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Hey it’s Sasha Evdakov, welcome to the stock market Rapid Recap. It is November 12, 2015 and this week's lesson is about Getting to Fast Gains in the Stock Market and really the core of the lesson will be about speed of implementation.
Now if you don't know yet already there are two primary things in the market or in anything that you do that you need in order to be successful and profitable whether that's playing a sport you need the physical aspects or the outer game and you need the inner game as well.
We need both parts to work together in order to be successful so for example if you're playing a sport and you’re a hockey player you need to be able to have the physical aspect the slap shot and the skating. You need to be able to do the physical part which is the outer game but you also need to have the mentality you need to be patient with the puck.
You need to be patient to find openings and take the appropriate shots when necessary and if you miss you can't get too upset because if you get too upset your mental game or the inner game is lost and then you won't be able to recover continue moving forward and just be struggled. So you need to have both concepts for having success.
In this week's lesson we’ll focus a lot on how to get to those gains and they're not really fast gains the title is a little bit misleading it's really about getting to the gains but the quick way of doing it is all about speed of implementation. So this week's lesson is about the inner gain and I'll share with you my story of how I've kind of learned concepts in the stock market and how things evolved for me over the years so we'll get to that.
Last week we covered all about risk management and how to really take shares off into strength this was all basically the outer game concepts it's all about the technique the physical things you need to do. In this week's lesson it's really about the inner game what you need to do for yourself to get better. So it's not about learning about the markets actually more about you.
Before we get into this lesson I do want to share with you as always a couple of quick announcements so here on this screen what I wanted to do was to share with you some things that I have been working on for the option trading course.
This is actually what I wanted to do was to share with you all the different modules, sections, and components that we have in this course and it'll probably be broken down into multiple courses.
Just that way it's easier to digest but we’ll have things put together and you can see all of these are just modules upon modules that will be putting things together so you can see it's quite large so when it is ready to release early next year.
I do apologize if it takes a little longer but you can see that this is a lot of filming and a lot of work and just breaking this apart so taking for example just one of these things.
If we get into setting up a basic calendar there are subsets in there. If we get into entering an iron condor there's things about buying versus selling, time, how far. So all these are modules as well executing the order there's things about winning and taking profits from iron condors so there's a lot of different notes and things that I have been putting together so all of these have subsections within them.
You can see this is a pretty big course so I just want to let you know how that was progressing we do have to work a little bit more on the weeklies here but other than that, we're filming, we're getting things going and we're getting ready to film some things. So all these things are moving it’s just a massive course and with the holidays around the corner that's kind of what my primary project here is going to be as we wrap up some final business things.
One thing that I would love if you could do for me if you're interested in the option course then by all means go ahead go to the website and send me an email of something that you may want to cover or some struggles that you're having with in trading options.
I understand that sometimes you may not even know what you don't know but if you have something that maybe you're struggling with something that you would love to learn maybe a goal of yours with options if you could just take a moment and go ahead and you know fill out a quote form then go ahead and do that.
It'll be really helpful for me and not to mention then it’ll be really helpful for you in the future when you're taking this course, so that way I can make sure to cover as much information as possible within this mastery course.
Before we get into the lesson of this week's Rapid Recap what I want to do is just share with you the market how things are going, how things are progressing right now, it's nearly or by the time we finish this recap it'll be about 3:30, its 2:40 right now Eastern Time but by the time we finish it'll probably be about 3:30.
You can see that the market is rolling over a little bit over the last few days so this is the S&P, the spiders 500 if you go to the Dow Jones DGIA you can see also 192 point selloff.
Now looking at individual specific stocks they’re not doing as bad but you can see that when we look at the SPY here we’re nearly reaching the top level and we’re nearly hitting those top levels where the stock market it could be selling off at.
When we start reaching these highs you want to be mindful that there's not a lot of room left for the stock market to go higher because it's rejected up those higher prices. If we go to the S&P, the same thing right here you can see these were the levels.
We tried to get there but we didn't even have enough room to get there and that is partly because this move that we had right here is just quite extended. So when you look at this move, this move is just very quick very fast and I talked about this a couple weeks ago or about a month ago, where I said if we go too fast too quick then what will happen is that you know we could probably roll over or we’ll isolate here for a little bit and then could power higher.
