Defined Risk During Earnings | Swing Trading (Days to Weeks)

Defined Risk During Earnings | Swing Trading (Days to Weeks)

Show Video

Afternoon everyone. John McNichol here and welcome to swing trading days, two weeks earning season is kicking off, and it's usually around this time to considerations may be taken for more define risk traits. So that's where we're going to be focusing on and this swing trading sessions, so stick around. All right. Hey,

it's great to see Maybe that are live with us today, such as Krishna VJ Sarah Wayne Fabian. Jack. CAH soon, Larry. Jack and everyone else. Kabuki. Or

Kabashi. David we got Mr James Boyd with us helping out on the chat. Any questions? I'm unable to get to he'll be more than happy to help to appreciate him being here today. You can see her Twitter hand my Twitter handle on the screen at J. McNichol underscore T d A. We used to follow myself along with other fine instructor such as James Boyd. His Twitter

handle is at J. B o. I'd underscore TEDA. Let's take care of disclosures and we'll get right into it. Apologize in advance. Uh I'm a little, uh, little congested here should be able to get through it. Hopefully, don't lose my voice.

The content is intended for educational information purposes only not investment advice or recommendation. Any security or strategy or account type options not suitable for all investors as a special risk inherent options Trading may expose investors potentially rapid and substantial losses. Carefully read the purpose of out a copy of characteristics and risk of standardized options. Spread's which we'll be talking a little bit about today straddles of the multileg option strategies can involve substantial transaction costs. They often involve greater more complex recent single league option trades. And keep in mind. That. Short lived

instruments, such as weekly options require closer monitoring. As all short term trades require closer monitoring as they may be subject to significant volatility and profits can quickly disappear. It can even turn into losses with a very small movement. In the underlying asset. Green encouraged practice what you learned here today with tools such as paperMoney software, which is for educational purposes, and that successful virtual trading during one time period does not guarantee successful investment of actual funds during later time period. It's market conditions change continuously. Likewise with the

strategies that will talk about may involve a long options as well as short options. Understand entire option position can be at risk. So all the switch short options assignment can occur. Uh at any time, regardless of the in the money amount. And while this

Webcast may discuss technical analysis, other approaches, including fundamental analysis may assert very different views. Brief background for those years. That may be unfamiliar with me. If you are new this Webcast, certainly, uh see how, uh, This is your first webcast, and we'd like to welcome you. And I, along with

James covered quite a few different topics here at Tdameritrade education and looking forward to seeing Yeah, and some of our other Webcasts as well as our virtual workshops. And here's our agenda. Take a quick look at the market snapshot as we do head an earnings season with JP Morgan reporting tomorrow and many other banks throughout the week and seeing is it that. Through Ah, earnings, more volatility can emerge. And which shorter term trades, things can quickly change. What

makes it all the importance of being able to fine risk on any given trade, so we'll focus a bit on that here today. Let's go ahead and bring up the thinker swim platform. Kind of a quick snapshot of the market. Ah, looking at the S and P SPX-. Still in a downtrend. As

from the bounce from. Last week. Ah did find some resistance. Combination as far

as some training resistance, as well as the kind of the distribution day the selloff day from the end of September, still acting as a bit of resistance. As we zoom in a little bit. Not necessarily all doom and gloom it at least not at the moment, One of the areas to keep an eye on on the S and P is around. 43 50 area kind of goes back to the closing range. For the S and P in September, even though we've seen lower intra day, uh, lows here. Ah

potentially a higher low prices are able to continue holding above the lows from October. This would be an example of a small. Inverse head and shoulders if prices are able to bounce somewhere near this range. And go above some of these previous highs and we'll see if earnings will be a catalyst for that for being a reversal or if things will continue to fade and support that downward trend. Looking at

the NASDAQ $NDX. NASDAQ continuing to roll over act after also finding some resistance. Last week. Mentioned about that as well. And still holding its longer term trend. And bulls, keeping an eye open to see if this will translate into a higher low and looking for a bounce on earnings. Um. Had a similar situation on the S and P two.

