Identifying Potential Entries & Exits | James Boyd | 3-20-20 Technically Speaking: Advanced Charting

Identifying Potential Entries & Exits | James Boyd | 3-20-20 Technically Speaking: Advanced Charting


hello and welcome to technically
speaking on advanced charting techniques my name is James Boyd today’s date March
20th hopefully wherever you are it’s nice warm weather hopefully and you’re
nice and safe great to be with you here today March 20th my name’s Chase boy
standing in the stead for Patrick Mullaly and so this class on advanced
charting techniques it’s gonna be I think a great session here as we talk
really about how to set up charts why do you use different indicators and also
really an emphasis today on exiting potential now just real quick as we’re
getting started here remember you can also follow me on Twitter or Patrick
Mullaly or any instructor on Twitter okay you can also subscribe to this
channel on YouTube trader talks or investor insights and that way when
we’re live you land you’re on your computer or on your phone you’ll
actually see that hey we’re broadcasting live so make sure you subscribe just
real quick as we’re getting started remember if we talk about options here
today options are not suitable for all investors special risk and heretic
trading options make sure that you have read and understand the risk and
characteristics of standards options remember in order to demonstrate the
function of the platform we will be using actual symbols
remember that TD Ameritrade though does not make any recommendations determine
suitability of any security or strategy that is up for you to decide really what
you want to invest in and also when we talk about options if we do if we have
questions on those remember that delta gamma vega theta know what that means
how it applies to the strategy now I also want to be mindful today as always
but maybe today even more so if you have questions as we go do not hesitate there
are no stupid questions okay just go ahead and ask what I ask of you is just
don’t ask them like at forty four minutes in and think I can cover three
questions right at the very end just go ahead and make sure you kind of put
those questions in and about every five minutes or so I’m going to kind of check
back in the chats and see if there’s any questions now one thing I also want to
kind of tell as we’re getting started here today
number one we’ll talk about market posture number two we’re gonna really be
talking about setting up the charts and why are we using certain indicators pros
and cons of each third we’re gonna really be talking about potential stops
how could you visually see where those stops could be on the chart in context
of what we’ve already talked about as of lately but I want you to see it and also
fourth I really want to kind of talk about some divergences from a MACD
perspective or in our side perspective all right no further ado let’s go ahead
and hop right in let’s take a look at the index here now first thing what I
want to kind of explain to you I know again I normally don’t teach at this
time but to just kind of give you a kind of set your eyes on what we’re taking a
look at here just looking at a moving average two different moving averages
the setting is a ten day moving average and the that moving average we’re using
is a whole moving average that’s the ten and then the lagging one right there
this upper line this is the twenty okay so of course the ten would follow closer
to the current price okay the twenty you’ll see will lag you’ll see that the
moving averages are color-coded I’ll show you how to put those on in just a
moment so first off what we’re seeing on the S&P today again what we’ve been
saying really about day over day over day is that 20-period moving average
which is what we really call a potential confirmation that line is still red
whenever that line is still red it’s still telling us as technicians
there are currently more sellers than buyers and they’re currently still are
now the earliest indication of any trend change could be a candlestick yes but it
really is probably going to come in the form of the ten period moving average
going from a red line to a green line that has not happened yet on the index
of the SP so the SP is still in control the sellers we don’t really see a turn
really if you go back to the date of about
probably March Scoobies february 18th or so fast-forward over a month now the
20-period moving average has been down for over a month again what’s that
saying is you’ve probably been more patient lately because you probably
don’t see any valid setups for the most part in terms of taking stock positions
because you don’t see the moving averages turning up you don’t see both
of them turning up you don’t see both of them turning green and the red shade is
just another emphasis of there’s more sellers than buyers quick look at the
let’s say the Nasdaq take a look at the Nasdaq the Nasdaq what’s kind of
interesting on the Nasdaq we and you might expect this as a technician and
there’s option trader the difference what we’re seeing in the Nasdaq is we
are seeing on the 10 P removing average the red line to the Green Line mark that
right there so we see we call that the warning signal a potential confirmation
of a trend change going from a sell-off to a reversal back potentially to the
upside is when this 20-period moving average turns green it’s not yet but
this is actually saying there could be some tech stocks starting to show some
strength we mentioned that yesterday like Apple Microsoft Amazon Netflix
things of that nature they have a large market cap and also it high up in the