It's important to always know and understand how fast a move is when the move is going. So as we look at the Dow Jones the same thing basically is happening with the Dow Jones, you can see that the highs are over here and you know we didn't even get that far but we moved up too fast too quick and now we're rolling over and pulling back and there's nothing wrong with that specifically it's just part of the movement in the market.
Markets don't go straight up markets don't go straight down they move in a wave-like pattern and you know if we get too far too quick overextended then we will have a slight pullback and that's just healthy and that's normal for the market.
Looking at the positions that we’re in we've been in heavy on Google. Actually that was one of the position that I've been trading quite large on and this has been a solid winner for me and stocks nearly continues to climb higher and higher with light pullbacks from time to time. So nothing wrong with that little pullbacks here and there.
On the weekly here we have a few nice opportunities that you had on the break here and then you also had on the break here so multiple breaks. As you look here as well there are a lot of breaks that happened and those were really your entry points.
Amazon was another one that we've been large in and for me right here as well the same concept same stair step pattern all these were opportunities and I know that we had earnings right here so you might be wondering so how did I trade earnings or how did i do the trade or what do I do when I trade earnings because I don't trade earnings.
Those of you that know me I don't trade earnings, I don't keep my stocks during earnings I get rid of 80, 90 95 percent of my shares or most of the time a hundred percent.
Normally I don't even hold it during earnings and what happens here is when looking at this really I waited, I thought and I believe that the gap would fill. This is typically what I believe is when a stock pops this high I don't chase it that's one of my rules, I don't chase it.
I used to chase it, now I don't chase it. So here the stock popped open right here sold back off down here and that spread was $18 selloff even though it popped high that selloff was $18 and I didn't want to give it an $18 stop right there because I don’t know if it could fill this gap right here or get back in here and if it got back down here that would be 564 from 616.
You might say “Oh, it had good earnings and the snap” but I could tell you stocks like Netflix and so forth that had these kinds of pops and then continue to sell off further the market didn't like it and they got down over here 528. So I'm always mindful. I’m always patient and discipline and that took time to get there.
Here I was waiting; here was the sell off so it took a few days for the stock to break and this was the breaking point right here. I waited for this breakout you can see that this breakout it's minimal. Its subtle little signs little clues right here you can see these two bars where heavier then when you start looking right here look at this light little bars and now look at these bars right here.
Look how much higher they are this is normal activity here and this is now the breakout activity you can see the difference right there in how that moves. So my entry point actually was right here, this was my entry point. When it comes back here and it bounces that’s the adding point.
Then here's another opportunity. If you didn't add there you could have added right here. So this stock continues to make higher highs and from here we basically had a good forty seven-point forty-nine point pop and I've been taking shares off in the strength.
Of course those of you that watched the previous video of course I only have about a third of my position remaining here and we'll let the rest ride but a lot of that position is just you know on a forty seven-point gain.
I mean how much more we are looking for right so you take a lot of it off and let the rest ride and just see what happens. So as it pulls back on lighter volume, if it pulls back let's just say it starts pulling back right here then I may add to that position and it bounces, I may add there so that's kind of where we're at.
IBM also a short, good short that we've had so here we talked about it for quite a while, there was the support point right here. The breaking point came back up rejected it. There are some resistance up here you could’ve shorted it there as well the stock just continues.
I talked about this one before that that 120 area would be a good level and that is really because here's some solid support level right around that region so when he gets there we'll see how it reacts and behave.
Those are my positions really there's some others I was looking at here’s SEE we didn’t get a chance to jump in on it today just because I was out and about taking care of some things but this was one I would have wanted to get in just lightly but I could get in a little bit tomorrow.
There's no rush there's plenty of time we'll see how it reacts. If it comes back up to this level and rejects it then that's also another opportunity but if not just go on next trade.
CMP same thing here, here was the rejection I was watching for this to reject you know rolled over but looking at my current positions you know I had plenty on the plate so I said you know what I’ll let this one pass as well because the volume is not as high on the selloff as I'd like it to be.
