Swing Trading Days to Weeks | John McNichol | 10-1-19

Swing Trading Days to Weeks | John McNichol | 10-1-19

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Good. Morning, everyone, John McNichol. And you're, here for swing trading days. Two weeks our subject. Is ATR. Average True, Range and. How it can be used for swing training so stick around. Well. Good morning once again folks thanks for being here whether you here live or listening the archive session, good morning to you Ron Ashley. Cereth. And, basil. Appreciate. You being here for. October. 1st 2019. You, can see my Twitter handle, on the screen there if you wish to follow me that's. The address there now, if you go ahead and follow any of our other instructors. Here at TD Ameritrade education. You, can follow them as well typically, it is their first initial last name underscore. At, TD a.com let's. Go ahead and take care of disclosures, and we'll get right into it. Options. Are not suitable for all investors as, these special risks inherent, to options trading may expose investors, of potentially rapid and substantial. Losses carefully. Read the previous a body copy of characteristics. And risks of standardized options, spread, straddles, and there's a multi leg option strategies, can, entail substantial, transaction, costs include multiple commissions which, may impact any potential, return also, advanced options strategies, often involve greater, more complex, risk than single leg option trades and investors may, wish to contact, a tax advisor regarding. To tax treatment applicable, to those spreads of the multi leg option transactions, now in order to demonstrate the functionality of the platform, we will be used in actual symbols keeping, in mind 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-directed account, is solely, your, responsibility. Transaction. Costs are important factors should be considered when evaluating any trade and the paper money software. Is for. Educational. Purposes only successful. Virtual trading during, one time period does not guarantee successful. Investing, of actual, funds during a later time period as those market conditions change continuously, as always. All investing. Involves risk including the. Risk of loss now while this webcast discusses, technical analysis. Other. Approaches, include fundamental, analysis, may, assert very, different views, now. The. At stop loss order will. Not guarantee an, execution. At or near, the activation, price once activated, they, compete with other income. And market orders. Alright. Scott. Says good, morning did, you get snow well I believe there's definitely, snow up in the mountains I, did. Not see any snow in the mountains immediately. To. The rear of my. House there heard. Montana. Someplace. Has got about 40, inches, of snow, so. That's a pretty. Big early. Snow even, for Montana, standards, there but. Let's go ahead and take a look at the thinkorswim platform and, see, what we got going, on here today.

SP. Is. Up. About. Ten points. Technically. Break. In kind, of the downward, slope that we have seen over. The, last. Over. The, last few. Days. Here let's, bring up the actual SP. SP. 502. Cache index there. And. As. We try. And get our settings, here. Just, want to go ahead and highlight this we have a little just a little brief lag here. There's. A little break of that downward, slope, over the last couple of days some, traders would refer to this as a bounces, price is trading above the high of the low day. Or. In this case the inside, day that is a typical. Setup. As far as a bounce, that some swing traders may look for and that's kind of tied in to our discussion. Point for today, we're, going to talk about ATR. Average True. Range we're. Gonna discuss, what it is. We're. Gonna discuss on how a trader may apply it and. The. Learning objective, for you is after understanding. ATR. Average True Range is being, able to practice, with that to, utilize that to set, a stop. Or. Even, a potential, target. The. Use of that indicator, could be for multiple, for. Multiple. Types of setups and you. As an individual trader can decide on what. Is more applicable to you okay. So ATR. What, it does how we can apply it for, both potentially, stops as well as targets, that's our topic for today so, let's go ahead and take a closer look at this. I'm. Gonna go ahead and bring up. The. ATR which is actually on the chart now I do have a shared, chart here I'm gonna go ahead and share it one more time. Make. Sure that we have those, same indicators, on there nice feature of the thinkorswim platform where. We can go ahead and share different. Tools so, I clicked on the share icon. I'll. Select share that's, going to create a, unique. Identifier. It's, a 6 character identifier. Now. I'm. Going to go ahead and paste that into, the. Chat. Now it does give kind of an HT. P. Address, however, for. Your purposes not necessary. All. One needs to do if you want to bring up a similar, chart, is. Go. To set, up in the upper right hand corner, of the platform. Once. There select open. Shared, item and. On. That open shared item, you, can go ahead and type in that, identifier, now this is case sensitive, so we have a number three capital. P.