price weighted space of the Dow now just real quick the question came is and I’m
gonna bring this up so whenever we look at this moving average setting ok
whenever we look at the moving average setting of a 10 or 20 it doesn’t matter
if someone used that on an intraday timeframe
like a 15-minute chart it wouldn’t matter if you’re gonna use it on a
weekly chart it wouldn’t matter if you’re gonna use on a daily chart so
it’s applicable to all charts ok and I’m gonna that’s gonna be something we touch
on here now the last thing I want to really bring up just to real quick
before we talk about chart settings when we go to the volatility one of the major
things we are seeing today is that the VIX and today’s really been probably
well at one point the Dow futures were up about 700 but for the most of the day
it’s been staying more flattish and today a positive is seeing some of that
fear okay come out of the market here in terms of
the volatility today is expiration we talked about that yesterday saying that
could be pivotal because of investors extra to their future of positions
bearish positions got out of there put positions they might not decide to roll
those they might just profit take and if that’s the case volatility if you want
the market to go back up you need the volatility to drop you need some of the
fear to come out of the market now let’s take a quick look so first off how do we
really put this on the chart okay this meaning this view of the chart I kind of
sometimes not all the time I just kind of expect that you just just know but I
want to kind of show you where you can get this now sometimes people say where
do you get it well so first off you can go to twitter.com if you’ve never been
to Twitter today’s your day now I’m not asking you to post everything you’re
doing on a daily basis this is a place where we just put information that way
you can reach out and grab the information so if you went to
twitter.com you searched and Twitter you typed in James Boyd up at the top right
you’re gonna see there’s my face right there just simple as that okay
go to twitter.com search and then type in James Boyd and you’ll see my face
right there if you do that okay you could follow me on Twitter now if you
take a look at this as we scroll down I’m gonna go to the date of something we
posted a little bit ago which was really February 24th okay so on February 24th
let’s actually get to that exact date there it is right there
so if you said James I would want that shading on my chart all you would need
to do and I’m going to show this nice and slow cuz we’re gonna look at it in
two different ways so if you want that shading on your
chart I need to write down those letters right there and they are case-sensitive
let me repeat capital n for a Rask a capital B for Bob lowercase R
capital X capital M nine capital u now once we have those letters there okay
made them nice and big for us let’s take ten seconds someone might wanna write
that down as well if they were looking to kind of practice this put this in
okay there it is now what we’re gonna do is we’re gonna go back we’re going to be
on the toss platform at the very top right it’s going to go to where it says
set up now if we go to setup art there we’re now going to go down to where it
says open shared item so not too bad top right click on setup open shared item
now what you’re going to see is if we come we’re just going to type in those
letters no that’s not really not that bad you can just copy and paste just
like I did so now what you’re going to see is we kind of get stuck right here
and it says preview open if we click on preview it’s just going to show you the
picture of what this chart is going to look like now if I just click on about
the only thing I can click on I’m just gonna say open it and now what you’re
going to see is on the chart and let’s just take this one that we just made so
let me maximize that not that big but now if we actually maximize that now
what you’re going to see is what you will probably be seeing on your charts
okay there it is now I want you to notice something as i zoom in I just
took this from Twitter and just like you might be doing is now it’s on my chart
now I want to kind of go over just real quick how do we adjust something real
quick okay so first off here what I’m going to do is I’m going to go up to the
test tube up up at the very top we go up to the test tube and now we see the
whole moving average 20 right there now we see the whole moving average 10 right
there okay now if we take a look at this we’re going to go to the whole moving
average 20 and I’m gonna click on that gear the reason why I’m going to click
on this gear is I want to change something I did this on purpose because
I want you to understand that it is something you can edit okay if we go to
where it says up when you think up we probably think
of the color green all right change it up green color for up down
still red alright nothing else we’re gonna go back to the ten period hole
moving average sit same thing you want to edit it let’s click on the gear
click on the gear same thing up is actually and I did this on purpose
because I want you to see where you can change the settings if you want we’re
gonna change that up to the green color for up now what we’re gonna do
click on OK apply okay we just go back to the chart now this is what you saw on
the chart that we were initially looking at so if you take a look at this chart
what you’ll really notice is we see that when these lines okay
and what I’m going to do here is I’m going to make the line a little thicker
maybe as fat as it can be like a width of five just so that way you can see it
