Swing Trading: Be on Time to the Party | Technically Speaking: Trading Stocks & Options
[Music] [Music] good afternoon everyone welcome to our technically speaking trading stocks and options i'm connie hill i'm happy to be here today i'm happy that you would join me now the question for you how many of you like to be fashionably late to a party we're going to get into party season again here pretty soon maybe some of you are doing lots of football parties or something like that so you have the people that like to be fashionably late is that you or are you one of the people that like to get to the party on time well today we're going to talk about getting to the party on time and maybe even a smidge early as far as it works out or as far as we're discussing with with swing traits here today well we've got lots of friendlies i want to just say a quick hello to vijay lou krishna frank larry ganesh alfred wayne sarah dylan sherry michael who else we got down here tony richard sharing welcome to all of you and i want you to know my good friend barb armstrong is in the chat she's going to help me out today answering your kind of or your questions maybe things that i can't get to or that might be a little bit off our topic barb's going to do our best to help us out here and i know some of you like us together as the dynamic duo uh i like us there as well well let's get started let's go through our disclosures and let's get down to business here uh before i move on should point out my my twitter handle at chill underscore tda barb's handle is at b armstrong underscore tda and we'll post educational content and information throughout the day on our twitter twitter feeds that we think you might find helpful because maybe we found it useful or helpful or we know how it might be able to help somebody so you'll want to not miss out on that even though you maybe you don't use it for anything else because i don't really use it for anything else just for the sole reason of being able to keep in contact with us as coaches you might want to do that what we talk about today is intended for educational and informational purposes only not investment advice or recommendation of any security strategy or account type options are not suitable for all investors as the special risks inherent option trading may expose investors to potentially rapid and substantial losses paper money this software application is for educational purposes only and successful virtual trading during one time period does not guarantee successful investing at actual funds during a later time period because market conditions continually change well this webcast discusses technical analysis we're going to be all over the charts here today there are other approaches including fundamental analysis that may assert very different views past performance of any security or strategy does not guarantee future results for success our agenda today one we're going to do a quick market review i think you probably all have somewhat of a handle but i want to note something as we look at the indices here we're going to do a couple of trades of trade management and then the bulk of our time we're going to talk about things to consider some considerations for swing trading and then of course we're going to look at some examples here so let's get busy first of all let's jump over to thinkorswim and uh let's pull up the spx here let me zoom out a little ways the s p 500 which is a great gauge for the overall market so many people like to use it had been in a nice steady uptrend for quite a period of time until just recently i'm going to just kind of zoom in on that period of time it looked like it fell out of that long-term channel it fell out and it started making lower lows and lower highs so what was that that's the beginning of a potential downtrend now what's interesting today is the smp is breaking through our upper resistance this diagonal and maybe it's not convincing to you maybe it's not convincing to me yet but it could be breaking through there and if that does occur say by the time the market closes we've got more time but if it closes in that area and it closes strongly that might be a consideration for people to say you know we've had this pullback but bullish momentum has moved back into the marketplace let's look at the dow jones now the dow looks a little bit different than the s p it had been going kind of sideways in a channel for a little bit here and i did draw in here a diagonal resistance line for it and it looks like it's breaking through there pretty cleanly today on the dow jones now it still may have some resistance up here at the 35 000 area to go through but as far as maybe noting a shift on the dow jones that's a pretty strong candle that direction for it today take a quick look at the nasdaq and our nasdaq i would say uh it's one of those that is really pulled back quite a bit more it is still in its channel all right it may go up here to the top of the channel and roll over and head back down and maybe we just have a couple of days of bullish momentum and it doesn't amount to anything right none of us really know we just have to be able to make our observations so we can adjust to it now wayne mentioned the spx looks like it may have a head and shoulders pattern in it let's go back to the spx to look at that and let me see if i can determine where you might be thinking about that i zoom in maybe on the most recent price action one thing maybe this is what you were looking at here wayne is maybe we have a potential shoulder here a nice rally up another rally that goes higher than the previous rally so that might be like the person's head here's the left shoulder and then potentially here maybe that is the right shoulder that formed very well could be uh we want to uh connect what we call the