Trading with Technical Indicators | Moving Average Application on thinkorswim®

hello and welcome to trading with

technical indicators my name is James

Boyd we welcome you on this Monday

morning and it's uh Market that's

looking like this might be deteriorating

a little bit we'll talk about that now

we welcome Scott Aloha back to you Kathy

Grace Eddie Doug rice bird and many

others we also have Brent Moors in the

chat we welcome him as well let's go

ahead and hop right in today we're going

to really be talking about um some uh

updated scripts the moving average

scripts we'll talk about those the label

themselves and the moving averages with

the use on the monitor tab market watch

and charts now we want to talk about

that because recently we just all moved

over to the Schwab thinker swim some of

you might have not have those scripts so

I want to talk about those and we're

going to be also using those as trade

examples here today let's hop right in

now remember with what we discussed here

today the information here is provided

for General informational purposes only

should not be considered an

individualized recommendation or

endorsement of any particular security

chart pattern or investment strategy

when and if we talk about options

options carry high level risk not

suitable for all investors all investing

involves risk and when we also talk

about examples they are just that so

today what I want to do is if you go to

my uh if you go to for example and I I

sent you this link before but let me

resend it out and uh for some of you who

are not on X okay you might say say hey

I I don't have X formally known as

Twitter that's fine I'm going to also

put this information in the in the

description as well on this video this

is being recorded also re remember when

we go when we scroll down historically

we had some of these old scripts that

were good on the previous website I want

to kind of talk about kind of

translating some of that over uh here

today and I'm going to really be talking

about this section where we talk about

crossover scripts daily weekly we're

going to be talking about the

differences in the whole moving average

versus regular moving averages talk

about cold which is a bullish bounce

setup the

cbld which is a bearish Bounce Down

potentially and we're going to also be

talking about the label counters on the

market watch that have been updated and

also the label counter that is on the

chart okay now I can give you that

directly this link if you if you have X

it will take you take you directly or

should to this direct post that was done

minutes ago remember if you're

watching this on recording or you do not

have X I'm going to put these scripts in

the

description because I love you now just

real quick as we get started let's talk

about just briefly the markets okay now

if we take a look at kind of the markets

what you're going to notice is we went

up to the downward trending  period

moving average and so far it's been a

decent rejection okay went up the open

was pretty much the Gap and then it

faded quite hard today's candle what

would that be

called okay what would today be

called well if we close here that would

be yours truly a bearish engulfing okay

so never like the red shading never like

that okay understand that you have to

get sell offs before you get

bounces right and so far the bounce kind

of a little soft here now we'll talk

about sectors and how this plays in in

just a moment okay when you look at the

NASDAQ didn't even get up to the

period moving average barely got above

the  and then faded down so the NASDAQ

even being a little soft okay Dow Jones

itself it had been ugly it led to the

downside kind of has more of that dark

cloud cover now want to kind of say one

thing as we saw the market drop what did

these two portfolios do with its

positions on a primary basis well we

exited the positions we know we exited

something because the cash is so high

relative to the account balance there is

only $, of capital in the market

from the IRA account that's it the rest

is sitting on on a soft fluffy puffy

pillow and kind of now literally is it

sitting on no it's not sitting on okay

it's just sitting kind of waiting for

those better setups to come which are

still yet to be seen okay now when you

take a look at the IRA so a lot of cash

there and you're going to see that if we

look at the margin quite a bit of cash

there , of , you only got

$, invested okay Grand told these

two portfolios only a $, investment

that's it okay now why is that well we

didn't like the trends we saw that there

was exits and we're going to talk about

how we're using these scripts for a

couple purposes which will name in just

a moment but Dow kind of still being

pressed down Russell God you even have

to say that the Russell is doing better

than the Dow okay least Russell staying

closer to the top where we're getting a

little bit more interest here is on the

vix we said this last week in Tuesday's

class Beware of the vix when it's low

and doing a bullish blank Divergence now

it's not called blank fill in the blank

that is okay Beware of the vix

low with a

blank yeah I should say a bullish blank

diverence fill in the blank okay fill it

in now also just real quick kind of

something on the on the news front crude

oil just absolutely getting walloped

here this morning we had ISM

Manufacturing numbers coming in at what

okay that's s like a contractionary

reading new orders were also

contractionary when I say contractionary

