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Good Day! It is June 18th 2015 and I hope everyone is having a great week so far. Today we'll be talking about Swing Trading with a Day Time Job.
Now I did do well pretty extensive video about how to trade stocks and invest while you work from 9 to 5.
If you go to YouTube and you search for it on you can see that this is the video right here and it pulls up so if you're looking for the exact link or the URL that is it right there if that's what it looks like. I believe you can even type it in and search for it over there on Google and it should come up right there if you search for those exact keywords so that's what it looks like.
I want to tackle this a subject and a little bit more detail or maybe in a little bit of a different way about getting into the trade and you know somebody that's working a daytime job oftentimes feels like they're missing the trades and feels like the opportunities that are presented sometimes get moved away or passed by.
In this video I want to approach swing trading specifically and how you can trade stocks on a swing trading basis even if you have a daytime job so we’ll talk about that.
Now before we get there I just want to let you know we're getting the final proof for the shorting book so that should be coming soon once I approve it probably early July it should be out there and ready for the launch. Also I just actually finished filming the on building your own stock trading computer or workstation.
For me personally I enjoy the the technical stuff, I enjoy the technology aspect of building and creating a computer. Just like I also enjoy cooking, I enjoy Yoga these kinds of things we all have different hobbies that we enjoy and that's just one of my things that I also think it's very good for risk management. If something happens you're able to diagnose it on the fly. So we will have a video out for that absolutely free and it's going to be in depth.
I'll cover more about part picking part choosing and we won't go in detail about building the computer itself and putting the parts together because there's tons of people that already do that.
I'll just go in detail about choosing the parts so already it's quite a lengthy and in-depth videos so a lot of knowledge in there and maybe I'll give you some insight for trading on your own workstation or building a training workstation or even just purchasing a training workstation and of course you can just trade from your smartphone or basic laptop but if you want something a little more powerful this video should give you some insight.
With that in mind let's kind of get started and let's take a look at the market. Let's see where it's at and let’s talk about some stocks and then we'll talk about the swing trading if you have a daytime job.
To get things started we're going to be talking about the S&P 500 first so here if we look at the S&P we’re pretty much where we were before I mean it’s just isolating and really on the mid-range picture we’re just bouncing up and down for the time being. The same thing here you know we’ll drop a bit and then we’ll go ahead and will bring it back up and it’s really not that exciting.
Really you're looking at specific stocks and what specific stocks are doing. It's a stock pickers market at the time we’re over-leveraged in terms of a lot of people there's not enough fear in the market so they constantly keep buying more in and raising those prices and then they pop higher on a light volume and by light I’m talking about here, the light volume relative to overall what's been happening.
If we look at the weekly volume, relative to some of the other peaks in the past I mean look at it here on the Dow Jones 3.55 versus in 2009 or even 2010 there's a lot more volume.
S&P as well, just looking at the volume how it's been going, that's contraction a contraction of volume usually can bring disaster so you always want to be careful and understand where it is where is the risk to reward and just cause the markets are there that doesn't mean you can't trade it you're just looking for the right stocks and the right opportunities.
Let’s talk about a few of the big names and the bi boy names were not going to talk twenty to thirty stocks but we'll talk about a five to seven different stocks and give you some insight here.
We'll start with Apple just because it's a fairly large stock and one that a lot of people trade over here. I talked about this one a while back, multiple times actually where we rejected these higher prices at these points right here so at every single one of these opportunities even though the earnings came out right it still rejected higher prices.
We pushed a little higher and then the stock rejected it so that means when we got back up to right around here, again you had a shorting opportunity and that allowed you to do a little run for about 5 five points, five and a half points if you caught it.
We are moving a little bit up again are but you know you’re trading in this range if you're looking to get in to that stock I wouldn't get into that stock until it breaks this level right here or the highs over here. Again we’re moving up a little bit right now today on fifty cents but it's nothing really exciting in terms of the stock is concerned.
You are watching for these breaks in these patterns and some great company such as Amazon had a nice consolidation pattern. If we look at this consolidation pattern right here today it moved eleven dollars and that's a serious move that's a pretty solid move and it’s picking up on volume picking up on some steam here and that's really what we want to see when it comes to stock breaking.
We have the volume picking up we have the stock moving good wide price spread. What we do want to see is some sometimes we want to see it now clear this level for potential long. You should also be careful of these gaps. Gaps right here do tend to suck the stock in so you would always use this line right here as a line of support or right below that as a stop because chances are if it breaks that level then you might be able to see that stock to come down to that line or to fill that gap.
