Getting Started with Stock Investing | 5-24-24

Welcome, everyone, to our webcast on getting started with stock investing. I' m Connie Hill. If you are new to the markets, this is the right webcast to come to. Now, I have a question for each of you to think about: How many of you have been through the Stocks Trading with Technical Analysis course out on the Schwab website? If you have, I commend you; if you haven' t, you' re going to find it' s a great resource to you. Today, we' re going to kind of condense and talk about the key takeaways from that class, that course that you went through. We' re going to condense it into about a 45-minute session here today. Now, we' ve gone into detail on each of the individual topics week by week, but today we' re going to bring them all together.

Now, I am joined in the chat by Lee Bohl. Lee is such a great veteran of the markets, a good coach and friend. If you have questions, go ahead and ask them. We want you to get your questions answered. If you' re listening to this on the recording, I know lots of you do, when you have a question, put it in the question or in the comment section, and I' ll go back and review those throughout the trading days and get your question answered quickly as well. So, go ahead and let us know. Hope you' Following me and Lee on X. I' m ConnieHillCS. He is Lee BohlCS. Put out some different educational content. We' ll notice things in the market, things that we think you might find interesting.

We' re going to show that information with you. So, do yourself a favor and follow along. And feel free to do just exactly as Roger did to answer if you have gone through that course. Let' s go through some disclosures here, and we' ll lay out our agenda for the day. What we talk about today is intended for educational and informational purposes only. It shouldn' t be considered a recommendation of any sort. We will talk technical analysis and fundamental analysis in this class. They may assert different views from each other. Past performances. Past performance of any security or strategy does not guarantee future results or success. We will be using the paperMoney software application, that' s what you download to your computer. It' s the most robust version of Thinkorswim.

We' ll be using it here today. Talk a little bit about our overview of the series that we' ve spent individual weeks going through. We talked growth and value, technical analysis, entry signals, all of these topics. We have addressed throughout the different weeks. Now, I want to just take a quick look at the chat, and I want to see who has already gone through the course. And maybe, Roger, maybe you' re the only lucky one that has done that. Oh, Sheena has as well. Okay. As well as Ambrose. Good. I hope you found it helpful and interesting. You know, they always say the book is better than the movie. Today, we' re kind of going to do the movie. But a lot of the details are definite.

So don' t skip over that, all right? Use that as your base foundation of learning. And then what we do in our class here is we augment that and support that, show it again. How do you utilize that information? Now, I hope last week' s class on candlesticks was helpful to you. And I hope yesterday, when we had that big bearish engulfing candle, I hope that you recognized that from our lesson from last week. Now, as far as our agenda, we are going to look at each of the elements that we' ve been going through week by week. Instead of discussing just one aspect, we' re going to go through a lot of it here. Of course, we' re going to look at some different examples.

So, our first initial week, we talked about different reasons why people might want to use stocks, why they might want to invest in them. We talked about those that might be doing it for a growth perspective, that they see a stock at a price, they think it' s really going to go up. And value or maybe they see a value stock, which is maybe a stock that' s been beaten down, but they crunched some numbers and they think, you know, I think I' m buying it here at a bargain. I expect it to go up in value over time and with some patience, or there could be an approach of income investing. Those of you that want some dividend paying stocks in your portfolio and receive an additional benefit from them by the dividends that they pay out.

Now, the one that we' ve really focused the most on that we' re going to review today. Is going to be the growth investing, we are going to combine both technical analysis and fundamental analysis. And we' re going to do that as we look at our scan that I showed you in week one. All right, let' s jump over there now, I' m going to take a slight detour here, we' re going to go out to the calendar where you can see the events that we teach. How many? Of you and I want you to answer this and in the chat there, how many of you have been tracking your trades? How many of you have been paying attention, whether they' re paper trades or in your live account?

I know some of you use your live account, how many of you really tracking those trades? Maybe in a journal of some type, something we' ve been excited to roll out to you is a trading journal. It' s finally available. I want to show you where to get it. What I' ve done is I' ve come out here to Schwab. com coaching brings up the calendar. And then I have on webcast selected, it has both webcast and Schwab events, I went over here to the right, and I went to put in a coach name, Ken Rose, okay, Mark Ken Rose, Ken' s a great, great coach, and he teaches a class on Wednesdays called short verticals, it' s in that link for that class that you can find the trading journal.

So as we go in here, I just select on it, you can pick from any week you want. This happens to be the one that he did earlier. And then right here, you' re going to see resources, you' re going to see trading journal, when you select this, it' s going to download that trading journal to your Excel, put it in the downloads file, so you can go ahead and pull it up. And then Ken has two tutorials here. There' s a couple of different tabs, and they calculate things differently. Ken has taken the time to do a couple of videos on each of those tabs, so that you can: If you want to use this as a resource, you can start having an understanding what goes in the different places and where some calculations might be done for you.