neckline that usually is a straight line uh but we connected basically those two low points where they come in i like to call it uh if you're looking up a person it's kind of where your armpits are okay but but don't tell anybody else that okay don't say hey look at those armpits because nobody else calls them that way but just to envision it you know your neckline might be up here to some people versus down a little bit lower okay where that skin comes down connects to the body and then it doesn't rally any higher than the head now we did look like maybe i should draw this uh let's draw this with a different tool here let's get rid of our pink lines here if it'll let me oh it doesn't want to let's figure it out here let's uh close it out this way bring that back over all right so if we were going to create a touching pattern on the neckline like i said this would be since this is the first shoulder this is the first armpit the low point and then we've got a second low point in this area and maybe coming across here now when the stock or the index in this case breaks the neckline and it looks like it solidly did and was just hanging around it for a few days then the expectation is it could make a move from the peak of the head to the bottom of the neckline and if we duplicate that and drag it down then we could say hey when it breaks that neckline that's the kind of move we're looking for now it didn't go down nearly low enough did it so that's what it's interesting to see is if the momentum is shifting again now i do have the adx line on here remember adx tells us the strength of the trend we're not going to use it for decisions today necessarily but we're going to consult with the adx and so if we've got an adx up here at 31.86 anything above 25 lets us know it's pretty strong so that was telling us through this period of time where we had a strong downtrend yeah it had been strong because that adx number was higher than 25 so we're going to want to watch this maybe as we get towards the close to see very good i appreciate you bringing that up there wayne yeah that had a potential head and shoulders pattern we looked at the nasdaq is still in its channel we'll look very quickly at the russell 2000 here at our small cap stocks let's see what's been going on with them see this big sideways range it's been in yeah it's been in a sideways range range for quite a while and one thing that i did observe here on this one is it looks like it's consolidating maybe not so much so much between horizontal support and resistance but maybe in a little bit of a triangle and so we might look on this one to see if it breaks out of this triangle you know maybe it gets up here to 2275 or something in that range and you feel like okay it's breaking out of that triangle yes maybe we can be early to the party by observing that kind of a breakout very good that's our review of the indices next item on the agenda is we're going to spend most of our time talking about swing trading now as we come over here there are a couple things i want us to just take note of that are considerations when swing trading how many of you have done some swing trading uh obviously i can't see you raise your hand okay uh but those of you that have done some swing trading uh here are some things to keep in mind although do you know what i skipped an agenda item first we're going to put this on hold i'm going to jump back to my agenda where we're going to do a little bit of trade management once we knew what the indices were looking like so let's jump back to thinkorswim here and jump on over here very good uh let's go to a couple of trades we put on last week now last week the market was looking a little bit more bearish on us if we come up here to the spx and we look what last september 30th looked like that was a week ago today this is our candle it was breaking down through some horizontal support in this area a nice clean breakdown it was right here at the bottom of this diagonal channel that had started to form and notice it's interesting it stayed inside the channel it didn't dip a whole lot but it did go sideways and it's not like it went low and popped right back up either although that's what we're witnessing here today so that was the day we got into the trades we're going to look at here that we're going to monitor there were two trades that we were going to compare and contrast together we looked at tjx and we looked at uh target that's what it was tgt now if you happen to have missed that discussion we talked a little bit about what kind of trades we might see and what we might consider setting up and it doesn't have to be you only do a particular type of trade that boy if you see this only do this trade it is the idea that there could be multiple trades potentially possible so what i'll do when we're finished with our post-production work i'll go ahead and put a link in here in the upper right hand corner i'll put that link in and that will go and revisit last week's class in case you missed that you want to catch up on it well the first trade we're going to look at here is dash we had some interesting things happen with dash we did a long diagonal we bought if i come back here to dash let's open that up we have right now a long 210 call that expires out in january we've got 106 days plenty of time for this trade to percolate one thing that was interesting we sold a call against it when we initially got into this trade is diagonal we sold i think it was the 230 call yeah we're long the 210 we were short the 2 30. and after our class last week it was interesting it looked like we could actually buy back that short call for a large majority of the game if i come over here to the monitor we come over to account statement we look at dash got that setting up here already we sold that call for 