Trading a Smaller Account | Barbara Armstrong | 4-16-21 | Learning from Trades Gone Wrong!

Trading a Smaller Account | Barbara Armstrong | 4-16-21 | Learning from Trades Gone Wrong!

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all right hello everyone welcome to trading a smaller account it is friday afternoon welcome to the weekend i applaud all of you for being here who are here to catch this live and the hundreds more that catch this in the archives if you're wondering why i'm dressed for winter well we've had two feet of snow hit the mountains i mean not that much in the valley but um wow i thought my ski season was over so in any event lots of exciting stuff to cover today we're going to look at trade's gone wrong uh we're going to look at trades that have worked out beautifully and we're going to place some new trades so we have a jam pack 45 minutes ahead stick around [Music] all right well if you are new to this class i would love it if you would type a greeting into the chat you can see that there are lots of people who have already said hello what you may not realize if you are brand new is that you aren't just tapping into a webcast but you're tapping into a community of like-minded people who are figuring this stuff out together we get together we place trades we actively manage the trades we place we look at the good the bad and the ugly and we move forward and as such we become stronger traders so hello to arturo and chesapeake bay and rosa and rico and alex and alfred and charles and vijay and bethany and uh make money gotta like that that handle and um amy and sherry and and the many others of you who are here and if you are new we will be discussing um we will be discussing some trades that we have priced placed previously but please do not check out because it is such a critical part of successful trading knowing when to get in when to get out and if you have a trade that has gone wrong it provides an opportunity for us to learn and one of my favorite books on the psychology of trading is called reminiscences of a stock operator and he said you can either choose to learn from your mistakes or you can pretend that they didn't happen and i'm paraphrasing but if you choose not to learn from them chances are you will have the opportunity the market will present you with additional opportunities to learn that lesson and they'll do the market may do that for you again and again and again until you finally get it and so we're going to go with the take of if we have mismanaged something or not managed something ideally how can we learn from that so that's going to be part of our agenda today you can see above my head that we are on twitter both mike fairborne and i and you know what kind of things can you expect from us if you go out to the twitterverse um you know at b armstrong underscore tda and mike fairborne mike really focuses on fundamentals and he is fantastic at that and mike fairborne is joining us in the chat today brings a wealth of experience with him this is my twitter handle and i tend to post a lot of technical things so i posted a chart on mosaic we were pointing out pennant patterns and diagonal resistance breakouts and you know i just provided a little bit of information on this you know company that you know they now uh one of the analysts recently upgraded this stock to a buy you know a buy with a target of 40. you know it was trading at 32 12 at that time um i post a lot of tips on think or swim that kind of thing you know we're now hitting edu um earnings season and you know some people might not be aware that there's this little market maker move that appears on the trade tab prior to expiration so those are the kinds of things you can see and i also do kind of an overview of the entire market at the end of the day um i also think it's so important to laugh especially during the year last 12 months we've been through so often on the weekends i post things that have made me laugh and i share them with you mike posts a fantastic amount of of information some of it's technically oriented but a lot of it you know here and i found this kind of fascinating here is the historical you know p e ratio over decades and this is only the third time in history that the pe of the s p 500 price earnings ratio has been above 30. and you know that the last two times we saw a pretty significant correction the market maker move and and i did explain that um in that tweet the market maker move is how much the uh market makers anticipate that this stock might move due to an upcoming event and right now we're heading into earnings season so a lot of that is earnings related a lot of the trades we place in this class we're trying to do higher probability lower risk trades so we sometimes will trade over earnings but if it's a short-term trade often we're looking for something where earnings has already happened or if it's a short put vertical we may be looking to avoid earnings altogether but if you like to trade over earnings this is important information or if you have a stock that has had a big run to the upside and then you see this market maker move you don't want to have your stop in place and then get nicked out on a wick and then end up with the stock you know back up by the end of the day so useful information news we can use okay so let's get um back to our powerpoint so we can get through our important information and get right down to business okay so options and we trade a lot of options in this class it is not suitable for all investors as there are special risks inherent to options trading that can expose investors to potentially rapid and substantial losses so you don't need a script so there's a comment in the chat saying you know i'd like to get that script it's not a script it's just part of thinkorswim you don't have to do a darn thing except go to the trade tab and when we get over to think or swim you know i'll show you i'll show that to you but it's just part of thinkorswim no script required which is kind of cool okay and also in order to demonstrate the functionality of the