Cancel out the other order, and, vice-versa, so. In this case we'll go ahead and plug in our target. For, the limit price which. I believe we came up with. We'll, put 2398. And. On. The stop we, had 20, 75. To. 0.75. Wit. Confirm and said now. Notice here since this is an equity. We. Are gonna be tying up more. Funds here in, this, case 20. 180, represented. At a hundred shares and what some traders may do is position, size, for. That allocation. So. Let's say I'm not willing, to invest more than let's. Say. 5%. Of, this account in any one trade. That. Again should come out to being about. 17,000. So. In this case I can probably do. About. 500. 600, shares, so. Let's see if it allows me to do that I'm gonna click on edit I. Can. Change that to let's say 600. There's. The little. Chain. Link there. And. If. I go ahead and click on that there's. A 600, shares. Hit. Confirm and send make sure my math is correct, there's, about 13,000. Tied up. And. I can go ahead and click send and. There. We go so. What's cool about this is you know when it comes to orders on the charts notice we can actually see. The. Open, orders on the chart so what will happen is if the price goes ahead and trades higher, goes.

20 Cents above there it'll. Attempt. To fill this position and, then. What will happen is, if the price was, to trade up and. Hit. That limit it'll. Go ahead and cancel. The. Other order. Likewise. And this has happened some of our trades as well if. We see that a. Price. Comes down, and. Stops. Us out then. It'll in turn go ahead and cancel out that limit, order this great way of being able to plan, the trade and trade the plan, alright, so we did two examples, of bullish trades, let's finish off with, a bearish. Example, there's, not as many out there as the markets gone higher but there is still you, know there's still some relatively. Weaker. Stocks let's. See if this one's still looking, the, same. I'm. Plugging, in, LNC. For. Lincoln, Financial. Now. As. We. Look at this one and we may have a few other ones that we can bring up so you can visualize this notice, a bit, of a difference, here compared. To some of the other stocks that had been up trending. Now, this stock technically, is in down trending, which you would assume would be the opposite. But, notice we see some of the characteristics. Of a, downward. Move and. Now. We're seeing a retracement. Going. Up to a potential resistance in this case notice, the 55, period moving average. Acting. As that resistance, now when trends are sideways, some traders. May consider is to be more neutral, and. So. One, can pick whatever bias. They're. Interested, in but in this case since. More of a stronger move retracing. Up this would be an example of more, of a bearish. Flag and what. A trader may be looking for is looking for a price to trade, or close, below below. Of a high day okay. And. Then. In turn they. May target a previous. Low or. Measure, the distance, from a. Swing and target. That. Next move now notice there's a couple of lows here that, can act as some potential, targets, now, we're not quite seeing the bounce right. Now but we are seeing the characteristics. Of that inside, day where. We're seeing kind of the body. Of. The candle or you may see the whole candle, being, inside, that previous, day that could be the first sign of looking.

For That potential, bounce. Now. We also have some script, that, we've shared with you in the past as well that. May help you find some. Additional. Bearish. Setups, as well, bullish ones, that. Script is right here you're welcome, to. Use. It if you'd like. Manipulate. It make it your own. But. Utilizing some of the moving average crossovers, as I'm looking at a list of penny. Increment, stocks you. Know could be looking for stocks that are generally, below, a, lot, of their moving averages. So. In this case would be some of the stocks that are kind of in red. And. Some. Of these are actually relatively, cheaper stocks here but you know there are a couple financials, you know here's AIG. Very. Similar Lincoln Financial, kind. Of sharp move down we're, seeing a bit of a retracement below, the 50-day moving average, some, traders may look for prices to trade below that. And. So they can find any other examples. Here. Another. Kind of got, a bit of confluence is looking for a bearish. Bounce, and the. Second, column is. Showing, stocks that potentially, may be having a bearish bounce. Now, these. Bearish bounces, don't, necessarily mean a bearish trade if it, is a a bullish. Trend in stock, for. Instance here is like CI. Notice. How strong this trend is yes. There is a bearish. Candle, here for today but, this could be a nice setup to look for a pullback and look, for that follow-up bounce, so. Just because you see red doesn't mean that it's bearish, if. We look for a stock that is more in a downtrend. So here's Corning. Notice. Price is now making lower highs and lower lows. Downtrend. We're seeing a bearish. Bounce. Now. Let's say in this example we, can go ahead and measure the. Distance from a. High. To. A low. You. Know in this case that's, only an, example of a. $1.00, move, notionally. Not a big. Move so some, traders again. May move, on to something else or maybe they may consider doing a spread trade similar, to what we did with. The. Other example, we're looking at. So. Let's say assumption, may be that believe let's see what the options look like on this one on. GLW. Fairly. Liquid as far as the difference between the spreads. Let's. Say the assumption is believe that the stock may be below. 28. At. Expiration. Let's. Say if I go ahead and and. In this case we're going to look at the footside, since. More of a bearish trade. And. I'm. Gonna go ahead and do the same thing let's say we buy and at the money. So. I'm going to go ahead and buy the 29. Which. Would cost 63, cents, but. Then I'm going to look at the 28. And. I'm. Gonna hold down the control key and let's sell that one. So. This one would be a 34. Cent debit. Let's. Say I'm going to do 10 contracts, here. And. I'll. Hit the confirm and send. Now. Notice in this case the, risk is going to be about. $340, and if the price is below 28. By. December's, expiration. The. Profit would be 660. Now let be a two-to-one trait. Now. Notice there are Commission's, transaction, fees with, that. So. I'm going to do is I'm, just going to go ahead and we'll send this one through. Just. To get an illustration, there. Because. The price is trading, below, the low of the high day there's, no guarantee, that that will stay at the end of the day that's the risk of enter and earlier on.