Put. In G number. Seven, six. Lower. Case X and, the, number six, we'll. Click on preview, and click. Open. That, will open, up a chart that should look similar to. The. One I just shared with you. And. From. Here if you'd like to save those settings. You. Can go. Up and. Right. Click on the chart. Yep. And, upon right-clicking you. Can go to style, and. Save. Style, and then, from there you can name it whatever you'd like. You. Can click check to include, the studies and. Select. Save. Now. Re save this here and, then once that's saved if. You go ahead and right click on any chart you should be able to go to style, &. Load. Style. And. As. You can see I've created quite, a few Styles. Based. Off of a lot of different classes that we teach and you can select that style and bring that up. Ok. So. What is a TR well a few ways we can look at this if, I go ahead and go, to the. Beaker. Which, enables you to add studies, if you want to do this on your own and. Over. In the upper left we'll, type in a TR. There's. The indicator, there if, you click on the question mark the question mark will give you a background. Of, what. That indicator is and we can see that the a TR study calculates. The average - price range over a time, period, the. True price range is a greatest, of distances. Between, the. Hi and the, current low, so. Think of your candles, and. From. The extreme, high, to extreme low, between. The clothes and the current high or. Between. The, clothes and the current low now by default the, average true range is about 14 period. That's. A period that we can use although some traders may go ahead and adjust that and. The. Indicator is added on the lower part of the chart. So. We go ahead and take a closer look. For. Instance on SPX. The. Current value for the ATR, is showing at twenty. Nine twenty, six so. That what that is implying, is the. Average, range for. The, sp500. Is. About twenty nine points, each, period. And since. We're looking at a day that, would be each, day. Now. If we go back and take a look. A. Little further back you. Can. See that ATR, value, can change. Typically. During periods. Of higher, volatility. It. Would be no surprise that the, average, range, of that, price action may. Be higher. You. Know currently with the ESPE with this average range being at around 29. Points you know that's kind of a round, a midpoint you, know going back to earlier, this year you. Can. See during extremes, when markets. Were selling, off that. Range. Was. Upwards close, to 60 points. So. How. Does that translate the individual, stocks let's, go ahead and bring up let's, say Apple. And. We can see even on individual, stocks that, average, range, may, vary over time current. ATR Average True, Range for. Apple, is, a little, over $4. You. Know other times it's been around 5. During. Some higher vials. Even upwards around six or seven. So. How can that be potentially. Helpful. For. An active trader, on. Utilizing. That indicator, well. Since that indicator, is a bit dynamic, what. It can do is basically. Compensate. For, the volatility, of a stock. When. Some of the traders may set a stop you know kind of by default, set. A stop you know 1% below, a low or. You, know 3%. Below a certain, area there you know those percentages, are very fixed. That. May work well for some stocks that are relatively, low or moderate, volatility, but if a stock as higher. Vol, you. Know a smaller, stop, may. Not be as practical. So. What the ATR, does is a bit more dynamic if, we were to utilize, this as. An example for a stop when, things. Are less volatile, the. Stop may be a bit tighter when. Things are more volatile, and that stop may be a bit wider. Trying, to compensate, for, kind. Of that day to day or period, period movement, of the, stock okay. Now. Looking at some of the questions there. Diane. You're never late and, Cole. Says what is the best time to, use with. ATR. Well. Since ATR is a technical, indicator Cole. It. Can be applicable, to any time, frame I it. Would be typically, applied to the time frame that one is trading, so since we're looking at a daily chart we're looking at daily, ATRs if. Someone was. More of an investor, looking at longer term. We. Can go ahead and change that. Period. Maybe, to a weekly and you. Can get an idea of, what. The. Weekly. Ranges, which, on Apple is about ten dollars. And. Even some option traders all there's various tools where you can look. Such a standard, deviation. And. And probabilities. You, know if I change this to a monthly. Chart. You. Can get an idea of what the average range, of that, stock may be on any given month. And. That can also highlight, some of the potential.

