Catching Falling Knives | Swing Trading Days to Weeks
well investors welcome to our session here today so it's frequently said that you don't want to try to catch a falling knife what is a falling knife well falling knife is a stock that's currently moving down rapidly if you're trying to catch that you're trying to catch the bottom right after our disclosures here today we're going to take a look at a falling knife and discuss some possibility strategies related to that so let's just go through our disclosures and just a reminder that in order to demonstrate the functionality of the platform we need to use actual symbols however td ameritrade does not make recommendations or determine the suitability of any security or strategy for individual traders any investment decision you make in your software account is solely your responsibility also keep in mind that spread straddles and other other multi-leg options strategies can entail substantial transaction costs including multiple commissions the paper money software the application we use here is for educational purposes only so we want to keep that in mind as well also keep in mind the short options can be assigned at any time up to expiration regardless of the in the money amount and in the money option has a higher risk of being assigned early it's important to remember that the paper money account that we use for virtual trading purposes will not assign a short option early which is different from what occurs in a live trading account we also use technical analysis in here do keep in mind that while technical analysis may put us in one direction fundamental analysis may assert very different views all right let's just jump right over here then i'm going to pull the thinkorswim platform and we'll just look at our example right here what a falling knife is we'll discuss this a little bit so you can see we have starbucks here you can see that starbucks technically would be considered to be an uptrend making higher highs and higher lows somewhat of a parabolic move up here to the upside and now we're pulling down and we're continuing to pull down today so this is sometimes referred to as a falling knife in other words a stock is in an uptrend it's pulling to the downside and as it's falling we may we may want to enter in a bullish trade if we're going to be looking at entering in a bullish trade in essence we're saying that we're calling the bottom now i don't know about all of you but i can tell you that personally i've never had success calling the bottom i i just haven't i've never had success calling the bottom or calling the top however there are some potential opportunities from a statistical standpoint to have some success entering in a bullish trade while a stock is moving to the downside and entering in a bearish trade while the stock is moving to the upside that's what we want to look at here with regards to this falling knife strategy so you can see that right now we're moving here to the downside but we're approaching a support level right here we're also approaching right here we're approaching the 50 the 50 period simple moving average line which is a a significant psychological support level for investors so we know for we know without question the stock could go down here and break down here and continue to move to the downside but there's also the possibility that when it comes down and approaches this old support level it could find support there and possibly bounce and head to the upside i don't know that will occur this possibility also the 50 period moving average that also could could could act as a support level so you've had stock that is moving to the downsides approaching a support level you may want to consider entering in a bullish trade now one of the reasons why some investors will do that particularly from an option traders perspective is because what's going on with implied volatility as the price is moving down typically as the price moves down on a stock implied volatility and right here we have implied volatility bottom of the chart as the stock is going down implied volatility is moving up and if we enter in a is if we enter in certain types of option strategies when implied volatility is moving up we tend to put ourselves in a position where we can capture a higher return on risk is one possibility and also a wider moat is another possibility when and when i say wide remote i'm saying that basically if we look at our theoretical support level here we may be able to get further down below that support level and get a decent return than if we wait for a bounce if we wait for a bounce there's nothing technically wrong with that if we wait for a bounce and wait for the stock to move up like this that's okay too we just want to keep in mind a couple things if we wait for the bounce for the stock to move up implied volatility is most likely going to move down a little bit that will that will decrease and again each individual stock is going to going to behave a little bit differently but typically that will decrease our return on risk and it can also force us rather than let's say for example we put in a we're looking at putting in a short put vertical below this support level right here if we wait for a bounce the short put vertical is probably going to be above that support level probably going to be somewhere in here however we want to keep in mind that by waiting for the bounce we'll have a new higher support level but on the other hand if we do get a bounce here then we've got a wider moat here we have this area of a moat we also have this area of remote coming down in this area right here so those are some reasons that an investor may look to entering a bullish trade even as a stock is moving to the downside i'm just looking at today's low and today's low is actually a theoretical support level i say that because in rolling over that i noticed that today's low was a resistance level over here we came up and we hit it we came up here we paused it we came up here we hit it here we hit it here and then we broke above it so actually today's low is also a support level let's just let's just draw in a couple of lines here i'm going to come over here and bring this line across we could call that support level one again resistance over here resistance right in here came down we touched it