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Ep 46: Being Patient for the Right Stocks to Setup

July 16th, 2015

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Hey! It is Sasha Evdakov it is July 16th 2015 and today we'll talk a little bit about being patient for the right stock market setups. I do have about 10 different charts I also want to cover.

We'll go over some of those stock charts and just show you some other things that are moving, what's new what's happening, but I definitely want to emphasize today about being patient for the right stock market setups or the right charts setup because I find that patience is one of the things that kills a lot of traders and especially a lot of beginning traders.

They get very impatient with things and get into the trades that they shouldn’t be into or get into trading stocks really when they shouldn’t be trading so that's what we’ll talk about.

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First thing I do want to let you know is that the book for shorting has been released and you can go to the website and go to the book section and now once you're there just scroll down and it'll be right there 245 Money-Making Stock Chart setups it’s Volume 2 and you can go ahead hit to get it now button and that'll be in the Amazon section.

It is basically similar to the 245 Money-Making Stock Charts for swing trading except this one gives you practice and study for shorting charts. The final book that I’ll be working on is Penny Stocks that will come out probably October or November time and that'll be one of the last course material for stock markets for the year in terms of books and then the last one we have is kind of the Options Trading.

I don't have too much more material that I'd like to create in terms of products because I feel like looking at all this material already studying it all I think there's a wealth of knowledge there for people to just grab and get a hold of and so forth. So that has been launched and I also launched a free-course this week as well.

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Now this course is a computer building buying workstation for you so it's an in-depth course for purchasing the right computer for your needs. Now I've built a handful of computers over the years but this is what the course looks like so will talk about desktops versus laptops and Apple versus Windows, choosing parts for a basic computer, intermediate computer, powerful workstation and just some things beyond the basics and a final wrap-up.

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Notice these videos they’re about 26 minutes each, 39 minutes, 40 minutes, this one's even an hour-long, 24 minutes. So the whole course about three-and-a-half hours and it's actually absolutely free and the way to get that is if you just go on the home page here and you just scroll down to just one or two posts, it's buying and building a stock trading computer. It’s free click the video when you click it there's a link in there to sign up and subscribe where the link is.

Once you start playing that video you'll see that button right there in just click it you’ll get there, sign up and you get the course absolutely free.

With that in mind just basically we got the book that's out, the shorting books if you want that grab the book, the course, that also free that's available. Last book that we have for the year coming out for stocks is this Penny Stock one. Again I want to be crystal clear I'm not big on trading penny stocks but I enjoy looking at the charts for practice.

Just for looking at more charts I think it's healthy to just continue to build your awareness and I know people have been asking me for penny stock related things or cheaper stocks, stocks that are under ten dollars. I have been working on that book as well and it just allows you to constantly practice some of the things in the charts.

I mean just think about it, something for less than twenty dollars or the price of launch allows you to study and own that book for years. It allows you to look back, allows you to continuously review things and the second time you go through it you start picking up new things and so I don't look at a book as just “you know okay well what's written on the page” but how far can it take me personally in that journey.

Getting to the market today I do want to talk about the market and we will be talking about some of things regarding being patient for your trades so that's the key concept and focus but let's take a look at some of the stocks. So what's happening in the market, what's going on, what am I seeing.

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I was watching Google just now for their earnings here and seeing what's going on. Chances are the stock will open higher here around here at over 600 hundred dollar level at the moment depending on how the conference call finishes off but definitely is popping quite a bit but you never know when a stock will pop or when it will drop in earnings.

As I always say and those of you that have been with me for a while I don’t trade earnings, meaning I get out at my position 100 percent of my shares most of the time. The very few exceptions that I may hold on to my positions are shares is, let's say you got into Google right around this level or this area and you've been in it since 2013.

The stock moved really well now it's moving sideways you know if you're planning it for the long term hold that's perfectly fine and then that what you may do is before earning sell ninety percent of your shares and then get back in it if it pops but I've seen more often than not that a lot of these stocks, a lot of these these earnings do go against you. So you never know which way they go.

I mean take for example Apple what happened on the last earning, what did we do? I mean in the last earnings right here, here was the earnings stock dropped you know popped a little bit and then a drop then continued to sell off about 10 points over the next few days. These things happen all the time with stocks.

Since we are on Apple, let's take a look at it. Now for me this stock, even though it is popping and you know in my view, it's not a healthy chart and for me I'm sitting on my hands on this particular chart. I like trading Apple, I like trading the liquid stocks because it allows you to get in and out very, without any signals, or awareness, or without getting read by market makers.