platform we need to use actual symbols we look at tons of symbols in this class we place tons of traits however it's you know to demonstrate concepts to show us how we can use the platform it's not to be construed as a recommendation on the part of td ameritrade or myself now why not well how can i know what's appropriate for you and your account i don't know what your trading style is i don't know what your risk tolerance is i don't know what's already going on in your account so any decision you make in your live account that my friends is on you and then know that all investing involves risk including the risk of loss and this is considered to be an intermediate level uh webcast so i do not spend a lot of time going through the details of you know here's a short put vertical here's what it means i'm assuming that you know what it is now if you don't know what a short put vertical is please type something into the chat and i'll take 20 seconds and give you like a super high level conceptual overview but then you know that i teach a getting started with options class and pretty much every trading strategy that we talk about in that class um there is a a webcast just on the basics on that concept so you can always go back okay what are we doing well i've already kind of spilled the beans i'm going to spend like close to zero time on the market forecast because you know the markets it's almost getting boring right like a new all-time high a new all-time high a new all-time high um on both the nasdaq and um you know the s p 500 and we're seeing volatility lower than it's been in you know a coons age whatever what's a coon's age anyway i'm not sure but you know in the last year we're seeing new lows on on the vix we're going to add some positions to our example portfolio now i don't normally do it that way i prefer to look at what's in our portfolio let's take care of what we already have and then we'll move into the new but i know that when i was a client because i started with td ameritrade as a client attending webcasts like this so if i can figure this out guys i know that all of you can um but it kind of drove me bananas it's like oh are you gonna talk about trades you've already placed but i haven't been to this class in three months well that was on me right you know but so we'll look at a couple of new positions and then i think it's critical that we look at managing the positions that we already have in there and last week we did you know a couple of trades on apple we were going to do three we ended up putting two in and we just wanted to you know follow up on how those are doing and then i want to look at one of our trades gone wrong well so far it's gone wrong um but i think that you know we mismanaged that and how can we look at that going going forward okay so that's the agenda for today so market forecast and i'm not even going to bring up that special script today um you know we're hitting a new high today on the market and we hit a new high yesterday and the day before we had a new intraday high and it's new high new high new high new high you know so the market is it bullish yeah yep how about the nasdaq uh yep new high today you know and we did see a pullback into actually correction territory when it hit down here you know but we saw a diagonal breakout back here on the 31st of march and it has just been like off to the races since and you know as you guys know nasdaq tech heavy index 50 is intact no financials in the nasdaq 100 okay and then let's look at our vix our volatility or our fear index i mean 15 this is a six month chart let's go back for two years i mean yes two years ago it was at 11 but you know since uh february of last year we haven't been anywhere in the neighborhood of 15 hitting 20 was a low and so this tells us that there is a lot of confidence in the market okay okay so first item check so some new trades so let's come over to mosaic that was one of the ones that i had pointed out and if you were in um advanced charting mike fairborne covered that class and he talked about money flow and you know i was actually don't tell anyone i was a little late showing up to the chat because i just got so caught up in what i was doing to prepare for this class i forgot about the time which i never do um so don't tell anyone um yeah no i'm kidding but he used the money flow indicator and i thought it was really interesting so i just threw it on the chart it's not a special script it's just um you know it's it's one of the standard indicators and the idea with the money flow indicator is if it's above the zero line then there's more money kind of flowing in than out and it can be seen as a leading indicator and when we saw this really starting to take off right around here it was after this thing had been pretty beaten up and then started moving to the upside and so we can see that you know this is continuing to be pretty strong right so um you know money flow is not an indicator that i typically have on the chart i just threw it on there today as kind of a a companion to what um mike had been talking about in the advanced charting class that he was filling in for pat milalion and then if we come in and we look more up close and personal at this you know and you know we can see that it came down and kind of was like hanging out around the this 30-day moving average which has it has really been using as support and then it has crossed and is kind of off to the races again um one of the things that you know if you come and we look at the fundamentals because if we were looking at just taking a long position on this we have earnings coming up at the beginning of may but if we came out to the td ameritrade tab and we looked at mosaic you know we can see that this thing it's in the material sector which has been one of the stronger sectors over the last since november so the last four or five months been totally outperforming for the last six months the s p 500 and the nasdaq we can see it trades over 2 million shares a day you know on average it trades about 5 million shares a day so today was a pretty