CYBR, this one also here's a critical support line breaking right there. Selling off picking up in volume looks good for lower prices. Waste Management I was waiting for the break actually on this one so it will just require more time. It still hasn't broken it yet so this was the resistance line right here.
Apple here we’ve been watching it, always watching trading Apple all the time. So here's the support and resistance line got a little above that sold off BOM rolling back over. It just doesn't have the juice there's weak, it's acting weak.
It used to be a leader. It’s still powerful company a lot of shares traded but acting weak. One of the members asked to do Facebook. So here's Facebook your entry points really for Facebook were right here on the break so ideally you'd want those shares at this price level if you could.
Unfortunately again we had earnings so what you’re waiting for is if you have a pullback. If you normally trade let's say a thousand shares you would trade maybe 200 shares and nibble it at these levels but remember the key support and resistance is over here.
This is the key so does that mean that once the stock start selling off and coming back in to here that it's bad and you should short it? No it just means it's a light pull back. So don't think that just because we start rolling all over that it's you know all of a sudden it's time to short.
In fact this just could be a natural pullback coming back here to retest it and then power higher. So I'd watch this level if you want to go half in or third in and then see how it continues then you can always add another future pullbacks but the move is you're waiting for that.
The other opportunity is wait for a clear of these highs right here those highs of what we have here and 110.65 so wait for the clearing of 110.95 and wait for those 111 right around that area for a potential long.
LinkedIn, hear this one is because it doesn't trade a large amount of shares and it whipsaws around you want to be careful. So looking at this one on the daily can be really confusing so I like to look at this one on the weekly and this one has a huge overhead supply with 26.5 million shares over here on the selloff.
Ideally because we don't have a lot of room how much room is left right here to here is only 14 points ideally I would rather this stock break these highs here than trying to get in it right now. I understand that right now it's been moving and you know went up 14 points and it went up technically 50 points from that breakout but if you're not in it now you'd want to wait here for 270.
Let’s say on the safe side 278 to 279 because here if you're looking at this monthly chart you can see that this is where the resistance is and you look at how much is left, how much is remaining in the run. It may only get to 269 and then come back down the 215 and there would still be nothing wrong with the stock.
I look at what's the potential and the potential here is just 10 points, 15 points you know if you want to get in it and you have very tight stops you could but this one will whipsaw you around and just to give the review for a member that that's the way I would look at this stock just because it's a higher price stock and its higher-priced stocks you got to give them $10 to $20 moves to wiggle around.
$10 to $20 point run to wiggle and that's what we do with like a Google you know you got to give this stock a $5 to $10 so you don't get stopped out so here's a $15 wiggle point and you have to keep that in the back of your mind that this stock can drop 15 to 20 points and still nothing be wrong with it. It's a whole different way of trading.
When you start getting into this, when you start getting and looking at all these different charts you’ll start being aware of certain things and for me when I first started trading you know I would mostly just do day trading its quick and easy in the sense of I knew what to do.
It’s buy shares and sell them higher and that was that worked out pretty easy but one of the things that really I struggled with when trading the markets when looking at the markets, when just improving and getting better and why it took me over a decade to just get better at it was just personal growth.
It's a lot of it has to do with personal growth self-improvement aspect and you heard me talk about the inner game and the outer game and the inner game took a lot longer than the outer game. I tend to spend a lot on the outer game when I was first getting started to learn everything or try to learn as much as possible and then I would try and use MACD.
I would try to use Stochastic. I would try to use all these different indicators to figure things out then I'd get into option trading then, I get into trading verticals and you start dabbling into so many different things that you don't really know where the right foundation is and going back to basics and fundamentals and one of my martial arts instructor said you know back to basics and back to fundamentals.
We went back to fundamentals and I said why I don’t do that also in the market in the stock market place because I don't really have a specific mentor that taught me and maybe why it took me so long. We didn't have YouTube at the time when I first started trading we didn’t have all these videos. I was still doing dial up.
At that time you know connecting to AOL dialup with the crazy tones and you know you're dialing in and everything was a lot slower back then. So for me when I first started trading and doing all these stuff it was really painful and it was painful because I was trying all sorts of different things.