475 and guess what we were able to buy it back for a buck 33 is what we were able to buy it back for what percentage of the gain do you think that is it turned out it was 72 and that was not being in the trade all that long was it because we entered this trade on september 9th is when we put on that diagonal and then last week that's when we looked at it and said this is after our class was over that hey we could lock in a majority of the gain and so that's what we did and i marked here on our chart the day that we went and bought that callback now could we have waited well in hindsight yeah we could have waited a couple two three four more days because it was down even lower we could have possibly locked in a potentially more return on that than 72 percent but it's just the idea that when you're active you're watching and you can see that you can lock in some gains on something you've sold sometimes it's not a bad idea to just buy it back when it's significantly cheaper and lock in those gains and look to sell it again so on dash we've got that long call due out in january we are going to look for opportunities here when it runs up to resistance maybe it looks like it's starting to roll over or something like that we're going to look for another opportunity to sell a call against it wayne says i never see things put up in the upper right hand corner on replays is there a setting i need when there is not as coaches we have to physically go place that in there now after we're finished with our presentations uh it has a review if there's any edits to it that needs to take place and as soon as we're done with the class we go in and put those links so if you're looking at it like immediately after class it might not be there all right because it has to go through the post-production work and and approval before it gets posted so give it a little bit of time and then it should show up for you all right if you're not seeing it maybe even refresh your browser if you've got it open and you're like oh it isn't showing up here yet and this particular one should be about the 12 minute mark but that's why i'm sorry it hasn't uh you haven't been seen it recently uh i had actually some comments in one of my classes that people weren't seeing it and i think that was the problem with mine is that it took a while so we actually got it posted out there uh for that link to show up all right so you don't need to do anything wayne you probably are just fine maybe refreshing would make a difference for you all right let's take a look at these other two trades uh we did tj target and tj maxx right here and we did this a similar three thing in both of them we put on a long put vertical on both of them and we also did a short call vertical on each of them let's just focus on target first uh on target not anything too exciting has happened yet our uh short or our long put vertical guess what we're at zero yep hasn't it's moved but it hasn't really moved significantly to start pocketing those gains on this short call vertical all right we are at least starting to feel some of that time decay some of that erosion we've got 43 days left on both trades so maybe there's not a lot we need to do verticals many times are trades of patience now one thing that i like to do to mark up my charts and help keep me oriented into the trade is where are my short legs and so i mark it out here on the chart so i've got a 240 listed here and i've got the 230 listed here so the 230 is for our long put vertical we need to the stock by the time options expiration day comes we need it to be below 230.
this is the one that doesn't have as much leeway on it right that's the one that we're zero in terms of the uh profitability of the trade up to this point and we can see we got on here in this day and it did go down a little bit but it was trying to race up above here do we need to panic if the price of the stock goes above our short leg right now it's 29 cents higher than it we don't need to panic all right we know it's going to play out but we are going to watch closely to see if the stock breaks any resistance all right that would be a sign of strength moving in that we want to pay attention to now the one we have more leeway on is that short call vertical we sold this 240 short leg and sitting in pretty good shape on that one we got in with a lot of room to spare and not quite as aggressive at the trade so we're going to let it percolate as barb would like to say now let's go to tjx on tjx again we did the same thing we did a short call vertical we did a long put vertical in this class we are going to talk about stock trades and option trades when we're looking more bearishly many people turn to verticals or other bearish strategies as opposed to only shorting stock shorting stock gives you unlimited loss potential and so that's why some traders prefer to work with the options where they have a max potential loss versus an unlimited loss potential if you were to shorting the stock so those of you maybe that aren't with option strategies yet maybe you're just learning stocks and that's all you can handle right now that's great you work on your technical analysis and when you're ready you might want to join barb armstrong class she does on tuesday mornings at noon eastern and if i said that wrong barb you correct me okay noon eastern and she goes through all of the strategies on the trading options course and walks you through them one by one so that's a fantastic class to help supplement what you're reading in the trading options course now on tjx again we got on in this kind of this big drop below the support level which getting in on a break of resistance or bounce down offers or a break of support or a bounce down off of resistance can be ideal entry points to getting into these traits that's what