today we came off of it that would be support level number one and then support level number two we could come down here and i'd probably be looking right in this area right here and i'll look at that as support level number two looks like that's also we came down here we got a bounce here so we got a bounce here at that level of bouncer at that level we're also sitting in the 50 period moving average line so what kind of a trade could we put together then in order to take advantages now this this session is about swing trading right we're looking at swing trading days to week so we'd also want to get it we also kind of want to get in mind what a potential target would be in relationship to this trade we're anticipating coming down here and bouncing hopefully before we hit this support level and one of the reasons i say that if we come all the way down here and hit previous support then if we look at things from a technical standpoint we have a left shoulder here we have a head over here and we could be making a right shoulder and that right shoulder that's going to complete a head and shoulders pattern which would decidedly which would be decidedly bearish so hopefully we're hopeful hopefully this will this support level will hold up here it'll come off of here coming off of a higher low rather than a lower low was we bounce up here what would be what would be some price targets we can look at well if we're expecting the uptrend to continue we could have a target up in this area right here but maybe look at maybe look at things a little bit more conservative if you look right here see this earnings announcement right here this earnings announcement created this gap and then we kind of gap back down here so one of one way we could create a target is we could just go to the top of that window that was created on that gap because these can act as resistance levels on the way up and say this could be our price target on the way up what would be our price target on the way down you know if we if we can't came down here i'd suggest our price target on the way down could be this um this previous support level right here so if we set up something down here we could actually come down here and hit that price target to the downside if this bounce does occur and still possibly have a profitable trade we're able to do a short put vertical down in this area so you know taking a consideration price targets and those different types of things there's there's different ways we could trade this but if we're trading this as a falling knife i would say that many traders would look at it more along the lines of an option trade that would give us a margin of error down here in case we don't call the bottom here again something i've never been able to do on a regular basis maybe we're able to call a zone here though and we do get a bounce in here and move out in the event we could have a we could have a possible profitable trade right there so let's see we can do here then as far as a a trade along those lines i'm going to come up here and open up the option chain here for starbucks and why don't we go over here why don't we come out here about a month we'll go out about 31 days right here we noted on the chart here that would like to be ideally would like to be down here below either at or below 115 dollars with regards to a strategy so if we come up here then and here is our option chain right here i'm going to open this option chain up and here we have 115 114 now right now we're going to talk we're going to talk about an option strategy and this option strategy is called a short put vertical now i know this session is like geared towards option but kind of looking at some of the other sessions looks like you guys have done a fair amount of options trading okay but i'll also point you to some additional resources here with regards to options trading in case you're not particularly familiar with options trading okay but we'll look at this um this short put vertical let's first of all look at some probabilities now on a on an option trade one of the one of the greeks you have is your delta and the delta is giving you the probability that that option will be in the money on the expiration date now again we're we're setting up an option strategy below support and so we don't want these put options to be in the money on the expiration date so right here if we set this up where we're setting this up at 114 and 113 then we want the price to stock to stay above 114 and the probability of that occurring is going to be the um the the the opposite of the delta right here the delta right here is 27 and so if we take 100 minus 27 our probability of success on that trade theoretical probability would be 77 so we have a 77 percent theoretical probability of success on the trade that's that's theoretical so we're talking about capture catching a falling knife and we're just looking at probabilities from an option traders perspective we're actually looking at a trade where we're not really trying to call the bottom because we're giving ourselves a margin of error here sometimes referred to as a mode all the way down here to about 114. and if we we have a probability of success there of about of about 77 again we we know that a lot of different things can happen what's our return though on a trade like that then let's put it together i'm going to do it to create this short put vertical where we're selling the higher strike price and buying the lower strike price just come in here choose cell and we'll come up here to vertical it looks like we're sitting here at 19. this was actually looking a little bit better before our session here that's a little bit that's a little bit tight particularly when you look at that as being the mid price um i'm looking at that folks and we may want to go out a little bit longer i'll tell you what let's make it a little bit tighter if we went with 115 then we have a delta of 31 which means our probability of success will be 69 which is greater than 50 percent and with the recent price action you know the market has been doing some it's it's been a pretty volatile day today as we're coming off of that so yeah let's do this let's let's bring it let's bring it up a little bit we'll still have a probability of success that's significantly greater than 50 percent being at 69.