we’re going to need that in just a moment so I’m gonna I fatten the line to
the width of five there we go and let’s really zoom in on this so what
you’re now going to see is on the chart is when we get when it goes red to green
red to green again that same trend sheets going from more of a sell off to
where there’s more buying pressure up top what we’re gonna see is it goes
green to red this is where we go from more buying pressure to more selling
pressure again the 10 is more of what we call the warning signal and the
20-period moving average is really more of the what we what the 20 is really up
top and that really didn’t turn green it’s gonna be didn’t turn red it was
still green there so we had a warning warning warning warning warning but no
confirmation on the 20 so that’s just simply how you put that on the chart now
let me know if there’s any questions right there ok now the second thing I
really want to take a look at here is I’ve been thinking about lately about
setting stops right I’ve been thinking about
in terms of exiting we talked about this is one way an investor might view
exiting so if we go over here on the right hand side let me just take a quick
look this over here on the right hand side is not an accident not yet not
based on the criteria of both lines being read so what you’re now going to
see is if we go forward no now now what you’re going to see in this case is both
of those lines this one and this one they’re both red so if someone was
looking to say what is the criteria if you might say look I’m going to use this
as a criteria to sell when both of those lines are red we have the kind of the
cautionary the temporary moving average same kind of warning signal and the
20-period moving average really being more of the confirmation of the selling
pressure now one thing I really will also want to bring up here so this is
visually how we can see it on the chart but I also kind of want to talk about
stops okay and so when we actually look at stops okay I’m going to bring up this
second piece now how many of you have questions on stops okay
and I the one of the things that I’ve seen over 20 years is sometimes people
don’t exit because they can’t see the exit the purpose of actually having a
color coded the PERT of the moving average lines the purpose of having it
shaded the purpose of actually seeing where a stop could be is that way the
investor could see it and I think if they could see it they might actually
have a better chance to execute based on the criteria they’re looking for all
right now what I’m going to do in this case let’s go back to Twitter one of the
things we actually did we put on earlier today was the following let’s bring this
up so now one of the first things I actually you’re gonna see right up
earlier today I put a script on earlier about an hour ago and what I’m going to
do is I’m gonna click on right on that script and I’m going to kind of visually
show you where stop can be and we’re gonna visually be able
to see those okay visually okay and I want to talk about
ahead of time not not when the cross happens I want to know where the stop is
before the price goes down in this example so now what I’m going to do is
going to click right on that okay and now what you’re going to see is let’s
kind of show that again so all I did right here is just just click on it I
clicked on it now what I’m going to do is just click right up top right there
and there’s the study now what I’m going to do is I’m going to go to the chart
same thing that we did before and I’m going to go up to the top where it says
setup open shared item and again you do it over and over again this should be
easier right set up open shared item now what you’re going to see is we want to
type in those letters that are right on Twitter okay so those letters if we go
back you’re gonna see that if I click on that and yours is probably coming up a
little different than mine mine’s kind of showing a little different but I’m
going to see if I can’t get those exact letters here there we go okay sorry mine
mine wasn’t coming up I’ll type those in nice and slow
capital P lowercase T v w/h X B I’m gonna stop right there
okay I’m just confirming that yeah that looks right okay
capital P TV WH X B now what this is willing to do is it’s going to show us
where the stops could be I’m going to show you why and how they relate to
those whole moving averages okay let me know if you actually have that okay now
if we click on preview now about the only thing we can do click on preview
now what you’re gonna see is once we get to here we’re just going to say open it
okay now what I’m gonna do is I’m going to rename this and I’m just going to
call it in this case stop example okay now you need to actually just put it all
one word that way you can find it you don’t want to create you can
put a space in here so I just called it stop example now if we click on stop
example and they’ll click on ok where did it go well what we just did is we
added a study and we’re gonna go right up to the very that test-tube right
there click on the test tube and on the left hand side what do we call it what
we call it a stop example that’s right there now what we’re going to show is
once we click on stop example double click you’re now going to see that that
is just now over to the right-hand side that’s all it is
we’re going to show you what it looks like in just a moment now if we want to
edit that click on the gear and what we’re going to do watch this ok first
off when we think about a stop I want to kind of make it where we could all see
