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Welcome to today's Rapid Recap today is April 16, 2015. I’m Sasha Evdakov and today we're going to do a lesson on monkeys and apples or actually chimpanzees with Apples and we’ll talk about the stock market, some stocks and also a little bit about earning
I dabbled a little bit about earnings on the previous Rapid Recaps, that Rapid Recap was a little bit longer and I apologize for that just because we didn't do one the week before are but here's some earnings that we have coming out at least some of the more popular companies.
I think I mis-read Google last week it was I had it somewhere up here for this week but it's actually April 23rd. We got some Amazon, Buffalo Wild Wings and GoPro these are just some of the stocks and things that I'm watching and looking at and they change from time to time depending on where I have exposure, what I'm trading and so forth.
These are just some earnings for you take a look at and just the keep your eyes on the earnings meaning when the earnings are coming out because if you know when the earnings are coming out if you're a shorter term trader meaning less than 2-3 months per position then normally you want to be out of the stock before earnings then you can always get back into the stock later on.
Now yes I know and understand that okay you may not capture the huge gains in those earnings if they bounce or go really high but you also don't lose that much either so because you don't really know the direction and what can happen to that stock.
Always be mindful of the earnings when they're being released because it can really move that stock in one way or the other. Now I will talk on a little bit about some of the stocks and what's happening.
If we take a look at the SPIDERS, not much has been going on today and the same thing with the Dow Jones, I mean if you really look at it since the beginning of March we’re really almost at the same place and then if you go back to even January the beginning of 2015 right here, we're almost exactly at the same place.
Here was December 24th, 25th, 26th and then you draw that line all the way across we are actually right there exactly where we were right around in December time. So the market really isolated and if you bought it on December, it went down a little bit, went up a little bit and right now it's exactly where it was.
It's really a stock pickers market and now you're picking the stocks that tend to work out well so some stocks, let’s talk about Netflix there's a lot of buzz about it today. Yes there are times where the stocks do have these explosive eighty six point gain or 20 percent and you can make it you know if you buy the stock here at 470 you know you're making a lot on your gains.
If you had traded during earnings and although today it may have sounded, if you are in the training you missed out on it, it may sound like I missed out on the trade in, I wish I would have got in it but you know over the years I've learned not to be too greedy about these things, not to be too upset about missed opportunities.
Opportunities come and go and it's just your awareness that really will dictate how good you are at spotting those opportunities but with earnings you know that this one was an 86 point gain.
There are other times in Netflix where if you take a look at this run right here that was a 100 point selloff. 100 points sell-off think about that so we can go back and you know we have different times and different movements and yes the stock broke out but it was one of those moments where by earnings is what I’m talking about.
One of those moments where you don't know if it's going to go up or it's going to go down, you could have been on the side at the trade where it would’ve went down 94 points and those things do happen and this is why I don't trade earnings, I would much rather play these stocks when they do something like this.
Right here we take a look, stock popped higher, we’ll base a little bit right here. Here's our basing pattern moves higher again we base and then we continue moving higher. So here hundred-point gain nice smooth uptrend, I don't like the emotions, I don't like the risk in the market like that because with earnings you don't know which way it's going to go on you really just don't.
You could have Panera in example where yes the stock pops you got a nice little boost like that or you could have a SanDisk example where if you take a look at the stock BOM gaps down 13 points, gaps down again 15 points, gaps down again 20 points.
So stocks acting weak time and time again so you have all these different scenarios and really it's much safer to ride these trends for a certain period and slowly take your position or slowly get out of the position but a lot of humans, a lot of people out there they always wonder why do I not just buy the stock and just hold on to it and have a stop.
Let's just use this as an example so let's say you got into the stock right here and it's riding, it's riding, it's riding and you're riding and you're making good money. So here you're making 15 percent or 17 percent or 20 percent on your money so why won't you just put in a stop you know let's just say you had a stop right here at ninety two dollars.
Why don't you just put in a stop and when your stop is hit you get out. Well the reason for that because a lot of people that email me why do you always say peel some in the strength, because I know over the years that if you don't take your money off the table that market we'll take it for you.
Here as we're riding up if we got in the position right here and we didn't take any in the strength all of a sudden in a one-day I'm back and almost below, in fact I’m below my entry price and if I continue to hold I'm in the negative.
Now think of the emotions, the feelings that you would be going through your head if this happen. Now on the other hand if you got in it right here and you sold let's just say half of your position right here or even more than half 75 percent then you let the rest ride and see what happens.