but let's do that let's do a 115 114 and see what that looks like that puts us at 29. that that's going to be a a a healthier trade as we and when you look at the when you look at the credit in relationship to transaction costs there are two transaction costs here when we enter there's also could be two transaction costs when we exit as well what would our return on risk be on this would be in the trade for 31 days if we're able to capture 26 here on a dollar wide let's grab a calculator and we'll go through some numbers here so we know our probability of success is 69 this this number is changing here let's just theoretically say we're able to get it filled at 25. we'll do a little we'll try to get filled at 26. boy this
thing's moving down as well price is really doing some crazy things right now but um i'll tell you what let's let's go ahead and try to get filled here then we'll go ahead and run the numbers after we get filled we'll see where we're at so i'm going to come in here before i do that i'm going to say roughly our risk on this is about 75 dollars a contract so let's play the part of the investor on this you know it is speculative and aggressive let's say the investor's okay risking a thousand dollars on this trade we'll take a thousand we'll divide that by 75. that means 13 contracts so let's go with 12 i'm just being superstitious i don't want to go with 13. okay go with 12 and we'll see if we can get let's see if we get 25 on this do a confirm and send and we were filled at we're filled with 25 of course again investors this is a paper trading account so we were filled then let's just double check where we filled it 25 we were able to get the 26. i'm kind of curious let's see activity and positions filled orders right here nope it looks like we got fielded filled at 25 which is fine okay so let's see what it all looks like then so we got filled at 25 which means our risk is going to be 75 right because we're a dollar wide so we take 25 here and i'm going to divide that by 75 to get our return on risk this is before transaction costs that's 33 percent and we'll be in the trade for about 31 days that's our length of time right here so we have a trade before transaction cost we're looking at a 30 about a 33 percent return with a 69 probability so that looks good so far we also want to keep in mind that this the nature of these trades is the is the reward on risk is inferior right i mean we're looking at a 33 return but if we incur a loss on this trade if we incur a gain we're going to be making 25 before transaction cost if we incur a loss we're going to be losing 75. so we do want to keep this min this in my particularly when we're looking at potentially trade management as we're going on okay all right so for example what i want to do now talk a little bit about how we found our falling knife we've talked about why someone would consider trading a falling knife we talked about how you know one method to trade a falling knife i also want to show you where you can find falling knives as far as potential candidates again they're not for everyone talk about that then we also want to look at possibly a bull flag trade we're actually walking we're actually looking for a bounce okay so do that i want to bring this up come over here and again i want to welcome over here to swing trading days to week i'm substituting fill in here for john mcnichol today again my name is ken rose you follow me on twitter my twitter handle's at kroc underscore tda it's great to see cameron may over there in the chat window very knowledgeable in this area so do feel free to shoot any questions you have over there to cameron also i would also encourage you to follow camera on twitter he's got a lot of great stuff particularly if you're if you like scottish stuff i mean not only a lot of great financial stuff a lot of really nice pictures and different things from i don't i think it's i think it's probably uh where where cameron's family comes from is scotland and the likes so some great stuff over there if you want to see cameron in a kilt then you might want to check that out okay so with that though let's come back over here then and i'm going to open up our left hand side over here so we've got a a column over here notice that at the top of the column right here i have this custom column it's called falling knives i see it i see a lot of familiar names over there in the chat window so many of you already have this custom column what this basically allows you to do is you can pull it up on a on a watch list of stocks and on this watch list of socks this is a this is a this is an option traders watch list of stocks by the way i'll include links for the columns that we talk about here today this one is one i've done this is one that john's done i'll also point point to where you can find john's link here as well and also with regards to where you can find i'll also point you to a link of the session that i did on building a option traders watch list okay but with this column when you have it in there you can just sort by the column like this and when you sort by it'll bring up the ones that have falling knives either bearish or bullish if it's green it's bullish the numbers that are in here like this three right here that means that the stock has pulled back at least three days okay so you can see starbucks right here which is one came up here it's pulled back one two three even even more than three days jp morgan looks like we have jp morgan as a possibility here as well you can see jp morgan came up here pulled back three days we're actually getting a bounce on jp morgan today mos a little bit of a two day pullback again these columns are not perfect they tend to do a fairly good job but they're not perfect okay but all um and again at the and when you look at the youtube video particularly for those of you that are catching this as an archive recording go in and look at the description okay and you'll see links in there for falling knives here as well as links here these are basically flags bull flags and bear flags okay if