0:04 So, good evening everybody and welcome
0:07 to this webinar focused on the fallen
0:11 angel strategy. Really happy to have you
0:13 guys here and invite you to ask
0:14 questions along the way. I'll do my best
0:17 to uh take your questions as they come.
0:19 Really, the intent of this strategy is
0:22 to go over a highle um approach to the
0:24 markets and how you can trade the
0:27 so-called fallen angel strategy.
0:29 Uh as always we need to let you know
0:30 this for information and educational
0:35 purposes and uh is uh proprietary to
0:39 trading terminal and its website. The
0:41 data for tonight is broken up into five
0:43 distinct steps. I'm going to talk to you
0:45 about this strategy in five steps that
0:47 are going to start with the trade
0:49 overview. What is the fallen angel
0:52 strategy? Uh we're going then going to
0:54 go into the conditions behind the
0:56 strategy, right? What are the setup
0:58 conditions that you need to see? Then
1:00 how do you set up the trade and get
1:02 ready for the potential opportunity to
1:04 trade it? What does the trade entry look
1:07 like? And last but not least, how do you
1:11 manage the trade once you're into it?
1:13 Uh we'll go through this in a step-wise
1:14 fashion. Like I mentioned, if you've got
1:16 questions, jump right in there. I'll do
1:18 my best to pick them up. Let's start
1:21 with the trade overview. Uh the fallen
1:24 angel strategy is actually part of a uh
1:27 series of four strategies that are very
1:29 similar but have slightly different
1:34 configuration options. Um the fallen
1:37 angel and uh rising devil are the most
1:39 popular ones. They're the ones I trade
1:41 most often. And being that I'm short
1:44 biased, I tend to trade the rising
1:46 devil. That's a short trade. The Rising
1:48 Devil and Lead Balloon are both short
1:49 trades. Fallen Angel and Phoenix are
1:51 both long trades, but most people like
1:53 to trade long. So, we're going to focus
1:54 on the Fallen Angel, and I'm going to
1:56 explain what that means. Now, most like
1:59 most trade names, it's just a name,
2:01 right? There, this strategy has lots of
2:04 different versions out there in the
2:06 world uh that you can find usually with
2:08 slightly different configuration options
2:10 or ways people have put it together for
2:12 themselves. I'm going to explain to you
2:14 what it means to me and how you can
2:16 trade it. Now, specifically, the fallen
2:20 angel strategy sort of has these these
2:23 items. It is a long trend continuation
2:24 strategy. So, we're looking for
2:26 something that is already heading in a
2:28 direction, and we want to figure out a
2:30 good entry point so that we can get on
2:32 board and have it continue. We're
2:34 looking for strong stocks that are
2:36 moving higher on positive news
2:39 pre-market. So, this is an early trade.
2:40 This is going to happen right at the
2:42 beginning of the day.
2:44 We're also looking for stocks that are
2:48 going to be sitting above the VWAP. Now,
2:49 a few times in this webinar, I'm going
2:51 to be using terminology that you may or
2:53 may not be familiar with. I'll do my
2:55 best to explain them, but if I miss one
2:56 and there's something you want to
2:58 explain, do not be shy and jumping in
3:01 and asking. Okay? Uh, VWAP stands for
3:04 volume weighted average price. And it's
3:07 a very common sort of uh uh average, a
3:10 moving average that people use to
3:13 measure sort of uh price performance
3:15 over the course of a day. I use it quite
3:17 heavily and it's one I like because it
3:19 helps me understand is the price sort of
3:22 moving higher or moving lower. That VWAP
3:24 is usually sort of your net zero line.
3:26 When something is at or just trending
3:28 around the VWAP, you know that mostly
3:30 it's not going anywhere. It's basically
3:33 at its average price for the day, hence
3:35 the name, right? If it's above it, it's
3:37 above the average price. If it's moving
3:40 below, then it's below. So, so you know,
3:42 on the fallen angel strategy, I'm
3:43 looking for something that's sitting
3:45 above that average price. I want to see
3:49 a rising price uh in the early stages. I
3:52 then going to take this trade within the
3:55 first one to five candles of the open.
3:57 Now, I've worded it that way, one to
4:01 five candles, because that implies you
4:03 can trade this in multiple time frames.
4:06 You could trade this using a one, two,
4:08 or five minute chart. You really cannot
4:11 trade this strategy with a higher level
4:13 chart because now you're getting into
4:16 longer time periods that have bigger
4:18 builds and you should be looking for
4:21 slightly different criteria. Now, I say
4:23 one to five candles and and I would say
4:24 it's a little variable. I'm going to
4:26 touch on this a little bit later. It
4:27 could be up to five candles if you're
4:29 using a one- minute chart, maybe four
4:31 candles if you're using a two-minute
4:33 chart, and three or so if you're using a
4:36 fiveminute chart because, of course, the
4:38 actual elapse time increases, right,
4:40 with that chart. You know, three candles
4:42 on a five-minute chart, you're looking
4:44 at 15 minutes of elapse time. After that
4:47 point, the strategy sort of loses its
4:48 effectiveness, and now you're moving
4:51 into other types of strategy uh definitions.
4:53 definitions. Um,
4:55 Um,
4:57 what differentiates? Oh, one thing that
4:58 you should pay attention to in this
5:01 chart are the green words. Those that
5:02 are in green are the things that
5:06 differentiate the fallen angel from
5:07 those other three strategies I
5:09 mentioned. So, if I look at the
5:12 different criteria on all four of them,
5:13 you can see I've sort of given you idea
5:15 of what they look like, right? The
5:18 fallen angel is longbased. It's mo a
5:20 stock that's moving higher on positive
5:22 news that is above the VWAP as opposed
5:24 to the rising devil for example which is
5:26 a shortbased trade that's moving lower
5:29 on negative news below the VWAP. And
5:30 then you can see the Phoenix and the
5:34 lead balloon uh described trades here.
5:36 Those are the criteria they look for.
5:39 You could trade all four of these
5:41 strategies using the information I'm
5:44 going to provide you in this webinar
5:47 because uh the uh basically the trade
5:49 setup, the trade entry and trade
5:51 management elements of what I'm going to
5:54 talk to you about are otherwise the same
5:55 if you just sort of replace the long
5:57 with short, right? The green with the
6:00 red as applicable in each strategy.
6:02 We are going to focus however just on
6:04 the fallen angel today. I'm going to
6:06 explain that in detail and give you what
6:08 you need to know if you want to see if
6:11 you want to try and trade it. Okay.
6:12 All right. So, let's move to step two.
6:14 We need to understand the conditions
6:16 under which you would identify a stock
6:19 to trade this. Well, like I mentioned,
6:21 this trade happens right at the
6:23 beginning of the day. Overall, I'd be
6:25 looking for a stock that has to have
6:28 these criteria. First, I'd be looking
6:30 for a stock with a float of over 50
6:32 million shares. What is the float?
6:34 That's the total number of shares
6:38 available for trade. Uh, anything lower
6:40 than 50 million, you tend to get less
6:42 predictable on the strategy. And they
6:44 tend to get, you may have heard people
6:46 talk about lowflat tra uh, stocks. Those
6:48 are often ones that have less than 20
6:50 million shares. 20 to 50 is sort of a
6:53 gray zone. And over 50, you tend to get
6:56 larger uh, stocks that trade a little
6:59 uh, a little, frankly, less crazy,
7:01 right? A little more mature fashion. I
7:02 like to focus on the ones that have over
7:05 50 million shares. However, you can
7:08 certainly trade this on smaller stocks.