Upside As well as some of the downside, risk on a month-to-month. Basis. So, in the case of Apple you know $21, you know that's a little shy of about 10% of the current price. All. Right now that we understand a little bit of more about what. The, ATR, is let's, see if we can go ahead and apply, it on, some. Individual. Stocks. So. Let's see we'll go ahead and looks, like Apple is doing pretty good today after, pushing. Out of a little. Bit of a fallen, wedge they're, attempting. To trade up into the channel. I'm. Gonna bring up, EA. This. Is a stock that we had. Tweeted. Yesterday, as far, as. Illustrating. Different patterns, that we discuss and technically speaking every. Monday at 3 p.m. Eastern Time. Electronic. Arts had a double bottom, kind. Of rallied up to the top as a channel and kind, of retested. That looking. For a potential bounce looks like it's kind of faded a little bit at the opening there I would. Some traders may be looking for is looking for price to trade above the, high the low day hasn't. Quite did that there. Are some earnings coming out later in the month. And. Let's look at a couple other ones here. So. You have any other stocks that may be bouncing. Utilizing. Some of our sample, script here. And. Some. Of that is right, on the, left-hand, margin I'm gonna go ahead and scroll this down for. Those of you that. May. Be new to the class welcome. Here's. Some of the shared script for the columns you can repeat some of the same steps that we, did with the chart. And you looking for some stocks. That maybe, bouncing. You. Know office support. Some. Potential colds. Generally. Looking for some stocks that. Maybe. Up trending and, bouncing. Are breaking out. All. Right here's Texas Instruments. Here, now. Texas Instruments kind, of like a few other stocks, have been kind. Of sloping down there. And. We're seeing price you know break above a diagonal.

Resistance. Let's. See if we can do an example, on. What. That. Was that's, low so it's trying to look at Texas Instruments looks like it's switched on me there's. Texas, Instruments, basically, have a breakout. Sometimes. It happens when quotes, are updating, looks. Like, price. Breaking, above resistance. Interesting. Pattern that we. Review, in reversal. Patterns looks like we may have a cup and handle, formation. Which. Some, traders considers to be a bullish pattern and you. Know they may go ahead and target, the, distance, between. That. Support. As well. As to that resistance. Now. One way we can possibly apply. ATR. Is. Let's. Say using it as a potential. Stop. Now. If we look at 80 are currently. On Texas Instruments, showing, at, 263. One. Can take that number or multiple, of that and possibly, set. A stop. Now. With, that 263, let's. Go ahead and, calculate. That. From. The current price. I must switch our gadget to a calculator. And if, we, will. Go ahead and start off by. Setting. The ATR. If. We do it based off of the current price the current price is at. 13171. 31.7. Minus, that, value. To. 63, we'll just change it to 264. Minus. 2 dollars and. 64. Cents. And. That, did, not work let's try that one more time. 131. 0.75. Minus. 2. Dollars. And. We're. Gonna have a little bit of lag here I'm gonna try a little, differently. -. Three's. A charm, two. Dollars, and 64. Cents. That. Would come out to be in. 129. 14. 129. 14, so. I can go ahead and. We'll. Use our drawing. Tool and we'll. Just go ahead and mark that on the. Chart. All. Right for some reason still having a little bit of a lag here but we'll push, through it. 1:29, 14. And. We'll go ahead and Mark, that. Okay. Now. What. We can do is we can put in a, stock. Trade we, can put in an option, trade let's, say we go ahead and do an example of, an, option, trade and. I. Can go ahead and go, to the. Trade tab. We'll. Go out and look, at an option you know over the course of at. Least greater than a month. And. Diane. I went ahead and initially. Put that on based. Off of the current. Price, or the entry, price, not. Off the low but off of the entry. Price. Or. A potential entry price. When. Off the current price and minus the ATR off of that which, should, put it below, the low of the day.