you wanted to um so i'll put the links in for both let me just show you with where you can find the bull flag here as well because you can follow the find these on twitter let me just come over here real quick and i'm going to bring up twitter right here okay so here's twitter and up here i'm going to where it says search twitter i'm just going to type in actually john came right up to the top let me just start typing in john and there's sean mcnichol right here so you click on john when nickel here and if you come down here john's got some nice links right here these are these are custom links one of them is a k-a-c-a-h cbl link it looks like he's got that right here at the top of the list right here you can take this right here and you can use this to build the custom column that we're going to be looking at with regards to completed uh both flags and or possibly verifies we'll be looking at it from the standpoint of bull flags okay so also while we're over here let me show you some additional resources here i come up here and click on this um three minutes before i'm just say cancel here i don't want to log out there we go so over here on the td ameritrade website if you come over here you can come over here to education right here and underneath education you come over here to education center and under education center just come over here to options and this is where you can you can take an online options course right here getting started with options seven things i wish i knew and i'm going to click on the little guy right here because i want to find the course when you come up here if you don't see the course just click on these arrows here it'll take you to the course so here's trading options course and here's another course on weekly options i think i think you'd find both these to be excellent if you want to be comfortable if you'd like to become more fema more if you want to have a stronger foundation with regards to options also under the education tab if we come over here and click on webcast right here and when the webcast page comes up we talk a fair amount about technical analysis in here by the way there's also a technical analysis course let me just show you a couple of webcasts in here so right here we have the webcast counter so when you come in here this is where you can sign up for basically what we're doing right now the web you know sign up for webcast okay and you can you can come up here and select by instructor to find those you just come up here to the webcast calendar and let me highlight a couple of these for you so one right one right here is on mondays it's called getting started with technical analysis is actually cameron who's over there in chat we know he does a great job here so i talk about technical analysis and just about all my sessions because i think it basically relates to just about every time you look at a chart so this is a really good one too coming here in 10 getting started with technical analysis and then also if we come down here on wednesdays we have right right here on wednesdays at 3 p.m
eastern time this is this is short verticals we just did a short put vertical and i have a session that's just dedicated to short vertical short put verticals as well short call verticals so those are those just a couple of heads up with regards to webcast as well okay all right let's shift gears here then let's come back over here [Music] now this this is an options trader's watch list right here okay and the reason i wanted to use this by the way i just call mine one one dollar wide liquid all right but um if we're looking for bull flags okay you know we don't necessarily need to trade those using options we can just come in and we can buy the stock long right now if you're looking at if you're looking at creating more of a margin for air different things like that you're looking at at some different aspects sometimes options tend to fit in well but we're just looking for a stock that's moving up here can we trade options absolutely there's some option strategies that we could do we can all just come in and buy the stock so the nice thing about that if we're looking for bull flags is we can go here let's change our watch list and let's just pull up the public watch list s p 500 here right there and let's i'm going to take our falling knives off here because we don't need it right now that tends to slow up the other column here a little bit well the other column it looks like the other column populated is fine you know that's great we'll go ahead and take that so now i've got this custom column again this is the column i showed you where you can get the link for this i'll also put in the description but this comes from john's twitter page okay and i'm going to sort by this column right here again these columns aren't perfect they tend to do a pretty good job but they're not perfect so these red ones right here i'm thinking that those are bullish excuse me i think those are bearish that's why the color is is red we come down here these are some green ones now what is this meant to find well it's meant to find a situation like this where the stock's gone up it's pulled back like we were looking at starbucks but we actually have a bounce we're starting to move up so we have a confirmed bounce i'm going to go through a few of these do it relatively quickly you know how we do it on time well it looks like we're doing okay on time i'm going to go through relatively quickly i i know basically what i'm looking for but we got a lot of stocks here right we got a lot of so when you see that many bull flag bounces what is that basically telling you investors if you pull up a custom column that's looking for bullish bounces on the s p 500 and we have um i'm just going to kind of visually estimate this i'm just looking how far i go down here we probably got about 30 of these stocks in the s p 500 showing bullish bounces what does that suggest it would suggest if we just pull up the spx right here we would see characteristics of a bullish bounds and you can see right there we moved up here