Now when this day comes right here you're okay because seventy percent of your money is in your pocket it’s off the table. So although you did lose a little bit and you’re back to even okay with that thirty percent of the money that you had the rest of it you actually had profits, you're still in positive territory on that trade.
That is the reason why I don't like trading earnings is the risk, this business in part is about risk there's lot of other things that this business is about, it’s about patients sitting right, letting things run, control of your emotions capital money management.
There are as lot of things that this business really is about but it's also about risk and if you know the risks, the risks that are involved by holding on to that position you're risking more. The longer you hold on to that position and not take any profits the riskier it gets because you're in a winning trade, take some of the table and that's what you do, it’s you peel things off.
Now going to our Chimpanzee example and now the monkey with Apple's, I want to share with you a little story little, little experiment that was done with chimpanzees, monkeys and apples so I like doing and reading a lot a psychology books for marketing purposes, for just human behavior.
I like seeing and understanding why we learn and do the things that we do, how to control my own personal emotions better. Just these kinds of things it's one of the sub topics that I'm interested in besides a variety of other topics.
We all have different topics that were interested in and usually multiple things some people that are Interfitness, also enjoy running and eating healthy so we all have our different kind of things that we like to study and for me one of the things that I enjoy studying personally is psychology, animal experiments and different things that were done to see how human behavior applies to the life around u.
This example study really was conducted with chimpanzees but it really applies a lot to human behaviors because we act very similar. So there was an experiment done and I'll try to really just condense the story where scientist took chimpanzees and they had two different studies they had two different groups.
They gave basically one group of these chimpanzees 1 Apple and they kind of measured the way that their heart is acting and behaving the way that they behave after the fact you know because you can see the emotions that play out.
One set they gave an Apple to this chimpanzee and before initially obviously the chimpanzee did not have any Apple's whatsoever so that chimpanzee was very pleased with that apple or by getting that treat.
Over the next group of chimpanzees what the scientists did, was they actually gave two Apples to the Chimpanzees, so again the chimp was also very happy very content and this group what they did was they evaluated the emotions and then they compared the emotions between the different Chimpanzees.
Then they noticed that you know the emotions were very similar to study A or the first study where the chimpanzee had only one apple. So they were both very happy in general but then what they did was they took away one of the Apples from second group and what happened was actually the second group of chimpanzees was very frustrated, very angry and just very resilient.
You can see that they were just very frustrated with the whole situation when in fact they still had one Apple whereas in the first group they only started with one apple and that's what they had so this loss or this take away from the chimpanzee from having two apples and now going down to 1 was a huge emotional distress.
You can see that if we take this concept and we actually apply it to our own personal human behavior it's very similar, it's very similar to how people behave, act and react in the stock market.
As things continue to move in their favor and they're making money, they're making money and you know if all of a sudden a stock goes in the other direction even though they were profitable you know we get really upset and vice versa.
It's almost as if nothing is really enough there's no enough level and if you have this kind a mindset where okay maybe you didn't catch this run in Netflix and you're thinking to yourself “Oh, I didn't make enough money” but you still made money on maybe another trade.
For example whatever other trade you traded you might have made let's say a hundred dollars on the trade or a thousand dollars on the trade but you're worried and wrapped up about another trade that you didn't make then this really goes down to the same concept of the monkey example.
The thing is that now your emotions are taking over your behavior and this really is very bad for trading. It's very bad because you're looking at all these missed opportunities and things that “Oh, I wish I would have done this, I wish I would have done that and there's no way that you really could have known which trade would have worked out a little bit better here there.
If you got into this run right here and you took half of your profits right here at this point and then the stock continued running higher and you said “I wish I would’ve kept my shares” That's a bad sign to be in because it's a winning trade and you're in the positive you have an Apple right there but you're beating yourself up because you didn't have two apples or three apples or 500 shares or 800 shares.
You can always increase your share size and share lots later by just typing on the keyboard a little bit more shares but you're beating yourself up from a successful trade and the fact is that if it was a successful trade you're in the green, you're winning you've done the right thing.
Then if you've done the right things and then you should actually be positive, you should be rewarding yourself, when you're feeling more positive it’s a better connection, you create a connection.
Let’s see how do I explain this a little bit better for you. We are always looking away to associate and disassociate with things so if you take book reviews for example one of my books that I have 245 Money-Making Stock Charts Setups.
There's a lot of different reviews on different books and oftentimes people do reviews on books for two main reasons: they do reviews because they want to, A: associate with something and they want to be a part of something or, B: they want to disassociate with something because they don’t believe in what's being said because we want to distance ourselves from something.
If you're applying this concept and you’re disassociating yourself from a positive trade you’re moving away from a positive trade then you're going to push yourself into a negative trade the next time.