Now. Can one go ahead and put in that. ATR. Below, the low absolutely. It would be a wider stop. But. In this case we're going off of that current price. Now. If. We go and look at an option. Let's. Say we look at an option that's, just. Currently about at, the money there now. If one wanted they may go into money if they're looking. For to capture, more. Dollar for dollar with. The, underlying, move. All. Of the premium would. Be more. In this case. Let's. Say I go ahead I'll. Actually go with a 70. Delta. Here so, I'm gonna go ahead and right-click and. We're gonna do a, buy. Custom. With. Stop. Buy. Custom, whit stop and. Right. Here one can go ahead and set a stop based off of the option price but. Actually what I'm going to do is we're gonna tie this to, the, stock. Price so. I'm gonna actually make this a. Market. GTC. And. Then. We're gonna go ahead and put, in a condition, order so I'm going to click on the gear, next, that order. And. Then. Here we're going to go ahead and put in the. Stock and, if. You click on it it automatically, loads the mark. Which is essentially, the current price and. Looking. Less, than or equal to that. Stock price and I, believe as far as on, the. Stock price I'm gonna go ahead and save this for a second. Bring. Up that chart that was one twenty nine fourteen. So. We'll click on that gear and. Make. Sure if the stock is less than or equal to one, twenty nine fourteen. Make. Sure it sticks. And. Bring. That up so when I hit confirm and send nope it did not sit this is why we do a confirm and send, under. The order conditions. That. Should be the stock price and it's currently showing zero, so. We need to go back and edit that. For. Some reason I'm having a little, difficulty. On. Getting. The computer to work, as fast as me wait, which is. Should. Not be an issue. All. Right. So, again putting in that price 129, 14 1/2. 9.14. Hit. Enter it's stuck, now. It click save now. As. Far as position, size we.

Can Position size this. To. A maximum. Loss. Or. Can, position size this based, off of you. Know theoretically how, much the option would be worth you, know if it goes down that much for simplicity. I'm, going to position size this to. A maximum, loss, which. Would be $900. On, this. Practice account, we. Have a net liquidating, value of. Three. Hundred and fifty. Eight thousand, so. Let's say I do a half a percent, that, would be, about. Eighteen hundred so let's do two contracts. We'll, do two contracts, we'll do to. Let. That chain link so we know that we're. Selling. As well as buying the same amount and, they. Will hit a confirm. And send. Double. Check basically. We have if the stock goes at or below that. Particular price. Now. The next step once. We place the trade would be managing. The. Trade. There's. Different forms of trade management, there let's, talk a little bit about utilizing. That ATR. What. One can do is adjust. To. Stop. All. Right maybe that was one of the issues we had there we got rid of that is. Looking. At the ATR and. Adjusting. Your. Stop based off the ATR value, each and every, day so if, the price goes higher let's. Say it goes to one. Thirty, three. Then. One can go ahead and take that ATR. -. That. Amount. And. Then. Essentially. Raise. The stop, on. This one let's say it's 131. You. Know 36. And. Then what you can do is go to the trade tab. Or. I should say on the monitor tab. Here's. Your working orders right here and. In. The case of. That. Position you can right click. Cancel. And replace order and. Modify. The. Stop. By. Changing, it here. Now. There's another way that we can actually apply and visualize this. Another. Indicator, that is in the platform, now, it may calculate a. Little, bit differently but it, may be a little simpler, for, some, traders to use, there. Actually is a ATR. Trailing. Indicator, that. One can apply to, the platform, so let me go ahead and show you how to do that. I'm. Gonna go to charts here. And. I'm gonna go ahead and we'll click on the beaker, and. Then. Go over, to. The studies here and you. Can see it's right from the top of the list ATR. Trailing. Stop. You. Can click on the little question. Mark to learn a little more about that. There. Are some calculations as, far as a modified. Versus. An unmodified. Indicator. Modify. It attempts to smooth, it out. And. If, I go ahead and add, this indicator. We'll. Go ahead and. Tweak. It a little bit now currently it's showing a, modified. Five period, three. And a half that's three, and a half times the ATR. Now. We were using an application of 180 R, so. Let's, say I go ahead and change the period. I'll. Make it unmodified, let's see what it looks like will. Change the ATR, to 14. And. The. ATR, factor, to, 1, now you know utilizing, a TRS is not exclusive, to swing trading a lot of trend traders, may. Apply, this. Method, as well however. They may use more of a multiple, of that, ATR, like, one and a half to three three. And a half times. Trying. To be patient, as. We know prices don't go straight up they may pull back swing. Traders are trying to get out, relatively. Quickly after. A move and so. Therefore maybe, utilize, in a smaller value, so. We got fourteen one there we'll go ahead and click OK, and, apply. So. As i zoom in, on this. Now. Notice in this example. The. Tick, for. The HR is a little bit lower than the one that we manually calculated. Now. It's probably because price may have backed off a little bit from. When we had. First went. Ahead and, put. In that. Trade. Now. Notice what happens if prices go in higher then. We can go ahead and raise that stop let, me go back in the case of Texas.

