Getting Started with Stock Investing | #3 Trend, Support, Resistance, Flag Patterns and Breakouts

good afternoon everyone I'm happy to see

you here in our Schwab coaching I'm

Connie Hill I'm happy that you're

joining us for our getting started with

Stock Investing now I thought I uh

changed a little setting here that I

didn't so let me go fix that okay there

we go you know last week we talked about

what we might consider putting on a

watch list and some of the

characteristics we would look for this

week we're going to kind of answer the

next question that a Trader might come

to which is well when when should I get

into this trade when should I pull the

trigger how am I going to figure that

out so today we're going to be spending

time on what are called the technicals

and the technicals are essentially what

we're reading on the chart kind of

analyzing the information they give us

so that we can know when a proper time

might be to get in okay this is going to

be one of the most important skills

you're going to be able to develop that

will work and last through your whole

trading life so really important stuff

we're going to cover here

now I am joined in the chat chat with

Scott Thompson I appreciate Scott being

here many of you might recognize his

name he's a veteran of the markets one

of our managers and so he's going to

help me out with questions so as you

have them go ahead type them in I don't

want anybody to be bashful about having

any or keep you know not saying what

their question is okay even if you think

it's silly you're really beginner guess

what this is The Beginner's class this

is where you ask questions now those of

you that are listening to this on the

recording night know so many of you do

when you have a question put your

question in the in the uh comment

section and we'll go ahead and review

those throughout the week so you can get

your question answered here as well well

let's go through some brief disclosures

and lay out our agenda for

today what we talk about is intended for

educational and informational purposes

only it shouldn't be considered an

individual recommendation of any

security strategy or account type we

will be talking about technical analysis

here to

and I have to tell you I love technical

analysis okay that's seeing what the

charts are telling us but there are

other approaches including fundamental

analysis that may assert different views

past performance of any security or

strategy does not guarantee future

results or success investing evolves

risk including the loss of

principle all

right this is an overview of our series

that we're going through where I teach

us step bystep certain friend one week

we go through it pretty detailed and

then we add on the next layer so we

started our series over a couple weeks

ago we talked about the different types

of stock somebody might be interested in

and how they might use it and then last

week we talked about uh the what are we

looking for what do we want to see and

put on a watch list all right so today

we're right here in this little area

here technical analysis and like I said

we're going to spend quite a bit bit of

time using and showing you some things

that we're going to use throughout your

trading life now our agenda will be this

identifying and defining various

technical indicators and I'm going to

say in technical terms because some of

these terms might be new to you so we're

going to spend some time doing that

we're going to also discuss how an

investor or a Trader might want to use

technical analysis and help us to

identify the entry point of Trades we're

going to be looking at got a lot of

stock examples here today we're going to

be using the Thinker swim software so

that's what you download to your

computer it's a little bit different

than the web version or the mobile

version all right it's the I'm going to

say it's the most robust version but

don't worry if you're not using all of

it all at once you're going to just

learn little pieces of it a little bit

at a time now I will keep my eye on the

chat see if there are any questions that

I need to address and remember of course

uh Scott is helping me out in the chat

here as well

so let me just check real quickly I

think we're okay oh I uh I'm going to

let Scott answer that question Wy all

right when we might do our next virtual

Workshop which we have one this week for

those of you that are kind of trying to

get used to moving over to thinker swim

from Street Smart Edge uh so look for

details for the next one to be coming up

which I think is at the end of the month

all right let's start talking about some

of our technical things we want to

consider now when we're looking at at

when we're talking technicals it really

means the chart what are we seeing on

the chart what is it telling this what

can we observe about the chart and so we

might put on

some uh indicators to help us identify

what's going on ultimately most of them

revolve around price and changes in

price and volume what happens with the

volume so on this screen here you can

see this blue line coming up here and

that is a  period moving average and

so many times we'll be looking at Daily

charts which means each of these bars in

our case we're going to use candles

represents one trading day and the

periods you know if this is a  period

moving average it essentially is a

-day moving average but if we were to

move to a longer term chart and look at

weeks then it would uh adjust and it

would become a  we moving average okay

so when you hear that period just kind

of key in we tooking a look at at a

weekly chart or daily chart a lot of the

time we're going to be on a daily chart

um a faster moving