You're always paying close attention of where the stock is what it's potential and what's its weakness and this is what allows you to make your decisions for the future and allows you to see what the opportunities are. The more things in your favor the higher your probability the less things in your favor the weaker your probability and the less chance of success.
If I have all these things in alignment then I'm able to get into the trade with more shares and with a higher leverage positions and when more things are in my favor then that's when you use leverage options.
There are many other things, allowing you to make even more money from the trade but you're looking for these prime opportunities when you're making your trading decisions.
Next stock I want to cover is CMG we talked about this stock for a while in the past and just one that I’ve watched because it’s a good one to trade it moves quickly. If we take it out to the weekly this was the pattern I was watching it broke right here at this level. Nice heavy huge volume on earnings right there that's your short entry point and week after week it's been heading lower.
Now if you look at it on the daily. The daily can play some tricks on you because you do have a few little spikes over here that start to come up. Like this little range this spiky area have a few little bounces here and that can get scary but if you look at the overall the weekly you can see that they've all been read on a longer-term picture the initial projection over the last one point eight months.
We got 36 points to the short side and if you've been with me for those last two months you know I’ve talked about this if you haven’t go ahead on the Tradersfly.com website go to the Rapid Recaps and you can see some of those videos where we actually talk about this stock right in this range, where we looked at this stock and when it broke here this was that heavy volume coming into the stock.
The stock came back up to retest this line rejected it, stock came back and the momentum and the energy pushes that stock lower. Again I talk about this energy and it applies to life. It applies to a lot of things in the world around you. It applies to your health and applies to your finances and applies to social aspects that you deal with on a friendship basis.
If your friend is constantly late, chances are they will be late to your lunch meeting. If you're on always the type of person that doesn't like to admit your faults then chances are that's going to happen the same thing. One of the things that I always enjoyed about studying business and psychology is, if you take your five closest friends take your 5 closest friends and average those people together, the end result actually becomes you.
If you take a look at one friend might be into let's say business things, another friend might be into exercise, another friend maybe into photography and another friend might be into decorating their house.
Chances are you're probably into those things as well because you are accumulation of all those friends and then average of all those people that you associate with. So if you really want to get better start associating with like-minded people that you want to become like or become better so with this in mind the same thing happens in stocks. This looking at the chart is really all about crowd behavior its people psychology it's about what people will do.
That's why some other things that the sayings go with the phrases, the rhythm, the rhymes and all these little things that we have in the stock market they're there for a reason and the reason for that is because human behavior changes very slowly its oftentimes very predictable.
As I like to say if you had something for breakfast today chances are you probably had that same thing for breakfast yesterday or at least the day before or at least sometime this week. We typically repeat these patterns, we typically wake up at the same time, we typically go to bed at very similar hours and so forth you're not always unpredictable. A lot of things are just systematic and conditioned for us that the programming.
With the stock market the same thing is true. Once you learn to read and spot some of these things and charts like Apple you can see that we repeat these concepts, here's the second time around so the swing point that we had back here it repeats right here or giving you a third opportunity right there. These things repeat time and time again until they don't and once they don’t then it allows you to make new decisions because things are now changing and evolving.
Just like a human being they eventually evolved and get better progress, build our nest egg, upgrade their up car, upgrade their lifestyle. The same thing with stocks they upgrade they get better but you know there's periods of times where they’re in that rhythm, in that rhythm in, that system until things change.
Let's take a look at another couple stocks. Here we have TRIP, looking at this longer consolidation pattern here it is and then we go ahead and we do a break right here this was your entry point if you're not in it.
Now I would be patient and wait for a potential pullback it's a little bit far extended. Another potential could be to wait for the break right there so just something to watch.
Then we also have ISLE I believe we talked about this one last week if not it was probably in the critical charts so here is the consolidation pattern for some period of time build momentum. Building momentum and stock broke, now it's selling off of the highs so you always want to make sure you take profits in the strength for this reason.
For this reason I wouldn't be entering that stock right now but again your entry point would have been right around this region allowing you to capture that run take some profits either on that first bar, that's red or you could have even taken it a few days later totally up to you.
The stock was starting a pause and then you could have enter again or added to the position as it powered higher. Now it's pulling back so definitely you want to make sure you have taken some of your profits.