There's a lot of things thrown at you and it's like ok this thing's going up higher and this thing is telling me to go lower and these things got telling them there's a lot of action here and this guy’s telling me on TV that this stock is going to break out.
Then there's news on FDA approvals and earnings and it was just too much to really digest. It was overwhelming to the point where you just break down and just day I've had enough, I've had enough of this and you know going back to the basics going back to the fundamentals is really where things started to take off.
It's like getting better at skating, running, walking or fine-tuning your techniques at kicking all these things they have their own little specific things that you start watching for and for me I started breaking things down.
Now for me when I used to do full contact kickboxing back in the day, only did that for a short time because they didn't want to take too many head punches but when I did do that I was very good at kicking.
I started to really break down the kick in very detailed manner and we start to break it up into most of you that know how to throw a kick or if you've done martial arts Taekwondo any of these kinds of things.
There is basically four parts to a kick you know you have a straight up, then knee goes up, leg goes out pull it back and then you put the foot back down.
Now a lot of the power you know you can break down the power going in from a lot of areas but as I started to break things down one of the things that I didn't realize was that you know a lot of instructors and people they talk about power from the hips, power from the ground, power from the rotation all that power coming from the body momentum, from the knee extending.
So you have your from your hip you have the extension then you have any extension but we never got into specifics until there was one guy that started breaking things down even further the basics and he explained that you know most people they look at the hip, they look at the knee, they look at the rotation, the twist and the torque but not a lot of people talk about your ankle.
Think about all the walking that you do, your ankle has the extension the movement, your toes all of that when you're walking around in your toes the balls of your feet. All of these have additional room for extension and light bulb went off.
When he said this I'm also thinking in the stock market on thinking in applying all these to my other things in life. I'm thinking about tennis, I'm thinking about how these things put together and all these puzzle pieces work together in my life in basics and fundamentals because all the things in life they worked together their synergy there.
I started to implement things I started to go back to the basics and I started to find tuning things and I started to go back to the root; price, volume and behavior or action or wide price spread. So I started to break things down looking at price.
The point of the stock is to purchase it at one price and sell it at another price so looking at price instead I was looking at trend lines, getting fancy with all these different things but looking at price, how is the price moving.
That was a big AHA moment that to me was aha because not all days and not all prices are created equal. So if I take for example the price right here of this stock or at that bar and I take a look at the bar right here the value of this bar is a lot less than the value of this bar and that is because there's a wider price spread, its wider.
Also looking at the volume you can see that there's a lot more volume here as well. So the value of it is just more important the importance of that is the key.
Let’s take a look at another one. This bar right here is more important than this bar or this bar, it's more important than even this bar over here. So you can look at how these bars act and react and then you start looking at price, how is that price affected.
Looking at this bar how important is that and how important is that next bar so looking at this right here we have this bar right here and this bar is important because of the swing point but this bar is also important.
This bar not as important, this bar not as important, I start looking at the price and I started to get things I started the common put these things together and then I moved to the next thing. I started go to the next thing the next thing the next thing and what's the next thing well there's a lot of different things than volume.
I started looking at volume and how volume compares with the price so then I would compare this I would compare this price bar volume of 23.4 million shares and then I would compare it to before where's the other swing points where is the other areas, 69.7 million shares.
Where's the other important bars, here's 34 million, so we have 23 million, we have 69 million, this is 34 million. This is another important one 32 million, here's another important one so we got 35 million. So 35 million up 34 million and 35 million up and we have 69 million, 23 million to the downside and then again over here 37 million down.
We have thirty-seven down and 35 up which one is more important 37 million to the downside for 35 million to the upside? Obviously the thirty seven million to the downside is more important plus its more recent and the volume, the spread and the price of that is also bigger.
Then, Aha! That tells me stock is going lower. Then I look at the next part where is the next important price point, what’s the volume there then it's breaking it. It's breaking it on 19.8 million. 19.8 million rather than 37 million, 35 million the volume now is weakening.
It’s not a fast-break less important right? If I was to scale it is let's say its importance level of five let's put it in the middle average five out of ten and the reason is because what happens later well we get up beat 19.5 million so we went down 19.8, we went up 19.5.