So what you want to do really is anytime that you have a positive trade, anytime you're doing the right things is really just start associating, being more positive about those trades, stop being like the chimpanzee that got the two apples and got one taken away because anytime you're profitable in this business that's a win when you’re profitable.
For me if I made a hundred dollars on a trade and I took some profits and then I took some of those shares off and its went back to break-even because I took my profits and I stuck to my plan that was a winning trade because when I don't want to happen is I don't want to go against my trade plan.
I don't want to go against my natural way of doing things and start trying to trade weird companies and start trading stocks that are illiquid and trying to chase things. So if you have a positive trade in the sense of doing the right things then you need to associate yourself with those so you can continue doing those things.
Now you're not always going to get huge major runs sometimes the runs won't be battle large as you expect or predict but if you're doing the right things overtime you consistently win time and time again and sometimes it's just best to just sit out because things are not in your favor and then you wait you wait for your set-ups, you wait for things that are in your favor.
Let's get into some individual stock things and what I've been training this week actually I've been doing a lot of oil companies this week so I don't know what you guys have been doing but we've been doing a lot of oil companies.
I didn’t post a lot of them on the critical charts because they’re a little bit more risky they're still initial at their popping point. So I'm not really sure what direction they're going to get into so we've been actually just nibbling, nibbling, putting on a smaller position in these oil companies for the time being and it's one of those trades where if you're not experienced I don't recommend it for the time being.
That's why I haven't posted these oil companies in the critical charts because they are little bit more risky. So we'll see where the earnings go and how they play out but here's what I've been doing is noticing that looking at the screen draw here.
You can see that we have this little volume spike coming in here and then another one right here so we played and entered some shares right here just to nibble on a light position and then we noticed another bit of volume so there was another bit that came but we're just nibbling.
We’re just nibbling we’re not up playing large on these positions or regular just because looking at the big chart picture it does not look that healthy. It’s still a nibble you can see the volume there’s still weak so that's why I don't fully recommend it but I just want to share with you what I've been doing.
Here's our still A to B, B to C and C to D pattern after that ABXD pattern complete something new usually happen. Something different often happens when that happens either we could be setting up for another leg down or popping higher to here and then selling off further there's different things that could happen.
We've been trading things like the XOM, so we got Exxon Mobile and here what we've been doing is looking at this one right here. Again you can see that we had a light little pop here with the volume and again coming in right there stock move for two days there and now it's kind of idling but it’s idling on lighter volume as you can seem.
Again it’s a nibble, it's for maybe a day or two couple days. We'll see how the trade lasts but of course I'm taking profits in the strength that way if they come back right here to this level let's just say if that’s my level then I’m out of the position and I've already took half of my profits.
Let’s say if you had one thousand shares on a one dollar moved that's a thousand dollar gain, if you had ten thousand shares that’s ten thousand dollar gain took half off so that's five thousand in your pocket and then you let the rest ride, ride either back down or you know let it continue to ride higher and see what happens.
We also have Schlumberger right here. You can take a look at this one as well so here we have this point that was crossing, you can see a volume pop at this level right here and then we have more volume coming in right here so that's another oil company so you can see that sector has been kind of pushing a little bit.
There's others like the BP, that we were watching but this one isn’t panning out so well. It's kind of moving but it's a slow mover. So you can see this one looks better on the weekly, again watch out for earnings we have earnings coming up so definitely we’ll be out before earnings.
These are the refineries and the refineries like WNR and we also have the VLO, we are not trading these refineries and the reason we aren't is because the refineries stray little bit differently than the oil stocks but those are the main positions we currently have at least I have in my current portfolio.
We meaning, my family and you know the portfolios I manage so those are the positions that we have right now is basically we have the HES, we have the Exxon Mobil and the Schlumberger so watching those oil companies peeling off in the strength but the majority of the positions are those.
Do you have a few other things that I've been trading throughout the week something like an AIG as well if you take a look at the weekly this one actually just came up on my radar right away and it was a spur-of-the-moment decision in a way. A little less plan but everything looked okay and we nibbled a little bit and that one came up but again its weaker volume.
Weak volume means you definitely need to be taking profits as the stocks move in. Again one of the reasons why this one is not in the critical charts because it doesn't have the juice, yes it's moving higher, yes it's breaking some levels but the juice is week the volume is weak it's not there so it can pull back at any time and snap on you and that can be very dangerous if you're new.
Let's take a look at some other popular companies, we got Apple right here got a little bit of a triangle pattern, we have earnings coming out in Apple next week. Again a lot of people be looking for that.