you'd almost have to say pre-

recessionary numbers you're seeing the

US dollar which is a reflection of that

bad number on the ropes or I could say

on the mat of support and you're going

to see gold getting a little bit of a

push that order from last Thursday Did

trigger okay silver was stomped out and

gold was triggered back to the upside

funny how that works now let's kind of

talk about just real quick what we're

going to really want to be using here

today and I want to go to the market

watch for just a

moment and what I want to do is I want

to bring up the indexes okay so when we

talk about trading with technical

indicators one of the main indicators we

used for technical analysis is scripts

and one of those main scripts that we

actually talk about is moving averages

the moving averages could be done in

many different ways and the purpose of

using the scripts for let's say moving

averages is to identify

sentiment okay if we see that everything

is bearish or most likely bearish that's

going to probably tell us something

about maybe the the sentiment itself at

the current time but also it's going to

tell us something maybe about the

strategies an investor might pick uh

number two from those uh scripts it also

might give us the idea of potential buy

and sell

signals okay now we know that for

example when we talk about scripts we're

using them number one the market watch

tab like from a watch list okay which

could be an index list as well we could

also use them on the charts we we could

also use them on the monitor we could

also use them on the scan and we could

also use them on the left-and side like

your watch list on the left- hand side

so it's embedded everywhere okay now

first off what I want to kind of do is

let me kind of show you something just

real quick okay and what I'm going to do

is let me bring up the index list and

what we have here on the indexes is um

we talked about okay about two weeks ago

the trend script which is right there

and what you're going to notice is okay

the Dow itself number one below both

moving averages NASDAQ Russell and SPX

showing in number five what does number

five mean and by the way if you say I

don't know what it means right click on

the column heading it will give you a

description of each

okay and by the way I'll show you where

that recording is if you miss that

recording now five just means we're in

in between the moving averages if you're

five that means you've broken down below

the short-term moving average you're

losing bullish momentum you lose bullish

momentum you're maybe starting to create

a bearish trend five is not good okay so

now if we look at the the vix not the

greatest sign to see the vix okay in a

number three you want your stocks in the

number three number three is when the

stock is above both moving averages here

we don't want the vix above both moving

averages okay because that actually

means that the vix is rising that

actually means that stocks could be

falling now remember if you don't have

the script rightclick edit formula let

me send this to you and what you're now

going to notice is put that right there

script's not guaranteed for accuracy

remember when you put that on right

click on the column heading there's a

reading right here okay uh read it what

is what what is one right what is two

two what is three I mean just read down

it the bottom line is doesn't make sense

we know how to read but we don't read

okay read we wrote it for a reason so it

give you some context and color okay

please read it it make me feel better

okay now so when we look at the indexes

nothing looks great okay and the

volatility actually is not even above

yet which means this sell off might be a

little early in terms of being done okay

now when we go for example to let's say

the sectors just briefly the only sector

that really kind of showed any potential

bullish setup was which one now what I

want to kind of make sure we know how to

do is how do we use these technical

indicators for a routine that's what I'm

interested in kind of teaching right now

how do we use this in terms of routine

I'm showing you so when I pull this up

and I look at this the only thing that

we see in a green color is real estate

okay that's the only thing we see the

only thing we see in a in a orange color

which is a level uh number four which is

uh

technology every other sector didn't

have to even look at the charts we could

to verify our number fives and ones okay

so remember read what it says in number

one read what it says in number five

Five Below both below the  but above

the  losing bullish momentum could be

the start of a bearish trend one below

both moving averages it means it's well

recently been getting hurt to the

downside now I want to kind of so when

we talk about the indexes we talk about

sectors this now really gives us a sense

of what the sentiment is and if we

wanted to just kind of verify it maybe

just a little bit more we could pull up

like an index like the Dow we pick the

Dow because it's just  stocks and when

we look at for example here on the trend

list uh the TD stands for Trend daily

you're going to see half of the list is

in number one Trend condition couple

others in five there is a small slice of

pie here of Dow pie that is for example

green but boy it's a small slice third

of this list is under pressure now don't

think about that song right now okay

think about what the the column is

telling you so we look at the indic

these indicators the script to give us a