we pulled back we're bouncing here today that's why that's why we have a lot of possibilities over here with regards to stocks but i'm going to go through these again relatively quickly so if you'll just bear with me we're going to have some different looks here and i'm looking for something that's going to have some ideal characteristics you know these things again they're not perfect they tend to pretty good job and you know i'm not saying i'm not saying just ignore all these ones i'm not saying that i'm just looking for a certain characteristic for teaching purposes and um those are loading up a little bit slow because of our environment in here actually hitting them both i was looking at something before we start here today you know that's actually a nice little bullish bounce there and why don't we take a look at this one here for a second aep then then i'll possibly look look at another couple so what are we looking for when we're looking for bullish bounces okay from which to do a swing trade from we're looking for an uptrend an uptrend meaning that we've got higher highs and we have higher lows this stock is rather volatile okay but still technically there'd be some justification to say that we're currently in an uptrending channel we had a little bit of a pullback here towards the bottom but now we're bouncing moving to the upside okay so that's the type of thing that we would be looking for i'm going to look i may come back here to aep but i want to look at another one i was looking a little bit earlier today coming out of the same list so here's a movement up here pull back and a bounce on home depot the bounce here actually occurred a couple days ago and we're running up against this resistance level here i'm going to take a look at one more here guys and let's let's let's use this one i think i think for teaching purposes this one's a little bit more um impressive i guess you could say okay so here's the here's the bull flag right we big move here pull back here for three days we're bouncing up here today so where would our target be on this trade with regards to a bull flag bounce well the target is usually with usually when you're looking at the target you're looking at the height of the flagpole which in this case we could go all the way back here okay but i'm not going to do that i'm going to be a little bit more conservative and say i'm going to go to the top of this gap here and call this the flagpole this the flag and right now we're bouncing there's our bull flag bounce so right here it's going to be our pull right here is going to be our flag and then right here it's going to be our bounds so where's our target well our target would be equal to the height of the pole extended beyond the breakout point so let's see what that looks like so i'm going to bring a line over here i'm going to grab a line like so just coming across the highs of our flag right here i wanna i'm gonna grab a rectangle here and measure the height of our flagpole right here which is right there and i'm going to extract i'm going to copy this we'll let's see we'll duplicate our drawing i'm going to move it up here i'm going to put it right here to our breakout point okay i need to get a little bit more room up here don't i so let me collapse this and i'll come up here to style and choose settings and we'll come over here to price access and we need a little bit more room up at the top right so i'm going to go with 20 rather than 10 percent apply that and that that just gives us enough room to squeeze our target in there so there's our target right there i'm going to grab a horizontal our price line right here we'll come right here there's our target at 2 at 280 172 okay now there's going to be some targets on the way up to that 280 172 [Music] and so what we might want to do is we can enter the trade right now but as we hit some individual targets we could we could start to leg out of our position that would be one way to approach or we could just stay in here you know hellfire just hold on until we get up to this point but let's use a technical tool called fibonacci extensions down here where you have your drawing tools you can come up here and choose fibonacci extensions right here this little this these percentage signs here and what you can do is you can on your flagpole just come up and start at the top of your flagpole and then draw to the downside right here and this will give you some targets one thing we could do is we could look at the halfway fibonacci extension target that looks to be at 270 287 so i'm going to grab this price up here that we got our our overall target and duplicate it duplicate that and then can i move that whoops not letting me do it i'll tell you what i'm just going to draw a new one at 270 287 so let me come over here and oh sometimes our mac just my little macintosh here it doesn't behave in the way that i would like it to 287 let's put that here at 272.87 and now that now that i have a couple of price points here i'm going to go ahead and remove this fibonacci thing because i basically have what i want so i have a target here then i have another target up here where would we set our stop loss in the event this trade gets into trouble would want to identify support it looks like we came down here this is kind of the low point right here so i'm going to bring a line across there this is this is basically what you're talking about when you're when you're looking at swing trading you know swing swing trading usually not looking at doing a trend trade looking at entering in on the bounds and catch catching a swing to the upside as we swing to the upside maybe take some profit on the way up to a potential target then also managing your risk to the downside in relationship to where potential support level is so we have our support level here but we might want to give it a little bit of room below that support level because you know it came down here and hit it we might want to give a little bit of room here so a nice tool you can use as far as giving yourself some room below that support level