light um trading day price earnings ratio around 20. so for those who are interested in a stock you know that's in kind of that value category this would be on the cusp of that and certainly a more attractive p e than the average stock on the s p 500 right now right we can see short interest negligible oh if i come back here and you know 75 of these stocks are held by institution 75 so we've got some big players that are interested in this and then if we come and i'm not going to go through this because we have a lot we want to cover today um but you know i encourage you to come and and not do this just for this stock but if you haven't spent much time on this pla page you'll want to check it out and then here you know when i i pointed this out already where do you think i got my info you know um berenberg upgraded the stock from a whole to a buy with a price target of 40. now often what i find interesting is when these analysts raise the price target it's already there it's like hey that the horse is already out of the barn guys like but um it shows a certain level of confidence and and often the market does respond positively when we see these types of upgrades and you know what we saw on the charts was something that what do you guys see you know i often say you know technical analysis can be like a bit of a rorschach test so we saw you know some consolidation well you already know what i saw because i showed you you know a bit of a pennant pattern happening here and it's broken out and so if we said you know what this is in our snack bracket it's 33.60 a share we have a 20 000 account we don't want to risk more than 400 on any one trade um but if we looked at this and said hey um you know what i wouldn't mind owning a position on mosaic where might we put our stop well we might say hey here's our 30-day moving average around this 31 level or if you wanted to use this diagonal resistance line you know where are we there around 31 let's call it 31.50

and so if we came over here and said 31.50 times 0.97 we'd put our stop at 30 dollars and 55 cents now could we just do a buy on hold on this absolutely what is the other thing we could do well we could do a swing trade on this and and where would our target be well if we looked at this and said hey from the high to the low was how much about five dollars so if we said okay well if it broke out here and we went up about five dollars where would that put us around 37 so we could put in a target you know this is at 36.96 37 you know so we could put in a target of 37. you might say well you know we're at 33.56 that's only 350

up well that's 350 dollars you know so and and sometimes we don't you know you it's great to get a huge win but if you can get base hit after base hit after base hit that can be kind of a cool thing too you know like if you can get on base playing baseball four out of 10 times and that's not like a bases loaded home run that's like getting on base and think about the numbers that means six times you strike out they'll pay you millions of dollars you know when it comes to baseball um so you know if we look at this we could put in a target at 37 and say hey if it hits 37 we'd be happy with you know that's over a ten percent gain okay now and others might just want to do this as a trend trade and so you can do it either way so we're going to come to our trade tab uh you can see i've been looking at some other setups here okay um and we're on mosaic and so this is going to be a stock so we are going to buy custom with an oco bracket and we'll get in at the current price when it hits notice the positive affirmation there when it hits 37 is there any guarantee it's going to hit 37 absolutely not could we end up stopped out sure we could how much are we risking now our our thing in this class is we don't want to risk more than four um four hundred dollars on any one trade so are we risking more than four hundred dollars if our stop is at 30 55 now does that mean that we're guaranteed to get out at 30 55 no if it gaps down we could end up out if it um you know we could end up with some you know out at a lower price there could be some slippage on this um but we're hoping to get out in that neighborhood so we'd be risking about 300 and would that be within our parameters yes it would okay so we're going to put that in our swing trade which means all that's telling us is we have a target okay so that's mosaic next one is fcx and we've traded this one before and in fact i think we had a position and we were up like enormously in this um i think this is one of the ones where you know we had like about a hundred percent return in this last year so we can see that as it consolidated we saw the money flow coming out and now we're back on the rise again when we look at copper futures so this is what kind of company oops i did a think back so let's come over to fundamentals this is in the materials it's a mining company and one of their areas of strength is copper and so we saw that copper if we go to copper futures what's the ticker symbol for copper again h is it hg there we go so we saw as copper consolidated so did freeport mcmorren um but it's on the rise again and and so is the stock now it it's fcx isn't just copper but if we looked at this and said well this has you know been consolidating and is you know this is another diagonal resistance breakout or we could look at this and again you know with the theme of the rorschach test some might look at this as a double bottom some might say you see a double bottom um excuse me i see a cup and handle you know here's the cup and here's the handle either one of these are bullish and some might say okay you see that i see an inverted head and shoulders you know so there's the head here are the shoulders all of these are bullish and all of these would say that there'd be an expectation if we go from the bottom around this 32 mark to the top which is around 38 maybe expecting around a six dollar move so could we come in here and you know our recent high was at 39 maybe do a buy right where we're selling a call around 40. and