7:11 Just know those low floats can be less
7:14 predictable. They're higher risk. All
7:16 right. Second criteria. I'm looking for
7:18 a stock that has that trades more than
7:20 five million shares per day. That just
7:22 shows me that there's volume in the
7:25 stock and I know I can count on regular
7:28 volume being available for my trade, you
7:30 know, so that it can be filled whether
7:33 I'm going short or going long. I'm
7:36 looking for an ATR of over a$150. Now,
7:39 the ATR stands for average true range.
7:42 This is an indicator of how far a stock
7:46 moves on an average day. Now, I'm
7:48 expecting the stocks that I'm looking at
7:50 to be in play. Remember I said it has to
7:52 have news. Well, I'm looking for one
7:55 with news. Therefore, it should be
7:58 trading more than a$150 on this given
7:59 day or I wouldn't be looking at it. But
8:02 I want to know that it has enough range
8:04 that I can make money off of it, right?
8:06 That it's going to move sufficiently for
8:08 to make it worthwhile me spending my
8:11 time paying attention to it.
8:14 Okay. So,
8:17 uh and I see your question. You got it
8:19 exactly correct.
8:21 So Shay, you're asking what is the best
8:23 place to get the news. Now I'm a little
8:25 biased on that. I would argue the best
8:27 place to get the news is Trading
8:28 Terminal. That's usually where I go. And
8:30 I'll show you I'll I'll sort of show you
8:32 what that looks like and and how you can
8:33 get the news. I do have an example that
8:35 we're going to go through. And you can
8:36 get all of this information, by the way,
8:38 from Trading Terminal. There there are,
8:40 of course, other news sources that you
8:43 can get it from as well. All right. I'm
8:46 looking for uh stocks that have a share
8:49 price of over $10. Again, for me, that
8:51 just allows me to get my risk-to-reward
8:54 in line. And uh, you know, under $10,
8:56 once again, sort of like a low float,
8:58 they tend to trade differently. They're
9:00 not there's not as many institutional
9:02 buyers in there, and they just become a
9:05 little more erratic in my opinion. So,
9:07 uh, that's why I look for shares, sorry,
9:09 stocks with a share price of over $10.
9:12 Uh, the last thing I have on here is
9:14 that I'm looking for a short float of
9:16 less than 20%.
9:19 Now, the significance of that is on a
9:21 fallen angel strategy, right? I'm
9:23 looking for this to go long. It's one
9:25 that's moving up on good news. I'm
9:28 looking it to continue going long or or
9:31 north. Um, and I don't want a heavy
9:33 short float. Why? Well, if you had a
9:37 really really big short float, you could
9:39 get a short squeeze out of it, which
9:41 means that, you know, if it's moving
9:43 higher, uh people could have to close
9:45 their shorts and and that would actually
9:48 cause it to move higher. But it what
9:51 sort of like the share price and the the
9:54 float, it can create erratic behavior
9:56 because don't forget people that are
9:58 short have a vested interest in this
10:01 thing going down. And unless they're
10:03 severely overpowered by the stock
10:05 movement, they're going to try and push
10:07 it down, right? Especially if there's a
10:08 lot of deep pockets who who are trying
10:11 to to make it move that way. So, I don't
10:12 if I'm looking for a fallen angel
10:14 strategy, I do not want to see a big
10:16 short float just because it introduces
10:19 risk. While it could support my trade, I
10:22 don't like the risk parameter to it.
10:24 Once again, Tony, you can check the
10:26 short float on a trading terminal. And
10:28 and why don't we do that since you guys
10:30 are asking the question? If you just go
10:31 to the main page on Trading Terminal,
10:33 this is what main page would look like.
10:35 You can just type a ticker in here. I
10:36 was looking up some earlier. Let's let's
10:39 take a look at Oracle. And as you guys
10:41 can see right here, you know, here's the
10:43 it's got the market cap, the float,
10:46 right? So 1.6 billion shares, so well
10:49 over the 50 million. Nothing to worry
10:50 about there. Right up here, it's got the
10:53 ATR, average true range. You can see
10:55 that's $1448
10:57 on this stock. And down here, we've got
10:59 the short float, which is only 1%.
11:01 Typically, it's pretty low like that.
11:03 It's only one, it's even half a percent.
11:04 Like if we were to call up something
11:08 like Apple, uh the short flood on Apple
11:09 I think is probably about half a
11:12 percent, no 75%. So it it's pretty low
11:14 on the major stocks, but when you get
11:15 into smaller things like there was a
11:18 stock that we were looking at today that
11:20 was moving heavily called PRA, you know,
11:22 it's got a bigger short float that's got 16.8%.
11:24 16.8%.
11:26 And as you can see, the total shares is
11:29 only 15.6 million. So, you know, that
11:31 would one that doesn't quite meet my
11:32 criteria, although I mentioned as a
11:34 potential option only because it
11:37 happened today for a rising devil. But
11:38 anyways, that's where you can find the
11:39 information. Some of the other stuff
11:41 that you that you might want to look at.
11:43 Uh it's it's down here under the price
11:45 highlight section, right? You can see
11:47 the opening price. You can see so notice
11:49 it's got the volume weighted moving
11:51 average. This is sort of the VWAP stuff
11:52 that I was talking about. I'll show it
11:55 to you on a chart later, so don't worry
11:56 about that too much. Okay. The other
11:58 thing that I mentioned was the average
12:00 volume. How I said I want more than 5
12:02 million shares a day. So if we're
12:03 looking at something like again this
12:05 PRA, notice the average trading volume
12:08 here is only 466,000.
12:09 Again, going back to something like
12:12 Oracle, its average volume is 20 million
12:14 shares a day. Right? Right. So, again,
12:16 these are all just indicators that I use
12:18 to make sure I'm getting stocks that
12:21 have uh the ability to move, but enough
12:23 stability that I'm not likely to
12:25 increase my risk more than I'm
12:28 comfortable with.
12:32 So, back to the presentation. Um then,
12:34 so those are the overall conditions,
12:36 right, that the stock can have. And you
12:38 can look that stuff up at any time. Some
12:40 people like to start really early in the
12:41 morning. Whether you're doing that at 7
12:44 am or 8 am or 8:30, I don't care when,
12:45 but you can, you know, you you could
12:47 filter some of your stocks that you may
12:50 be looking at based on on that
12:53 information. Now, by 9:15, here's the
12:55 specific criteria I want to see on the
12:57 day. Like I mentioned, I need positive
13:00 news. I want the news to know there's
13:02 some driver. There's a catalyst for this
13:05 stock moving higher. I want it to be
13:08 gapping higher on that news. When I say
13:11 gapping, we usually mean basically it's
13:12 the differential in price between where
13:15 it closed at 4:00 the previous trading
13:18 day compared to wherever the price is at
13:19 the time at which you're looking at it.
13:22 In this case, I'm suggesting it's around
13:25 9:15. So often we look at stocks in the
13:26 morning, if you follow the pre-market
13:29 show that we have with Carlos and I, for
13:30 example, you know, we look at gappers.