we call being to the party on time last week we were trying to be to the party on time as opposed to letting it break support and watching it for two or three days to see if it was still gonna go that way now if we weren't convinced that it broke support then yeah maybe we might wait for some follow-through but if we see it there get to the party all right we want to be really quick when we're doing some of these shorter term type trades now these were not swing trades they were verticals and we're going to continue to monitor them and see what happens we've got our 65 long leg here for our long put vertical so we need it to go and stay below 65. this was definitely more aggressive of the two trades and our short call vertical our short leg is up here at 70. and so we just need the stock to stay below 70 which it's done the whole time we've been in it and so as we look at our our numbers here our short call vertical yeah we're up 160 to 50 in a or 160 50 i should say and then our long put vertical we're up about 25 bucks in it again lots of time left 43 days so we're just going to let those trades work we're going to be patient because they are traits of patients all right next thing we're going to talk about is the considerations for swing trading because the examples we're going to look at today are based on potential momentum shifting and getting in very quickly when we see that move now if we come back here uh to our slides this is what i wanted to talk about the considerations for swing trading many time your timing on entries and exits can be challenging maybe you're not sure you're not sure if it's a big enough breakout you're not sure if that bounce off resistance is good enough so we give you some additional things you can think about looking for a close below the low of a high day on a bounce down off resistance that can be helpful and just knowing that maybe your next target might be your next level of support or in the case that we're going to look maybe some swing around of momentum could be a previous heist that as may be acting as support so we've got our short-term price action is sensitive to market forces and global economic events and they can be volatile our target prices and stops as well are generally based on those support and resistance areas and then the technically based price targets are theoretical in nature and may not be achieved we use them as a way to set things up but we don't know if it's going to happen right these market forces might come in company might announce something with their earnings or maybe even something before earnings some news comes out that you weren't even expecting that changes the trajectory on the price of that stock so all of these things we want to be very cognizant of when we are doing a little bit of swing trading so let's go look at a couple of examples here let's come back to our thinkorswim and i'm going to kind of collapse these up we're going to come over here to the charts now on the charts i have some stocks that are came on a watch list here and these stocks came from a query that i call or a scan called big fish movers all right uh let's just look at what the contents of that scan is just quickly you can take some notes down these are not a recommendation but they are looking for particular things so i'll just point it out to you here real quick we're looking for the minimum price of the stock to be ten dollars we're looking for the move of the stock to be up today we're having a big bullish balance we're looking for things that aren't fighting that trend that are going along with that maybe they're having a balance themselves we're looking for average volume of 2 million now do you have to have 2 million no you don't if you're an options trader you do want to see that liquidity in the options and so if we're seeing at least 200 000 traded on a stock in a given day over the last 30 days so about six weeks then there are likely to be liquidity in the options yeah and then we're looking for change we're looking for a trend of going up at least 10 percent in the last 65 days and we're looking for the trend to go up at least five percent and last 21 bars which are basically 21 trading days so we've got a month so this one is about a quarter going up 10 this one is going up about five percent in the last month so we're trying to find basically technical setups we're not looking for anything fundamental here and that's something that you'll find is very common with swing traders is that they're very technically focused just like we are in this class we're really seeing what the charts are trying to tell us trying to interpret that and then taking action based on our interpretation do i care what the p e ratio is or do we i don't have it listed in this scan do i uh the uh return on equity or some of your other ratios uh like your current ratio do they have enough money to cover their current debts do we care about that we don't okay swing traders many times don't really focus on that they are focused on like we said those considerations trend support resistance all right let's see if there's any question i needed to answer here looks like barb's been busy here thank you barb all right we're going to carry on uh again if you want to take notes on what we've got there you are welcome to you may have to go back if you're not able to copy it all down you may need to go back to the recording so you can write this down if it's something you're interested in trying to duplicate this particular scan i don't know that i'm able to share it legally in class so i'm not going to to make sure i stay out of trouble okay that's why i say take all the notes you want but remember these are not recommendations they cert they just meet our criteria what we're looking for here all right let's go to i've got several