it so I’m gonna say width of 5 I’m gonna say color here you might choose red that
way we can see it clearly I’m gonna make it a yellow and where it says draw as
what I’m gonna do here is I’m gonna go down and I’m going to use this one right
here you’re gonna see why because what it’s gonna do is it’s gonna plot day
over day basis where that stop would have been over time ok and you’re going
to see that so let’s take a quick look we said draw as we went down to if you
clicked on one of those they’re both fine okay either those who to work it’s
a great visual though with the 5 color yellow now let’s take a quick look if we
now click on OK and then apply one of the stocks that I want to first look at
here when we talk about let’s say exiting or where those stops would have
been over time going to show the example of a stock called Lu Lu now the example
what I’m going to look at here is I want you to be able to visually see on the
chart and I’m going to zoom in so we can see it ok now again I’m going to guide
you but then after about the third example you’re gonna say I get it now
I’m going to mark where those potential entries could have been we’re going to
mark or it has marked for us where the stops
would have been overtime and I’m going to tell you how they’re actually
calculated and I’m going to tell you some adjustments you might make and how
what are some of the pros and cons so first thing what I want to do is let’s
think about X entries potentials and then what could be the exits
so just as you would probably expect we when we see the turn right there for an
aggressive investor they might take that entry right there again that’s that’s
aggressive because you don’t have any confirmation so that’s not the entry
we’re gonna show in the class the entry we’re going to show in the class and
when we have an entry example we’re gonna put an out an error right there
when both of those lines actually turn we have the warning plus the
confirmation now what you’re going to notice is we see that green shade when
the green when we have that green shade again that’s just saying there’s more
buyers than sellers now if an investor wanted to let’s say move stops the
yellow line might be places where an investor might consider moving their
stops now I’m not going to tell you how that’s doing that yet I just want you to
see how this is working okay and now what you’re going to notice is on this
chart here here here you’re going to notice on this day right here okay that
hammer day that and I’ll circle that that came really close to stopping out
but it didn’t okay so let me mark that again so we just said the entry was
actually right there set up and now if you go forward you go
forward now if we look at this know and you’re gonna see that this area right
there came really close and now if you look at this none of these we don’t get
any touches right there this line right there represents where the investor
could raise up the stop potentially and then now right there now we come down
until about maybe December 11th where there’s earnings so going into the
earnings day the stop would have been somewhere in the ballpark on Lulu about
225 okay so let me mark that on the chart so
happen on that day well what you’re gonna see is I’m gonna mark on the chart
where there’s a potential exit we’re gonna mark on the chart and x4 where
that position was probably stopped out okay now do we think that price might
have been filled at a lower price level based upon a gap down in price yeah I
think that’s probably likely it probably gapped below the stop which means the
fill was at a lower price now what you’re going to notice is all through
here there was no stop out point okay that was just entry exit all right so
let me go and kind of go forward now so let’s kind of now I want you to think
about the next thing which is once the investor gets stopped out what is a
potential reentry I’m gonna go back to the same thing we looked at before which
is when do we actually get both lines that really go from red to green and
then red to green well the time we actually see the warning plus the
confirmation was really about right there that means that just met the
criteria does that mean it’s guaranteed to go up of course not
okay he’s just saying at that moment in time it meets the criteria now if you
take a look at this what you’re gonna see is the yellow lines really are just
showing over time where an investor might have moved up their stops here’s
one thing I want you to recognize there is sometimes where the yellow lines
signifying where that stop might have been that is really signifying maybe in
this case that the stopping over these five days the stop might have not really
been moved that much because the yellow lines who are pretty much all at the
same price level now if we go forward now what you’re gonna see let’s kind of
go forward let’s kind of see what happens and if you go forward and really
take a look at this that’s not stopped out this isn’t
stopped out we go forward forward and then now let’s take a look at this okay
now remember I talked about using these yellow lines in common
texts of the whole moving average I’m not trying to forget that we’re not but
what you’re going to be noticing is right on this date so when we saw the 10
period moving average go from green to red we saw that at that time on that day
the stop would have been right around 240 dollars okay on that day that
position stopped out okay it went down in today and touch the line so the
whoops so the entry on this one would have been entry and then what we could
see is yes it did stop out now what I want you to notice as we go forward