ADMS I don't like trading the pharmaceuticals too often just because they whip your around very quickly. If you take a look at the weekly here the stock broke out very nicely and very well on fairly good volume. This one also trades lightly, again something to be careful of with those pharmaceutical companies because sometimes they’re a little bit your erratic or they just don't move as smoothly with lighter volume.
Always be very cautious when trading bio-techs and pharmaceuticals although if you catch the breaks they can be really profitable.
Looking at this one you know you’re watching the highs. Here you can see that this one right there was starting to break right there and you could have entered it on the second day and it would have been a superior run for you right there five dollars in just a handful of days it's quite remarkable and percentage-wise 20 percent.
Good run there but always be peeling into strength with these biotechs any stock for that matter.
Let’s talk about a couple more RDUS, here again consolidation pattern, consolidation here broke out first day with little bit of volume picking up right there and then second a follow-through again huge. We had a little Sell off of the highs which could be some trouble or profit-taking but always be mindful of that gap.
Sometimes when a stock is overextended it likes to pull back and retest things but nevertheless this one broke out fairly well here.
CMCM, also we talked about this one also we talked about this on critical charts or the Rapid Recap week or two ago. Look at the stock right there building we had heavy volume right here coming up nice spike coming up right there and if we take this out to the daily.
Here's the daily you can see all that volume contracting and then building and exploding so again if you want to do the ABCD pattern, here we have our A to B, B to C and C to D right there and now again we're building right here on this support and resistance line you know once it broke right here, this was your real entry point and that's where we were talking about it.
Using support right here, support here, support here and now it's building again wait for a clearing of this line right here if you want to add to that position on volume of course. Watch those closely and wait for that break.
I do want to talk about a couple things here for your job if you're trying to swing trade but you have a job let me just get into some insight and I'll use an example from some of the examples I've used in the past.
We'll just do Duke Energy, I had a question about this one. How do you really trade or get into this Duke Energy stock if you have a daytime job? Well the thing is you should be doing your homework the night before, before you get into the trade and if we’re looking at the overall picture of this stock.
If we’re looking at the overall trend and if you study the courses I have such as the technical analysis course or even the green course both of those courses cover the ABCD pattern so here we have A to B, B to C and C to D so that's really the pattern I won't go into detail about it here too much because that could be an hour on its own.
When you're looking at this pattern as you're doing your homework let's just say we're in this time frame so here we have our A to B and now we're retracing to the upside on lighter or contracting volume.
Now I start noticing volume picking up right here and I start noticing the clearing of this support line right there. Now if Is wanted to really be precise I could've I could get right here in just get super precise on it so I can see it's pushing against it but it's increasing in volume so I’m waiting for it to clear this level
Now what I could do is I can already start nibbling some shares short so by nibbling I mean lightly and you can start nibbling some shares short here but personally I would wait for it to clear.
The next couple of days you can see it hasn't cleared it yet it’s still holding up on that trend line but then after a day or two it finally broke right here. This was on 5-5-2015 very interesting and ironic. Here again and you can see that we went up on lighter volume but we broke on heavier volume so we broke downward.
If you set a little order trigger right here to short the stock it lets say 76-63 because you know the bigger picture you know the bigger picture that stock was down retraced you know that you’re all the way here which your potential should be down here then you have time to get into that stocks so you could have put an order right around this 76-75 level the night before or even in those few regions or areas.
If we take a look at let’s say here you could have put an order during these few days you could've put an order in right at this price level right around there waiting for it to clear because you're expecting this.
Now the next few days we had optics so even if you didn't get filled there you can adjust your limit orders or whatever they are and place the short order triggers right around this area or this region again playing around in there. That’s if you didn't get filled then you would have been fine you have been riding in that stock.
The next day what happens? We come back and re-test that previous trend line this is the trend line supporting trend line that we broke right here. This is called an internal trend line resistance so we came back to test that and we rejected it. So what happened? We opened up right here at this level we got to these highs and we closed over here.
That means weakness we popped higher we close lower right so next few days or next couple days right here what happens? We continue to sell off the stock but you got to remember you're already short either here you might be short here you might be sure here you might be short here. Even if you got in at the worst time let's say you got in late at this price level which is the lowest out of those four days to short the stock, that’s the worst day out of those 4 days.