so you know when we use that buy right strategy in this class our thought is that we you know we're willing to own the stock we like the fundamentals and um but we're totally cool with selling a call in the middle of the road and and having the stock run over that price and getting called out you know when i first heard this strategy i thought it was the dumbest thing i'd ever heard like why would you want to buy the stock and sell a call buying the stock is bullish selling a call is kind of putting a cap on your gains or seems neutral to bearish and then someone said well you could use it as a short term trading strategy if you're concerned that the market may be overheating and there may be a pullback you want to do a short-term bullish trade because the market is still bullish but you're happy to come in earn some money earn a nice return in a short time and get out so that's this earn some money in a short time frame and get out okay so we're going to come to our trade tab and say okay if we came down and we looked at may and we said okay um if we looked at the 40 and it's now trading at 38 how much would we make well we'd be paid a dollar you know 63. actually you're paid the the mark do we have a lot of contracts on this well 27 000 yeah that's like a few um we're on the books over 4 000 traded today so we're certainly not the first people to come up with this brilliant idea right um so if we looked at that and we said okay we want to and this is buying a covered stock so 36.59 what's the most we could make is the difference between this with the price we would be called out at because we are putting a lid on our potential gains and we've seen this happen kind of painfully i think it was with apps last year um there's a question in the chat about levels of trading approvals and i do not know the answer to that i don't know if mike can help you with that but it going back to this so the difference between the strike the strike we would be called out at which is 40 and this 36.59 so i was going to say let's call it 36.60 so you know 40 minus 36.60 the most we

could make on this is three dollars and 40 cents a share but how much are we investing 36 so you know my spidey sense tells me that that's probably an eight to a nine percent return if we were making 360 it would be a 10 return how long would we be in this trade 35 days so if anyone is interested in that potential return in 35 days say i i um and you know could we get run over could it go to 45 it could would we then you know have wished we didn't sell it yes but if we said you know what a nine percent return in 35 days no one's going to come to my pity party if i decide to throw one it's a you know it's a decent return now could the trade go against us yes it could so where might we choose to put a stop so if we look at this and we say okay i think this diagonal resistance line should hold and if it doesn't i don't want to stay in the trade so if we look at this and say okay this is around that 36 21 mark so i'm going to take 36 21 and say if it goes three percent below that i want out 36 21 times a 0.97 okay 35 12. so that's my stop every that makes sense yeah yeah so you know what if earnings is next week are we cool with owning this stock regardless now the expectation on fcx because i did some reading on this ahead of time and i'll show you where i got this then this is why we're going to go ahead with this trade um [Music] i think it was this article here top ratings upgrades and downgrades so it talked about you know what they're expecting um nope this wasn't it sorry there there was one that is saying like they're expecting um uh the analysts are expecting earnings to come in like hundreds of percent over what it was last year um and the same thing uh maybe this is it here so if you go and click on some of these articles it's just interesting and sometimes you know there's no article at all all you get is you know this notification um let's come back but like they're expecting it to be hundreds of percent higher than what it was last year they're not expecting it to maybe beat on earnings but you know when we look at this um [Music] it's saying implied upside is 29 um our 21 eps estimate to 246 from a dollar 96 and the 22 earnings per share to 270 from 220. you know those are pretty substantial beats and there were others that were expecting it to be even more and so some people might just say you know as a oh am i looking at the wrong one uh oh yes it was fcx okay earth to barb fcx this is what happens when you try and go too quickly because i thought these numbers were much higher uh [Music] oh yeah what to know ahead of next week's release and so and again this is just information this information is just you know one analyst perspective right so this mining company is expected to post quarterly earnings at 51 cents a share which represents a year-over-year change of 418 percent and revenues are expected to be up 73 and so even you know if it doesn't beat on earnings now you know who knows the market can be a fickle lover i've seen apple totally crush earnings and the stock go down so that you know there are no guarantees but if we get a nice bump let's say it goes up to 43 or 44. this year and we get called out earlier well then we've reached our max gain faster and we have that money ready to redeploy you know even quicker and that would be a cool thing yeah so thank you guys you are so on top of it so to una and emme and dar thanks for you know correcting me on that so so you know it's they're optimistic coming in but then kind of one of those things is okay they still totally crushed it but they didn't like beat expectations handily they just met the expectation that their numbers were going to be up you know over 400 year-over-year you know like so interesting stuff anyways let's go out and and put this in so we're going to come to the trade tab we are so we have this up and then if we want to put in an exit so that we're defining our risk where do we want to get out 35 12 so first trigger sequence right click create an opposite order do we put 35 12 in here no we do not because that would be the combined value of the um of the call and the stock we only want to exit if it goes below 35 12. and then some might say you know what i don't like to have a stop loss in place over earnings and so some people come in the day before earnings and they'll remove a stop just because they don't want to get nicked out on a wick because sometimes a stock will come down and go back up again you know lickety-split and then you're out and the stock ended up up on the day you know so confirm and send so we want to buy one covered at the current price we want to get out if the value of fcx goes below 35.21