A way to kind of help you automate as you' re tracking the trades. So I' m going to look through here real quickly at who has been tracking their trades. Sandeep, you said you started 1st of May? Perfect. I' m glad that you did. David tracks. Great. Ambrose, as I do with the live account. Paper money, not daily. Yeah, maybe once you do a transition, you' re doing more of your live account. Yeah, you' re I absolutely know that' s where you' re going to put more attention. Okay, so here is the trading journal. Now, while we Re: out in a browser real quickly here, I want to remind you to subscribe to our YouTube channel. All right.

When you come out here and you' re a subscriber to our Trader Talks channel, you' ll be able to see this page and it organizes our content. It shows you what' s coming up. Shows you some recent. Some webcasts that have taken place, and if you' re somebody that maybe is a little bit new to our classes, one that you might find interesting would be to go down here a little bit, see where it says, ' Start Here.' If you' re a new person, you' re trying to really understand the different items that we' re going through. We have a series here for you. Just take him in order. This will be the last week of the current series, and so we' ll probably update that and put the more recent links in there.

But you can just go along from lesson number one all the way to lesson number seven. Okay, so take advantage of that. All right, let' s jump over to Thinkorswim here, we talked about in our very first week, we talked about growth stocks, and I laid out for you a scan that you could use. I' m going to pull it up here because, of course, I saved it saved a long time ago, and I made it, and I just named it growth stocks' for our class. We went to the trading journal. Or not the trading journal, the example, sample investing plan in the trading stocks course. That' s a resource in there, and it outlines some things that we might be interested in looking for. So we built these into this scan here.

Now, if I' m not going to go through tick by tick about exactly what' s in this scan, but essentially we want stocks to be at least $10. We looked at a couple of fundamental filters here. One' s a PE ratio, and we put in a range from seven to 80, and then we were looking for return on equity, and this is a really, I' m going to say, healthy return on equity. We start here about 15%, we don' t limit it. Okay, we let it go as high as we want. Then we want stocks that are trading. We don' t want stocks that are trading 500 shares a day here and there. We want things that are really exchanging hands. Makes it so much easier on your trading.

And so there' s a couple of numbers you might look for. In the sample investing plan, it says look for stocks to be about $500,000. Some may have a lower threshold than that. Some may start at $250,000. For our scan here, we did $500,000, right? That means people are trading in and out of it. Makes it easy for you to get in and out of it. And then we have actually all three of these are come from an indicator or a filter over here that is called studies. And I do want to warn you that studies. Only works in your live account side. It doesn' t work in your paper money side of things. Okay, so that' s important for you to know.

And then we built in trend here and we said, okay, we want stocks that are short- term trending up as well as intermediate- term trending up. We' ll look at stocks or we' ll look at some charts a little bit and talk about trends and so forth. So we said, all right, that intermediate trend. We' re going to look for the price of the stock to be at least 15% higher than it was 65 bars ago. Bars are essentially trading days. That' s about a quarter' s worth of information. Okay, so we' re looking for him to be up pretty decent in the last quarter. And then we' re looking for him to be upward trending in the last month. So we' re going to say 5% in the last 21 bars.

That' s about a month' s worth of trading activity there. That' s it for the scan. I' m going to hit scan. We' ll see what it brings back today. I will share this scan with you. But know it changes every time that you run it. Okay. Anytime we share a link with you, it' s not guaranteed as accuracy and timing. And this one I want you to know changes continually. If there were changes in it in a given day, then you go run it again, it' Going to change the results. By and large, a lot of them are going to be similar because if they' re in an uptrend and they already meet this criteria, yeah, it may be that they stay on the results list frequently.

Now I' m going to come over here to where the flame is and it says share scan query. This is a little bit more advanced. Those of you that are stumbling on this for the first day could be possibly, right? You might go, whoa, Connie, this doesn' t sound very beginning. And it' s a slight step up from that. Okay. I' m going to call this growth stocks class because that' s what it is. That' s what I' ve called it. I' m going to share it with you. How do I do that? This little URL is created here. I am going to put this out in the chat. I' m going to paste it over to you. Those of you that are here live, you can take that and copy it.

And then what you would do is you would come up here to the setup menu, upper right-hand corner, say open shared item. It can be a scan. It can be some columns that we' ll use sometimes. And then you can either type it in or you can copy and paste it. I' m going to move my mouse out of the way. Those of you that are listening to this on a recording, that might be a little bit small for you to see. In a minute, I' m going to post it over in a chart so you can see it bigger. And you either grab the whole thing or grab everything after the front slash starting with the exclamation point. It is cap sensitive, so you have to do it just exactly the way it is on here.