13:32 They're moving more than 2% higher from
13:34 the previous close. I want it to be
13:37 gapping at least 2% although the number
13:40 isn't um important as long as it's
13:42 higher than it closed yesterday. That
13:43 that's what's important to me when I'm
13:46 looking at the fallen angel strategy. I
13:47 also want to see that there's been at
13:50 least 500,000 or half a million shares
13:55 traded at by 9:15. The more the better,
13:57 but if there's less than half a million
13:59 shares, that tells me there might not be
14:02 a lot of enthusiasm for this move. the
14:04 news might not be strong enough to
14:06 really drive the type of uh activity
14:08 that I'm looking for. And I typically
14:10 would avoid a trade if it's got less
14:13 than half a million shares traded. I'm
14:15 also looking for a stock that is showing
14:17 consistent price action. And by that I
14:20 mean it's got regular trading volume
14:22 when you look at a fiveminute chart
14:24 again premarket.
14:25 This is also important because when you
14:27 look at charts premarket sometimes you
14:29 see these big gaps, right? If if there
14:31 was 500,000 shares, but almost all of
14:35 them traded in a 15minute block between
14:38 6:45 and 7 a.m., well, that's not very
14:40 good, right? Because that was like two
14:41 hours, two and a half hours before the
14:43 market open. And it could be that this
14:44 thing is not going to move when the
14:46 opening bell rings. I want to know
14:48 there's consistent price action, that
14:50 volume is showing me candles in every
14:52 minute. There's shares traded every
14:53 minute or at least every five minutes
14:56 premarket. That gives me confidence that
14:59 this trade again has some of the
15:01 criteria that I'm looking for. Last but
15:03 not least, I want the price to be above
15:06 the pre-market VWAP. Now, I say that
15:08 because VWAP traditionally is a measure
15:11 that is used only after the market open.
15:13 However, nowadays, every people use it
15:16 all sorts of times, intraday on on
15:18 different scenarios, and of course,
15:20 pre-market. So, the VWAP will be
15:21 available on any platform that you're
15:23 using. you can see it pre-market and
15:25 it's usually good for the fallen angel
15:27 that it's above the VWAP. If you
15:28 remember, there's four different
15:29 criteria where I could have something
15:31 that is trading below the VWAP with
15:34 strong news, right, that I might want to
15:36 look at for a gainer. And we've seen a
15:37 lot of those recently, by the way,
15:38 right? Because the market's been gapping
15:41 down and then it it jumps up pre-market.
15:43 Uh that would be a Phoenix type trade,
15:45 but we're talking about a fallen angel,
15:47 so I want it gapping above the VWAP premarket.
15:49 premarket.
15:51 Okay, so that those are the background
15:54 conditions. That's step two. Step three,
15:56 let's look at the actual trade setup.
16:01 What am I looking for? Between 9:25 and
16:03 9:28, right? So, these are just the few
16:06 minutes right before the open, the stock
16:11 must have target profit levels above the
16:13 current price. Now again, I'm going to
16:15 show you on a chart what I mean, but
16:17 really I want to know how far can it
16:19 move. If I think this thing is going to
16:22 h going to go higher, where's it going
16:24 to go to? How far is it going to go?
16:27 Right? You must be able to identify
16:29 them. If you can't identify those
16:31 levels, you might want to consider not
16:33 taking the trade. Now, there's a couple
16:34 of exceptions to that. For example, if
16:36 you've got a stock that's at all-time
16:38 highs, well, you don't have any levels,
16:40 right? It's never been here before. So
16:42 what do you do in those cases? You
16:45 usually use whole dollar numbers, right?
16:47 You go to the whole dollars. Those are
16:49 usually good targets because stocks love
16:52 to move the whole to and through whole
16:54 dollars. Okay.
16:57 Second, I do not want to have
16:59 significant support or resistance levels
17:02 in the active price range. So what does
17:04 that mean? That means, you know, if I'm
17:06 looking at this thing to move higher, I
17:08 don't want it to be all congested with
17:11 areas where a ton of trades uh a ton of
17:14 shares have traded hands many times and
17:16 it's created levels. Now, the levels
17:19 depend on you in your trading, right? Do
17:22 you use uh uh Camarilla pivot points? Do
17:24 you use regular pivot points? Do you use
17:26 moving averages? Do you set daily
17:28 levels? Again, I'll go through and I'll
17:30 show you sort of the type of levels I
17:32 look for. But if you have levels that
17:34 you rely on and they're all within the
17:36 price action pre-market and all over the
17:38 area where you think it might trade
17:40 through, it's likely to have more
17:42 difficulty moving higher like we want
17:44 this stock to do. So I would probably
17:47 abort. By the way, any of these criteria
17:49 I'm telling you about, if they don't
17:52 occur, generally I say not this stock,
17:57 not this day. Right? So these when I say
17:59 the stock must to me these are criteria
18:01 that have to be there. If any one of
18:03 these conditions fail, I don't take the
18:05 trade. So, you may understand I don't
18:07 take all that many of these, right? This
18:09 is a strategy that works very well when
18:11 you identify it, but you can't force the
18:14 rules. Either the rules are present and
18:16 you have an opportunity to trade or they
18:18 do not present themselves and you abort.
18:21 No trade. Okay, let's go back to the
18:25 criteria. Next one. It must be the stock
18:26 must be able to deliver a minimum of a
18:29 2:1 win loss ratio. What do I mean by
18:31 that? Well, specifically, you know,
18:33 those levels we just talked about
18:35 between the place at which I think I
18:38 could probably get an entry and the
18:40 price target. I want to know that it's
18:43 got twice the range between those two
18:45 levels as it does between where I think
18:47 the entry will be and where I would
18:50 likely put my stop loss. Now, again, I
18:52 can I can't tell you exactly what that
18:54 looks like in every stock because it
18:57 depends on the situation. But this
19:01 brings us to our our next points, right,
19:03 which I need to find out where to put a
19:05 stop loss. So,
19:07 So, um,
19:09 um,
19:12 the other, uh, setup criteria that I'd
19:19 uh, that, uh, I'm looking so by
19:21 basically the time at which you want to
19:25 have executed the trade. And I say 9:35
19:26 because some of this could happen
19:28 pre-market or it could happen in the
19:30 opening minutes of the market, right?
19:33 But if it goes past 9:35, remember I
19:35 told you my one minute criteria. Sorry.
19:36 If you're trading off a one minute
19:38 chart, you can trade it for roughly the
19:40 first five time periods, which actually
19:43 gets you from 9:30 to 9:34, right? If
19:45 you really count it, because, you know,
19:47 9:30 is a minute. 1 2 3 4. Anyways,
19:48 there's your first five time periods.
19:50 But, so if it hasn't done these things
19:53 by 9:35, it's an abort on the trade. But
19:55 again, it's not a bad thing if it
19:59 happens earlier, like 9:25, 9:28, 929,
20:01 that's okay. I just want to see it h
20:03 happen within the opening minutes, okay,
20:07 of the stock uh of the trading day.
20:09 Okay, so first item I'm looking for the
20:11 pullback to the VWAP and or a
20:13 significant level. This is important for
20:16 this strategy to work, right? I need it
20:17 to pull back a little bit. Remember,
20:20 it's gapping higher. It's moving higher
20:22 on uh good news, but I want a little bit
20:24 of a pullback. Why? Because that gives
20:27 me a good riskto-reward. that gives me a
20:29 good entry point at which I have a
20:31 greater probability of success. I'm not
20:33 chasing it higher. I'm not risking
20:35 entering at the high of day and having
20:37 it go higher. There are great trade
20:38 strategies where you can trade something
20:40 at the high of day and look for it to go
20:43 higher. That's not this strategy, right?