of these marked here of ones that have potential entries now the first one we're going to look at is mosaic right here a mosaic let's move in here a little bit uh the trend is at 25 so it's starting to tell us it is strong and we can see through this period of time it was a little bit sideways but it was having little flat patterns being manifest here we had our sharp run up and then a little pullback this one almost retraced all the way so that one would not have been as big or as powerful you wouldn't expect it to be as big of a move okay simply because it retraced almost all the way down the flagpole we really don't like to see that if we're trading it as a flag pattern but what did it do it made another little flag here and it consolidated and pulled back a little here ran a little here just on one day so it didn't really make a good flagpole but you can see here we've got another flagpole we've got a really long flagpole here and then we have its most recent flagpole which consisted all of two days well that doesn't seem like a whole lot what i did is i went ahead and duplicated this line made a copy of it and i put it here where basically the breakout of resistance was or the breakout from this flag pattern was right here and i said okay we're expecting it to go up a bit now it formed a new high today 39.91 so
our little bubble is in the way there but if i put my mouse here i can see the target based on the flagpole is 50 basically 41.54 all right in essence it's about a three dollar move now you look at the stock and you go well maybe it's run some of that and that doesn't look like a great target connie and so what some people might do if you did not want to use the flagpole itself but you wanted to use some other sort of measurement you could go and look at the average of the past five moves how big were these other flagpoles now i did that before our class started all right and the average of these all of the flagpoles together including the height of this flagpole turned out to be a three dollar and seventy cent seven cents average okay so instead of looking for a three dollar roof we're looking for almost a four dollar move and so that's what we would do with the stock here so let's put a target on it uh might have to use our little calculator here for a second clear anything out that's left in there so if our target is up here at 4154 um i'm not going to use that i'm going to take the average of the flag pulse here all right we're going to say hey this stock has shown some better moves than just this more recent one and so we're going to say our expected move here from where it broke out about 38.40 so we say 38 40. where it broke out we're going to add on about 3.77 that was the average of the other flagpoles so we're going to put a target at 40 to 17.
so let me just kind of write that in here 4217 is going to be our target on this first trade now what about a stop loss if we're going to get to the party on time as soon as the stock breaks out of that flag pattern well we need to be tight on our stop okay we're gonna not let it dilly dallying come clear back here or even clear back here that would be a little bit crazy what we're gonna do is just go slightly below the lowest price well it was consolidating here while it was consolidating the low price here was looks like 3710 let's just put it at 37 we'll give it 10 cents leeway so we're going to put it at 37 equals the stop and one thing we might consider doing in terms of management of this trade and this is probably something i may have to do without you is when the stock starts moving up let's say suppose tomorrow we have another bullish day and we've got another nice uh candle here on our flagpole what we might consider doing is moving our stop loss not to being a little bit below the low but maybe moving it up so we're at least locking in some profits with the stock maybe that's at the price we get into it maybe it's a price a little bit below that so if it does retrace me we only take a little loss you'll have to play that and manage that each of you will probably come up with a different methodology that you like to use but for our purposes let's go take a look now mosaic is not an expensive stock so if we come over here to the trade tam and we look at mosaic we could say let's just do it for a stock trade all right let's do that so we're going to put on our ask price do right mouse click by custom with ocl bracket that's going to allow us to put in a target and a stop loss and how this sets it up on thinkorswim this first one notice is a dollar higher than the price that's intended to be your target this one that's a dollar lower than the price that's intended to be your stop and you'll see it sets it up here we're going to put in what our trigger price is when it gets to that value if it does it'll trigger a market order and remember market orders aren't exactly the price that they get triggered on but they line up and get filled at the next available price it's just our our indication to say all right it went too low let's get out so let's put our stop here uh we said our stop is going to be at 37 even and we said our target here based on the average flagpoles is going to be 4217. again you could use another methodology this is not the only way it could go we're going to make both of those good till canceled just kind of review it now in terms of what we might be willing to risk in terms of shares in this class we're assuming 150 000 portfolio we don't want to risk more than a half a percent in any trade and that's why i have this little equation right here 150 000 times .005 says we don't want to risk more than 750 dollars in the trade so let's see what the risk would be on this stock trade so we'd say here we'll we'll go uh 20 uh 4217 which is the target let's subtract the current price of the stock which i know it's jumping around here we're going to go with 39.88 oh that didn't jump in there did it all right we're going to risk 229. let's write that in here so let's see how many shares we could buy without overextending our risk so we're going to say 750 divided by 2.79