But. We'll see if that goes ahead and fills, now looks like we didn't get a fill there let me go ahead and double check want to make sure this gets taken care of we can go to our monitor tab go, to work. And orders. There's. A spread right there looks like it's pretty close but let's see if we can go. Ahead and get. This filled so I don't forget about it notice, there is a little bit of a spread here between. What. The, mark. Price is and we're the natural, prices, we may have to pay a little more for that let's, go ahead and increase, that the 35. See, if that fills and. Looks. Like we went ahead and we got that filled alright, so it looks like we were able to get, in a couple, of swing trades here, and. Hopefully. You learned a little something new. That. When it comes with. Some. Of these different, setups you know if we're not necessarily, forecasts, in a larger. Move and you're. Looking to trade options a spread. Trade may be an. Option, no pun intended. To be able to maximize or, to be able to generate. Some type of return, for. A defined, amount of risk so if you want to learn more about these verticals, join, me tomorrow at. 2:00 p.m. for, trade and verticals if you can't make it live all of these sessions are recorded. At, least most of them you, can go ahead and go to webcasts click, on the the. Archive there, and be, able to see some of our past, sessions, alright, so hopefully, you'll be able to repeat these steps as well that was our learning objective, to go over some examples of both, bullish. As well, as bearish. Swing. Setups. Hopefully, you met that objective for, you today and, would encourage you to do a practice, trade on one. Of these setups, maybe. Go ahead and do an example of, a just. A stock trade single. Option trade or maybe dabble. And do. One of the spreads for today as well, so, thanks for being here remember, the learning doesn't end here coming, up at. The, top. Of the next hour we're, gonna have my good friend Barbara Armstrong, with. Getting. Started with, futures, I'm, just going to double check doesn't, look like we have any questions. But. I do hope all, of you do have have a a good. Holiday. Season. Also. I actually, clicked a little wrong there but here's. A Twitter, here, all. The coaches do, have some. Accounts, on Twitter so, if you'd like to follow us learn. More about the different markets kind of see what we're up to both personally, and professionally you're. More than welcome to join us and probably. Good fitting as well being. Thankful for what we have as we, go, into this holiday season, a, little, picture there that was me right before Thanksgiving of. 2003. Spent. A little time in Afghanistan, at the time I you. Can see had. A little nice beard there also, had a lot more hair back then too I kind of I kind, of missed my hair.

Fortunately. I still have some not as much as this guy but. But. Certainly, thankful for what I have. It. That was actually not a great. Day, when that picture was taken, and. Kind, of made me reflect and. Had. A friend take a picture of me so my kids, knew what I looked like if, anything ever happened, to me but, I was fortunate about five days later I was, able to make it home for Thanksgiving, one. Of the few Thanksgivings, that, I was able to spend with family and I was pretty thankful for that and my family was as well so, wherever, you're doing this week hopefully, you have a great Thanksgiving. Thanks. For your time as always. And remember. In order. To demonstrate the functionality of the platform, we. Have to use actual symbols, keep it 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 in your self-directed. Account, is solely. Your, responsibility, so. Denise Happy Thanksgiving, take care everyone we'll talk to you again real soon bye now. You.

2019-12-04 22:19

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