20:46 Don't confuse them. If you want to trade
20:48 a high of day break strategy, right,
20:50 that's great. Don't confuse it with this
20:52 specific strategy. That's not what I'm
20:54 looking for in this case. So, I'm
20:56 looking for a pullback that I can take
20:58 advantage of and then a trade to move
21:01 higher. Okay. Second item under this
21:04 section, I'm looking to show support at
21:07 or near the support level with a strong
21:09 order book.
21:11 This specifically means that I again
21:13 once it gets to the level I've
21:14 identified for the low, right, where
21:17 that pullback goes to, I want it to like
21:19 halt. It doesn't have to halt for a long
21:21 period of time. It could literally be
21:24 seconds, but I want to know that it's
21:26 reversing that. I'm also seeing stuff on
21:29 the ask, right? Meaning higher orders.
21:32 Uh, you know, you can use a level two
21:34 bid and ask. You look at the ask side.
21:35 Where are the big orders? Hopefully,
21:37 there's more there than there are in the
21:39 bid. Or you could use a visualization
21:42 tool like uh our Atlas tool that you've
21:44 got in Trading Terminal to see where the
21:46 volume sits. Ideally, you want it above
21:48 the price that the stock is currently
21:50 trading at.
21:52 Okay. Now, Anony's asking a good
21:54 question. Do you use a screener for
21:56 these criteria? You can. The more
21:58 criteria you try and put into a
22:00 screener, the more complex that screener
22:03 needs to be, right? I generally don't. I
22:06 I do to identify the gappers, right? I
22:08 have a gapping criteria I use in the
22:10 trading terminal scanners that allows me
22:11 to identify things that are moving on
22:14 the day. Uh but a lot of the criteria I
22:16 go and I look up myself. I look up
22:18 manually. I make sure it's in place. uh
22:20 because it one it gets me familiar with
22:21 the stock and what's happening. It gives
22:23 me an opportunity to sort of just take a
22:25 look at it, get a feel for what's going
22:29 on. Um but two, I I feel that it just
22:32 gives me that that uh that comfort that
22:33 I've done my due diligence, right? I'm
22:35 not just trusting the tool to have done
22:37 the filtering. I've looked it up for
22:39 myself. I've checked the boxes. And
22:41 maybe that's just my bias, but that's
22:43 how I do it.
22:45 All right. All right. Back to the the
22:48 data. Next point, I want to start the
22:50 move higher
22:53 uh sorry uh move sorry I want to start
22:55 the move higher above the identified
22:58 support level. So this means again it
23:00 shouldn't still be dropping when you're
23:02 entering this thing. I this is a long
23:04 trade. It should have been moving long.
23:06 It pulled back yes but now I want to see
23:08 it start to go back in the direction of
23:10 the trade. It's just a shortterm
23:12 pullback. Sounds probably similar if
23:16 you're familiar with an ABCD
23:18 type trade, right? Where you're looking
23:20 for that pullback and then a move
23:22 higher. A lot of the same principles
23:24 apply. This is just a very specific
23:27 criteria to trade at the open. And I'm
23:29 looking for it ideally to still be above
23:31 the VWAP or have regained the VWAP at
23:33 the point at which I take the trade.
23:34 Meaning, I want it to be above that
23:36 average price that shows me their
23:38 strength and it has an indication that
23:40 it's interested to go higher.
23:43 Okay. All right. So, that's the third
23:44 step. That's all the setup criteria. And
23:46 there was a lot in there, right? But
23:48 that's the stuff I look for. It's not as
23:50 complicated as it may sound once you've
23:52 done it once or twice because most of
23:53 that stuff you can clear well before you
23:56 have to worry about the trade entry,
23:57 which is the next thing we're going to
24:00 look at. Right? So, when it comes time
24:01 to make a decision, are you entering
24:04 this trade or not? What do you need?
24:07 Well, um, first at the trade entry, and
24:09 remember I told you about that criteria.
24:11 Here it is written out. If it's a one
24:12 minute chart you're looking at, that
24:15 would be the first sort of 9:30 to 9:34,
24:17 right? The first five time periods, two
24:19 minute, 9:30 to 9:36, the first four
24:21 time periods roughly. And the five
24:24 minute, the first three, 9:30 to 940. So
24:26 that answers one of the questions you
24:28 guys had earlier. Okay.
24:31 So at trade entry, I am going to be
24:33 looking to identify before I enter, I
24:36 want to know where my stop is. It's very
24:37 important, I believe, in any criteria
24:38 for you to know where your stop is
24:40 before you hit that button. Don't figure
24:42 it out after you've bought the shares.
24:44 Make sure you know where it is before.
24:45 Make sure that it gives you the right
24:47 risk to reward. So, I'm identifying that
24:49 stop below the targeted level of support
24:53 or at the low of the day, right? So, I I
24:54 may say, look, I had a targeted level,
24:56 but maybe so oftent times it goes right
24:58 through it. Levels are rough estimates
25:01 of areas, right? So if it if this thing
25:04 if the price had spiked through that a
25:05 little bit lower, I might put my stop at
25:07 that low of day. Now if it spiked lower
25:09 in a giant wick, I may say, "Well,
25:11 that's a really long wick. I might sort
25:13 of, you know, sort of half the distance
25:14 and not go all the way to the bottom of
25:17 the wick." It depends on the scenario.
25:19 But if you want a strict rule, I would
25:21 say put it just below whatever your
25:23 targeted level is if the price didn't
25:26 quite get to the level or pick that low
25:28 of day, whatever that number is. That
25:31 would be your absolute criteria. Okay,
25:33 next one. Confirm that orders exist on
25:35 the ask. I'd mentioned this earlier,
25:38 right? I want to see that they're still
25:40 there. Remember when we had the previous
25:42 step, I was telling you, check see if
25:44 there's orders there. Make sure there's
25:46 a little bit of an order book. Uh when
25:48 you're about to enter, make sure they
25:49 haven't disappeared because sometimes
25:50 those orders go in and they get pulled
25:52 off quickly. That could be a sign that
25:55 there's a change of of attitude, right?
25:57 and they're thinking, well, maybe it's
25:58 not going higher. They're going to pull
25:59 their orders and wait for another
26:01 opportunity. That would weaken the
26:03 stock's ability to move higher. So, make
26:04 sure those orders on the ask still exist.
26:06 exist.
26:08 Um, like I said, you want it to be
26:10 rising. Confirm that the price found
26:12 that support level and is starting to
26:15 rise. It doesn't have to go far, but you
26:17 want it to have started to rise so that
26:19 you you have confidence on where you're
26:21 putting that stop.
26:24 And like earlier when you wanted to when
26:25 I said you want to make sure you've got
26:27 a 2:1 risk ratio, reconfirm it. Notice
26:29 that most of these actions are sort of
26:31 reconfirming things, right? You checked
26:33 out earlier the ask levels, make sure
26:35 they're there. You want to make sure
26:36 that that price support that you
26:38 identified, did it actually adhere to it
26:40 or did it bust through it? Right? You
26:42 got to make quick decisions, but it's
26:45 not you're not finding new data. You're
26:46 just validating the data you were
26:47 already looking for and then
26:49 reconfirming. Does my riskreward ratio
26:52 still work? Yeah, it does, guys. And I
26:53 know there's a lot of stuff. I'm going
26:55 to take all of this and put it into a
26:56 very quick example for you in just a
26:59 minute or two. Okay. All right. And
27:00 then, of course, you just take the
27:02 trade, right? Super simple. That's all
27:05 you need to do. Take the trade. Um,
27:07 Um,
27:09 when you take the trade, you know, the
27:10 next thing you need to do at trade
27:11 entry, of course, is to set your stop.