average uh can be more responsive to

price movements so for example U we'll

put some different um averages on but

one that's a shorter time frame say like

a  we're going to see it wiggling

around a lot more than something like a

or a  or a  day which is a

long-term moving average we will spend a

session on moving averages

uh a slower moving average can help you

out with this strong Trend but it's a

little bit slower for it to reflect

changes in the price all right next up

support and resistance you are going to

learn this principle and you're going to

love it okay because it gives us a way

to observe the charts now I want you to

imagine a highrise or you know maybe

even an apartment building that's has

different floors and on this apartment

building what might be the ceiling in

one apartment could become like say this

the apartment this is the ceiling where

the yellow line is but once you're past

that ceiling you're basically up to the

next floor right so whatever was the old

ceiling becomes the new floor for the

next level up and support and resistance

will work that way now resistance is

what we call this ceiling here okay the

stock maybe runs to it pulls back runs

to it again maybe gets rejected again

and then at some point news is big

enough or some occurrence of something

to cause the momentum to shift enough to

break above the resistance level and

then we expect the stock to act as what

we call support a place where the stock

can't drop down below that's like the

floor right you're standing on the floor

it's holding you uh we're not expect

expecting to drop through the floor

although sometimes support will be

broken we'll see that when changes uh

Trends change but in this case notice

that then when the stock pulls back to

this area that was the ceiling it's now

the floor many times it'll bounce up and

so it's helpful to be able to observe

that so we saw it happen here we saw it

happen again right here and so you know

prices have a tendency to go back to

these areas of support and

resistance just taking a quick look at

our chat

here oh I'm seeing something already

looks like we have in our survey or out

in our chat a survey and those of you

that have been with us know that from

time to time we'll go out see what your

opinion is in a really simple survey and

I like simple surveys I I don't like to

do long surveys it's two questions all

right and you just fill in the radio

button on a scale of  to  one you

hated it  as I love it uh just on

today's presentation that we're using

here today and then there's two

questions if you want to answer them

great I also encourage you to use it as

a place to communicate with me for

example maybe you don't want to answer

the question but there's a place there

you could put in a request and you could

tell me hey I'm struggling with this or

could you maybe bring a session up and

answer a question related to whatever it

is that is your concern tell me about

that because I like to weave those in to

our classes so you can understand maybe

something that's hanging hanging you up

okay so use it for that as well now

we're not finished with our Clash out

obviously but if you'll click that link

now just let it sit in the background

and then when you need to leave or our

session's over then I'd ask you to fill

it out then okay uh let uh let me see if

there were any other questions besides

that and I think there isn't Scott's

just doing a great job helping me out

here

next uh well let's get rid of the

drawings okay uh another thing and we're

going to use one of these today that a

technician might use in their charts

could be a trending indicator which

would be many times like the moving

average and it'll sit up here with the

price of the stock and then there'll be

something else called oscillating indic

indicators they typically will sit in a

different uh window of the chart and it

might be telling us things about

momentum might be telling us things if

we are getting into an overbought or an

oversold condition you'll start learning

and hearing those terms and so there's

different ways that we can put our chart

together

here all right last component typically

that you're going to see on a chart is

volume sometimes volume makes a big deal

we'll talk about when it's important to

see extra volume or what it means maybe

when there's not as much volume but

it'll be something that you'll want to

pay attention to and then something we

talked about last week was that we

wanted our stocks to have at least you

know a lower limit of , or maybe

, shares traded per day to let us

know that it's active that it should be

easier for you to get in and out of

because there's a lot of uh uh lot of

shares exchanging hands all right let's

go out let's look at some examples here

we're going to head over to thinker swim

here and actually I'm going to start on

SPX

and this is the S&P  I want to start

here and talk through the different

things that we were just kind of

bringing into into play right and

explaining so number one some of you

probably haven't worked with charts a

lot yet so I'm going to show you how we

might just set up set up a typical chart

so this little

Beaker right there I should say we have

a class on getting started with thinker

swim Cameron May teaches that he does a

fabulous job with that class I believe

it is on

Mondays can't remember the time Scott

might help me out by putting the time in

there it'll it's an excellent class to

go to it kind of Works hand inand with

this class because we're learning some

principles in this class the basic ones

and then Cameron's going to add to that

but as we look here this Beaker means uh

we could put in pull in some studies so