how much can we make 339 on an investment of so this is what we could lose is if it went to zero in the next 35 days so if we look at our 339 oh i have to put this in before i can go back and use that we're gonna put that in our buy right covered call bucket okay so there we go fire in the hall okay so we only have 15 minutes left i wanted to do one other so we're going to do this super quick not a lot of chit chat um says she who is doing all the cheating in the chatting um but this is gm and so we can see that gm has you know we've got a double bottom i was calling it by another name think queen song but apparently there are some people who are not queen fans so they didn't know that i was referring to a song about girls um yeah so and when we see this breakout what what might we anticipate it to go from that 49.50 up to about the what 56 ish 57 level and you know it came back this support level didn't hold resistance new support didn't quite hold but it looks like it's on its way so could we sell a put now the put might have us a little bit just a little bit over our max position size which is 5 000 however if we put in an exit and say you know what if this goes below this line here by a certain percentage we're going to call that a support level we would get out and so we're saying hey if this hits 55 29 we would exit which is somewhere in this kind of neighborhood okay so we're going to go in and sell a put on gm trade um and we're going to come out to may and we're going to sell the 57.50 now it's trading at about 58.69 so some people might say that's just a dollar above where it's currently trading you know this could move five dollars you know is anticipated the one standard deviation move if you're not sure what this means what this means is that over the next 35 days the one standard deviation move is plus or minus 550. you know so if it goes down you know more than 250 if it goes down below 55 29 we want out we're expecting it to be more likely to move to the upside right whoops then to the downside otherwise we wouldn't be selling the put so there we go you know this is a consumer discretionary stock um you know it it has investments in china and investments in electric vehicles as well as you know the current technology for vehicles so we said okay well how much could we make on this do we have volume yes we do three cents spread good to go so we just want to actually we want to sell with a stop yeah yep okay so and where would we want to exit well we would want to accept if the stop we're just going to put in a market order actually good till cancelled and we're going to say hey if gm does what we are not expecting it to do we're expecting it to go up but if it goes down and it hits 55 29 we want out okay confirm and send so we want to sell this put for a whopping two dollars two hundred dollars that's one percent of the account value we started out at so if you could make like juice four of these a month you'd be up four percent a month if they all panned out and four percent a month you do the math over a course of a year that's nothing to sneeze at but there is a downside right and it's not taking our stop into account but it's saying hey you know we want to buy this put back if gm goes below 55.29 and it's currently trading at 58.68

and you could go in and and you know use your theo price calculator and get a sense of what that might be okay so that's our cash secured put okay so we're gonna wait for that to percolate i did go in and talk to um okay this is stuff that we have done before okay so yeah we want to sell it for two you know it if we don't get this paying doll i'll go in and you know make sure that it it goes through okay so now let's take a look at what we have in the account and the biggest one i want to look at the one where we are down the most fourteen hundred dollars on neo well how on earth did that happen i thought our rule was that we weren't going to risk more than 400 yes that was our rule so typically when something like this happens someone got smoke in the hopium the trade started to go against us and someone started to hope that it was going to go back up and i call that smoking the hopium so what we can do what i did with this was a couple of things i you know part of it was that we only meet once a week but that's no excuse because you know we had easter and we missed a week but if i bring up our friend neal which has been very good to us over the last year we've traded this one quite a bit now we can see is money flowing in currently it is not now might that turn up it may well turn up and we've got earnings next week but we sold this put at fifty dollars back on january 22nd now what if we had treated that the same way we might have treated a stock purchase and said you know what we sold the 50 call but what if we said hey we're expecting this to continue to uptrend and if it closes below the 30-day moving average we're going to put an exit on this the same way we might put an exit on a stock and if that had been the case we would have been out on it out of it on this particular day now what price would we have had to pay it back now the way i i determined that was i came to the analyze tab and i think this is a such a cool feature think back and i typed in neo and i said okay if we go back in time to let me i have notes on this if we go back on time to that day february 18th so we're going to go back to february 18th and if our