Now what happens next few days 17.5 down, 42 million down, 34 million down and Aha! Now I'm realizing 19.8 million down, 19.5 million up, 17.5 down, 42 million down, 34.7 million down. What does that tell me? That tells me this volume bar 19.5 versus 19.8.
19.8 is more important so when I see this, when I see 19.5 at the end of the day, when the stock is going up on 19.5 in just previously the important bar at 19.8 what do i think is going to happen? The move is fake, the move is not real and the move will continue lower and then BOM, light bulb goes off and you just snap and get into it, next thing you learn this.
All I'm sharing with you is just two concepts right now, where you got it, you got it, you get it you know it you got price you got volume then I would go to the next thing and the problem for me the problem and I'll tell you the big problem for most people is they take too long to get there.
For me it took more than a decade to get there and to understand this, to put the pieces together. It just took too long I wouldn't say took too long I mean it's just part of the educational business. It’s part of the learning it's part of getting there it just took time and a lot of it has to do with putting the time and energy into it I don't know why it took so long but maybe because I didn't have the mentor maybe because I didn't have you know YouTube around.
Maybe because I didn't have their appropriate courses and I had to do it on my own you know I didn't have someone to guide me through the process. It just took a lot of extra time that I thought could be condensed and one of the ways to get to those fast gains in the market as I’ve mentioned earlier at the beginning for the core of the lesson is speed of implementation.
The quicker you can learn and implement not just learn but learn to change your behavior and implement the things that you're learning because once you learn something such as going from crawling to walking you learn to walk you typically don't crawl anymore.
The quicker you can get to implementing what you learn, the faster you'll get to your end destination and the faster you'll get to your goals. So if you can learn and implement and do those things as fast as possible once you learn something and implement it then you'll get there but you have to do it accordingly.
First nature rules, nature rules first you have to learn to crawl, then you learn to walk then you learn to run and then potentially learn to fly if you get there ever. In either you go step-by-step nature rules and you got to learn in the market you don't get to MACD or Stochastic all these different indicators until you learn price, until you learn volume, until you learn behavior of a stock or wide price spread.
You don't get there until you learn those things and until you know those things I know it's probably boring it's kind of like your instructor or trainer telling you “Well today we're going to run again, today we're going to run again and then we're going to run again and then next week. We're going to run some more next year we're still going to run some more”.
Then what you can do is you can run and put a tennis racket in your hand and then you can hit the ball but first we're going to run because we're going to build your endurance. You got to know how to run properly and quickly so you can get the ball.
First you start with the core you get to your fundamentals, you get your price down, you get your volume down. After a while you know I would get to… Let’s just take GMCR it's fairly easy example or even WYNN.
As you get better you'll start learning and seeing things so I would get to these points and then I'd start implementing new things, i would implement things like ABCD pattern. So we have A to B, here is our B point, B to C and then we got C to D.
You know it continues and then it repeats you know A to B, B to C, B to C here sideways and then potentially D. So we'll see if that pans out but if you look on the weekly you have the same thing on the up channel.
Here again we have A to B, B to C, C to D and there that move is done so here's our A point here is our B point, here’s our C point and here's our D point. So A to B, B to C, C to D and this is just typical stock market move. This is human behavior we get a nice run, people want to take some profits they don’t want to take everything off or not everybody wants to take everything that they had off.
Some of the people still like the people back here will still leave some shares and then again we continue for another run for the people that missed out on the trades, we’ll continue or if we break these highs right here notice how that works out right here we come back after we break this level right here.
We break that level then we come back and pull back to this level right here and we continue to power higher. See how that works out right there? BOM, we break it comeback retest it and we power higher so that's your ABCD pattern.
Then I learned ABCD patterns then I applied that together but glad all took time that all took a lot of energy. It doesn't happen overnight, it took a lot of patience, it took a lot of discipline and took a lot of time to stick with it that's probably one of the biggest things is that the ability to stick with it to be committed and if you're not committed you know that's really where you'll struggle in this business.
If you can learn something and you get something you get some knowledge insight whether that's for your business whether that's in your life, your health or the way to cook something if you can learn and then do it right away and apply it then you'll be better off because you're implementing it right away in your life and you'll be able to use it time and time again.