maybe one two you’re going to see that that it that exit there was really about
two days early from when both of those whole moving averages crossed and both
lines were red so remember we said there’s two ways to look at this number
one investor might be using the criteria to say when both lines are red going to
exit number two you could say James if the stock is continuing trend I’m going
to continue to move this stop up these plots are plotted for you you can adjust
them I’m just showing you example of what it could look like on the chart
okay now what I’m going to show in this case is let me show how this could be
viewed also from let’s say one more chart but we’re gonna speed it up now
we’re gonna take a look at let’s say a stock like Netflix and I will do this
one faster but now you kind of get where we’re going so now if I take a look at a
stock let’s kind of go back to let’s say this time period and we’ll mark this so
now what you’re going to see is we’re just looking for when both lines turn
green right there now what you’re going to see is I’ll put an X on the day where
the stock goes down and touches that yellow line what you’ll notice is from
the if you look at how many days there were between when both lines turn red
you were within two days of when both lines turn red okay now if
we go for what you’re now going to see is where’s a potential entry it’s about
right there what you see is if we go forward forward forward forward forward
you’re now going to see on that price it looks like that date look looks like
that day right there that was stopped out so that entry right there that was
kind of more like in potential entry and an exit that was almost like a flat
trade nothing really happened if the investor takes another reentry let’s say
right there when both lines and meets the criteria and then you go over to the
right and say what happened well it looks like same thing another flat trade
almost or slight loss let’s say the investor got in somewhere in here fast
forward about five six seven days the stock did go down to that yellow line
stopped out now go forward you’re now gonna say that again two days later you
get another potential reentry now what you’re gonna see is what happens well
what we’re gonna see is then touch then touched in touched in touch no no no no
no no no touched so now what we see is if we kind of go back let’s kind of
compare and contrast this one last example before we look at weekly charts
you’re now gonna see that it stops out right there how far was that between
just looking for the two red lines when you look at example upon example upon
example which you should you should do the due diligence you’re probably going
to see what that when the stock stops out it’s probably going to be within two
days or days plural okay maybe a day or two or days plural
maybe when both of those lines turn red so if you’re setting stops a you could
see where those stops are you could actually be discipline and have a
routine and actually adjust those stops as the trend is changing well every day
could the investor be moving the stop well base it depends upon the trend okay
now what I’m gonna do let me show one example now I’m going to kind of answer
the questions here okay so one of the things is not every invest
is going to be someone who is investing on the daily charts of course not so let
me kind of show an example in this case so maybe where an investor might be
let’s say using the weekly charts and the example what I’m just going to show
and again this can be fast if we looked at let’s say a stock for example like
and I’m just going to choose one that you might be looking at I’m going to
change daily to weekly now what I’m going to show in this case if you don’t
mind I’m just going to kind of look at this let me kind of really fat and that
make it kind of a little wide there and so what we’re gonna do is really kind of
mark on the charts if we’re looking at a weekly chart same idea we see that the
stock meets the criteria both lines green the moving average you go forward
not the price action does not hit the yellow lines I’m going to show you how
to put that on in just a sec which you already did but I’m gonna answer the
questions on that about right there I’m gonna mark an X that was stopped out
right there so we can see where on the chart was where the entry was both lines
green if we’re using that as criteria and we can also see where that stock
went down to the yellow hash mark number two we can actually see on the chart we
if we go forward whoops go for it you’re going to see it
about two days later about two weeks later excuse me we see another potential
entry of the stock meeting the criteria we go forward and say what happened well
about right here this stock was stopped out the stock actually went down and
touched the yellow line let’s put an X right there we did now if you got a
member that’s weeks this is probably two months of time an entry and exit we go
for it actually we take a look at this again we see a potential entry now what
we see is none of these so right about right there the stock actually we get a
potential entry we don’t get any exit over these three weeks there’s no stop
but just we don’t see this top adjustment not really we see us we can
move this top up over time because it’s trending move the stop up over time
because we can see it’s trending same thing same thing same thing and then
same thing so remember week
see what’s in the future we can’t see dacovia 19 coming the only thing the
investor can see is both lines are green there’s more sellers than buyers and the
biggest thing is we can see where that potential stop is and I’m going to show