ASML you can see what happens here with some of these stocks once they sell off they move sideways to consolidate and again power lower. So this is why you take your profits, this is why you take your profits.
In just a handful of 23 days we lost 15 points or 15 percent, that's huge in terms of the overall chart 15 percent is a pretty large drop. CARB, same way look at this sink lower sideways BOM same exact chart just about as this one that we just look at, Goldman Sachs has been pressing higher right here. You can see this line of resistance so we've been pushing volumes coming in, it may come down to this level and then bounce so we'll, I didn’t like the action today.
Normally I want to see a second and third day follow through but we didn't get that so definitely a traders market. We got SanDisk which we talked about this stock. If we look at what's going on here on the underlying and we start looking at it you start looking at some of these levels right here you can see that we have multiple ABCD patterns.
We have A to B, B to C and C to D so it really should come down lower because this from here to here is the measured move and then from here to here what we should get so right now looking at this chart it's attempting to come up back here and chances are it's going to reject that and follow through lower again so the stock is not very healthy and it's not doing very well.
We also have Sony on the weekly this one's moving higher and higher, here with the consolidation patterns are but it does move a little weird for a day to day basis, you can see these text here but if you're on a longer-term basis it's looking pretty good again watch out for earnings.
We have STO, this one here's our swing low on this point moving all the way across there's intermediate swing high starting to pop and break again on the weekly volume a little weak because tomorrow's Friday and the volume isn't there. If the volume was good we would be at about $15 million shares right there and see a heavier amount of energy to the upside.
That's kind of what we’re watching right here you can see it right there trying to break and fill this gap so that's what it could do is come into this gap and fill it so those are kind of the stocks I've been looking at I've been watching.
A gain mostly it’s 60 to 70 percent of my holdings right are in the oil companies and again we're selling some in the strength because they're shorter-term plays. We do have some other positions and so forth that are on but very close watch on all these positions because the market the way it's moving the way it's behaving I mean just take a look we're basically where we were in December. It’s kind of a stock pickers market.
We do have some things like this Amazon that's hitting these points right here and aiming to push higher but because we have all these are earnings coming up you know we have all these earnings that the stocks could move in any direction, they could pop higher like right here or they can actually move lowers like Amazon did back here A to B, B to C and C to D. See that movement?
Again we are moving but its moving sideways and something that for me on this stock picker markets I don't like to trade too much I will nibble some and I will watch certain key stocks but if there's not a lot about action there's not a lot a movement and with the summer months they are little bit slower than normally, there's no need to play and chase too much.
Like I said I got a couple of positions on but nothing like normal just because waiting for a lot of these earnings to come out and then we can get back into some trade that we're watching and taking a look at.
Remember when your trading whether it's trading a stock, option or whatever so if you're trading even an option and you have just three option contracts you always peel one or two options into strength. Don’t be the monkey that had two Apples, one taken away and then scream and kick yourself over it you still got one Apple.
A successful trade keep successful trades moving in your favor keep them in your arsenal and just keep making those trades because eventually all your account builds and things add up and then you don't stress too much about it.
You don't worry too much about it because you know that the next trade is going to set up eventually it'll set up eventually. Looking at IBM here again here we're looking, we played the stock short a handful of times anytime it comes up here you played it short anytime it tries to come up there you play it short.
Now after a little while of consolidation as you get better at reading chart patterns and seeing these, this thing now is starting to get extended and now there might be better trades out there or you're watching for the break of this level to break higher.
Again you're starting to look at where your risk is and where your reward is. Is it rewarding that you keep trying to short a stock that's pushing against this resistance line, no it's not so now you move on to the next one and you know when you took your profits on this trade then you move on to the next trade.
You can do that we did that with WYNN, pretty well here so the stock had a lot of opportunities so here was our few different patterns again if you can notice the A to B, B to C patterns here. So here we have on let's draw them we even had some up here, A to B, B to C with sideways C to D and then up here again A to B, B to C, and C to D.
We have a few different patterns right here but A to B, B to C and C to D, another A to B, B to C and C to D. So there's our pattern in our movement in the stock you could've trade it multiple times and after the pattern kind of concludes i mean how much more do you need besides eighteen, twenty dollars on that trade in just a couple of months.
18 days here and then and you had 13 days here so within let's say the three-and-a-half months you got forty points. Be calm, be patient take your profits in the strength and don’t be that chimpanzee with one Apple screaming fighting and kicking because it's just not worth it.
It's not worth it to get upset, it's not worth it to just try and make just a little bit more instead of making you know this forty-five dollars right here people want 46 or 47 you know how much more do you need even if you got thirty or twenty point run there’s a lot of people that would love to get a 20 or 25 point run.