There is a bit of a slight divergence there. Which sometimes is typical win support is setting. However does not necessarily translate into a reversal. So again, Bulls are looking for that higher low there. The Russell

small caps and, uh, this has been a theme that I've discussed. Over the last month and. And so, uh, far as with kind of more of the cyclical stocks, outperforming that continues to be the case. Ah, at least over the last week. If they, um energy consumer discretionary. Although we've seen a lift and information technology, which can be good for the overall market there.

Ah but over the last month as a whole energy financials consumer discretionary Industrials, uh Even ah, materials. In there, at least over the shorter term. Ah have been supporting the Russell, which is relatively outperforming, but still kind of neutral. Rain that middle range there. As traders are

looking to see which way things break again. Earnings can be a catalyst for that on some of that direction there. And they would volatility. You know where things mixed in the market today? Uh volatility you know, still remains elevated, at least from the summer months kind of those higher lows but is below the 20 Mark, which.

Again kind of seems to be more of an inflection point. For that bullish versus bearish sentiment, at least at the moment. All right. So what we're going to do is do an example of some setups. Now those of you that had joined us last week. Ah we had talked about incorporate in volume into the mix. Ah as far as

volume supporting the trend and we utilize indicators such as on balance volume. Uh what we'll do for those of you? If you did miss it will go ahead and actually inserted a link for you here so you can go back and reference that some of the examples will be looking at are supported. By the volume on balance, supporting the price action, whether to the up or the down side. Uh also another reference for you if you do. Follow me on Twitter at J. McNichol underscore T D a. Go

ahead and click on the profile and look at some of the different posts. Uh if you scroll back to October 7th you see some my eating habits there, along with some of the weekly charts there. But if you go to Ah, October, 7th did place a post with some of the script that we utilize during that session for on balance volume modified. I'll go ahead

for those of that happened to be, uh, live in this session. I'll go ahead and I'll post that in the chat for easy reference. And also another reason. Uh you know, you can go

back and look at these sessions if you don't want to miss out on some of these sessions, another thing for you to consider and would encourage you to do so is subscribe to this trader Talks Channel A lot of viewers that we have. Uh do not subscribe to trader talks. And that's one of our channels here. So if you do like what

you're listening to, you can click like but more importantly, click on that trader talks and subscribe that way, you can actually be alerted to upcoming sessions. And you can always go back on the playlists and listen to them to your heart's content. Okay? And if we go ahead and incorporate some of what we talked about last week in or discussion. We're going to go ahead and take a look at And see first example here. They got example of a couple of bullish as well as bearish. Uh let's start off with, um crm salesforce. Now this may come

across as an unlikely candidate as technology has lagged a bit as of late, Uh, but there are still winners in that area there after consolidating. Over the last two weeks. We're seeing Salesforce, uh, making a two week high breaking out of that range. We're seeing some higher lows. Overall trend

higher highs, higher lows. As we go ahead and take a look at The on balance volume. On balance volume is rising, supporting that trend. And as we look at tools such as the on balance volume modified, uh, still running parallel on the positive side, whereas negative crossovers may imply a correction or a change in that direction. And with this being

a more, uh. Relatively uh, higher price stock. You know, traders or individuals that may have smaller accounts. We have

to look for other options if they're trying to potentially profit. From that move. And what we can do is do an example, which has been a common theme in this class that we're looking for an example of a defined risk defying game. Uh trade is to consider a spread. What we can do is go to the trade tab. Let's bring up CRM. As far as looking at duration.