you what it isn’t just one second where we want to see where this would have
stopped out so now what you’re going to see is going forward again can’t see
into the future but the stop would have been somewhere in the ballpark on a
weekly chart using this criteria probably right around 161 notice that
going into the week which we didn’t know is gonna drop that hash was right about
160 and then now if you go forward on the same week both lines turned red so
here’s the thing there’s a couple of visual cues that are happening here
number one green signify more demand the other visual cue of selling pressure is
the red shade again the 10 is actually telling us e8 warning the 20s showing
confirmation of the selling pressure the red shade another kind of way to kind of
make sure are you getting it right and also another visual cue is if you
actually have stocks that are now below these yellow hashes you might be
thinking did I miss a potential exit so there’s a couple visual cues that should
be kind of going through your mind and I think there are more visual cues you see
the probably more likely you are to adhere to what your exit criteria is now
one thing what we’re going to do is kind of let’s kind of talk about really what
this is really showing okay so the first thing is what I showed you is this is
for a daily chart this could be used for a weekly chart it could be used for
different types of products it could be used for gold that could be used for
it’s not stock specific okay we’re not talking about mutual funds though okay
now the biggest actually thing is if we go to the
little test tube right there one thing I would actually ask you to do is I want
you to kind of see what let me show you what it’s doing and when we go down to
that sheet of paper right there that sheet of paper right there
and click on the sheet of paper and it’s going to show me what this is plotting
let’s click on the sheet of paper now what you’re seeing is it’s just plotting
the five de l’eau okay so let me let that sink in for just a sec just
plotting the five-day low or in other words plotting the five the low over the
last five weeks now why five why not four or three why not six or seven well
what you’ll notice is if you use somewhere near a five you’ll see that it
really probably more lines up with with where those moving average crossovers
are that we’ve been talking about okay now one thing I would ask you to do is
maybe you start with a 10 or try 9 try 8 try 7 try 6 try 5 and see if the stock
actually starts to go down does the stock actually go down to where that
hash mark is and how close is that stock to getting that crossover or both lines
red and what you might find and you might find a perfect number for you
let’s say we use kind of maybe five as a starting point but I want you to know
you could simply just go in there and you can edit that you could say you know
what I want to do I don’t want it 507 well what we’re trying to show is we’re
trying to show where we could plot it on the chart that it’s very close to where
we’re probably seeing the crossover and both lines read so they kind of go back
and show this and I’m going to get to these other questions so that’s the
first thing what is this showing I just answer that
so what you’re going to notice is if we’re seeing that these yellow lines are
actually lower than last week’s this line right there is lower than the
previous and this line right there is lower than the previous then that
the immediate questions should be calling up in your mind what did I have
an exit what was the exit because you might have been maybe missing some of
the technical cues that you might be using for potential entries and accents
does that make sense now so first off okay let me kind of go back
so some questions on this study link so let me just kind of go back so if you go
to let’s say Twitter comm you search for my name James Boyd you’ll see my face
right there you’ll notice that actually right near the very top it says script
we will discuss in class at 2:00 p.m. Eastern if you click on that and I’ll go
ahead and I’ll put that up again just because I want to make sure you practice
with that I’m gonna go to the very top go to setup go to open shared item now
let me type that in again nice and slow capital P it is case-sensitive tvw hx8
excuse me nope P now what you’re going to see in this case is I’m just
verifying this that looks good I’m gonna magnify this it’s about as much as I can
right there there we go now remember the reason why I’m showing you how to go
into the study is I want you to do your own testing I want you to go in and say
maybe I’m gonna do it like a 10 maybe I’m gonna do like an 8 day low a 7 day
change it see what you’ve seen the purpose I’m actually showing you the 5
is we’re trying to line up when we see those crosses on the moving averages or
we get the red shade how many days down does it typically take to line up what
the moving average crosses for our example here today and it is an example
ok we’re using the example of a 5 day low okay number two can you use this as
an alert rather than a stop so let me just ask you something Jeff so first off
you can just say look if we let me kind of answer this let me kind of go back
let’s say we’re the stock what actually up here right there so going
into this let’s say we said look could we right-click let’s say right-click
right-click and let’s say we just go down to say create an alert well sure
okay we can just say look going into this next week we don’t see what’s going
to happen could you just alert me that if we go add or below that price not a