that's what we're going to do let's put

in a moving average now we are going to

look for what's called a simple moving

average now I could grab this and and

drag it all the way down here and find

simple my way to get to it a lot faster

is just start typing in what it is so I

just typed in s here's our simple moving

average we're going to bring that

over we also want to see and I'm going

to talk to you about it a little bit

today because it's very relevant in our

kind of what we're seeing going on in

the market right now

RSI and that uh is that oscillating

indicor indicator and then we want

volume volume that I prefer to use

doesn't mean you have to use it uh but I

like the one that says volume average

because I like to put a moving average

on the volume two so let's bring this

over and then we're going to personalize

this now the simple mov average came in

at a nine and we're going to look for

something longer than nine for today

we're going to use   and  are

moving averages to help us with the

intermediate trend of the stock okay so

we'll put that at at  to make it a

little bit fatter I'm going to change

that to a three and then I'm a creature

of how I like that intermediate moving

average to be

read hey so that's set up now this

RSI uh we're really not going to change

it a whole lot except I want to make it

thicker okay so typically you'll just

leave the settings just the way they are

I'm going to change the width so it's a

three I'm going to select okay and then

here is the volume that I that we put on

there that says average uh I'm going to

click on this little tab here um well

actually that's not

true um I'm going to put a length in

here the default is  I'm going to

change this to  as well okay have

day moving average on the top this

one's for our volume and then I'm going

to click here what says Ball app and I

just like to make it a little bit more

bold okay so I'm going to change this to

again to a three and then I'm just going

to make this a darker color so it's

maybe a little bit easier to identify

let's go ahead and hit okay uh if you

need to make a note on anything this is

just a simple chart that we're going to

use today and it's going to give us

quite a bit of information

now because we're looking at the index

and we don't really trade the index the

volume's missing okay but that's okay

when we start looking at stocks it's

going to appear at the bottom I'm going

to give us a little bit shorter time

period to work here and when we're

talking about say a trend a trend is

when we're seeing the stock make higher

highs and higher lows okay so we want to

observe when that's happening and we

want to observe when maybe we see it

changing okay let's zoom in here a

little bit closer on this chart I'm just

going to maybe take this much

area this -day moving average helps us

know that gee yeah this the index has

been in a decent uptrend

for before I even zoomed in here towards

the end of last year and then more

recently we're starting to see some

things that might be a little something

to pay attention to okay one I would

note hey we just have another I time

high here on the SPX and I've got my

high bubble showing it got up to

which is helpful to see and then if

we are looking for an uptrend we're

going to look for it to get beyond that

so maybe we have another dip and it

rallies up then we would want it to get

a little bit higher here and become the

new high when we start to notice that

that doesn't happen that can give us an

idea that maybe some things are changing

maybe Trends are changing or maybe

there's some weakness uh doesn't

necessarily mean that every time

something makes a lower low or breaks

support that oh man we're going to have

a bad we're going to have a bearish

trend but it will be a clue to us to say

he we need to be paying some attention

here and one thing that I'm going to

kind of point out to you is when this

when the SPX rallied and ran again last

week it was almost about the same height

okay it was very close but it pulled

back and then it ran again to right here

and we can tell this is not as high

right as these highs here and here on

this red candle and that low that it put

in right there let me get my drawing

till this will help me this low that it

put in here certainly was was

lower than here we want to see it making

higher lows and it didn't here so that

should be kind of a a yellow flag to to

say hey maybe some things are changing

and then we see this other this period

of time here where it ran and it didn't

get higher than that and it didn't get

higher than that okay in fact we could

probably draw in a little trend line

there connecting the

tops so that's something we want to pay

attention to now what about support and

resistance here uh I want you if you're

if you're looking at this with me want

you to maybe see where you think I maybe

should draw support line and a

resistance

line sometimes these lines can be

diagonal too they don't always have to

be horizontal although I think

horizontal is a good place for people to

start uh to identify it so if we came

back here and let's just go to a

one-year chart we're going to see man

for the most part for a year the Stock's

been making higher highs and higher lows

I'm going to use my drawing tools up

here I have a video where I teach you

how to build that and Brent mors me

actually in his class as well doing

exploring thinker swim uh so you can

either click on the drawing tool or just

click on that gear on your mouse if

you've got a mouse with a gear and then

you can bring up the toolbar here and

for something flat we would just grab

that price level and then we might just

kind of observe where we see the stock