will tell us how many shares we probably shouldn't go more than this says 268 shares now if we really brought 268 let's see how much money we would spend to go 268 times current price 39.88 we'd be spending about 10 000 plus out of our 150 000 portfolio some people don't want to exceed 10 in any position that clearly is below it it's not near 15 000 we're a little ways backed off of that so we could feel comfortable doing 268 shares here that's exactly what we're going to do i think i did that number wrong 268 and then i'm going to click on this link it's going to flood in the current quantity for the target and the stop so those are identical we've got these good till canceled we don't know when it's going to happen we're going to get filled at whatever the current price is right now i'm going to unlock this for a moment so that current price can flood in there we're going to hit confirm and send we're going to send it to our stock class trading stocks and options we're going to pause pop it in there and let it go right we're going to follow up on this trade like we like to follow up on our other trades now what if you're an option trader and you said well i don't really want to buy the stock i want to buy the option buy enough time for the stock to make the move we don't know how much time it could be could it get there in three days yep good is it guaranteed no what if the stock just starts going sideways i really like the fact that it's had a nice new upward trend here as opposed to being sideways like it was down here so it's more we could say maybe it's more likely to just because of the trend of the stock but nothing is ever guaranteed but suppose you were interested in this buy as much time as you think you need and then add 30 dates so if you think it's going to take let's say seven days and we add on 30 days to that would say we need to buy at least 37 days worth of time now the 36 weeklies right here is close to 37. it's a little bit below but as we open this up we can see in the open interest column right here is there a lot of open interest no no there certainly isn't so we're going to stick with the monthlies that do have a lot of open interest we had get better fill prices on it and there's a couple of ways that we could do this if we wanted to be fairly conservative we could start at something a little bit in the money like say here with this 58 delta or 65 delta or 70 delta we could select something like that if we wanted to be more aggressive we could come out here now because it's not a very big target okay we're not looking for a big move we're going to play it a little bit more conservative here we're going to go with the 39 strike price it has almost well it has about 90 cents of intrinsic value so it is a little bit more conservative let's go ahead we're going to pop this up oops let's do something different here and we're going to say buy custom [Music] with ocl bracket and then we're going to put conditions on this now we could put conditions on the price of the option you know if you said i want to get a two dollar move here and make the target five dollars and have a one dollar loss on the option you could do that we're going to do something different here we're going to change these to market orders and we're going to put in those same stops that we did on the stock we're going to put them on here so as we come over here to the market order click on the gear it's going to bring our order conditions box up and move this over to this screen we're going to still use these numbers so the first one is going to be our target typically it likes to use the ask price and we're going to go greater than or equal to check your verbiage down there and we're going to say 4217. whatever the price of the option is at that point we're just going to use it there is a way to do this on one order one sell order i didn't set it up that way that i could have let's go ahead and hit save here noting that it will trigger a market order that says get me out of the next available price so we'll go ahead and hit that let's configure this one that's going to be our stop loss bring our order rules box over and so we're going to base it on the the stock price not the option price again mark going to go less than or equal to our value of 37 and again you might choose to come in here and set that up higher depending on what the movement of the stock is in the next two or three days you might say it if it goes up for you quite a bit and you're up on the trade hasn't quite hit the target you might say well i'm going to move up my stop loss so that i am likely not guaranteed but likely to get a better feel on that and maybe make sure that you're locking in again with the trade one of the things that i have found as a trader on shorter term trades if i am really active with my stops and tracking the trade and not thinking oh i'll catch it i'll watch it but if i'll put those orders in it it helps facilitate your trading okay you can do be doing whatever thing you don't have to sit here and babysit it right you could be out walking the dog or you could be studying the trading options course okay you don't have to be staring it down and let the system do the work for you uh rosten says you know how much considerations should we put into earnings uh great question there roster be aware of earnings note it pay attention to it and then some people will make a decision when they get into the trade they're going to say i want to hold it over earnings intentionally or you