Uh you know, since we are looking at days to weeks. You know, we may look at somewhere in that 20 to 50 Day expiration. We've got about 38 days. That kind of fits right in between. They're going out to November. We go ahead and

click on that. Look at the drop down. We can go ahead and select an option to buy and as far as the strike selection. We may be looking at somewhere at two slightly in the money. Think of as almost an example of potentially a stock replacement. And then to, uh reduce the cost of the trade and define the risk as well is selling a another option to reduce the cost of the trade and. The selection as far as on

that short strike. Uh may lie around where our expectations are for that price to be trading. Think of a price target, so we go ahead and look at the example of Salesforce. It's gonna blow us out a little bit. We can go ahead and look

and measure out on previous swings. Uh, we Take our drawing tool. And go ahead and draw from Previous lows. The previous highs. You may be able to get an idea. Some of those swings if you want to kind of visualize it when you click on Below. And drag it up to the

high without clicking again. Notice You can see that data there. You know this swings an example of about 30 some points. If we look at Ah, the previous swing to that that was about 30 points. So if we were to project out something similar, we can take. One of those trend lines duplicated.

Go ahead and slide it to the low there. And that would give us a potential price target in this case based off of previous moves. That could be trading up to that $300 area. If we go back a bit further on this. Traders may be able to identify, uh, price channels. And we can go ahead and click on the drop down for drawing tools. Let's

say select a price channel those parallel lines. And then kind of connect the dots, so to speak. As far as going off of those lows. Click. Let's try that again. Click. It ain't

going off of some of those previous highs, looking to see where that price gravitates to Okay? On this example, Uh, this swing would potentially take it a little bit beyond that channel depends on how that's drawn, but notice, you know, is pushing up closer to around that to 90 area there. So let's say as an example we select to 90 as an example. Now if one's more directional, they may look for a higher strike, and there's going to be a bit of a balance as far as that return. On that risk taken. So let's say we went ahead and did an example. I think I was looking at the 2 80 to 90. And so in

constructing that, uh, we can do it two ways one. We can go to that long strike that to 80 simple way of doing this is just right clicking. And doing a buy. Vertical still do a by vertical. And with that's going to do it's going to simultaneously by the 2 80 then sell the very next strike. Now

this already happens to be $10 wide and happens to fall on the example to strike that we wanted. But let's say, you know if one wanted to select another short strike to trade up to more directional, they can go ahead and change that now knows that change the dynamics of the trade. As far as that risk. I'm going to go ahead and make that Ah 5 90, So this would be a $4.35 debit. Times a multiplier

of 100. Which would reflect. Ah the multiplier for that option. Before $135 now notice if we are just done a long option. Ah that would be $9.40 some cents, So we're reducing the overall cost of the trade. However the trade off is our gain is going to be defined. Going up to that

short strike. And since this is a relatively shorter term trade that may be sufficient. So I'm going to go ahead and go back and look at this example. If I go ahead, right click on it. And let's say we, uh, select analyzed trade. Right now.

We're actually looking at the earnings tab. But we're going to go ahead and go to risk profile. And you can see the dynamics of a. Long vertical in this case, a long call vertical. The profit is defined to the upside. And notice that

Maxim game would be realized at that short strike at expiration. You can also see our risk is defined as well to the downside, and that's going to be based off of the debit paid Uh, The other potential benefits since we reduced the cost of the trade. Uh is we do have a break even. And sometimes just to

double check on that we can come over here to the plus sign next to that, plus sign. And click on the little pancakes. They're those bars and we can go ahead and set slices to a break. Even Going out to the expiration, which is November.

As we look at this example Uh, the break even is going to be 2 84 38. Now the price right now is at. To 80, so this stock still needs to move for this trade to be profitable. And if we do get that move, then we get out of potential profitable trade. Now some traders, uh you

know, may look for a little more higher probability and possibly lower that break even if we wanted to do that. Ah, we can evaluate Looking a little more into money. And buying the 2 70. And then. Selling the 2 80, which were already at that price right now, let's kind of evaluate that one. So if I go

ahead and I change this, uh to a to 70 By 2 80. We are going to have more of a debit. But. If I hit to confirm and send. Our break even, uh, is going to be lower meaning at the stock stays above 2 76, which is about $4 below where it is right now, this would be a profitable trade. Uh now the thing we are given up is on the return the maximum gain. Is