sense of the sentiment of the market now

here's the thing you got to be careful

on no pullback including the great great

depression pullback or  pullback

eventually every pullback has an end

okay and so the thing is you want to be

thinking hey the sentim is bearish but

where might the market bounce you always

want to answer that question where might

the market bounce what do we want to see

for a bullish reversal now what I want

to do is I want to kind of talk about

the scripts just real quick so right

here we have moving average crossover

market watch and these first two right

here are really based on historical

moving average we use they're not bad

okay and what you're going to notice is

they're for the market watch okay

they're for the market watch okay so we

could just copy and paste those scripts

right there remember they are case

sensitive okay and we could just put

those in now remember when you put those

in and I'm going to show you one of

these watch very very closely okay so

what I'm going to do is I'm going to go

back to this just real quick and then

we're going to look for examples of what

we are seeing so at the very top right

of the screen very top right click on

the gear go to open shared item okay

what we're going to do is I'm going to

say just now I'm going to type this in

or I could just copy and paste there it

is now if you're watching the recording

on at the same time what you're going to

notice is I'm now just going to say

let's preview this okay that here's kind

of the misnomer I already had someone do

this it's okay that's why we're talking

about it hey I downloaded the script I

can't find

it okay we're all guilty okay so when

you say so this is a market watch script

how do I know it's a market watch script

uh because literally says that right on

the sheet okay now I'm GNA call this I I

just call this

Max okay so when I type in Max and say

import this this has been always the

problem that once someone downloads it

they think it magically should appear it

doesn't you got to go to the column

heading okay grab it with both hands

literally and right click on the column

heading

and say customize what you want those

columns to be we want that moving

average crossover script right click on

any column heading click customize on

the left hand side we can pick from the

scripts that we have and then move it to

the right now guys and GS like you if

you can do one of those you can do any

of them okay but sometimes it seems

really hard for some people I think

sometimes people just need to watch me

do it and then watch the recording over

and over maybe in a five minute period

you can do one of them you can do any of

them okay so now what we're going to

take a look at here so the first thing

is when you download the script name it

right click on the column heading you

right click on the column heading any

the scripts you have you could then put

them to what the current set is showing

now let's kind of talk about where the

current market is

now excuse me now first thing what we're

going to notice is some stocks okay when

we look at the moving average crossover

okay there we had a crossover that X is

today okay that's getting a crossover

today crossover Friday cross over Friday

X cross plus one meaning one business

day ago cross plus one cross plus one

cross plus two so out of the whole list

of Dow stocks you got six out of  that

are getting crosses so the one of the

first homework assignments that I would

give is update your scripts to to the

new platform okay that would be

extremely helpful and that's what we're

trying to really use them for now let me

kind of just do this just real quick

bring that back there you go so the

first thing is if you don't have that

script put that on I'd also like you to

put the weekly crossover on as well that

is not going to get as free as frequent

as signals but it's not not a bad it's

not it's not bad as well okay uh just

understand

weeklys not going to be as typically

active okay now the one we're going to

focus on right now is that whole moving

average X is it for the market watch or

the chart well if I read it would be for

the market watch and what time frame is

it it's for the day hall and the

-day Hall okay and there's the there

it is and this is where we're going to

kind of get into the trading aspect okay

so if we go back right here you're going

to see the

max okay now if we said just where do we

go to put that on one more time you're I

know you're gonna kill me you know

that's what you're probably thinking I

just need to ask one more time don't

worry about it I uh we were all there

once top right open shared item and then

copy and paste when you put that there

remember to save it okay call call it I

just call it h

Max and then right click on the column

heading now what you're going to notice

is when I go to the very top if you

wanted to customize these okay

rightclick edit the formula okay now

what we can actually see in this case

it's using the whole moving average and

anytime that we actually see length of

there's your  and then we have

length of  if you like to use not

but maybe something like  feel free to

anytime you see  take  out and then

put

there take it out put  take it

out type  it's an easy way to change

it okay anywhere you see  put it to

that's if you want those signals to be a

little slower fine okay so now we're all

happy now I want to go back to just real

quick one of the things that we saw from

before and I want to bring just CL just

briefly okay now when we look at CL and