Instruments Let's look at a previous, swing. So, here's a previous, swing here where price trades. Above. It. Would typically go to the big screen on this one but, these. Indicators, are a little bit smaller there so I want you to have the benefit of being able to see it on the screen. So. There would be potentially. That initial, stop as price. Goes higher, the. Stop is, rise. And, with it. Now. Stops, are always adjusted, up not down and also keep in mind that just because we put in a stop there's no guarantee, that it will fill at a. Specific price we. Already know that we, had put in a market, order it's going to fill at the next available price. And. Then. Notice as we're looking at this that you know price has not gone. Below, any, of. These, previous. Levels. Came. Pretty close on this day right here. And. It. Would be on this, day that. That, stop potentially. Would have been triggered and that's probably coincide, in with a a candle. Reversal. So. This is one method that one, can apply. As. We. Go out for. A swing, trade. Where. I, one. Can just go ahead focus, on the entry and then, utilize, the stop as an exit as price goes higher and higher and higher it. Would adjust, itself. That. Way if. Versus. Having a predetermined. Target if the, swing keeps moving up then, the stop is there to basically capture it as it comes back now. Some traders may still want, to utilize a, 1, cancels, other where. They can still have a price target where they wish to sell at but, then go ahead and raise the stop, as well, to, basically. Reduce risk, or, possibly. Lock in some of the gains if the price does not hit, that target so, let's show you if we can have some time we'll do that one as well. Let's. See what else we got going on let's, get your questions there oh. No. Thanks to Han no. Worries Coco, says John I'm new to this class can you explain a bit about the 513. Column, what, is the. Five, less, than the thirteen so. These indicators, are, basically. Showing moving, averages, you can see the moving averages that are currently on my chart I have a red four a five period, blue. Is a thirteen, and green, as a fifty-five, you know some traders, may use moving, averages to. Identify. Trends, and kind. Of confirm, some, of that weather. Upward, or downward momentum. We. Utilize, it have in this class to look. For stocks that, may, generally, be trending, that's one of the reasons why we looked at Texas Instruments, it, was showing up more, in the green, I'm, gonna have to click and highlight another one. Where. The five is greater than the 13 it's green because they're both above, the. 55, period, moving average or. Above. Its intermediate, average. If. You go ahead and take a look at the. Archive. In the webcast you can look for my name and. Dated. It would, be August 27th. I did. A session that. Was called, trend. And bounce, scripts, I actually, covered from a good friend Ken, Rose who teaches a class on that that. Is actually later on this afternoon, scripting. Studies on thinkorswim which, is going to be at 5:30, p.m. Eastern Time, and if. You go to the webcast and look at the archive it's. About a just. Shy of about a 30-minute session, you, can go ahead and get. Take a deeper, dive on it, that. Doesn't, give me as much time to, permit today. By. Clicking on the archive. Instructor. John. McNichol and, if. You go ahead and look down the, list. There it should be dated, August, 27th. There. We go script studies on trend trend, and bounce scripts so, the, first script is an example for trends, and breakouts. And the second script is looking, for the coals price closing or trading, above the, high the low day, including. Including. Her. Ami's or inside, days. Also. What I have a tendency of doing, once, you add that. If you right-click, on, any, of the column headers and. Select. Edit formula, I usually. Provide a background. On what each of. Those. Scripts. Represent. Alright. So if we found that helpful. For. Instance one example looks. Like a GoPro, maybe breaking, out a, crossover, let's take a look at that one. Looks. Like rallying, up relatively. Cheaper stock although. Some traders may go ahead and look for a flag trade look for a bit of a pullback, it's. Triggering, today because both, the 5 into 13 have crossed above the, 55, kind of more of a reversal. Pattern a little. More of the insight. Or not inside, but an inverse head and shoulders and a. Lot of times a moving average crossovers.