going to be 3 67 lower reward. Higher probability. Okay So if we're less directional, uh, this could be a good example uh of a of a trade. And at least

on our practice account here. And with that, uh, you know, that would be about a 50% return on that risk. I'm gonna go ahead and keep this as a little more of a directional trade, but just want to kind of show you those comparisons. Uh we'll go ahead and make that 2 80 by the 2 90. And if I go to confirm and send. You can see

the trade off. Uh, It's going to be less of a probability as our break even is going to be higher, but we do get a greater return if we have that movement. Cell phone were more directional. Um, this would be The better candidate. Okay Now

looking at the questions, Uh, Al says does price need to move through both strikes to be profitable. That's the idea with the long vertical spread is that both options for maximum gain. Both options would be in the money. Uh at expiration basically trading through the spread now, since that previous example that we're looking at both of those options were already Kind of at to end the money, all that wood requires at the price basically stayed above that short strike kind of similar to short spread's that some year may have learned about where you want the price to stay outside of that spread. Okay? But in this case, Loomer directional. We're looking to trade through that spread Maxim game would be realized if we're trading at or above 2 98 expiration now as a matter of profit management.

Ah! We would keep an eye on that maximum profit if we're able to capture about 50% of that maximum gain, uh, at any time. Ah then we may look to possibly lock in. Some of those gains are scale out of that trade. So let's say, well,

position size this and I said I wanted to risk about $1000 on the trade. We can position size this to a maximum loss that enables me to Due to contracts for this practice trade. It confirmed and sent. We're risking 86. There's our potential gain. And so if we're able to capture about 5 50 of that. That could be a profit

target. So define risk defined gain. Uh let's go ahead and send this one through now make note that there could be a bit of a spread between what the market prices and natural price and with the mid prices. Sometimes you may have to adjust a little bit there, but let's see if we can go ahead and get this filled. Uh, as

stated. Do confirm and send double check that and we'll go ahead and we'll click. Send. Now notice that didn't feel right away. That may feel as we speak, and there we go. And so there we have an example of a.

Defined risk defined game trade to attempt to profit from this swing. If we get a stronger move, and particularly if it gets, uh, beyond that midpoint. We may be able to lock in some of those gains. Now We've done

some examples of, uh, spread trades in the past. Let's see if we can bring those up. One from a bullish perspective. Long call vertical and diagonal along Call the vertical on Delta. And on the bearish side a long, uh, put. Vertical which is bearish on five below sports.

Now both of these are actually pretty close to expiration. And so as far as managing the spread's if we have not reached a profit target. Before then, is looking to close these out in that last week, uh, to expiration there. Ah knows the P and l. On both of these

clearly exceed the 50% that I mentioned. But usually I try and leave these on so can kind of close them out during the class. It may not be the most opportune, uh, time, but nevertheless, we need to get practice on closing those out. So if we look at Delta. The

short strike was at 43. That was ideally where we like to see the stock being at or above. And with three days left, we are about 50 cents above there. Uh, there's a P N l on it, uh, benefiting again today if we go ahead and go to the chart, bring up D a L. It was

interesting as far as with the spreads that can be a little forgiven. Now this is just a straight stock trade. Uh or a directional option. Trade Uh, one, maybe lose in some of those gains with the passage of time and also with the price being. Ah pulling back. Uh

we're pretty much right still above that short strike so still at a profitable trade and still pretty close to Its maximum. Ah gain here If I go ahead and right click on this create clothes in order. We can go ahead and sell it for a buck 60 Now. Nice thing about what

the spreads is. We can look at the difference between those strikes. Which is in this case, $2. The most of this spray could be worth is $2. So

there's 40 cents left of potential game question is, do you risk. Whatever gains you have to try and capture another 40 cents. Think prudent people may say probably not. Okay So