If you got in short there you still would be ahead basically here's our trend line right there and you can see that we continued lower right here and here's the increase in that bearish red volume. Here, here and you see it's building cost and that stock as we look at it basically we're saying that if we got into this stock at a horrible time and that horrible time was right around this level.
Let's say even we got in late five days later or a week later right here you still would have been let’s just draw the line right here to this level two dollars and seventy cents profitable to the short side. That’s if you got in late, choosing the right stocks at the right time and allowing them to run you're still up two dollars and seventy cents to three dollars and that's even.
Let's just say the stock is now bouncing and its right here you're still up a buck profitable and that's if you got in late and you’re exiting lat. That’s if you're making a horrible trade entry and exit but you're choosing the right stock then you're still profitable so imagine that.
Learning to read the charts properly is very critical and very important as you can see by this and I mean if you had a thousand shares short you know just making a buck and that’s if you're a horrible entry and exit person just making a buck right there that's an extra thousand dollars but if you did a good entry and exit you know right around here just you’re up about three to four dollars so thousand shares 4,000 bucks, 10,000 shares forty thousand bucks so that gives you a lot of room to play.
You can do the same thing in Netflix, to the upside. You're looking for potentials, potential so looking at the weekly I see this consolidation pattern so I'm noticing these highs right here you could do it where the highs are rejecting you could do it where it's breaking so let's just take it to the upside.
Let's just say you miss this move right here you don't want to chase it, that's not really exploded but we know that there was a lot of volume there's a lot of volume building right here over this time period. There’s a lot of volume building so if we consolidate right here at this level you had all this time to get into the stock long you had 22 days where you could've every night adjusted your limit position to get into that stock and you would have just used the Lows right here as you are stop.
If the stock broke this level right there you would’ve exited the position for safety reasons and risk management. Now when it broke right here you know it continued higher and of course higher volume right. Same thing here at this level so even if you got into the stock and trade late let's say you got in right here or even right here and the stock where is it now, you're still up forty one dollars in 30 days.
Choosing the right stocks but you had 22 days to get in 22 days to get in so it's not as important to get into the stocks at the exact breaking point although I think it is better if you get in at the right time and exit at the right time that does help but if you have a daytime job I know sometimes it's not perfect but you can't stress the fact that you have to get in 10 cents twenty cents lower because you have to look at the bigger picture and the bigger picture we're looking at is a longer-term game.
We're looking from runs that are a month, two months, four months or six months you know that's what we're looking for and as the stock powers higher you sell some shares into strength.
In this case the stock continues to power higher from multiple months now and you had you know multiple weeks to get into that stock multiple opportunities so it's not as critical. Now there are times where you get into the stock and sometimes you get into the stock and sometimes you do want to get it initially right away on the break so if it breaks and it continues moving in two days very quickly and you missed the opportunity then you definitely don't want to chase it.
Here in this example again to the short side you know you can do the same concept right here. The first day break right here and then the second day break already I feel like it's a little bit past it so you could still nibble some shares short but maybe you wouldn't trade fully short as you would if you got in up here.
The same thing here you had one 2-3 days to get into the short side there was your volume so even if you got in late you still had a good run of four to five dollars to the downside so here even if you got in late and you know got out early that's still a six dollar run and our pattern of course is A to B, B to C and C to D or if you draw it another way again we got A to B, B to C and C to D so these patterns typically repeat and again it's just natural human behavior.
I hope you got some insight from this don't stress too much about getting in at the exact precise moment if you have a daytime job. Just trade a little bit lighter and set a position to get into that stock within that one or two-day breaking period but you need to know chart patterns if you're trying to swing trade and you have a daytime job.
If you don't know chart patterns and you’re not equipped with the right education it's going to be a little more difficult because you don't know what to look for then you're going to be throwing dart blindly. It's going to be very tough to know what's going on and what's happening or even understand things.
Before you do that you really need to know and understand what you're watching for and then you can go ahead and make the trades but you can do it and you can set the positions and set the limits in place if you're gone for the day and that is something that I may even do from time to time just because you know and understand the pattern you know and understand the behavior and it typically repeats time and time.
I hope this video was helpful thanks again for joining me and I hope you have a great week ahead of you, enjoy your time, enjoy your time with your family we’ll be heading to Chicago for a little break here soon and then also to Canada.
I'll probably seeing some of you over those breaks but if not enjoy your time, enjoy your weekend.
I will see you next week thanks again!