When you can use it you get better at it just like cooking you continue to cook, you cook let's say a steak you cook a steak once a week you'll get better at it after a year. You cook a steak every day and you’re a cook for a restaurant or you’re a chef you’re going to be really good within a couple of weeks or a couple of months the more you do it the better you'll get out it.
You just continued to evolve and get better implementing what you know and learn but it all starts from the core and if you don't have the core, if you don't have the foundation and if you don't have the basics there's no way you're going to learn about MACD Stochastic and Stansky indicators.
If you don't understand how price moves, how action moves, how behavior moves and how just stocks are breathing if you don't understand the basic concept of life within the market with just the way that price moves in that action you’re going to struggle because you're going to chase the fancy stuff you’re going to chase the fancy indicators.
Calm yourself down go back to the basics go back to the fundamentals. Review things apply things one by one and then all these things start falling into place then you say ok I got it ABCD pattern you look at this stock right here okay here's A to B, breaking out so here's my A point right here and here's my B point.
I'm looking at the stock right here I miss the breakout so let's let the stock ride. Here's my pull back now I noticed the stock is pulling back, the stock starts breaking out this could be my entry point. If I miss that no problem, no problem if I miss that point right there instead now what I do is wait for this next break because I know I have highs here there's my B point.
I know I have another high right here let's just call it point H and then I'm waiting for the next break and I get in right here. if I miss that point I get in right here on the bounce so even if I got in on the bounce or even the break right here of this high right here from here to here still 60 points.
60 point gain in this stock in a short period of time in just three months, 60 points and just to give you an idea let's just say you have a 60 point gain and you just have 50 shares that’s $3,000. 50 shares, if you have a 60 point gain and you have let's say five hundred shares that’s $30,000.
Let's just say you only had a 40 point gain but you traded let’s say 1,500 shares $60,000. 40 point gain times five thousand shares $200,000.
Now I'm not trying to you know boast about numbers and things like that, what I’m saying is that even with a 40 point gain and let's just say you had twenty shares to make it conservative that's still 800 dollars.
800 dollars, just think what that could do to change your life. If you just had $800 and you made eight of these trades that's an extra $5,000 $6,000 $7,000 per year, how much different your life would be. Now imagine a large portion of the world lives on less than a few dollars per month.
For you guys if you're looking at an extra couple hundred dollars a month that's a great starting point so I just want to share with you that if you start looking at concepts, start with the basics and implement things as quick as you can because that'll really compress your learning.
I mean it then maybe won't take you 10 to 12 years like it took me to figure things out instead it might take you three years, five years, maybe two years maybe one year if you're lucky but it takes time to learn these things to understand these things to put all these things together.
We’ll be launching off one of the final videos after the option course on how to really put all these things together and exactly what is it that I do when I enter the trade, why I enter the trade.
How I choose these things really specific and that’ll just be coming out later towards the end of next year but that's one of the things that I really want to cover is just putting everything, putting everything together and seeing how it all works tying it all together how the trading works together and making it all work together to benefit you.
Hopefully you enjoyed this Rapid Recap I know we didn’t talk stock specific but it’s really important you get that inner game, it's really important that you go back to the basics, go back to the fundamentals and learn step-by-step what it is that you need to do to continue to improve your craft, continue to evolve, continue to get better.
Step-by-step piece it together first learn about the price, learn about the volume go back put it together make it your own but you still of course have to do your due diligence to learn all that outer games stuff, all the external things in order to make it all work.
Go back start from the basics. Go step by step, make it your own and just continue to improve every single day. I'm pulling for you to become successful whether to make a little bit of extra money you know from the side.
Whether that's to use that extra money to go to college well that's just for a long term side income or retirement fund you know you don't have to be a full-time day trader. You don't have to be a trader every single day or every single week but if you at least learn the basics.
That way you can rest some money aside and you know continually check your positions once a week and your retirement funds grow then by all means you’ve won and you're ahead and you know you have the oyster right in front of you.
The world is your oyster and you can continue to do greatness from that.
Alright go out enjoy this weekend, have some fun, help a friend do some studying and just continue to get better.
Thanks again for joining me, sticking with me and just being a part of this community and I’ll see you next time!