stop okay just alert me so if that stock now goes to at or below that price it
now alerts you on the platform or it sends you a message etc yeah just simply
right-click right on that line that’s all you have to do right click on the
line with but that your potential stop is you determine for yourself what how
many days down do you want okay if you right-click on it say create an alert
now what you’re gonna see is it’ll say at or below okay
create okay kids you want us to edit or blow now other question we actually have
Patrick says has this entry exit than back-tested well no that’s what I’m
asking you okay the whole purpose of showing you this is that you can see the
process of entry exit sometimes when people talk about a system they just
wholeheartedly rely upon what someone else says I’m showing you I want you to
go out and I’d like you to kind of tweak okay this and I’d like you to see it for
yourself now I’d like you to look at it don’t just look at it on will all
Microsoft or Apple go look it on stocks maybe like Intel go look it on stocks
like Starbucks don’t look at it on the other stocks that don’t necessarily
trend that well it’s important to look at this on different types of trends now
anytime you talk about a moving average come on my gosh I mean they’re they call
it a moving average for a reason okay it does it’s not called the flat average
when you ever you talk about any moving average it’s looking for stocks that are
moving okay or in other words that the stock typically tends to trend okay
so other questions alright can you adjust the stops on the top to show
better sexual possibilities what a great question so the example given and the
paid money count one of the examples we’ve done is Chevron so let’s bring
this up so the paper money count you’re gonna see that in Chevron and the
position is a bearish trade so now what you’re gonna see is a short call spread
there it is with a long put could you take this exact same idea but then
instead of since we’re talking about bearish not talking it lows now we’re
talking about highs yes well if you just go right to the chart go right back to
the test tube we already were here we’re gonna go right back to this for example
click on the sheet of paper and what do you think we would put here let me just
just imagine what you would put well having a little fun here we might say
Jesus maybe Jesus settled maybe the low maybe you could actually put the high
huh let me actually see so if we actually put high let’s just keep the
example 5 but member if you don’t want 5 you don’t want that let’s say you want
to put 10 just simply take out 5 and put 10 that’s all you’re doing it’s not even
that bad you do not have to be a code linguistic person to actually do this
you could just take out low type and high type in the number days you’re
looking at click on apply ok now let’s take a look at this so let’s kind of now
follow this so this is really kind of the purpose of actually testing right so
what you’re going to see is Chevron was a stock that really has gone down let’s
just say massively and what you’ll notice it went from a hundred and twenty
that went all the way down to fifty okay now what you’re going to see is over the
last couple days Jesus hit that right there hit that right there hit that
right there touch touch touch touch touch through
this period of time you never saw the 20-period moving average change you
never did but on an intraday basis it did go up
and touch the five-day high yes okay so this is why you want to kind of test
that yeah okay ARS let me let me actually hit one more
point here okay so one of the ARS brink kind of wants to take a look at let’s
say one quick one more quick example what we really talking about potential
entry potential exit got about two minutes here let me kind of just touch
on let’s say one just real quick in terms of JP Morgan okay and this is what
I want you to kind of do is be really being able to see why do you consider
doing what you’re doing okay so I’m gonna put it back let’s take a quick
look I am answering this question and so now what I’m going to do is is let me
just kind of bring it back up I’m gonna strip it where there’s no lines on there
unnecessary so again here we go so we’re just going to look on the chart so this
right here again looking for the criteria doesn’t mean it has to go up
see boat look we see both lines right there both lines the moving averages
they’re green now if we actually follow the price up we ask that ourselves the
question or any of our the moving averages red and or is the stock coming
down to touching a five-day low as our example well what you’re gonna notice
right here is right on this date right there we can see intraday it did come
down to actually hit that this would be a stopped out point potentially we go
forward and say well what could be another end potential entry notice about
two days later both lines were green again let’s say we look for another
entry now we actually follow this through now what actually happens you’re
gonna see that whenever this that yellow line is lower than the previous that’s
like saying that someone is moving their stop down here’s the question do you
move stops down I mean you can but if you’re trying to protect your capital
you might not consider moving your stops down so that the exit most likely would
probably be right in that ballpark right there so let me mark this one too
now notice what you’re going to see this in trends all trends do not last the
same amount of period of time all trends don’t make money you could have you
could actually get stopped out lower than where you bought it in obviously