May, Precede. The. Formation, as well as the potential breakout of those, patterns. So. Kind of a good tool to try and, work. With and you know you don't have to be hamstrung, by those. Particular periods you. Can go ahead and look at that recording, and you, can learn on how you can change those values yourself, and make. It useful. For you and Ken Drozd uhz a great job with this class each. And every week. All. Right so we've got one example here let's see if we can do a couple. Others here. Utilize. In that ATR. You. Know looking at. Netflix. Netflix. Is. Potentially. Showing a bear flag although. We have an earnings, event that. Is coming up. Now. Some traders may be looking for prices, to trade down below, the. Low of a, high day so. This would be a setup. But. Nothing trigger in at the, moment. Let's. Look at Nvidia. Here's. Nvidia a few of technology, stocks you know have been you know attempt, in to bounce. After. Kind of sliding down over the last few weeks there's, no guarantee, that this. Bounce, or, swing would, translate into. Taking. Out those previous, highs although. Some traders may look to target that. We're. Gonna see if price is actually breaking, out not only off the trend. But. Trying to trade above that resistance, looks like it did and kind of fallen back which kind of points towards some, of the pros and cons on you, know entries, you, know entering, into a trade earlier, into the day you, know the condition, such. As a breakout, or price trading, higher you. Know may fade, and the, reason what got you in the trade in the morning may not apply in the afternoon, some. Traders may wait. Till the latter part of the afternoon and, seeing. If the. Price is actually in fact going. Above that level. Now. The, con it on that is. Well. If the price opens, and goes strongly, higher throughout the day one, may be missing, out on that, momentum, so. There's gonna be pros and cons with that think. About what you're. Comfortable with and more importantly practice, with. This is what basically helps. You build up your confidence on. What type of techniques may, work for you. Alright. So what else we got here. I. Got. Yum Yum's another one in and these are just different you, know potentially, different, setups. You. Know since prices have been generally more sliding back you, know we may see more, potential. Breakouts, than. Kind. Of the classical. Bounce and. We're. Having a triangle, that's forming, at its. Channel and support this. Is something that can break either way you. Know bear players may look for a break below support. Bullish. Traders may be looking for a reversal, and a, break above. Now. Prices are trading below the low of a, high day if. Someone was inclined to be more bearish it is below the 55. They, may speculate, that price may, anticipate. That, it may break lower. In. Fact let's go ahead and we'll just do this as an example that way we at least have an example of a a put. I'm. Going to go ahead and we'll take a look at the trade, tab. Well. Look at yum. Well. Look at the put side this time and. We'll. Go a little, bit into money now, there, is a larger. Spread here some traders may. Stay away. From. Liquidity, if. The. Difference, between the bid and the ask is alone the large side, here. We got a spread of about 50, cents that. Exceeds, about 10 percent, of the ass price that some traders may use, as a filter, so, then we'll go ahead and just move, on from that one. Let's. See a couple other ones. Let's. Get Facebook and we'll look at eBay. All. Right Facebook kind, of forming a little bit of a little. More of a bearish, flag. We. Have an inside, day now it hasn't traded, below, the inside day. Not. As of yet. Let's. Look at eBay. All, right if we can get that up. EBay. Going into earnings is setting up as, a. Potential. Bear Flag here. Notice. A bit of a shooting, star formation, now this is early on in the day now, for illustrative, purposes I'm, going to do this anticipating. That this. May be a bounce, and. Anticipating. Does not necessarily, deliver. But. We're gonna utilize the, ATR in this case so. Looking at eBay let's see if the spreads, look. A bit better and they. Do will, go close to the 70 Delta here. The 41 strike to 73, to, 77. I'm. Going to right click and we're gonna do a a. Buy. Custom, we'll do a no Co bracket. Actually. We don't have to do a no Co bracket, in this case since we're gonna do it tied to the stock or a conditional. Order. We're. Gonna right click and. We're, gonna do a. Buy. Custom. Width. Stop. We're. Gonna change, that, market, order expand. This out. Or. The stop market, to a regular market. GTC. And. Then. We're gonna go ahead and, plot. Two. Potential exits. One. Could be the actual swing, for, the target and we'll, use the ATR, for, a stop. And. That. Do not work let's try that again so. Just measure in from a high, down to a low.