is the average true range that just makes it so that your your your process is geared in to the volatility of the actual stock you're looking at rather than saying oh you know i'll go one percent of the price of stock oh i'll go 25 cents below that or whatever but using the average true range it narrows it more into it to what is actually going on with the stock so right now i've got implied volatility down here we really don't need that because we're just looking at buying the stock so i'm going to come up here to where it says studies and we're going to come down here to edit studies and let's take our implied volatility off there because we don't need that for now and then we'll bring up our average true range right here and we'll bring that over i want to make it big enough so that we can see it make that a three and let's lighten this up a little bit like oh how about that okay now that the average free range is just giving us an idea of the range the stock trades in on a day by day basis going back 14 periods you can adjust the periods on it if you like there may actually be some justification for adjusting the periods on here because right here we have this huge gap which is rather unusual which is just jack the average true range up here because that falls in that 14-day period so a couple things we could do we could either use the average true range before the gap or we could come back here and say okay i'll go back one two three four five change the period on the average to range going back over the last six days so we're not using the gap okay part of that could be related to the earnings now it's like why don't we go ahead and how we doing on time looks like we're doing okay on time let's go ahead and modify our average true range to just this unusual price action we'll take that out of there and we'll set it for going back six days rather than 14 days up here to studies and choose edit studies and here's our atr it's currently sitting at 14. i'm going to change the period was going to look at the average true range over the last six trading days rather than the last 14.
and did that bring yeah it brought it down considerably but yeah we still do have some big days in here right so our average range is is six dollars and 62 cents okay what does that mean well it means one thing it's a high-priced stock at 264 264 but it means that on a day-by-day basis that's the average between the highs and the lows of the trading day so how much of an average to range we want to come down below that support level well that that can be different for different investors the important thing is whatever you choose to do try to use it with consistency and keep a record of it in your trading journal for purposes of our discussion here today let's go with sixty percent of the average true range okay and bring this over here like this so sixty percent so we're at six point six two and i got some coming up here on another screen that i really don't want there we go six point six two i'm gonna multiply that by 0.6 so 3.92 97 cents below our support level right here so we want to find the difference between that and our support level of 257.32 equals 253. 34. okay so this this will be our this
will be our exit all right so question ron asked ourselves at this point is how much of an investment do we want to make in this stock and after we determine how much of an investment we can calculate our theoretical risk why don't we play the part of the investor that's okay with a because we're buying the stock you know we're bouncing up we know that it can revert and we could get stopped out why don't we play the party investor that's okay investing five thousand dollars in this trade so five thousand dollars on the trade then we'll take five thousand here five thousand dollars divided by looks like we're going to be getting in at about 260 450 264 0.5 getting 18 18 shares would be would be 5 000 looks like we're at 18.9 i'm just going to go ahead and round it up to um to 19 shares which put us a little bit over over 5 000.
go 19 times to 64.5 look at about 5025 you know we may get a little bit less than 50 but yeah i will play the part of the investor that's okay with this okay so what is our theoretical risk on the trade then okay well if we enter in at 264 50 and we get stopped out at 253.34 then we're losing we're losing 11.16 times nine shares right you're risking about one hundred dollars okay so are we okay with the total investment of five thousand dollars are we okay with our theoretical risk of one hundred dollars we'll play the party investor that's okay with that now some of you may be saying wait a minute ken i'm only risking a hundred dollars we just want to keep in mind that things can happen that a stop loss does not protect you against case in point maybe some of you saw this how'd you like that okay so let me let me take some drawings off here i'm going to remove clear our drawing set right here okay so what if what if we had a trade on here in clorox and we set a stop loss at 60 of our atr our stop loss might be right here and as a result of the earnings announcement clorox gaps all the way down here what happens do we end up selling clorox here no we ended up selling clorox all the way down here so that's why you know you can have your stop-loss in there just keep in mind it's theoretical in nature if you get a gap like this it's you're going to get filled down here rather than up here also when a stop loss gets triggered that's going to trigger a marker depending on how fast things are moving will have an impact on where you get filled on that so that's why we want to that's why we want to run two numbers we want to look both at want to look both at at what our risk is per share but also our total investment and realize that something cataclysmic could happen we incur losses that's substantially greater let's see let's see how we would put this order together then we're probably what we'll want to do here is we'll want to have a heads up at 272.87 to possibly get out of the trade but we do want to have a stop set we're set where set where our stop loss is at okay so i'm going to we're going to put the trade in right from the chart i'm going to right click on the chart i'm going to come down here and i'm going to choose by custom with stop okay and we don't want to get 100 shares we want to get nine and our firecracker here so we have both of those rocade is taking this on our stop order we're going to make a good till canceled and that slop amount was going to be 253.34