what we'll do is we'll go ahead and right click create a close in order. To close out that trade. And visa is that is this week. Would you take them all

off at once? Or set an order and take off some So as far as closing out, one can potentially scale out of the trade. If they wish. If they hit that profit target, we've done a combination of both if we realized about 50% of the maximum gain, close out part of the contracts and then sell the rest. Your results may vary on that. Ah in this case here with

the Barrish example of the long put vertical again three days left the short strike at 1 87 50. The stocks at 1 80 so weigh about $87 out of the money now and this example. If the price is. Farther away from that short strike. Some traders may

just let it expire. In both of those are in the money. They will cancel each other out. However there could be a risk of assignment or exercise. I should say, uh, on the long strike at the price falls in between. So that is a potential

risk, and that's why a lot of traders look to manage the position by closing it out before expiration If I go in right click On five below created clothes in order. This again is a $5 wide spread. So the most this could be worth is $5. So this implies there's only 35 cents left. Ah per, uh,

times multiplier of 100 Times three. So there may be about $100 a squeeze out of this, but we've already realized. About 80% of that maximum gain. Believe a little more than that, Okay, so make sense to close this out as well. So we'll right click create a close in order. And. We'll send that one through now knows this one does have a wider spread, and that can also be a concern when you're closer to expiration.

But we'll attempt to, uh See if we can get that filled. Let's go ahead and see what else we got. Uh, Some other examples. Yeah and let's see. Another one

was looking at was. And again. A lot of the drivers on these was looking at the, um. On balance volume on top of the price action. Let's take a look

at cyber here. C Y B R. We take a closer look at this. Example of a breakout. Uh this is discussion point. We'll have tomorrow on breakdown reversals.

Another class that I teach that webcast starts at, um. Uh I believe it would be. Ah, one um No. Noon eastern Time. Noon Eastern time tomorrow, breaking out and this is a stock that's already in an intermediate uptrend. And so, basically

potentially breaking out of that range actually did fade a little bit here today. As we scroll down and look at The on balance volume. We can see that on balance Volume again is also coming higher now, you know, didn't tick to a higher high on this breakout. Quite yet. Volume is a little bit lighter. But as far as the trend of the volume, the on balance modified, you know, still rising, supporting that trend versus divergent or breaking down. Now

you know, as far as time frames here, you know this classes focus a little more on on the shorter term and remember those here that are following and 10 James classes he does have. The trend trading class more weeks to months, and I believe that class if you go ahead and look at our schedule by the education tab under Webcast. You can go ahead and ah, you know, search upcoming Webcasts. In this case for James. And you can see that on the 14th. Which I believe is on Thursday. We

got technically speaking trading the trend weeks to months. Surviving could be even more important on supporting the trend. Uh from a larger timeframe there so encourage you to check that out as well. All right. If we, uh it looks

like we got to fill, closing out five below. On our practice account and again, you know, we can do a similar thing here. Uh maybe look at a long call Spread. And I think the example I was looking at was going out to November. Buying the 1, 65 and selling the 1 75. So let's see how we can construct that go to the trade tab. Here's

November 38 days out. And let's see 1 65 1 75, Okay. Let's make sure we get the right one up. C Y B. R. So here's the 1 65. If

we went ahead now, these spreads are somebody spread's me. Yeah. Be a little wider, ideally like to see the spread between the bid and the ask No more than 10% of the ass price is about 90 cents. That kind of falls a little into that there.