stop had been triggered we had the march expiration what would it have cost us to buy that back so let's say it would have cost us four dollars and fifteen cents to buy it back we were paid 380 when we got sorry 330. my handwriting is terrible um you know and how can we see what we paid for it when we got back so we would have been out at sorry let me come back to my think back again the 50 strike we would have been out at 4 let's call it 4 15 or 420 and if i come back and i look at our monitor tab and we come to the account statement and we type in neo we can see okay we paid we were paid 380. so if we had gotten out on that day we would have been down 40 dollars 40 dollars so what we are out is thirteen hundred dollars because we started trading on hope and of course yeah you know there's a comment in the chat saying is there a risk of delisting and i don't think any of that is ha helped i think that there's a an issue with um part shortages like there are companies that have had in the auto industry that have had to stop production because they can't get parts there's a chip shortage so but we look at this we are where we are now so now what are we going to do one going forward how can we prevent this from happening again well one we can put an exit in when we sell a put like we just did on gm and said hey i'm kind of treating this like a stock purchase if this goes this low i don't think i'd i'd choose to buy the stock so if i'm not choosing to buy the stock at that price why would i keep it the other thing is we did get paid 380 for this if we had looked at this and when it came up you know to this 46 dollar mark we could have exited and been out like a thimbleful because you know our high on this particular day was 4616 and you know our break even is 46 20. so we might say hey if this goes or when this goes back up here you know we would like to um exit the trade or we're going to put in some type of trailing stop but if we look at this it's come down to what price 34.90 34 34. so this 34 ish tends to be a support level and again you don't want to risk being nicked out on a wick and if you're watching your account you might say i'm going to put this stop in place and while i might take my stop off just over earnings to avoid that you know potentially getting nicked out on a wick thing um if it goes more than three percent below this 34 level we might need to call it a day so if i took that 34 times .97 we would be out at 32.98

so we now own 100 shares of neo and we would come here and say we're going to put a stop in i also we had an alert at 36 and you know what it didn't quite you know maybe i just didn't pay attention to it um but you might want to put an alert in also and right now it's trading at 36. so you know we're going to put a stop in to create a closing order with a stop if it hits 3298 we're going to exit because we can't go back in time what we can do is make sure that we don't make the same mistake again right so we're going to make that good till cancelled and i'm going to leave this in our cash secured puts just to remind us that this is a stock that was put to us now often you know it's pretty easy to see if you bought something and you you know it's showing in your account at a totally round price fifty dollars chances are that that came to you because it was put to you okay so the other thing that i wanted to kind of look at was we did two long call verticals so we did uh or sorry we did a long call on apple and we're up a little bit pulling back today and then we did a long call vertical we also had tried to put in a short put vertical and then someone pointed out that earnings are just around the corner and so we tried to put something in that was just two weeks out and that would expire prior to um earnings um and that did not get filled so these are both directional trades and what we found in our account last year was that it we had some stocks where we purchased the stock and held it over time and that did very very well but the directional options trades one of the challenges is that it has to go up and it has to go up in the time frame you're expecting so ed simon just in the chat had a great comment it's like you wouldn't consider selling calls on neo and you know what that's a pretty good idea because you know we're just ahead of earnings so you could come to the trade tab and say hey if we said we wanted to get out at you know 46 um you know or we'd be happy to even get out at what was our number at 40 um you know we could sell a call because you know you've got you know when we look here you know we've got very high volatility and that might be a way of recouping you know so but at this point do you tend to sell a call when something's sitting at support typically not you wait until it hits a resistance level and then you sell your call yeah and there's another comment in the chat and for those of you who are watching this in the archives i know it can be sometimes a little frustrating because you guys can't see the chat but but someone in the chat is saying if i close one eye i kind of understand it and all i can say is keep coming back we run in this class so we are running you know we are running we're covering a lot of ground and we're covering a lot of ground quickly and so i really appreciate everyone you know hanging in there you know with this because i know that when i was on the other side of the camera and trying to figure this out the more examples i got the happier i was um because you know it really accelerated my learning so i'm really trying to do that for you so we have to wrap now but there was one other one that i wanted to talk about today and that was um nielsen so we just added fcx well we have nielsen which we had bought you know this was another buy right so we sold the call at 27 for 70 some cents let's see for 75 cents we bought it back for 10. how do i know that because i came here i typed in nlsn and oh this is the order history so let's just look at this so you know we bought the stock for 26.29 sold it for 70 sold the call for 75 bought it back for 10.