know if i get to make this loop this move before earnings comes out and i want to be out of the trade average and so it's not that one is right or one is wrong you just have to know when when earnings is and then make sure you follow your intent for the trade and make a decision don't go oh let's just see what it does it's like no you're going to be in or you're going to be out and and follow through with that uh serbian said as when we were looking at mosaic here are we not buying mosaic at the heights we are currently buying it at a high but it does have that technical setup that'll broke out of the flag and so our expectation is it's going to continue to go and that may happen when you see a lot of flag patterns in say the spx and then you start seeing it with a lot of stocks you'll see that be repeated over and over again and especially in mosaics case how many it had like four flags that we went out and looked at and took an average of the flagpoles for our target so yes it is but that doesn't mean it's going to drop uh let's see zeke said i used 279 rather than 229 of risk did i type that in wrong um i apologize zeke that means we probably could have bought more shares than 268 we'll just leave it at 268 for the shares of the stock appreciate you bringing that up let's see if there was anything else here that's relevant to what we're talking about all right kaz has a question out there for some of you folks that are out there live in the in our class here if you want to participate in answering his question kind of your opinion if you've heard about something in any case let's go ahead let's finalize this again it'll trigger a market order we don't know what that price is going to be at that point in time it just means get us out there's a lot of liquidity with those options so hopefully the antennas will get filled at a quote fair price let's send this over and we're going to put this in our stocks and options class we're going to hit send now there's one more i want to take a look at here with you i think we have time if i don't dilly dally around here let's look at another m stock that came up on our on that little scan murphy oil some of the natural gas natural gas has been going up and there's a lot of stocks that are natural gas plays murphy happens to be one of them and recently here what did it do it made a really long flagpole i'll start at the bottom of this bullish candle and it'll go all the way up here two to five days is ideal in terms of a pullback for that flag gave us two days sometimes it goes longer boom it's freaking out today this is a very long flagpole is it realistic it's hard to know if it is or not we just know it's a pretty long okay so maybe your expectation initially is that you're only going to go part way to the flagpole maybe you're going to do a half a flat pull and maybe take some profits off the table versus saying holding out all the way to the very end so let me get this duplicated here which i thought i did there we go i'm going to grab it i'm going to put it into play here and we've got a target up there about what 34 something it looks like that'll balloon out 34.51 that's a pretty decent sized move which is different than the first one we looked at that kind of had a smaller target but let's do this let's suppose we're not going to go pi in the sky let's suppose we're going to look for the uh target to maybe be about 30 let's go 31.75 31.75 at a stop
we're going to do it the lowest a little bit lower than the lowest in the pullback which was here low here is 26 11. so let's go to 26 dollars and i'm making some round numbers to facilitate it here again if you're an option trader you might choose to do something with the call options like we did you might not be that convinced of the move and so you go for a vertical all right in this case we are just going to do the stock so we're going to go right mouse click by custom with ocl bracket we're going to say our target 4217 and our stop loss 26 dollars again if it gets to that price twenty six dollars or lower it'll trigger the market order get us out of the next available price we're gonna make both of those good to cancel we're gonna hit confirm and send we are going to send this to our stocks and options class for us to take notice and monitor if it doesn't get filled in just a couple minutes i'll come back and make sure that it does get filled now we covered a lot of ground here today keep in mind what we have to keep in mind for swing trades you have to be good at the timing you've got to be the party on time you cannot dilly dally you don't come into the party halfway past the time of the party starting okay you won't have much move left if you do something like that and that's why that timing is critical and we're going to use our stops and resistance so be really good at figuring out your stop losses for targets what i want you to do is i want to prac have you practice some of your own swing traits all right in your own paper money account we're using thinkorswim some of you this is a newer platform and we get that maybe plan on coming to mike fairborne's class at five eastern time today about getting started with thinkorswim so that you can ramp up your skills on the thinkorswim platform all right well as we wrap up here today i need to remind you that what we talked about today is for educational purposes only it's not considered a recommendation of any security strategy or account type now coming up next is going to be james boyd trading the trend i know you guys will be excited to sit in for james class so you get about a 15-minute break go refill your water whatever you're drinking your beverage and then come on back we're gonna follow up with these trades and some others next week when we get back together thanks everyone bye-bye [Music] [Music] you