we look at this chart okay now if we

kind of went to one thing that we had

before which is this chart

itself I want to bring this back up and

I wanted so there was a question asked

about the bullish bounce dots known as

cold or the bullish bounce dots called

cbld now I want to kind of put this on

here because this might be an

interesting time to get a little

practice because there might be some

things going down let me kind of just

put this on for just a moment so this is

going to be a chart script okay and this

where we're going to get into the

trading how do we know it's a chart

script well H moving average ma with

cold on chart how do you put the script

on the chart how are we going to do our

first trade well what I'm going to do is

going to go to the the very top right

open uh shared item copy and paste

preview now I'm just going to say uh

import this and now what you get in this

case is a miniature chart you haven't

had to name it yet okay now what you're

going to notice on this chart is we see

Dots Dots Dots those green dots are

really for bullish bounce setups okay

now what we're do is we're going to

change it to a one-year daily chart okay

and I'm going to go back to the test

tube so whenever we actually want to

edit something on this chart I want to

show you this feature we're going to

click on the test tube right there click

now what you're going to notice is

there's a section in this uh setting

where it says cold and CB LD close below

the low of the high day that's the

bearish version of Co now when you go

over to this gear the

settings click on the settings now what

you're going to notice is it's kind of

more of a toggle on toggle off we have

said on here show cold yes but what we

really want is we want to see show close

below low of high day no

yes okay now we don't always have that

turned on because the most of the time

we're bullish but if we have a chart

that is going

down now we can see the bearish version

of CLE let's see that and let's do an

example so what I'm now going to do is

I'm going to go apply and then okay and

now we're gonna see I'm going to bring

up a chart here and I'm going to start

with example given

Alberton so I want to talk about the

moving averages and these dots okay so

first off when we talk about let's say

the moving averages we know that when

the shorter term moving average goes

from green to Red not the greatest sign

we're losing momentum okay that's on the

day moving average Line This is the

we know that if that goes from green to

Red that's not a great sign the  is

used for a

momentum Momo and the  is used for

Trend if both lines are red you know you

have negative momentum at that time and

negative Trend now what are these red

dots for the red dots are really showing

you okay let me take that off kind of

show this what it's doing is it's taking

a look at the most recent

updates well the most recent updates are

one two

three which of those three days do we

have the highest intraday low the

answer it's number

three and if we get the price to trade

in or close below the low of that

highest most recent up

day that is why there's a red dot right

there okay some technicians would say my

gosh I'm going to do a bearish trade now

does it always have to be three days no

if we see where it only goes up for one

day okay what is the most recent update

in terms of a green candle well you only

got one do we clo trade or close below

that day yeah the very next day we did

and that's why it's showing that red dot

and that update only lasted one day but

here we actually have where it goes one

day up green two day up green and then

what we see in in this case is Red Dot

why well because which update is the

highest the second day about that are we

trading in or closing below that second

day the answer is yes that's why there's

that Green Dot okay now so here's the

deal we know that on on the on the

market watch you can have cold you can

have CB lhd as well okay can so there's

not but here what we're actually talking

about is where we can see the kind of

help us see the bullish bounces or

bearish bounces okay now the big thing

is what you got to understand is if that

chart is going down the green dots don't

really matter because you're buying in a

downtrend okay so the number one thing

you're looking for is number one is

Trend okay Trend Trend which moving

average are we using to see the trend

the  okay if we see that  period

moving average down and we get a Green

Dot okay that doesn't matter because the

trend is

down

okay yeah so the com okay the comment on

this and and yeah and we could fix that

so how do we actually and I'm doing this

on purpose we can talk talk talk about

settings so how do we change that if I

see that hey this is looking at a  and

that's looking at a   and this is a

good time to bring it up how do I change

that how hard is it go back into the

test tube and there now the reason why

we want to talk about settings is not

all of us are going to agree okay all we

had to do is oh my gosh that was

incredibly difficult go to where it

saids  click on the symbol of gear and

then type in from  to  oh was back

breaking incredibly difficult okay now

if I also want to make sure when I go

back to this chart and pull this up

there you go how can we verify

and then when I kind of put my cursor

right there and move it around you'll

see over to the right it it should say

okay there you go yep simple now guys

and girls I think it's good that we show