It allows you to kind of get into it stealthily for all your trades. When this stock was breaking right here, this was a short for me. Now we did feel something from strength and then BOM stock went back up above it so you exit. It hits your stop you exit. That’s it you don't hold on to it because you don't know what the stock can do and this stock it's moving up on lighter volume.

To me this move isn't real and because it's not real for me based on my strategy, based on my rules, based on what I see in the markets because it doesn't have the volume, it doesn't have the juice. It's going up on air the stock has been selling off for a while. It's been selling since May, since the end of April so we have 2.4 months, almost two and a half months where it's been kind of selling off. Always been acting weak and now we get eight days or seven days of a pop.

I mean look at the big picture what's been happening, what's been happening. So I look at it, and to me the only way I would get into the stock is if sentiment changes, is if things changes because right here. I'm watching for that stock to break this level at this point. Now if it starts increasing in volume, we got earnings and so forth, everything just start moving together then you can of course get in earlier because it'll break that resistance point but until then I mean we have some things that are working against us.

We want to do this with looking at the overall market you want to do this with looking at the overall stocks and being patient for setups that are in your favor what is working in your favor and what works out well. In this case you know I'm sitting patiently on the sidelines for this to play out.

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We have BWA, is a stock that I'm watching as well for a setup. This is a setup, I’m watching for it to break lower. Even though this one's accelerating to the downside I’m waiting patiently for it to break this critical line right here. I'm not chasing it I could have went in it earlier but you know right here the risk the risk is that it could bounce at this level what did it do before, what did it do right here, the stock bounced at this level and then again it bounced again for almost a full 8 to 10 months the stocks bounced at this level.

So if it breaks this critical level at this line right here on this much volume on 10 to 11 million shares, that would be fantastic and it could be a great opportunity for a short. Sitting and being patient is something that you need to learn to do in order to trade successfully and a lot of things that beginner traders do, is they get really NC, with the trigger fingers.

What they'll do is let's take a look at the daily you know that daily on this has been selling off pretty well and if I would have caught it early, right around here, that would mean fantastic and I could say great you know the trades working out well. Unfortunately not every trade is going to be a perfect entry and a perfect exit.

The look at this, the stock may break they may get in it and then the stock starts bouncing and then they get out of it, they're not patient to getting in it, they're not patient to hold on to it. You know maybe they get in it right around here and then the stock bounces because it's been going down for so long, the stock bounces and they get faked out for two days and then the stock rolls over. That's what the stocks do, they fake you out and you have to be patient to trade the setups that are in your favor. For me this one I'm waiting for this setup and this break.

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Here we have Sherwin-Williams with the major sell-off here, stock sold off this one, you trade slightly on lighter volume than a huge company. So be careful with this gap, you want to use the top of this one and on the bottom of this as your stops, otherwise it has a potential to fill it if it doesn't continue to sell-off further so watch those levels closely because we also have that 200-day moving average that it's heading right there on that line and using it as a little resistance.

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Just be mindful of the stocks that trade with lighter volume that's why they move quickly.

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The next thing FNBC, same thing weekly chart stocks coming in and nice heavy heavy solid volume for a stock like this here we have two pops, one was right here and now it's breaking here, good entry point solid for those of you that got in it. Second day follow-through looks good for higher prices.

For some people what they do is they don’t enter the stock right away and this is what may happen to Google for example tomorrow. Let's say it bounces right here and it gaps up, now after that stock gaps up what you can see is a follow-through day, so like this stock or what you can see is a sell-off day to fill that gap and then potentially to bounce.

Be mindful of how the price action is the second day as well and for you, may want to just get in it on that second day because even getting in on the second day with fairly good volume you can still play out with some nice solid and big rewards.

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Let's take a look at, here's another EROS, this is what I mean by awaiting for the second day. Take a look at this stock where even if you got, so looking at the overall trend, even if you got in the third day here on this line break okay so you got in right here on the third day, stock continued if you were patient to watch for the trend.

Then the stock retraces pulls back then you can get in, you can get in the first day, second day, or third day but then you got to be patient for the stock to consolidate and then again even if you got in the second or third day be patient and allow that stock to run but what a lot of people do is if they get in late right here there's nothing wrong with the stock they don't understand that there's nothing wrong with the stock but they got in a little late because there's no perfect entries, there's no perfect exits but they weren't patient.