I'm. Gonna duplicate, this. And. We're, gonna go ahead from. That. Lower high. In. This. Case would be target, in around. Looks. Like just about thirty seven. So. Not a huge move there but certainly illustrates the point, and. As. Far as utilizing the ATR. The. ATR point is actually plotted, now notice, in this case it's, actually plotted, inside, the range of the day some, traders may look to basically put that initial plot above. At least, the high and if, we're looking at the current. HR. Of about 80 cents. We, can use that initial stop, of being, basically. Thirty, nine. Eighty. One or thirty nine eighty two. So. Let's go ahead and do that. So. I'm going to go ahead and click on our order here. If. It allows me to. And. We're gonna click on the gear and we'll put in two conditions. One. With a desired outcome. So. Ebay, mark. Now. Less than or equal to that's going to be the target. Prices. Remember, this is an example of a bearish trade I'm. Gonna go ahead and plug in. Thirty. Seven and. Then. On the. Opposite. Order we'll, say if it goes greater than or equal to that's, our potential, exit based off the stop. Will. Do. Which. Currently should, be. 3980. See. If that sticks. There. We go and we'll, click Save now if, I go ahead and actually hit. Confirm and send we should be able to see those conditions. If. The stock goes at or below 37. It'll. Close. Out the option or if it goes at, or above 39. 80 it'll. Go ahead and close out the option now remember there are transaction. Fees and. Since. This is a market order we don't have control over the price it will fill at the next available price. We'll. Go in and we'll click send on that. Alright, so we went and we got that filled we'll see how that plays out. So. Hopefully you learn something new today folks. And. As we go and bring up our slide here. So. Again what we did was we went ahead and discussed. On what ATR, is Average, True Range, where. We can identify what. The average price. Activity is for a stock on any given period we, use an example of a daily chart, with. That we can see that, as a stock. May become more or less volatile. The. Stop can be more dynamic on, widow, will do is it'll enable, us to possibly, set stops that are relevant, for, the trade activity, of that stock. Also. Showed you on how you can add that, ATR. Trailing. Whereas. After, that initial stop as the, prices going higher you, have a visible, marker, that, one can identify, where. A potential, stop can be raised to now, this is just one technique of many that, one can apply to. Kind of more systematically. Set. Stops, and kind. Of hopefully, remove, or mitigate. Some, of the emotions, that we have and maybe save some time for some of those calculations. There you're having a physical rip of. Visible. Representation. On the chart says, prices going higher we. Can a, just those stops in the context, of a swing trade, let's. Say if you have any additional questions here, I don't see anything coming across but. Remember, folks in order, to demonstrate the functionality of the platform, we, had to use actual symbols, keeping in mind TD Ameritrade does not make recommendations. Or, determine, suitability of any security or strategy, through, the use of our tools any investment, decision you. Make in your self-directed account, is solely. Your, responsibility and. As. Mentioned. Take. What you learned today and apply, it go. Ahead and maybe do a few practice, trades utilizing. The ATR, weather. As a stop. A. Trailing. Stop and some, traders may even use it as a target, maybe target one ATR, or a multiple. Of that and see. If what your results are so. We didn't join us next week folks looking forward to spend some time with you again John McNichol sign it off and coming up at the top of the hour it's, going to be Barbara Armstrong. With, getting started with futures so, stick around thanks, everybody.

2019-10-04 13:40

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