27:13 Now, some people like to have mental
27:16 stops, others like to do, you know,
27:17 toolbased stops. I would highly
27:20 recommend an automated stop. Uh, that's
27:22 up to you. We don't have we're not going
27:24 to be getting into using hot keys and
27:26 setting your stop automatically. There's
27:28 tools to do that, but if you know where
27:31 it is, you know what you should do.
27:32 Don't ever let yourself go past your
27:34 stop. That should be a cardinal rule. I
27:37 don't care what strategy you're trading.
27:39 And as people are saying, you guys know
27:42 me, you're saying, take the damn trade.
27:45 Absolutely right. Take the trade. That's
27:48 step four. So, you're in the trade. What
27:51 now? Well, now you need to manage it,
27:54 right? And managing a trade tends to go
27:56 one of two ways, doesn't it? And anybody
27:59 who's traded even once knows what that
28:02 looks like. It either fails or it
28:06 succeeds. Now, I'm defining failure here
28:09 as it's a red trade. It not all red
28:11 trades are necessarily failures. You
28:13 could execute this strategy perfectly
28:16 and it still might not work. But for the
28:17 sake of direct language so that you
28:19 understand what I'm talking about. If it
28:21 doesn't work, if it starts to go red on
28:23 you and you're losing money, right? Your
28:25 action is simple. What do you need to do
28:28 to manage this trade? You stop out at
28:30 the loss that you'd already determined.
28:35 Period. Full stop. Literally full stop.
28:37 Full stop at your predetermined
28:39 stop-loss. You're done. The trade's
28:41 over. It didn't work. No worries. Did
28:43 you follow your rules? Good. That's a
28:45 good example of a fallen angel strategy
28:48 that just didn't work. That's okay. They happen.
28:50 happen.
28:52 If the trade succeeds, meaning you
28:54 start, it starts to go green and you're,
28:56 you know, you're seeing success on it.
28:58 What do you do? Well, remember earlier I
29:00 said you should identify levels where
29:02 you think it's going to achieve. You're
29:04 just waiting for them to come in play.
29:06 You're waiting for it to hit the levels.
29:08 Once it gets to the first target level
29:11 you'd identified, well, you take a 50%
29:14 partial at your profit target,
29:16 then you immediately move your stop loss
29:19 to break even.
29:22 Next, right, where's your next target?
29:24 It should be another one that's higher
29:26 than that. You're looking for another
29:29 50% partial at your next higher target.
29:32 Or if the stock starts to move sideways
29:34 or just starts to chop up and down, this
29:37 happens. It happens a lot. I would say
29:39 if it's still doing that in five time
29:42 periods, keep in mind this is all based
29:45 on whatever chart uh time frame you're
29:47 using. If you're using a twominut chart,
29:48 you're going to be looking at longer
29:50 time duration, right? Than if you're
29:52 looking at a one minute chart. If it's a
29:54 one minute chart, this would mean if in
29:55 five minutes it's still moving sideways,
29:58 take another partial. On a two-minute
30:00 chart, it would be 10 minutes. On a
30:01 five-minute chart, it would be about 25
30:03 minutes. Right? because the bigger the
30:04 candles, the bigger the time frame of
30:06 your chart, the longer you've got to
30:08 give it to have it sort of take, you
30:11 know, to to work.
30:14 Um, I would then you update your break
30:17 even uh stop for for the remaining
30:19 shares. You don't move it, right? You're
30:21 going to keep your stop at break even,
30:23 but being that you took a second
30:25 partial, you should update it. Now,
30:27 again, I have tools like you might have
30:29 that automatically do this. you don't
30:30 have to do anything exceptional, but if
30:32 not, you want to make sure that you're
30:33 not going to get stopped out for more
30:35 shares than you actually have, right?
30:37 So, you update your stop to break even.
30:38 And then you repeat the top two steps
30:40 twice more, right? What's the next
30:42 level? Move your stop or update your
30:44 stop number of shares if you're not
30:46 stopped out because, of course, it could
30:48 go hit your target and then go down and
30:51 uh and stop you out.
30:53 Last but not least, I'm suggesting you
30:55 exit the remaining shares at your final
30:58 target again if you're not stopped out.
31:00 So basically I'm suggesting to trade
31:03 this effectively right you're only
31:07 trading it basic four times right the
31:09 first time you take off 50% the second
31:12 time 25 the next time 12 a.5 the fourth
31:14 time you're taking off 6 and a4% that
31:16 will leave you with six and a quarter%
31:18 of your original shares there's no point
31:21 going smaller just exit now those are
31:24 rough numbers and the key the big caveat
31:26 you guys can question me I'm expecting a
31:28 lot of you know questions on this
31:29 because people always ask, do I have to
31:32 take a 50% partial? Do you recommend
31:33 that? I'm giving you rules that you
31:36 could follow. These are great beginner
31:38 rules if you're starting a strategy. As
31:40 you mature in using a strategy, you
31:42 might want to change your trade
31:45 management criteria. That's fine. That's
31:47 on you. Your first partial, you might
31:48 want to be smaller or bigger. You might
31:51 decide to go all out at that level,
31:53 right? Thor works on a strategy that
31:56 way. I like to take lower smaller shares
31:59 early and take more shares later. I'm
32:01 trying to hold more for the bigger gain.
32:02 But as a general rule of thumb, if
32:04 you're just starting on a strategy,
32:08 follow these rules. 50% every to 50% of
32:09 your remaining shares. I want to be
32:11 clear in that. So if you take a 100
32:13 shares, you're taking off 50, right? You
32:15 should have a button that does that. Or
32:17 if you're man calculating it, you know,
32:19 you've got 50 left. The next partial,
32:21 you're taking 25 shares off. You've now
32:23 got 25 left. The next partial you're
32:26 probably taking 13 shares off because
32:28 you can't take 12 and a half. So, it's
32:29 going to leave you with 12. The next
32:31 partial you're going to take six. See
32:32 what I'm getting at? Right? That's how
32:35 it works. And if you're using smaller
32:36 share sizes, don't worry about it. If
32:39 you're using larger share sizes, do the
32:42 math. Okay?
32:45 So, those are the rules. Those are the
32:48 five steps, right? It's it's that
32:50 straightforward. So, a couple of
32:54 questions here. Um, are there are we
32:55 trying to see if we can achieve at least
32:58 2 to1 win loss ratio? Yes, absolutely,
33:00 Michelle. Yeah. On this trade, the way
33:02 I've defined it and set it up, you
33:04 should not be partiallying at all until
33:06 you have at least 2 to1. That should be
33:10 your first partial range minimum. If it
33:12 doesn't get there, then you could you
33:17 may just be stopped out for a full loss.
33:19 Um, is the sheets somewhere to download?
33:21 Wolf, I'm not If you're asking about the
33:23 uh the the
33:26 sorry, the presentation,
33:27 uh I don't I don't have it available at
33:29 this point, but I could make it
33:32 available. It's not a problem. Um and
33:34 Shay, you're asking instead of stocks,
33:36 can I buy calls? Sure. You know, you
33:37 don't have to buy stocks. You you could
33:40 do that if you prefer. Um, just know,
33:42 you know, you'll be looking for the same
33:44 setup and you generally be looking for
33:46 it on the stock chart because, you know,
33:49 the you can't do it off of anyways, you
33:51 can't do it off of an options chain. Uh,
33:52 you're going to need to do it based on
33:54 the price movement of the stock.