running to and kind of hitting its head

and pulling back okay so we're going to

go for

you know maybe this  area it was a

level of

resistance uh we would also kind of note

here look these lows kept getting lower

through this period of time where the

highs and the lows both went lower and

if we look at where things are right now

oh I might be zooming in a little too

tight let's try it from here where might

you see some support and resistance now

you might see this one here at the top

because it had oops I want to use my

flat uh because of it ran up to that

area a few times right this

ish area ran to it pulled back ran to

it again pulled back ran to it again

pulled back so that's acting as a pretty

strong ceiling right there now do we see

any ceilings in the past that maybe are

acting like floors right

now I'm going to I just take a quick

look in here oh Scott's helping me out

thank you Scott for helping out

answering some of these

questions making sure that uh they're

not intended for

me okay

uh what about in this area and and I

want to emphasize support and resistance

are kind of areas think of them that

you're drawing them in with a big old

Sharpie not a fine tooth or a fine point

you know ball point or or pencil right

when they can get really really SM you

know some people might even may even pre

want to draw me an area and sometimes

they might make this line thicker to

kind of represent that uh what's

interesting is I see some resistance

about in this area and I'm going to keep

drawing it

across and had a hard time getting above

it finally it did right pushed up and

then it kind of danced around it I'm

going to say right a little bit below it

a little bit higher than it over these

periods of days so it may have been

acting like Support over here

dropped below it but I'm still kind of

in that area yesterday it looked like

maybe it was going a bounce off of it

and then of course we had some reaction

to some of the economic news today and

of course right from the get go this

morning index was um all the the major

indexes started out down okay so right

now if we're saying okay is is the SPX

at support or is it at

resistance we would say well it's on the

bot bottom part of this right it's on

the bottom part so it's probably just

broke through

support uh it just kind of so happens

that the top of the candle was right

there uh but remember it's moving down

okay how far might it fall we never know

right but we might say well where was

the old support area and so I'm going to

draw in maybe what could have been the

support previously maybe about in this

area the  area okay so you can see

where these different levels uh occur

now I'm going to encourage you to

practice developing that skill it uh

first for some of you it might be a

little bit difficult and there might be

others of you that you were just like

damn your eyes see it but the more you

draw it out on your charts the easier

it's going to be to recognize what it is

I should have pointed out here over here

on the far right is price down here

that's the RSI we're going to go to some

else we're going to be able to see the

volume here as well so I want to let's

bring up this chart it has some

interesting things going on wow they

must have had good earnings or good news

here look at that tremendous Gap uh this

is something we we would notice wow it

had a big

breakout it gapped up and sometimes that

bottom of the Gap will act as support

that's something else to know so I'm

going to just draw it in this what I'll

typically do when I see a big jump like

that I'll just draw it in here and then

notice what has happened here recently

it kind of floated back down to what

should be the the floor to support it

the support area and it bounced up off

of it okay so maybe that one's a little

bit easier to see for you and we can see

down here the volume and I want to say

when we're seeing breakouts breakouts

above resistance it's nice if they have

extra volume and that's why it's helpful

to have the volume average down here so

on this day instead of being an average

of 

, it on that day traded over 

million shares when you see lots of

volume mve in that's a little bit more

convincing that maybe that breakout uh

could be happening now I want to

redirect our our thoughts here for just

a moment I want to take you back to the

course because I want to show you where

you can read up on these things that

we're talking about today to really

reinforce and I love the testimonials

that uh many times uh Wy will put out in

the chat not even being solicited where

he'll say hey if you go you look at the

online course it really helps the

learning curve so uh let's

go over

to where did my icon go there we go

we're going to come over here uh this is

our Schwab demo account and I want to

show you again the the path to go find

the course so up here at the top this is

just a right after you log in what you

see click on this uh learn menu right

here and then just a little bit below it

to the right it says courses we're going

to select on courses we're going to go

to the Third for down so I'm going to

drag oops let's see where did it

go

uh it did not go to courses I wonder if

we just have a

new little

bit oh okay looks like maybe we have to

select on it again right here looks like

they changed the menu just a little bit

recently all right there's the first

course the second course third course

stock trading with technical analysis

honestly everybody should do themselves

a favor and go through this course now

I'm just going to go in and I just want

to point out to you introducing

technical analysis what are the benefits

and the risks of using it and then it