how to change it because not all of us

are going to want one chart okay I mean

when did  people agree on anything

never okay very rarely so what I want to

do is I want to talk about looking for a

bearish trade in oil how do we do it

okay now what we're going to do is we're

going to go to market watch and then

we're going to go to let's say visualize

okay now what we're going to do is I'm

also gonna let me actually let me just

show the visual but then we're going to

go to a scan as well because there was a

question on scans with this so if we

want to get a visual idea

where maybe some of those bearish trades

could be we're looking at the S&P

okay well we see the energy in the

bottom right okay if we want to see a

little bit bigger list of energy stocks

of which ones could be getting hit now

we see a little bit easier list to see

there's more stocks that we can read and

there they are right there now the

companies that are actually probably

going to get it more hit from oil prices

dropping the most are ones that are

probably uh not

refiners they're not integrated

companies they're more just the

Drillers so we know Exxon has a gug gas

station and refines okay and they

actually uh search for it we're looking

for probably companies that probably

don't have gas stations but they are

just a Flatout Drillers okay so if the

price goes down it could impact their

business

more because they're not on all

spectrums of the Fulfillment of that

product okay yeah so now I want to kind

of talk about the the question which was

asked to me on X and it was as follows

Randy welcome to the game of answer that

question okay are the moving average

crossover watch list

scans well so they if you had a like a

lift if you had for example like a a

personal watch list or a public watch

list they can be a scan and I think

you've just shown that as a way that we

can see a sentiment but we could also

for example with this kind of filter

them yeah by looking for opportunities

sure and the question he ask was they

aren't showing up after importing we

just went over that make sure you label

them and then you make sure that you

right click on the column heading but I

want to talk about the scan for just a

moment okay let's say we wanted to go to

scan and I want to use these headings we

just did in terms of like a filter of

looking for something okay now what I'm

going to do is I'm just gonna uh go over

here and I'm just going to clear any

filter the only thing we're looking at

is scanning the S&P

we're going to say intersect with by

industry and we're just going to say

energy now if I just click on the energy

it's just going to pick the sector but

if we want to try to focus on finding

something bearish

that could just be drilling

itself okay if we look at some of these

other companies production marketing

Transportation Etc we might just be

looking for drilling itself okay so we

could but we're just going to take

energy as a whole when we talk about for

example the two things we look for all

the time greater than  above a million

in terms of volume there's  matches

scan it

now notice that what it comes up with

these headings right here this is not

what we saw in the market watch don't

worry we're going to go over here to the

right hand side and we're going to click

on the three lines click on the three

lines save as a watch list guess where

you could pull up your watch list right

on the market watch tab let's do it I'm

just going to call it energy okay energy

stocks pull it up okay and what I'm

going to do is uh energy let's put it

right there save there you go go back to

Market Watch

quotes right below quotes there's the

little drop down for where we can see

our list personal and go right to energy

now we already put the headings there

okay now I want to talk about just real

quick what we see on the right hand side

okay if we saw like a bearish crossover

this would not be a green background it

would be red it be a red X a bearish

crossover negative okay and it would

also for example I want to kind of talk

about this right here this is where we

talk about kind of seeing how long has

it been down and this is not a New

Concept this has been around since

probably

is this is counting how many days

it's been down so if I said James I want

to get something where it just crossed

down or it those moving average just

turned red well what does the what does

the red background mean it means that

the the moving average has been red for

a

day one okay the  period moving

average it's been read for a day now do

you just kind of take a hook lineon

Sinker and believe it everything you see

no you verify okay so when we actually

go back and say let me see f is that

really kind of what it's supposed to be

showing well let's pull this up has the

moving average for Fang been a day to

the downside one day one day it was

today it was just a big drop on Fang and

here's the thing you can know all about

techn technical indicators you want you

still need to know something about

strength strategy okay because I can say

oh look look at the downtrend okay uh

look at what the indicators are telling

us and the investor could just sit there

and stare at it so this is why we talked

about last

Thursday Tuesday as well is that do you

have a strategy to play bearish now what

we're going to show in this example is a

short call

vertical a more forgiving type of trade

okay where it's more probability based

we're going to go to the trade tab just

real quick so do you understand how we