33:56 Obviously, your your criteria is going
33:58 to be slightly different because you're
33:59 going to be looking at the price of the
34:01 calls rather than the price of the
34:02 stock, but you need that price movement
34:04 of the stock to create value in the
34:06 calls. But there's no reason why you
34:08 couldn't do that.
34:11 Right? So, so the example I I was going
34:13 to run you through because again it can
34:14 be tough, right? When you're just
34:16 looking at that to uh to know what is it
34:18 that you know what is it that I should
34:20 actually be doing and and so I thought
34:22 let's let's just take you through a very
34:24 quick example. This should just take a
34:26 couple of minutes. Um and and we'll show
34:28 you looking for right. So let's go back
34:30 to the beginning. Remember we said we're
34:32 going to look at Oracle. I've got I've
34:33 called it up. I've got it on the screen
34:34 here for you. You can see those things
34:36 we already look for, right? So, okay, so
34:38 it's got the float I mentioned. It's
34:40 already high enough. It's got the ATR.
34:42 It's $14. That's good. The short float
34:45 is 1%. Uh, it trades 20 million shares a
34:48 day. Those are some of my base criteria.
34:52 Now, on um on September 19th, it had
34:55 news. Now, I can go to the news here in
34:57 Trading Terminal and uh there's so much
34:59 news in Oracle. We got we keep seven
35:02 pages of news. Oracle is one of those
35:04 stocks like Apple and AMD and a bunch of
35:06 those where there's so much news it
35:08 scrolls off every couple of days. So,
35:09 you're not going to find it here, right?
35:11 The last news is two days ago. All
35:13 pretty much mo all news feeds sort of
35:15 stop. However, I can tell you on
35:18 September 19th, the news that Oracle had
35:20 was that it was reported they were in
35:23 talks with Meta for a multi-year cloud
35:26 computing AI infrastructure deal worth
35:29 approximately $20 billion.
35:33 That's billion with a B. So, a big deal,
35:35 right? That's great news. That's good
35:37 tradable news. That's the type of thing
35:41 I'm looking for. So, let's go into the
35:43 the replay mode here in Trading Terminal.
35:45 Terminal.
35:47 And uh we're going to we've got Oracle.
35:49 We've got it here on the screen. Let me
35:51 call it up for the day in question. So,
35:52 we're going to pretend like we were
35:54 trading this on the day and we're
35:56 talking about the 19th of September. So,
35:58 I'm just going to call up the day. And
36:00 the the way Trading Terminal, by the
36:02 way, loads this for you is it puts you
36:03 pretty much right at 9:30, right at the
36:05 market open. That's good. Nothing's
36:07 moving yet, right? We can just watch it
36:10 and see what it's going to do. Um, but
36:12 uh, you know, so let's do some of the
36:14 setup I was talking about because you
36:16 could do this anytime prior to the
36:18 market. So, I need to find levels. Where
36:20 do I think this thing would move to? By
36:22 the way, when I go to the stock, this is
36:24 the stuff I look for. The big blue line
36:28 is the VWAP. The dotted lines you see on
36:30 here are the previous day closes for
36:32 each day. You this will come into play
36:35 in a second, but what I'm looking for is
36:36 levels. So, let's start with levels. I'm
36:37 going to expand my chart. Let's look at
36:40 a 60-minute chart. And I want to see
36:42 where where did this thing, you know,
36:45 have levels over the last few days. And
36:46 if I'm looking at this, I'm like, wow.
36:49 Like this thing really, if I look down
36:51 here yesterday, look at how many times
36:54 this thing wicked down and then stopped.
36:56 That's that's crazy. I'm going to zoom
36:58 in again to the five minute chart here
37:00 in Oracle. I want to look at to see what
37:01 happened here in the previous couple of
37:05 days. And I can see that yesterday. Wow.
37:08 This this level right here. Um, so keep
37:10 in mind the gray part is after hours,
37:12 before after hours. The white is during
37:14 the trading day. Oh, sorry guys. I'm
37:16 scrolling all over the place. And I can
37:19 see yesterday, let let me try and uh I
37:30 it looks to me like this area of roughly 9750,
37:32 9750,
37:34 let's call it right right around here.
37:37 9750. Look at how many times it looks
37:39 like it sort of bounced off this like
37:40 there were. And what that tells me is a
37:42 lot of shares were traded in that area
37:44 during the market trading hours. So, I I
37:45 want to put a level there. I think
37:47 that's that could be important today
37:49 because it was important yesterday. If I
37:51 scroll back, look at the day before, it
37:53 looks like that level also had some
37:55 importance. Not as important two days
37:57 ago as it was yesterday, but it still
37:58 had some support there. All right,
38:00 that's interesting. Holy cow. Look, I go
38:03 back to the the 15th, right? The 16th,
38:04 well, it was trading above that price.
38:07 It wasn't in play. But the 15th, it also
38:09 used that same level that I just set at
38:12 97 29750.
38:14 All right. So, I've got a level now. So,
38:16 that remember the the stock right now at
38:17 this present time, right before the
38:20 market open, is trading at $299, but I'm
38:22 saying I think I now know where I'd like
38:25 it to move to, right? I've got a target
38:28 area. This is my level of support. This
38:30 is what I think I'm looking for. I don't
38:31 know what the stock's going to do, but
38:33 that's an area. Okay. So, what about the
38:35 top side? Where do I think it can go to?
38:38 Well, the high of well, if I go back
38:41 here, the high of like 3 days ago on the
38:45 16th was way up here at $320. Well, that
38:46 that's a lot. That's like $20 above the
38:49 current price. It's possible, but not
38:51 likely it'll go up there. I I think I
38:53 might want something closer into the
38:54 price action. So, if I look at
38:56 yesterday, look at yesterday's high of
38:59 day. Yesterday's high of day was about
39:01 30 301
39:03 uh 30150.
39:05 And I'm thinking, you know, that's an
39:07 area I'm going to keep an eye on for the
39:09 top side.
39:11 And uh but that's, you know, that's just
39:15 that one area I I see up here at 305.
39:18 I'm I'm liking this area at 305 because
39:20 let me set it and you'll see what I mean
39:22 here. If I try and put this at 305
39:25 pre-market, uh yesterday, it used that
39:28 level as a high and pre-market the day
39:30 before it actually used that as a low.
39:32 Interestingly, it then moved quickly
39:34 through that, traded below it, and came
39:37 back up to that level at the close. I'm
39:39 thinking that is a level where if we're
39:41 going to get resistance, we might get it
39:43 at 305. So, now I've got two target
39:46 levels uh above the active price, 30150
39:48 and 305.