so it's still sitting in the account we're down a a little bit as far as from where the price was originally purchased so it's sitting at 25.67 so if we exited this position now we'd be you know up a few bucks even though it's showing a loss because we we netted um you know 65 so it would cover the transaction fees you know and it wouldn't even buy us you know uh a mcdonald's um take-out meal um but if so let's come and look at clean but when we see l what was it i can't talk and type and you know apparently my skill oh nlsn and and lsn okay so you know this has you know obviously had a tremendous trajectory to the upside it's pretty much doubled in value in the last six months and it's been kind of just coming along hugging this 30-day moving average so what if we just sold that 27 call again we were happy to sell it at 27 once before and if we sell it again you know we have earnings coming up at the end of the month but that might just mean we'd get a little juicier premium and so if we come to our monitor tab or sorry the first thing we have to do we have a stop on this where's our stop 24 12. does that still seem appropriate well if we look at our last low here and i hover over this and say okay that was at 25 17 25 17 times 0.97

so we're going to make our stop 24 41 and the first thing i'm going to do is come in here and i'm going to get rid of this one we're going to just cancel it because we're going to sell a call out in may we're going to sell the 27 so you know let's see if we can get 75 cents for it so we're going to sell one call see if we can get 75 and that's in our buy rights oh what do you know we got it so then we'll come back to our monitor tab and we are going to right click sorry that's a left click to bring that up highlight the position right click and create a closing order to shut down the whole thing and when would we want to shut down the whole thing if and only if the stock trades below how much 24.41 and you know some might look at that and go that is such chump change uh why would i want to do that but you know what seventy dollars here seventy dollars there you repeat that week after weeks you know this is a twenty thousand dollar account so it starts to look like smell like real money you know but if we don't manage our losses you know we were up over 15 in this account we're now up just over five and it's because you know we had one trade that wiped out like thirteen hundred dollars like that's about seven percent of our account value that's a hit that you know we really you know can't afford to take and we can't afford not to lose you know learn the lesson that it offers from it right okay so confirm and send gtc we want to buy the callback and sell the position if nielsen trades below 44.41 and so we've got that teed up so guys that's a wrap for today did we do what we said we were gonna do yep we covered the market forecast we added um i think three positions we did one on mosaic one on freeport mcmorren so mos fcx and a general motors and we did like a super fast i'm sorry it wasn't very detailed on apple a comparison of our two strategies we looked at one of our trades gone wrong the biggest trade gone wrong um that we've had in the last year and a half probably that we've been together i appreciate you all being here i don't recall seeing a survey if there was one if you do me a favor and fill it out would love that if you enjoyed this and found it helpful please smash that like button please subscribe to this channel if you haven't done so already um if you're watching this in the archives if you could put a comment in the chat if you have a question i'll get back to you uh promptly um if you loved it let people know hit the like button and it will help more people find it and if you have a trading partner who you wished was watching this with you today share it with them um you know i used to do that all the time in fact you know i when i used to be able to attend live events as a client you know we would meet weekly you know and and talk about our trades and our trading strategies and um you know they helped me kind of like broaden my horizon if you will so um i encourage you to do that so guys have an awesome weekend stay safe best of success with your investing and um i will look forward to seeing you in a webcast coming up soon huge thanks to mike fairborne for being so busy in the chat i bet he's got writer's crap by now um but we sure appreciate all he brings to the table thanks so much everyone bye for now oh you know what i didn't go through the disclosures my bad just keep in mind we looked at lots of stuff today for example purposes only know that you know none of the examples we looked at were to be construed as a recommendation um and that all investing involves risk as we have seen um demonstrated dramatically in this account so take care everyone bye for now

2021-04-24 07:28

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