The stock pulls back and that's healthy, it's healthy for stocks to pull back but if you weren’t patient it didn't allow you to capture the next part of the run or the next part would be right here. Then again they may try to get in again and say “I missed that move let me get back in, the stocks still doing fine” and then again the stock pulls back and it's healthy for the pullback and then again the stock powers higher and they got out of the position somewhere over here at this level.

Understand what's happening with the trend with the market look at the bigger picture and start being more patient. It's very difficult, it's very difficult to be patient in this business and that is because your emotions are tied to it and one of the easier ways to be a little more patient is to: Number one trade less shares, Number two is you can walk away from the computer so that way you're not psyched out emotionally, mentally and psychologically from the physical day-to-day movements in the market prices because what you may have is just movement that where the stock bounces up goes down and then comes back and finishes exactly where it started.

Having the patience to know the longer-term multiple day run is more critical and important than getting the perfect entry and exit because I always talked about and I like to mention to people as well as some of these recaps that we've done that look at it. Even if you got into the stock late right here, look at the run that you would have had. Look at the 10-point gain that you had, if you had a thousand shares 10 points you can do the math.

Same thing, even if you got in right here, 5 to 6 point run, 100 shares do the math, same thing. So don't stress too much about your entry and exit preciseness it's all about being patient in the right set-ups, getting in at the right stocks at the right time and allowing them to run, so you do have to get into them at the appropriate times and don't wait too long but you don't have to get in at the exact same second at the exact same moment that they're breaking, you don’t have to do that.

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You don’t have to worry about missing it by a minute or a couple seconds because stocks usually will give me two or three opportunities. Let's take a look at Amazon, this one right here, look at this how it was building it was showing you its hand retesting. Here's a high retesting and retesting finally broke.

Even if you got in it the second day or the third day, right here it still be up 14 points even if you took profits or you got in a little late let's say you’d be up seven points that's fine and you take half of your shares of now so that way you're not stressed or worried about a pullback in the stock.

Watch for earnings next week on the stock but it is making highs, look at that consolidation pattern, look at the consolidation pattern here, look at how they move and look at how they work. Watch these things, previous highs same thing isn't that interesting how it nearly is at the same level. Consolidation flag patterns and they repeat.

It's fascinating how that works out but for many people they're not patient in this game and you know they'll get in it at… Here’s another example I did it all the time, get in it, stock popped higher. Let me get rid of some of these lines for you. Stock popped higher let me mention to use Google we’ll be popping higher probably tomorrow. If if it doesn't then you know things changed in the conference call  but let's say stock popped higher right here I would be the one that would enter this stock right there.

At least I had a level had not to trade earnings but you know even it’s 7-10 years ago I would get into the stocks right here and then waiting for them to pop higher and the stock started selling off and it was a huge sell off. I mean looking at this sell-off right here if I got into the stock I mean that’s a 22-point sell-off 30 points sell off.

That was painful you know that was painful when you're confident thinking that it's going up you got a 30 point selloff but I didn’t see the big picture I wasn’t patient. I wasn’t patient to allow it to consolidate here to get into the entry point right there, I didn't see it, I didn't see it and it takes time. It takes years of study, you have to study the charts, you have to learn how stocks breathe, how stocks move.

It's like a doctor when you hear someone's heart beat you got to know how is that heart beating, is that a healthy heartbeat or does that heartbeat sound a little off, there’s something wrong with that heartbeat.

Always watching how that stock is moving, how that stock is breathing, how was it reacting and being patient, being patient for these trades and sometimes it takes a couple months to be patient but then the payoff is huge then you get in it then until then you're on the sidelines or you were trading it before for the longer term play.

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Amazon looking good higher prices watch out for earnings coming around the corner, SUN another one. Right here setting up for lower prices, setting up for lower prices since October it's been setting up. Since October it just took, it just took the additional energy to get there from October to now. So it's been setting up. How do I know it's been setting up? You probably wonder how did I know it's setting up for lower prices.

Think of it as an explosion if there's a nuclear bomb that goes off in the middle of a city, a lot of people are going to die if there's a nuclear bomb that goes off in a certain area, even though the people right there in that region is going to die. The after effects, the energy that continues moving forward into other cities from the additional diseases, from the dust, from other effects, to the water effects, it's still going to affect people.

Unfortunately, that's what happens to these stocks as well, is that this is the bomb, this is that explosion. We really started over here but a lot of energy came into it right there, huge volume. Here's another spike. All this started to add up so if we start breaking these things down, we look at this, this had a million shares weekly whereas previously we had two hundred thirty-seven thousand shares in a week so we had nearly four times the volume just in that moment.