39:50 All right. So, I know what I think I'm
39:52 looking to do. The stock meets my
39:55 criteria. I've got an area where I think
39:57 I want to stop. I've got areas that I
39:59 can think I can get a target to. Now,
40:01 we're right before the open. So, guys,
40:02 this is all sort of the mental
40:04 gymnastics I'm going through when I'm
40:05 watching a trade. Obviously, I'm doing
40:06 this in real time and the market's
40:08 moving, but I have multiple minutes,
40:10 right? I don't have to do it right at
40:12 9:29. I'm doing it sort of as the
40:14 morning evolves and on a couple of
40:15 stocks usually because I'm trying to
40:18 find ones one that will meet my criteria
40:19 because I can usually only pay attention
40:21 to one at the open. But what I'm
40:23 thinking right now is if I can get an
40:26 entry somewhere around this 299 level
40:30 with uh a stop at uh 190 sorry at 29750
40:32 that's about a$150
40:35 stop loss right and that would mean I
40:38 need for my 2:1 about $3. So I'd want it
40:40 to go up to 302. Well that's a little
40:44 bit above that area that I had targeted
40:45 right where I think it might get some
40:47 resistance because it had been there
40:50 before but it's well below the 305. So,
40:53 I'm in a not quite a comfortable zone. I
40:55 can get the 2:1. It's really going to
40:56 depend on my entry and what the price
40:58 action looks like. You know, it's sort
40:59 of a judgment call. Would you want to
41:01 take it based on that or not? Well, I
41:03 should be able to get my 2:1, but it
41:06 it's not as comfortable as I'd like. But
41:08 what's good is I didn't find any levels
41:09 that are in the middle here, right?
41:11 There's no levels that I really have to
41:13 worry about. Even the $300 price, which
41:15 is a big whole dollar number, the price
41:17 didn't seem to hang around there very
41:18 much, right, when I was looking at the
41:19 previous days. So, I'm not really
41:22 worried about it. All right. So, now we
41:24 can get into the trade. Let's actually
41:26 run this thing. We'll run it sort of
41:28 real time, if you will, just to take a
41:30 look. So, let's start the market. Off we
41:34 go. Right. Uh time's a ticking now. You
41:35 can see the clock up here in the in the
41:37 top right where the market's open. The
41:40 bell rings now, you know, and I want to
41:41 see the price action. Now, we're going
41:43 to have to maybe speed this up a little
41:45 bit. Let me just ex put an accelerator
41:48 on here. And oh, by the way, the one
41:50 thing I didn't mention is I'm looking to
41:53 take a $100 risk. So, if my stop is a
41:56 buck 50 and I can take a $100 risk, that
41:58 means I could probably take about 70
42:00 shares, right? 100 divided by 150. I
42:02 think it comes out to like 66. But let
42:04 let's for the sake of argument say 70
42:06 shares. So, I like to pre-populate
42:07 things or say I'm looking for 70 shares.
42:09 Now, you can also have a tool that where
42:11 if I pick my stop level, which would be
42:14 around this 29750,
42:16 I could just type that, put that in, and
42:18 then I just wait and hit the button, and
42:20 it'll automatically calculate the number
42:22 of shares. But I need to see what the
42:24 stock is going to do. And it's happily
42:26 turnurning away, right, at double time here.
42:28 here.
42:30 So, all right. So, I saw it move down a
42:31 little bit. It moved up. You know,
42:33 hasn't gone crazy yet, but it it's
42:35 moving at a range. That's okay. I, you
42:36 know, wanting to see what happens.
42:38 Again, I want to know that this thing
42:40 has pulled back. It shows me that if
42:42 there are sellers who had Remember, this
42:44 thing is gapping up compared to
42:46 yesterday's close. There could be people
42:47 that say, "Well, now that the market's
42:49 open, let me sell my shares because I'm
42:50 in a profit position." I want to know
42:53 that there's not that many of them and
42:55 that they've had a chance to get out.
42:58 Get out. Get out of my way. Right now,
43:00 if this thing takes off without me, I
43:01 might lose my opportunity because my
43:03 riskreward is not that good. Remember I
43:05 said it's already it's already a little
43:10 tend tenuous um at a 29 299 entry. I
43:12 certainly don't want it to be up at 300
43:14 or above, right? If it just goes without
43:15 me, then it goes and I don't have a
43:17 trade. But I'm just watching it and I'm
43:19 watching it do this stuff and I'm
43:20 watching it bounce around and I'm
43:21 thinking, you know what, it's come down
43:23 here. It's set these levels. It hasn't
43:26 got to the 29750, but it's tested this
43:27 level and it's showing a little bit of
43:29 higher lows. So, I think if I leave my
43:31 stop there and I can get a good entry at
43:34 around the 299. This this feels like,
43:35 you know, the type of trade that that I
43:36 want to take. So, I'm going to do my
43:39 best to to get an entry. Let me do it
43:40 right there. And I'm going to get an
43:42 entry at 2. What did I actually get
43:45 filled at? You can see it here. 29912.
43:47 So, I didn't quite hit my target, but I
43:49 got in at 29912 because I saw it holding
43:51 this level. I saw it come down and test.
43:52 It didn't go right to my level, but
43:55 that's okay. It tested a 298 area
43:58 multiple times.
43:59 All right. So, that was my pullback.
44:01 Now, I'm looking for it to move higher
44:03 and I'm willing to risk it going lower,
44:05 right? Going lower my stop because it it
44:06 might like right now. See, it's going
44:08 and it's testing that level and I'm I'm
44:10 like, "Oh, gez, you know, did I take a
44:12 bad trade?" Well, not. Remember I said
44:14 you either put your stop at the low of
44:16 day or slightly below the level because
44:18 I know my level's approximate
44:21 and and you know, like the thing is
44:22 going to go test. It tested, but look
44:24 how quickly it was down there and back
44:27 up again. That tells me I perhaps have
44:30 identified that level properly,
44:33 right? Could I have got a better entry?
44:35 Maybe. But I also might have cost myself
44:37 the opportunity for the trade. That's
44:39 always the tradeoff,
44:43 right? So, uh, Arensa, you're asking the
44:45 pre-market levels are not that
44:47 important. I prefer to there's so much
44:48 more volume that trades during the
44:51 market hours 9:30 to 4 that I will
44:52 weight that a lot more heavily. But I
44:54 will pay attention to the pre-market
44:56 trading especially if it's like this
45:00 morning's trading because um I know that
45:01 that just happened, right? And those
45:03 people have either bought and are
45:05 holding or sold shares, right? So there
45:08 so it puts them more in play than other
45:10 days aftermarket or pre-market stuff.
45:12 All right, so this stock has moved up.
45:13 I'm in a little bit of a profit
45:15 position. You can see my unrealized P&L
45:18 here is about $160 $170. Remember, I'm
45:20 looking for the 2:1. I knew that this
45:23 was a tentative area. The the the 10350.
45:25 So, look. Oh, it hit 102. Maybe I want
45:26 to take half my shares off because
45:28 that's my 2:1. Let me do that. I'm going
45:30 to take half off right there. And I got
45:32 a pretty good fill. I actually got
45:34 filled. Uh I don't know where I got
45:37 filled, but I've now got it looks like I
45:41 got filled at uh wow, pretty good. 30280
45:43 or so. So remember, so that was my first
45:46 level and it popped up through it. I
45:47 gave it a second and it gave me a little
45:49 bit more. That's great. So that's my
45:52 first partial. Now my second partial.
45:54 I've got 35 shares left. So I'm going to
45:56 take what 18, right? Slightly more than
45:58 half off at the next level. And it's the
46:00 305 that I talked about earlier. All
46:02 right, let me let me sell right there.
46:05 Right, so I'm at 305. Why do I do that?
46:07 Why do I set those levels and I take
46:08 half off? Why is it a good place to
46:10 start? Well, look at my realized P&L.
46:13 Right now, with having sold three
46:16 quarters of my shares, I still have a
46:18 quarter left to play with, but having
46:20 sold threequarters of my shares, I've
46:23 secured my 2 to1 return.
46:25 Pretty easy. It always looks easy when
46:27 you get to do it in hindsight, right?