starts getting into the principles we've

been starting to talk about like Trends

support and

resistance uh Trend and time frame we'll

spend some more time there but this is

where you go to find that information

and then I want to point out to you

again this uh resource called the

trading uh stock trading with technical

analysis bull flag sample investing plan

it is quite the mouthful okay yeah if I

come down here to page uh three and

that's where we've started several times

we've took taken a look at the watch

list

criteria this is the sample entry rules

so you have to understand some of these

principles in order to for the rules to

make sense to you all right uh so here

it says we're going to be looking for

the support bounces or a resistance

break and sometimes be common entry

signals uh we also could look for

something called a cold which stands for

a close above the high of the low day

got a little acronym for it over a my

scratch pad and so we might look for

that as an entry signal uh another thing

we might like to use this bull flag

pattern

is sometimes we'll see it break out of

the flag and I'm going to draw a a

little picture for you so you can see

what that means okay so this is the area

we're really focusing on here today so

if we're looking to get in we might look

for a breakout above resistance or we

might look for a support bounce or a

cold okay uh this is where you're going

to go find that information now I want

to since I'm out on our browser I'm

going to stop here for just a moment and

remind you to if you haven't already

oops that's ugly go ahead and subscribe

to our YouTube channel in the bottom

right hand corner of your screen you're

going to see the little YouTube logo in

blue you want to go over there and you

want to subscribe to our Channel which

is the trader talks Channel then when

you do it makes it a lot easier for you

to see what's coming up uh if you want

to have it remind you and send you a

reminder that this is the class that's

coming up soon okay and then those of

you especially those of you that are new

we have some sections for you to be able

to go and find a particular course most

of them are the getting started with

courses okay and so the ones for this

class come down here it says start here

okay so anybody that's just learning

these where the basic principles are

taught last time we went through a

series we parked all the versions here

so you could just go in sequence okay it

makes it easier for for you to find the

things you're looking for all right

let's jump back to our charts

here and uh I want to talk to you about

what a cold is for a c hold let's look

at a different stock here we're going to

look at we're going to use apple as an

example for some things we may have seen

in the past and I have drawn on my chart

here and I'm just going to zoom in

what a flag might look like now a flag

has a sharp runup it's just kind of like

a pop pop pop all right start vertical

rise up and so like say this area

here that's not very black enough or

dark enough but going up here you can

see mostly it's a pop pop pop right kind

of going up and then we would call that

the flag pole and then we would say oh

when it's consolidating when it gets a

little tight range and quits popping

that creates a flag and so I had

actually had a couple pre drawn here

from a while ago this one could have

been a really long flag pole and or

somebody if they were maybe not looking

that long they may have considered this

little shorter one a a smaller flag pole

that looks legit as well because there

was a little tiny break in here but this

area this is what we call the flag area

sometimes that flag might go straight

across we call that a flag in a stiff

breeze this one is just kind of like

your droopy flag right you hang it out

and it droops a little bit and then what

we look for is we look for the stock to

break out of that consolidation and so

say on this green candle that probably

was the day that it looked like yeah

it's breaking out now if you've got a

flag pole and a flag that's kind of

steep you know the breakout might be

just like over here it doesn't have to

go past the top sometimes it might like

it really did actually in this situation

but sometimes it won't all right and

you're going to get used to kind of

seeing these and you're going to be the

one making the call hey did it break out

here yeah I think it did or maybe you're

not quite convinced about it okay so

that's our flag we have another

principle that we call a cah hold and

that just stands for a close above the

high of the low day you can see over

here on my scratch pad got it listed

here feel free to take some notes what

it really means what it's an

abbreviation for and essentially what

we're seeing saying is we may see a

stock in an uptrend we see it pull back

sometimes it might be in a flag

sometimes it might not okay and we look

and see well in the pullback where did

it go the lowest and then we're looking

for the price of the stock to close

higher than the low the high point of

the lowest day in the pole bat make

something here

so for example in the flag maybe you

haven't learned about Flags yet but in

the pullback what day does it look like

it

goes the lowest probably this day here

well the high on this day was

. and so we would be looking this

next day hey is it breaking out is it

having a c hold we need the price of the

stock to close higher than

. and we can just visually see yeah

I did it on this day here uh some people

might not wait for the close of the day

they might if it makes a big move they

might feel convinced that maybe they'll

take a move above the high and the low

day and get in on something like that