got here we looked at the indexes part

of the index is we could put some

Commodities like oil and gold that we

like to see based on what those were

doing and what we saw with the energy

sector itself we knew that in that area

it probably be kind of maybe some stocks

going down we ran a

scan based on energy and then we

actually said what stock is maybe fresh

in terms of maybe going down in the last

one two three days well when I looked at

the h  whole C that just stands for

it's counting the number of

days that that line has been up or down

and that right there is the   H C

o counter and again that just really

kind of showing it's counting the number

of

days that we actually have now what

you're going to see is those scripts are

right here okay and where does that go

it goes on the market watch okay now I'm

GNA kind of show you something if we

pull this up we're going to go to the

trade tab just briefly we're going to

look to do a short call

spread so a we're going to start with

that first two words short

call so when we talk about a short call

we're going to use the example of

selling now I got some really odd

strikes here okay uh they've got the

and you got really let's say the

We're not gonna go kind of go these

little odd  three quars Etc we're

going to try to stay to where there's a

little bit more by the way there's

actually some decent open interest there

but we're going to look at the volume

today  there on the  we're going to

try to do the

okay so when we look at selling

the  when I say short call that means

that we're selling the call okay we're

selling the

call sorry about that let me go actually

go back we're going to look to do the ju

July's okay the  we're going to look

to sell that call and that call has a

Bid ask spread of  cents we're going

to want to make sure we get somewhere in

the middle like some in the middle being

when you look at the  your

typical wide $ spread   that's

kind of more standard so we're thinking

here could oil go down and maybe stay

down now there was a couple events last

week that kind of might be leading some

investors to think that if something

were to be the outcome energy might be

under pressure because there might be

more potential potential Supply you fill

in the blanks maybe okay maybe this also

has to do with the number we saw on the

uh ISM Manufacturing data as well could

be both we're going to look to do a

short call vertical there's the credit

notice that the the break even okay

stock's at

and you got a break even of

a built-in maximum loss and

whatever the built-in maximum loses that

is the buying power Effect Note the

commission now I gave you a homework

assignment last week to practice Bears

trades for who

yourself and what you're going to notice

is we're going to practice one more here

and we're going to send that order

clearly the goal is when you sell the

short call is to have the stock stay

below both strikes but especially the

okay now I want to kind of bring

something up for just a moment okay

let's go back to this list okay I'm

going to kind of show us something just

real quick how many you ever feel like

you're just

late and I want to kind of also mention

one other thing on yours when you bring

this up you might say hey James mine is

green I have a green background I have a

green background it's harder for me to

see okay fine now we're going to right

click on that heading edit

formula and what you're going to notice

it on here is it's going to show

us the color blue okay I have never

written a script I I don't know I don't

know a stinking thing about how to write

a script I'm just being honest okay I

don't how to use the scripts I've never

wrote a single one of them okay if

someone said well James what is your

academic uh level in terms of writing

scripts okay I can take out a color and

it went from Blue I could type in green

yellow red that is to my extent as f as

far as my script knowledge so if I went

back to green and said apply okay for

you as the Watcher you might say hey I

can't see the number how do you change

that right click on the heading custom

formula and just find the green

background and just just type in blue I

think you can do that because you know

as much of scripts as I do okay perhaps

maybe you know a lot more blue now I

think you can actually see that a lot

better what I'm trying to see is the

counter okay the counter itself now how

many you ever feel like you're just

always getting in

late but what what this is trying to

stop people from doing or at least to

evaluate is you have a stock right here

SLB that has been down for  days on

the whole moving

average this one PSX it's been down for

days on that whole moving average it

could have go further it could but the

biggest actually thing here is if you've

been down   days already the

investor might say gez have I missed

that shortterm opportunity so maybe

investor says you know I'm trying to

find the ones that are maybe like only

down for one day the the -day moving

average been down for seven days we

already talked about the Fang and which

other one for example you see Devin it's

been down for  days and the shorter

term moving average has dropped again

cop has been down for  days on the

hall and it's been down for eight days

so I want to go to oxy real quick this

is something a little earlier potential

Into the selloff Now want to kind of

make sure we're crystal clear when you

see a blue background does that mean

bullish or

bearish does that mean bullish or

bearish yeah blue is really bullish okay