While other people are screaming for that 30-35-36 and if they get 36 then 37 isn't enough and it just really comes down to how it plays out in your psychology. One of things that really helped me is just some of things that you know…
I have talked about it before is that in my past and if you read some of the books, I'll just share a photo here of my past. This was the street that I grew up on so for mostly you can see there's not a lot happening here.
The roads are pretty bad pretty horrible and we did not have a lot of wealth in our family and you know when you grow up in a place like this and you know you were raised and money was tightened and things are struggling you know you got to do a lot of different things to survive.
There was a pump well that you go and get water somewhere over here in this region and you know when you go pump your water and then you drag it across here and our house was actually right over here so it's very similar to this one and so we lived in there for a while.
Now for all these different opportunities and people that you know tell you about “Hey you know why don't you buy you know a Ferrari or Lamborghini” and you know for me those things are not important and when we were down in Florida actually this last week we went out with one of my good friends over there he’s multi-millionaire.
He always says that you know you don't really want to show your money to people because people start judging you they start looking at you a lot more and the more you showcase the attitude starts to change and he’s one of my mentors and some of the things that we discussed really it starts making you think about the way that people behave and react then and this guy is wealthy.
He’s got 4-5 boats over of 30-40 feet long, he's got multiple warehouse, businesses you name it and you know we just went out on the boat just chatting talking and talking about life, talking about wealth, family you know just relaxing out there on the water and you know a lot of people they’re just never satisfied with what they have.
This was a guy who literally struggled feeding an eating when he was younger he's been hungry and when you have that hunger you know what I'm talking about and we also had a lot of struggles here as well with food and I'll show you the inside hereof the kitchen.
We didn't really have a plumbing. Here’s our sink, and this sink you dump a bucket of water right there and that water goes down in here and out this little faucet right there. Here's our stove, it wasn’t electric, it's a wood-burning stove we did have electricity obviously there's the radio that you can turn on.
Here’s our kitchen table and there's the wood right there that goes into that stove we also had another little stove right here that was electric but oftentimes we use that wood burning stove. That’s kind of that the kitchen and where we eat and everything like that so you can see it was not a pretty picture.
Now when looking at stocks when now we're trading one to three thousand shares and making twenty thirty dollars on that run when you're making twenty thousand dollars on a trade, forty thousand dollars on trade, you know that taking profit is critically important.
The same thing goes with if you're making just five hundred dollars or a hundred dollars on a trade, if you're making a hundred dollars on a trade and you don't take you know half off and it was a large trade for you then that’s just silly, that's just plain silly and foolish because if you don't take the profits, if you don't take the profits from the market in the end the market's going to take your profits.
Learn to take your profits into strength, learn to take your money off the table it's vital. It's vital to survive here don't be greedy, don't be on you know wishing for that second Apple back it's gone it's gone that's it you still got one apple you still got your profits that's what you can rely on and that’s your survival you can eat that Apple and you can continue living and move on.
That's what you got then that's what you got. If you got a thousand dollars and you're starting trading there that's where you're at then that's where you're at. If you’re at fifty thousand or a hundred thousand dollars then that's where you're at so start there.
It's irrelevant, it doesn't matter in terms of the big picture and I'll tell you that once you have or you get to a point where you’re little more consistent you start worrying about the financial aspect of it a lot less. You want to do other things with your time you don't focus in on the trades as much and it actually starts to become a lot easier because you're less worried about it.
For those of you that know the less worried you are about the trades, the easier things get its kind of like when you're first playing a sport then you're worried and your nervous before a big game the less worried you are the better off you'll do.
The more relaxed you are the better off you'll be so you need to start finding that peace you need to start finding that peace and trading and one of those ways is really just taking that money off the table and taking those profits.
I hope you got a lot out of this recap if it’s anything, it's taking money off the table. Make sure you're not chasing these dream gains because there's some more to those who runs than just hoping and wishing that you got in it over here.
Once they're gone they're gone wait for the next setup there's going to be another setup but always take your money off the table. Thanks again for joining me I wanted to share with you just a little background again just a little bit of my story, I don't really share a lot about myself and my story just because I don't think it's about me.
I’m comfortable with where I’m at. I'm very well-off in that sense and it doesn't matter about me it's about you, it's about you and making you better. It's about contributing to you guys so that you are where you are in life so that you are where you want to get to in life. So that way you can make a difference or that way you're comfortable, you're relaxed and you're enjoying that piece of life.
Thanks again enjoy your week, spend some time with the family, give some people a call and just live life. Thanks again and I'll see you next time.