it's going to be up to you to decide

some people might wait till the end of

the day to really see if it's going to

close there rather than getting in and

maybe having the stock maybe not run up

as high as it did at first thing in the

morning okay uh next up so we've talked

about flags and entry points let's look

at something here

um

cpng now this is an interesting company

here uh we can see it was in a downtrend

for a little bit of time kind of hit

some lows and started making higher

highs and higher lows what did it do

here today

boom man that thing shot out you can and

I'm going to just zoom in here so we can

see better look at all that volume and

did it break above some resistance yeah

probably did uh there may have been an

area of resistance what maybe maybe at

this $ and some odd and some change

okay uh some may have said well maybe

this is resistance because there's maybe

more hits there and it could be that

maybe it's a little bit of a range okay

uh technical analysis is it's not a

science it's kind of an art form right

you may see something a little bit

different than I see it okay doesn't

mean you're wrong and I'm right or vice

versa just means our interpretation of

it might be a little bit different now

as you look at this particular stock you

may go well the breakout was today but

gez Connie was at  and a half% so some

people might look at that and say well

let's see if the stock comes down and

tests out the old resistance and then

some people might try to get in if it

bounces off of that which would now

become new support right old resistance

becomes new

support uh let's take a look

here

at that's not the right

place I want to show you I'm going to

show you um we looked at a bull flag

just because you're going to start

seeing I want to identify this for you

okay CBR RL is what I want Cracker

Barrel maybe you have a Cracker Barrel

by you uh in any case the moving average

shows us man it's been downward trending

kind of flattened out a little bit here

but starting to drop again here and I

just want you to see that we can have

Flags in an uptrend we can have Flags in

a downtrend as well okay so I if I were

drawing the flag in here let me go to my

drawing tool that might be a bit little

bit better is I might see that steep

drop and that little

consolidation and then breaking out of

it again boom shoot H big drop and

usually the height of the flag pole is

what we might expect the move to be

after it breaks out or in this case

breaks down below that's the kind of

movement we're going to expect out of it

so I want you to just be aware G it can

be on the be be side as well as the

bullish side right now are really

training our eyes to look more bullishly

but there will be a point when you feel

a little bit more comfortable with that

you'll start to use your technical

analysis to identify things in a bearish

type scenario now I'm not saying we're

in a bare market yet or anything but

we're starting to see a little bit of

that weakness aren't we uh let's take a

look at this St

etn okay Eon

corporation uh you can see from the past

I drew in maybe an area of what

resistance we've got it's -day moving

average if if your eyes are having a

hard time figuring out Trend have hard

time finding the higher highs and higher

lows sometimes it's helpful to just have

the moving average there to tell you hey

that the average is about this now as we

look at Eaton the question might be well

um what what might we look for for an

entry signal there were not a lot of

bullish stocks this week especially not

today Wednesday and today were pretty

heavy bearish days in the market uh but

but this particular stock keeps making

mostly higher highs and higher lows now

I would say the previous low was right

here at the bottom on this little uh low

point on the Shadow and then here it's

in a similar areas it went slightly

lower and what's interesting here it

looks like maybe it's bouncing off the

moving average so in this case we might

say okay here's our pullback what was

the lowest day in the pullback well it

was this candle here two days ago on

Wednesday the high that day is

did it close higher than 

oh it was so close it was

so it didn't quite do it well does

it do it today we need it to close above

uh 

and it does it closed at

so technically this would be our

cold candle day and some people might

use that as an entry now does it mean

you have to use it for an entry not

necessarily but trying to give you lots

of ideas that you might want to consider

and practice trading in your paper money

account now the other thing I wanted to

point out too is this

RSI and basically there's an area of uh

it goes from zero to  okay it doesn't

go higher than  and our key points

here are  which is up on this top side

and then  down here so if we see the

line is maybe dropping

uh overall you know we'll look for Peaks

and troughs again then we might get the

idea that the momentum is starting to go

more to the beider it's becoming weak

all right so during an uptrend typically

we'll see what we saw here a lot of the

time it might be above the  would call

that the overbought area if it drops

down below  like some of the be stocks

you'll be seeing right if they're down

below  they're in an area that we

would we would consider oversold

and sometimes there can be negative

connotations with those terms but I

would want you to think okay if it's

overbought means buyers are in control

if it is down below  in that o

oversold area would say the sellers are

in control now I do want to do in every

one of our class I want to at least do

one example trade okay so we're going to

use some of the things that we've talked