46:31 But but notice what I did. See? And and
46:33 see, I'm And you're right. I did in this
46:35 case trade on the fifth candle. So, uh
46:38 one, two, three, four, five. Right. But
46:41 look at the candle I traded in. 9:34,
46:42 right? It's the fifth candle of the day
46:44 at 9:34. That's sort of the ta the the
46:46 the outside range of what I said my
46:48 criteria was, but it was within my
46:52 within my criteria.
46:54 So now what you do is you've got a
46:56 decision to make as a trader. Right? By
46:58 the way, after I took those partials, my
47:00 stop automatically moved to break even.
47:02 So if it came back down, right, to my
47:04 entry level stop out, that's going to be
47:06 automatic. But I I've got to decide what
47:08 I'm going to do, right? And usually what
47:10 happens when you get into a trade, this
47:12 is when things, you know, can take
47:15 longer. And you need to make a decision.
47:17 How long do you wait? You know, I I
47:19 can't like it depends on your patience.
47:20 How long you want to be in the market.
47:22 You may look and say, well, look, if now
47:24 the VWAP is actually above your average
47:27 price, which it is right now, so I'm
47:28 going to I'm going to move my stop. If
47:32 it moves down to the VWAP, I'll get out.
47:34 Or you say, well, we previously thought
47:37 that 30150 area was significance. If it
47:40 comes back and tests it and fails, I
47:42 might take my my shares off then and
47:44 just put my money in my pocket. Or you
47:45 might want to wait for a bigger move.
47:48 Remember, we had identified that $320
47:51 range. Who knows? Maybe it can get
47:53 there. But the likelihood based on how
47:55 it's moving so far, it's going to be a
47:59 while. So, you need to make a call as uh
48:02 as you want to do as as you you know as
48:04 you want based on your criteria. Rich,
48:06 you're asking uh do you ever add with
48:09 this pullback? So, I you know that's
48:11 completely based on again your trade
48:13 management rules for this to keep it
48:17 simple. No, it's a it's a very different
48:19 sort of strategy strategy add-on and
48:21 another level of complexity to add to a
48:23 trade. You need to know are you adding
48:25 in a place where it's likely to bounce?
48:26 Is it going to move higher? You know, I
48:29 I I am not I'm not a great adder to be
48:32 honest. When I add, often I do it too
48:34 soon and I cost myself the opportunity
48:35 because what it does is it moves my
48:37 average price to a level that's not
48:39 technically significant and I usually
48:42 just end up getting stopped out. So, I I
48:44 I am not great at adding to a stock. I
48:47 don't usually do it.
48:49 So, you know, look, you know, not to not
48:51 to ruin the story for you, but bottom
48:53 line, this this stock, you know, now
48:56 like we're now roughly what, almost half
48:59 an hour into the day. Um, I'm running
49:01 this at 10 times speed. But, you know,
49:04 if we jump ahead, let me just jump ahead
49:06 here about an hour.
49:08 And you can see, right? Look what
49:10 happens. This thing is moving sideways.
49:12 It's moving on that VWAP I talked about.
49:13 You may just say, "Look, enough is
49:14 enough. Let me get out of this thing.
49:17 I've made my money. it's good. I don't
49:18 want to hold on to it. That's okay.
49:20 That's a decision you're making, right?
49:21 Maybe it's just to free up mental
49:22 capacity. I don't want to worry about
49:24 it. You could also say, "Hey, it's done
49:26 nothing wrong. Hasn't broken the VWAP.
49:28 Hasn't come back to my entry. Why not,
49:30 you know, just let it go. Let's see what
49:32 it can do. It's completely up to you."
49:35 Right? I personally, because I trade all
49:37 day, I'm happy to leave it. I'll let it
49:39 run. Let's see what happens.
49:42 Right? Uh you may say, "I don't have
49:45 time for this." Right? Let me out. let
49:48 me I got things to go do. So, you know,
49:49 I I would say you got to pay attention.
49:51 You got to dynamically assess the the
49:53 trade based on what you're seeing. And
49:54 let's jump ahead another couple of
49:56 hours. Another couple of hours later,
49:58 right? If I'm looking at this, look, it
50:00 hasn't done anything. A few hours later,
50:04 Oracle still it did go below VWAP right
50:06 over here at 11:00, but it never quite
50:08 hit my entry. It came really close
50:10 though, let me tell you. right down here
50:12 in this candle. It's something it came
50:16 within like 30 cents of my entry, right?
50:18 But, you know, if you really want, you
50:20 can keep holding. What time are we at
50:22 now? We're at 1:00 in the afternoon.
50:24 Let's jump to 3:00 in the afternoon. You
50:26 know, your patience can sometimes be
50:28 rewarded because if I was to wait this
50:31 out all day,
50:33 you know, uh, sorry, it's 251. Let's
50:36 let's move ahead even more.
50:38 Um, you'll see that eventually this
50:40 thing will go up to I think the high of
50:42 the day was, you know, it was about 307.
50:45 I think it even goes higher to to 311.
50:46 But, you know, you're waiting all day on
50:48 this. But my point is this is the type
50:50 of stock you trade you can take where
50:52 you're either just in for the open and
50:53 then you're done. You could have been
50:56 done happily take your money off or you
50:57 can wait all day like this and try and
50:59 pocket a few extra dollars. Notice the
51:02 difference for me was like $40 when it
51:06 was here compared to $115 up here. So,
51:07 was it really worth waiting all day for
51:10 60 bucks, 70 bucks? Your call. You make
51:11 the decision. Let's get out of it right
51:12 now and just say, you know what? I'm
51:15 done. What a great day. Oops. Look what
51:18 I've done. I'm now short by one share.
51:20 All right, let's get out of that. See, I
51:22 didn't I didn't look at my size
51:24 properly. Uh, so here's my realized P&L,
51:27 $366. Oh, look at that. There's a
51:29 there's a pop higher. So, right before
51:31 the close, it it popped higher. I
51:33 thought it went up to 311 at some point,
51:35 but anyways. So, so there you go. On
51:38 this one trade, I just made $366,
51:41 right? Relatively straightforward, but
51:42 that's how I like my trades to be.
51:45 Simple, structured. I know what I'm
51:46 looking for. And by the way, if any of
51:48 the criteria I was looking at didn't pan
51:51 out, abort, you're out. There would have
51:52 been no trade. Look for another
51:54 opportunity. I usually only get to look
51:57 at one of these per day. So, if Oracle
51:58 hadn't worked on this day and that's
52:01 what I'd chosen to watch, I do not have
52:03 a fallen angel trade for that day. You
52:05 know, live to fight another day, look
52:07 for another opportunity.
52:09 So, that's the trade strategy. If you
52:11 want to look at another example, PRX
52:13 from today, I only put it on there
52:15 because it happened today. I'll tell you
52:18 right now, it did not meet my criteria.
52:21 Its float is too low. Its uh short float
52:24 is well, it actually does meet the
52:26 criteria, but barely. its average shares
52:28 per day is too low. I think its ATR is
52:30 too low. There's a lot of stuff that
52:32 doesn't work. So, you know, but it's
52:34 another one that sort of works when the
52:36 style even if I don't like the stock itself.
52:39 itself.
52:42 All right, so um hopefully that gives
52:45 you an idea of how you can trade this
52:47 and I appreciate you guys taking the
52:48 time being here. I'm going to stick
52:50 around and answer a few questions if you
52:52 guys still have them, but we're going to
52:54 close the recording for now. Thank you
52:56 for being part of Trading Terminal and
52:57 joining us here. It's always great to