now if we take a look at this let’s marked out we’re going to just look when
do both lines turn green that’s the criteria we’re gonna fast forward we’re
gonna ask ourselves do any of the moving average lines turn red
just give me do both lines turn red and or do we get any intraday lows where the
price actually comes down and touches that yellow line on this state right
here and it gapped down so that means it was that stop was filled at a lower
price and what you’re gonna see is that trade probably most likely was just a
flat trade trade 3 there you go for when do both lines turn green well when does
it meet the criteria right there now what you’re going to see as we go
forward for again ask ourselves do we see the moving averages lines turn red
both and or do we see any price action where we come down and actually touch
those lows that are plotted there for us which I said I want you to test that and
I like you to look at it I’ve looked at it that’s why I’m showing you it but I
want you to kind of maybe look at maybe what the setting might be for you as a
visual think of it as a visual stop where that stock could be doesn’t mean
it’s going to get filled at that price level now what you’re going to see in
this case is we see that that stop was probably about right there so that was
really trade for so now what you’ll notice is over this period of time this
was about what two months of time two months and over that there was for
potential entries and for exits so over two months on JP Morgan some trends were
longer some were shorter but all of them weren’t profitable ok really trade
number one in four those are the ones that really had
a run to them number two and three those who are a little bit more concise
consolidation but nevertheless you’re the investor is really trading forward
okay so now last question and I have to wrap it up here
just trying to answer them any questions I can now remember if we go to the if we
go to for example the test tube right there go to the test tube if you’re
seeing that the setting is maybe not what you want we’re now going to go over
to the gear if we click on the gear right there now remember just go the
test tube remember if you want to edit something go to the gear if you go to
the gear you’re gonna see where it says draw as if your is yours if yours is
let’s say a straight line and you want it to be like a highway strip I call it
just change the line right there so change the style yours is a straight
line change it right there what I want you to see from this class the learning
outcome is where you could visually look visually look at a chart and see where
that potential entry could have been and I want you to also see where the exit
could have been from the moving averages both lines actually turning red meaning
the criteria but also number two if the investor was adjusting stops over time
where did the price come down to touch that that is very important because
that’s really about riding the trend but it’s also really about risk management
okay and I think the biggest thing is investors can probably avoid quite a bit
of pain if they just identify ahead of time with some visual cues what those
exits or entries could look like doesn’t need to be extremely complex notice
today we’re just talking about colors and moving averages and did the price
come down to touch the yellow line it’s nice and simple right not a PhD class
not talking about physics or chemistry or microbiology for crying out loud
just looking at what the trend is doing just a simple way to see who’s in
control the trend huh I stayed a little bit longer to answer those questions
but I want to kind of just make sure that as you now go forward
have the tools in your toolbox so we talked about how to put the hall moving
averages on with the shading we talked about how to actually put on the the
yellow that line on the chart I showed you if you wanted to how to change the
number of days if you say I don’t like stops that close I showed you how to
change that I want you to go out and do the homework look no one cares more
about your money than you do so if you’re not willing to put in let’s say
in the last 30 minutes of your time think of that as your due diligence
why do you set the stops where you do right go out and test for yourself look
at different stocks and see what happens over time I think it’s that’s important
to see the whole process not just looking at one side of the trade okay
now remember with what we talked about here today in order to demonstrate the
function of the platform we did use actual symbols okay
as examples remember that TV Ameritrade does not make any recommendations
determine suitability of any security or strategy for individual traders any
investment decision you make in your own investing account that is solely up to
your decisions okay so with that said thank you so much for your comments and
your participation I wanted today to be visually stimulating and I wanted you to
be able to just be able to point on the chart here here here here when the stock
was meeting the criteria again that does not mean the stock has to go up or has
to go down it’s just it’s saying at that point in time it’s meaning the criteria
okay and all trends are not the same length of time okay
so with that said I want you to go out and practice that now if you wanted to
you could also look at that in terms of maybe bearishness as well okay stay
tuned coming up just in a little bit we’ll have another class coming up just
shortly right after me and we will be getting I have a should be having a full
webcast scheduled next week as well with that said thank you so much take care
bye-bye