about today to set up that trade now one

thing we talked about uh in previous

weeks is that when we get into a trade

we want to know where we need to get out

when uh maybe it's at a point that we

say hey if the stock really goes there

it's not up we trending anymore or it's

breaking down through support

significantly that we decide we don't

want to be in the trade anymore and when

you decide that up front as you're

putting these practice trades in your

paper money account think of it at the

time you're doing it because if you wait

sometimes it gets too emotional

especially if you're a new Trader you're

like oh should I put that stop in you

know maybe I maybe I'll give it a little

bit more room right emotionally we don't

make very good choices okay but what we

could do here we could say all right

looks like the last time it came down

was to this  period moving average uh

that value is over here on well actually

that's not right this is what the -day

moving average is is today at the close

but if I just came down here it's going

to be pretty close to what the low was

so the low here is

and use our calculator we're going

to go % below that % gives it some

wiggle room okay uh where we're like

yeah if it really goes there we really

want to be out of the trade because it

could kind of Wiggle around and maybe

bounce off here again right so  

is the current value and I'm going to

multiply that by

okay  is the quickest way to get

% below your number you're looking at

so it says

so I'm going to go put my mouse as

close to that as I can okay that's

pretty close

or yeah  so if it really went

there yeah it's making a lower low uh

could be the trend is changing or maybe

they had some bad news that might be

changing the trend but in any case we're

like we don't want to be in it anymore

okay so this is where we're going to put

our stop value now in a future week

we're going to teach you about how much

to buy okay uh managing our risk okay

for our purposes today we're just going

to buy  shares okay trade

tab click on the ask

price uh when I kind of was doing some

risk management earlier on this one

that's where I came up with the  we'll

teach you that another day and then

here um we got our cold signal so we're

hoping we can get in close to what it

closed at so I actually might change

this price to be

it's a little bit high right now

BEC artificially High I should say and

then we'll make it good for the day now

what I really should have done is I

really should have done a right Mouse

click and said buy custom with a stop

okay uh that actually puts two things up

there together so I'm going to take the

time to do that we're going to change

that to  shares again and then uh you

click on that little link it'll make

sure that which what we're selling is 

as well and then we will change our

price back here to

think I got an extra digit in

there 

and then we'll put in our stock price

there we go it'll trigger a market

order if it gets to that price or lower

and we'll make it good tell cancel so we

don't have to go set it up every day

okay that is going to be our trade

example for today

and we may use some of these trades in

future lessons uh just read through it

make sure it represents what you want

this lets us know hey they hits that

stop it triggers a market order it's not

a guaranteed price we know that and then

we would go ahead and send it in I'm

going to send this to our getting

started with Stock Investing

bucket okay I need to check your chart

your questions over here that I haven't

looked at for a minute uh if you have

any questions you you need to raise

right now let us know cuz Scott can help

me out here as well

uh and it looks like maybe uh maybe

we're Scott's just been helping you out

all along here thank you so much Scott

all

right next week we are going to get into

more technical analysis there is such a

lot to cover uh that we only can cover a

little bit in one of our sessions and

still show you some examples so I'm

going to encourage you to do couple of

things one subscribe to the channel

makes your life easier uh and then

number two fill out that survey for us

we always appreciate when you take the

time to do that we really appreciate

that as coaches we read every single

thing you write in uh in fact Scott will

be Scott's the reader he's helping me

here today but he's the one that

actually gets that information it's

totally Anonymous uh nobody knows who

submitted whatever okay unless you stick

your name in there then we might be able

to guess uh but otherwise yeah it just

helps us out so I would encourage you to

do that okay we started talking about

some of the parameters and tenants of

technical analysis and where to find

that information we talked a little bit

about some entry points I want to go uh

into a little bit more detail on that

next week as well and as we look through

some examples okay so what I'm going to

encourage you to do is start marking up

your charts start drying the horizontal

lines the diagonal lines if you feel

comfortable with that identifying ooh

maybe this was a breakout here because

it broke above resistance oh man look it

broke through support right here and

just start teaching your eyes and by

drawing the lines on the chart they stay

there they're not going to disappear so

the next time you pull it up it'll still

be there which is always very nice it'll

show up on your mobile device too if

you've drawn something in there so it's

time for the weekend it's time to Turn

You Loose I appreciate you being here

today uh we'll be back here bright and

early Monday morning : right at the

opening of the market uh and so we'll

see you back then have a great weekend

everyone bye-bye