Um now another way. If we want to construct it by individual legs, you know, I can go ahead and click on, uh, by. As an example that would be a long option knows that would be 11 90. Now one of the drawbacks with a an individual option, which we can do be very directional. Ah if we went to analyze the trade I think I already have. Yeah Looks like

it's on there. Okay So here's that long option. One of the drawbacks of long options is that time decay that negative time decay. And since we're looking for a move if the price doesn't move, you know one is losing dollars. With the passage of time. So another

plus on doing a defined risk defined gain trade. As far as with the spread is if I go back. And look at the short strike. I think I said it was 1 75. I'm

gonna hold the control key. Hit cell that goes ahead and constructs that spread. Now you're reduce the net cost of the trade. In this case before 95. Now there is a bit of a wider spread. We may have to pay a little more. We'll see

for this example. But if I go ahead and right click and analyze that. Let me go ahead and remove the long option. Notice the impact of time decay has significantly been diminished. So even if we don't get that, uh. Shorter term move. The time decay is going to be a bit offset and sometimes this could actually be positive, particularly go a little more at to end the money. Uh, if I

go ahead and right click on this. And do it confirm and said. We can also take a look at the break even. The breakevens 1 69 95. So about 1

70. And notice what the price being at 1 68 59. We're pretty close to that level, so does not require a large move for this trade to be profitable. Once again, we have control over the risk as far as the maximum loss. And again if I wanted to risk about $1000 for this example. We can go ahead

and make that two times. Confirm and send. There's are defined risk. There's a defined gain, and once again we can look at setting potential profit target. And trying to

capture At least half of that maximum game. Okay? I'm gonna go ahead and send. We'll see if we can get that filled. This was double check, making sure recovering down. We're supposed

to so. Yeah we did the market snapshot and we, you know, we're looking as far as with the bias of the market, even though we're seeing more of that correction there potentially higher lows. We have seen examples of stocks that would have reversed or they're continuing their trend. And so we did some swing set ups. That are a defined risk. And given that. Since we don't

know how live the earnings are going to shake out there could be more volatility. It is a little reassuring to know that when one places a particular trade, they can see where they're defined gain is as well as more importantly, they're defined risk now another trades. We've utilized examples of stop losses. Uh but keep in mind

those stop losses do not guarantee. Uh exit at that particular selection or that particular trigger price gaps in the market to the downside, which typically can happen around earnings, just like gaps of the upside. Can happen against a bearish trade, at least with the spreads. We know what the potential worst case scenario is and can manage that before we place the trade and focus on managing the winning trades. And then even if price

goes against us, and let's say price breaks below support. One may be able to close out that position without losing the entire amount. And her dad Deng looks like I think we got our other practice trade filled therapy, go to the monitor tab. There we go. So we got cyber in

there. And uh let's see, you have to go ahead and find I think I had the other trade in their their CRM. Let's go ahead and move that to the swing class. There we go. All right, so there's our existing examples there. Ah, let's see what else we got going on here.

Um. Beyond managing. Ah I think this is from a another class. We've talked about Ford in the past. Here is an example of a stock trait. Where we have 500 shares. Uh you know this one's

profitable as Ford's pushed up higher. Let's take a look at that. If you go and bring this down. So we can see example of a kind of a classic swing with Ford. Making more of reversal. Sandy's higher highs higher lows. You can see kind of

similar what we projected with Salesforce measuring a previous swing. And then going from the low of that pattern. There was a little bit lower than that. And this example was target upwards around the $16 area now knows In this example prices already made, Uh half of the move. Ah currently have a stop that is below. The low of that

swing. At this point, traders may consider that if prices made half the move, you know, at least adjust to a break, even and if we go ahead and take a look on For Ford, We can right click. On a symbol view trades. The entry was at around 14 89. So I can go ahead and,

you know, adjust that. To, uh. You know more of that entry price. Yeah, and we'll send that through. And so that way, if the price does roll over, uh, at the very least gotta break even. Uh And then if we hit the target price, uh, it'll close it out at the target and then cancel out. The stop order and

keep in mind two stops not guaranteed to fill out a particular price once triggered, it will compete with other incoming market orders. Okay? Looking at some of the questions. Let's go in a dress that there. Ah Mellish says, Will you cover? Uh why? W Ap, uh, which is volume weighted Average price? Not in this session uh, may incorporate that in the future, James. I'm