I'm just changing that so you can see it

better on your end if you can see the

green on your end fine fine just keep it

green I'm just doing that so you can see

it on your side easier okay now I want

to go to just real quick want to go to

the example let's follow all this all

the way over oxy okay there it is why am

I looking at that well it just dropped

down one day ago the  period Hall

moving average has been down for seven

days let's look and see what we have

okay pulp oxy okay now if you look at

oxy what you're going to notice is we

kind of have like a

plateau of support okay it's kind of

sitting right there the next level below

us might be in the vicinity of there and

we're obviously talking about down there

okay now we said last week if now

remember you can know all about

indicators at some indicators are only

good to a point okay we now need to know

about strategy when we look at this wh

when we look at this chart what you're

now going to notice is the moving

averages they're down and that

short-term moving average went down in

the last

day now now if we look at this chart for

just a

moment I want to

see my dots okay so what I'm going to do

is I'm going to put those back

on and I want to see if we can't just

kind of show that a that one doesn't

have it you know that if you put uh put

that chart back on today should be what

well remember you went up for one day

two day which day is the highest it's a

second day and what you're now going to

see is right now we drop down that would

be a close below the low the high day

and so that is what some technicians

call a bearish bounce down we're going

to use the example on this of a long put

vertical so when you're doing a long put

you're picking the strike where you

think the stock could stay below okay

we're going to R right click on the long

put strike where we think the stock

could stay

below what we're going to do is we're

going to make it a $ spread after we

verify what's the open interest and the

spread on that  and a half why the

and a half well because the long put we

chose was  and a half we're going to

do the  and a half and make that your

classic $ wide spread there's the debit

okay and the built-in Max loss

is okay the debit the

$ and the potential maximum gain

now the difference between a short call

vertical long vertical is the break even

and if you change the break even you're

changing the

probabilities the difference also there

is of course the time Decay okay we're

going to send that order now I also want

to kind of say this last thing here okay

what we can also do with these scripts

is if if we have positions that we're

monitoring we could actually go to that

column heading right there and we could

just type in  okay that day whole

label we could actually just put that

right there okay so this is now going to

count the days that it's been up and the

second thing we could actually do is

also put  there as well okay and if I

put that  and mine have my there it is

let me actually change that put that

back and let me put  okay so now what

you're going to see is we can have those

counters right on the market watch as

well okay now there it is and when I say

there it is I I did set those up earlier

with the blue background so you could

see those okay so if you're managing

your

positions clearly you want that ticker

to be getting up higher and higher

higher to let us know that trend is

continuing to go if that goes from that

blue or green color whatever color you

set that to and it goes red it's

probably telling you that trend is

starting to reverse so these scripts

these indicators can help us with

current

positions it can also for example help

us with let's say

identifying sentiment of an index a

basket of Commodities a sector uh uh s

in Industry Group it can also help us

when we run scans to filter that list

and what we really did here today is

also brought up this the the scripts uh

in terms of also bringing them up on the

charts themselves okay so your homework

assignment and I know we all were on the

prior website this is now moving all

that all the things we've done

historically over to the new Schwab toss

so these script are new given the Schwab

thinker swim and I tested them all out

they should be good to go remember that

scripts are not guaranteed for accuracy

they're just showing at that potential

moment in time so your homework

assignment is to make sure you uploaded

those and put those on your market watch

and charts now remember if you have not

subscribed to the trader Talks by Schwab

coaching do so simple how you got do

click subscribe also if you do not have

the

playlist for this

class okay make sure that for example

you have that playlist and I'll send

that to you right

now and that playlist is as follows okay

there's the playlist now also remember

that uh coming up next right at the top

of the hour we'll be having a session by

uh trading cover calls and short puts by

Michael fairborne gave you a homework

assignment trying to get us updated with

the kind of the newer technology and

then we're all on the same page remember

with what we discussed we did two

examples here today bearish trades we'll

talk about that more tomorrow as well

remember with what we talked about today

that all investing involves risk

including loss of principle they were

examples this has been trading with

technical indicators make sure you do

your homework and I'll see you tomorrow

stay tuned for Michael fairborne coming

up next bye-bye