Then we continue going down and we went down on nine million shares, nine million shares, 8.7 million whereas previously we were moving on seven hundred and fourteen thousand shares. So Okay, the stock then plays around, isolates for a while, isolates here and stock retraces to this level right here and what we can do by the way is we can take a little Fibonacci for those the little more experienced take Fibonacci and draw it down here.

Look at that and how interesting that is 61.8. See that line? Those of you that have the green course or technical analysis course 61.8 level and look at where those bars are closing off. Let me zoom in, look at where those bars are hitting exactly 61.8. Let me to make this bigger. Look at that, that's nearly perfect at their closing and opening prices.

Look at how that pans out and then the stock tries and retest those levels multiple times, right here. Getting ready for the break, now there's higher volume here and then finally we broke it there was your short entry point and the stock is running higher and because of all the energy, the previous energy that was building you know all of this unfolds fairly quickly.

If we zoom in and get rid of those few bars, you can see we have a huge cluster over here and this level with bearish downdraft bars, bearish, bearish, we got some more bearish stuff coming in right here and pushing down versus going up it's a lot weaker.

Always be mindful of how the stock is acting, how it's behaving and how what it's doing and be patient for the setup. Now looking at the weekly moving it over, you can see even on the daily we had two days kind of in the red but right now it's going to pause a little. Usually when the stocks, when they sell off so heavily or when they pop so heavily they’ll pause because there were so many other people in the trade. Sometimes they’ll bounce and they’ll get to let's say 43 and then sell off further.

You have to be patient are you going to nibble some, nibble meaning if you trade a thousand shares normal you trade a hundred now or 250 shares and then later you can add to your position or you’re going to be patient and wait until it gets to 43 and if it gets to 43 and you notice its weak and start selling off that’s when you take it and short it you know if it starts acting weak on volume.

You have to have your game plan in place and be patient so you got chances and opportunities of what if the stock does this then you'll do that, if the stock does that then you'll do another thing. It’s kind of like playing chess you're setting things up for what's happening in in the future what may and could happen.

Here’s another stock right here descending trend line, the stock is popping a little bit higher after breaking this descending trend line so good entry point was right there, after it broke that line. Looking on the weekly you want to be mindful that you probably will have a few more points than the stock until it tries a little pullback, unless more volume comes then but always be mindful where the stock was. In this one at least was at the 47 and the 45 level and then it sold off.

It could probably get to you know 41 you might get to 45 but be mindful where it was but volume is coming in and looks good after breaking that trend line.

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Finally Netflix after doing it split and then the earnings call. Notice the stock opened right here at the 110 level and the stock just basically, here's what happened, pull back a little bit. After pulling back and consolidating that's why you wait the first half an hour after earnings, let people do their thing and at ten o'clock that's where the smart money comes in, the intelligent investor's they say “okay well let's go for it arm you know our stock is cheaper now and let's continue to run” and if you got into that stock waiting for those highs to be broken you still got, you’re up four dollars.

So if you got in it right here at 1:11 here at 1:15 now it's a four dollar gain not saying you have to be in the stock right here at 99, I'm saying get in at the right time and be patient because right here was still a good time and good opportunity stock was moving the big picture look good and they look clean.

Be mindful and be patient and I know that in a lot of things in our life we want things yesterday, we want them now, we want them quicker, and part of that is social training just because you know think of it like with fast food chains. Just think of it with online delivery these days, we all want it very quickly. I understand that that is the convenience in the modern society but unfortunately it teaches your brain in the stock market to really work against you.

If you aren’t able to be patient for these trades on the long-term it actually goes against you. So if you're the type of person that gets frustrated in line waiting for things, if you're the type of person that gets angry while you're driving because you have to be a little more patient because maybe there's an accident ahead or maybe there's a red light or you’re trying to speed through things, you know in this business it’s going to be very difficult for you because you're not going to be patient.

For those of you you that are very how shall I say I'd a very antsy very A type personality people that are you know trying to always move very quickly if you always feel like you're the energizer bunny you have to learn how to mentally calm yourself down. You have to learn how to mentally be patient and sit on the sidelines.

You have to learn how to really adjust your temperament because there's going to be months where you have to be patient, you have to be patient for something to evolve for something to happen for a sign that okay this is the appropriate time. Now the better you get at trading and the more you do it the more often you will see clearer signals.