not sure if you have a comment if you cover this at all in your class. Uh V. WAP is basically, uh, taking in consideration the volume for the day and coming up with the average prices. Some tree Some Ah, Investors, you know, may buy or sell or attempt to buy or sell stocks based off of that volume weighted average price for today in the swing class, uh. Not as applicable there, but we may take a look in the future. Ah! We already

dressed as far as with the spread so ideal with these long spread's. We're looking for the price to trade through the spread through the short strike were both of those options would be in the money and the further the price moves away from that spread. Deeper into money we should be able to lock in. Those gains. Ah David says on is on balance volume a better indicator than RSC. If I look at RSC, then CRM indicates a near over bought situation.

Well, first off. Ah would as a technician would never define quote, you know, one indicator being better than another. Uh an indicator is going to indicate something. What is it

indicating? Um on balance volume is focusing in on volume. Relative to the price if the prices up. The volume is counted to the upside If the prices down the volumes counted to the downside, and on balance, we're seeing some trends and in two different ways, both from. The on balance volume indicator itself or the modified which kind of almost kind of like a Mac D in a way, showing some of that momentum of that volume, whereas with rse If we go ahead and. Add the RSC indicator our size and oscillator. And notice

you can go to the question Mark. Which gives a breakdown is not to be confused with relative strength, which compares against a benchmark like the S and P. That's a common indicator I have had on, uh, my charts. Uh during

classes, but if we double click on it, it's an oscillator. That may be applied to identify overbought and oversold conditions. And as we can see what crn it is in that upper zone Now there is a bit of a fallacy as far as with oscillators is just because it's in the overbought that is bearish. Actually went oscillators are trending. That is a bullish sign and for strongly bullish stocks can't stay in that extended area for some time. Now, there's no

guarantee of that. Obviously. But some traders But keep in mind that that does not mean that the stock would go ahead and sell off. Uh if we go back by comparison back in May and remember this is a relatively shorter term trade. We went

into the upper zone and. The end of May and pretty much stayed in that zone over the course of at least several weeks. Now in the case of Ford here now, Okay? We're looking at Sierra before but just by comparison, we can do the same thing with Ford. Ford went up about 30% during that time. Let's look at Salesforce. Salesforce is not, uh in the upper zone. Uh and so

therefore, you know, not as much of a concern. Okay? So it's really a matter of personal preference on how applying that but hopefully kind of illustrate the dat with Ford that just because the stock is overbought. Doesn't mean that it will necessarily drop from there. All right, folks. Gosh, we are about out of time there, but we went ahead and did a couple of swing set ups. Focused on the bullish side. We'll see if things

change and may do a couple of bearish ones. I think the only other one that I was looking at, uh. That would have been example of a bearish one. And you can explore that if you wish On paper money was general. Electric um, little more neutral was actually looking. That's being more bullish. Uh

price did roll over and went down below low, but, uh, maybe hammering, so maybe not quite a breakdown at the moment. With earnings coming out. There's some analysts saying that General Electric maybe about 20% overvalued from a fundamental standpoint, but looks like we had don't see that momentum right there. All right, folks, let's go ahead and wrap things up. Hey, if you enjoyed which you learned here today, click like that way other traders will have an opportunity to see what you've learned here today as well and would encourage. To practice what you learned here today with the paperMoney platform as we went over some examples of long, verticals defined, risk defined game position size appropriately for the risk we're willing to take and also considerate and profit management. As we get closer to

expiration and war, when one realizes a potential target with some of our long verticals setting that 50% I like to thank James for helping out on the chat here today. Uh always looking forward to working with him, Uh, and looking forward to working with you again. Same time next week for swing trading or join me tomorrow at, uh, Noon Eastern time. For uh, our discussion on long correction on break out and reversals. So thanks, folks

have a wonderful day looking forward to talk with again real soon. Bye now. Then. Listen.

2021-10-13 17:20

Show Video

Other news