okay now i'm going to go ahead and put in i actually actually what i'm going to do here folks i'm going to make this a one can't a a first triggers oco right now it says first trigger is all i'm going to say first triggers ocl because i want to have a stop order but i also want to have an order to take me out of the target right here i want to get a heads up when we're here on our way to the target but i want to have a stop in place to take us out at the target that's that's part of swing trading you know if if something happens and this stock takes a huge move to the upside maybe unfortunate event occurs then it starts fading and i'm not there to see it i'm okay taking taking that profit up there at 280 172. so i've got first triggers oco i have my stop order here i'm going to just come over here where this order is at this buy order i'm going to do right click and choose create opposite order that which should give me a third order here so there's our stop this is a limit i'll put the limit at gtc as well which is what i want i'm going to put my limit order in it 281.72 which is the target so we'll come in here and go 281 dollars and 72 cents right there so we got 280 172 target here we got 253 334 that's going to be our stop-loss down here we're entering in right here at um let's see by take that thing off of there oof you know when you you basically want to be ready to put your order in when you do this because if you make an adjustment up here it's going to adjust your your limit order down here it's also going to adjust your stop order so let's just go with 264.49 i'm going to
move that up to move it up by nickel then we're going to reset our stop here remember you want to put in your stop and your limit orders last because if you make an adjustment here it's going to it's going to monkey around with these we'll put our stop back in here then at 253.34 and our limit order actually held on there our limit order is still sitting there 281.72 so we're good on that okay this looks like we're ready to go i'm going to do a confirm and send here confirm and we got everything it looks like we have everything in place here and we'll choose send right here there we go all right folks so we got that in looks like we're running short on time just want to double check over here in the chat window um let's see from greg yesterday you shared n-i-t-o-j-a but link does not work please repost you know greg if you want to chat in what exactly that link was because i do a lot of links if you want to chat in what that link was then i'd be what i'll do on that one is i will go ahead and i'll i'll put it in the description of this of this webcast but you can just chat in what it was because i see nit i'm not sure what i'm not sure exactly what it was was that was that negative volume index was it something else if you wanted to put that in i'll go ahead and put it as a put it in put it in the description for our deal here all right everybody let's see for robbie does anyone have a daily journal blueprint for documenting your training that that's that's a great question robbie by the way let me just show you something real quick in relationship to that i'm going to come back over here and here we are on here we are back over here on the calendar here okay remember td ameritrade education webcast let me just show you where you can find a journal okay that's available to you go here to education come over here click on webcast then in webcast you can either put in my name or you can put in barb armstrong's name let's give these a chance to come up like right here i'm just going to go ahead and use my name to keep things simple instead but again you can use either use my name or barbara armstrong name so instructor i'm going to come down here and choose ken rose and then in here look for short verticals and when you look for short verticals you'll see a trading journal right there and if you put in barb armstrong let's see can we get barb here put in barb armstrong right here and on barbara armstrong when you have trading a smaller account you'll see trading journal here both of those the links they download the exact same trading journal all right so just uh heads up on that let's go ahead and wrap everything up here then everybody it's been great subbing for john here today thanks again to cameron may for being over there in the chat window and it looks like see you in generating income in your portfolio in 16 minutes great so you guys can look forward to cameron here in a few minutes there our agenda here today what do we want to do well we wanted to look at falling knives how to find and trade them we want to look at bowl and bear flax how to find and trade them we talked about the custom columns and then and then trading them as well and just a reminder again you can follow myself as well as cameron over there on twitter i'm sure can't be more than happy to send out his twitter handle to you and wave disclosures just again remind everybody that in order to demonstrate the functionality platform we need to use actual symbols however td ameritrade does not make recommendations or determine the suitability of any security or strategy for individual traders any investment decision you make in your self-driving account is solely your responsibility everybody thanks for joining us here today i hope you have a great rest of your day and a fantastic evening best of success you're investing and hope to see you next time i believe john will be back next time touhou so hope to see you then as well and we'll catch you later bye everybody thanks again and we'll see you [Music] you