If you're just starting out, you're probably going to try in enter a lot of trades quickly but they're not the appropriate trade, so if you're doing this with a very good clear conscious mind into trading but you were new and beginner there might be times where you're sitting on the sidelines for a couple months because you're waiting for the right trade.

As you get batter you might see those patterns emerge more often and more frequently because you're view and your ability to spot these things is quicker however if you can't be patient and wait for a month or two for things to play out or wait for a month or two for that stock to setup and you're doing all these wild trades and crazy trades.

Some people I’ve known in this Twitter space or YouTube space you know they get in and they’re in it for a month and within that month they lost everything that they had, they lost their earnings, they lost their capital and they're not in the business anymore and then finally with you know within that next month that stock they were watching or trading finally breaks down and has the right setup.

You have to learn first off, you don't know what you don't know and if you don't know what the right setups are you need to look at a lot of charts, you need to look at a lot of healthy things in the marketplace or in the books I mean that's why I have the books available therefore use for less than 20 bucks you can study charts of what looks right or even if the comments in the commentary in those boxes is not something that you can relate to and maybe you’re a whole different type of trader or you like trading different types of stocks then at least it's still a printout for you to look and study charts maybe for your own way.

The point is, is that you need to be able to look at charts and study them and be patient and noticed the time frame some of those time frames are weeks you're patient for weeks, some of those times you're patient for months and then when the signal happens, when the action happens that's when you have to now you know execute you have to take action and if you're also the type of person that just sits on the sidelines and doesn't do anything, doesn't take action is unable to move forward well you say okay I'll get to it next week, I'll get to it next month then again it's going to be difficult much more difficult.

You have to be the person that you want to transform into and I know this starts getting into more business education and personal growth and self-development but that's really what it's all about. I mean if you want to be a successful trader, if you want to trade well, if you want to make great income from it or if you want to have more time freedom and only trade three months out of the year then you have to turn in transform into that person, not the type of person that's worry about every little tick or signal.

You have to move and focus on the larger picture you have to transform and be more patient for you to allow you to have that lifestyle because in the end that's really what wealth about, it's not just income. Income is just one way to judge it, to judge the wealth and that's what's in the tabloids and it's a way to keep score but something that's not measurable is the quality of life that you have, the quality of life that you have among your family.

It’s the W’s, who you associate with, where are you associating with those people, or where are you, are you enjoying yourself in the environment that you're at. It's not just about the quantity of dollar figures that are in your camp that’s just the easy way to count score in life and I think it's probably one of the worst ways to count it in life.

Look at it in terms of success, in terms of other factors, things that are more immeasurable. So look at it that way because that in the end is worth much more in the long run then all the money that you can hoard for the future.

I hope this video is helpful insightful and maybe just pushing you a little bit to be a little more patient because if you gain a little more patience if you're waiting for the right set ups, the higher probability set-ups, you may only need to trade a couple of times a year and be profitable and make your year from those trades.

It just really comes down to your trading strategy and objectives but look at that long-term, find a little patience and I'm sure if you get a little more patient about those set-ups those trades you’ll be much more profitable just from building up that patience factor for yourself.

Alright thanks again for joining me, remember you can check out that book 245 Money-Making strategies for shorting it's out, it just was out this last week July 10th it was posted I sent an email and you’re welcome take a look and get it on Amazon. I'll be in Florida this next week so take a little time to you know spent some time with the family go to the beaches so that's where I'll be and spent some quality time there.

I hope everybody else is doing well I'll still try to do probably a recap from there, we'll see how things go so I'll still go ahead and make sure we have a recap and my assistant is helping me out with some of the emails, questions and things like that and if you have any account issues so don't be shy to get in touch with me.

Other than that thanks again for all your fellowship thanks again for reaching out and just sending in your comments, your insights, your feedback, it’s all a wonderful journey and those are the things for me that are immeasurable so it really adds a lot for me when I get to talk to some of you and you're telling me about the successful trade you’re doing and the things that you've learned from the material that I've released and as well as from these rapid recaps.

I know that a lot of you watch almost every single week of these rapid recaps and try not to miss a week so thanks again for sticking with me and joining me and I hope that this video was also helpful for you in this earnings environment so be patient on those earnings wait for the appropriate set-ups, you don't have to chase some there's always another trade and if you missed it remember the word next because there's always going to be other stocks, other companies that come your way.

Thanks for watching take care and I'll see you next time.

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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