Okay. Then if you saved it with the same name when you' re ready to run your scan, your query, you would just come over here and say load scan query after you' ve brought it in and imported it and saved it. And then it will show up in your personal scans that you' ve done. Okay. It would show up just like mine does down here with growth stocks class. All right. That will give you a little bit of a head start here. Now, I said I would go put this in. I' m going to put this over on a bigger screen. I am going to jump to the SPX. I' m going to do a little text note.

I' m going to stick it in the middle here and make it big so, again, those of you on the recording can see that or those of you that just need a little bit better look at it, it' s a little bit bigger here on the chart. What I was talking about that I said I hope those of you that were in our class last week and we talked about candlesticks being something to pay attention to if they happen to be reversal candles. And I said I hope you saw and you noticed yesterday what this was. That was one of those candles we talked about that could be an indicator of a change of momentum. Turns out today we had some bullish momentum. Right. Quite a bit of a recovery here.

But that was definitely a bearish engulfing candle. Okay. So those of you who noticed that and saw that, good job. Hope that helped. Let me look at you real or look, not you, exactly you. Let me look in the chat window here real quickly. See if there' s anything that I missed. Sim says you haven' t been trading since November. Sim, Amsterdam couldn' t be that bad and busy on you. We' ll have to get you back into the swing of things. But good to see you here, Sim. And looks like we are doing good. Okay. Roger says, ' Yeah, I saw this scan, but you lost it. Couldn' t find it again. Okay. When you bring it over, open shared item. I hate to bring it over again because I don' t want to junk up my charts.

And you hit preview and you click on import. Then that should save it for you. But you have to remember what you called it. If you go with the name I left it with, that' s what it' s called, or change it so you can recognize it. That' s one of the big keys when you import these links that we share with you, those think scripts. Yeah, you' ve got to remember what you called them. All right. And again, if you' re new, that might be a little bit too much for you. Let' s move on to the next piece. All right. We ran our scan. And it brought us back 67 results, which is nice. I have some extra columns in here that you probably don' t have on your scan.

Don' t worry about that. For example, I came in here and I added the sectors. Some of the sectors aren' t showing up here. I' m not sure why. But I have them breaking them down into the sectors. Sometimes that can be helpful. And then I also have a couple of columns here, a one -month return and a three -month return. Where did those come from? Well, they' re little calculations done in what' s called ThinkScript. It does some easy math for us. That' s one of the things that ThinkScript is really helpful, I find helpful for. And so I do have a three-month return and a one-month return. I' m going to copy both of those out into the chat.

Again, for those of you that are here live, I' m going to copy both of those out into the chat. Again, for those of you that are here live, I' m going to copy both of those out into the chat. If you' re on the recording, you may have to pause this so that you can pull it up. If you' re on the recording, you may have to pause this so that you can pull it up. So here' s the one month. Here' s the three month. I sent those off to you. Same thing. It' s coming to setup, open shared item. Give it a good name. Okay. Don' t say Connie' s return or Connie' s formula. You' ll never know what that is. Right?

But maybe call it one month or three months, or whatever makes sense to you to call it. Now, this is nice that we have quite a few results here. Remember, when you run a scan, it' s for the purpose of creating a watch list, not necessarily for the purpose of finding something that might have an entry signal today, right? But you want to kind of be watching it and identify when it gives you the entry signal that you' re looking for, which we' ll talk about in just a moment. Now one aspect that we brought into the stocks that you might consider important qualities to have on your watch list, we talked about doing something called a top-down analysis.

And a top-down analysis essentially is identifying which sectors are the best performing sectors and looking for the better performing stocks or stocks that meet this criteria in that sector. Now, what' s a quick and easy way to know what sector has been performing well? Well, I have it over here in the watch list. I' m going to expand it and open it up. I have here a watch list called S&P 500 Sector Indices. It' s a public watch list. Come down to public in the S' s and then come over here to S&P 500 Sector Indices. It' s a pre-built watch list for us, which is nice. The ticker symbol looks like this. Now that' s not as intuitive as something like AAPL or V for Visa, right?

So what I' ve done here is I' ve kind of, I' ve brought in another column. How do you bring in columns? Click on this gear and I' m going to go make a mark around it. Maybe you draw your attention to it. You click on that gear. That gear allows us to customize what the columns are that we see. And so I actually have different columns in here than what are the default columns when you first open up your thinkorswim. So I have the symbol. In this case, we' re going to use the description. We can see what the percent change was today. Sometimes that' s helpful. More so when you' re looking at individual stocks than actually sectors. And then I have that one month and three month return.

Okay. Calculating for us. So I' ve got this currently set a tracking or shorting, I should say on the three month return here. In fact, we don' t really need today. I' m going to squish that up a little bit so we can see more description. Uh, so in the last three months, would you believe utilities has been the strongest sector? 15%. Followed by communication services, significantly less followed by information technology. These two are about the same, communication services and technology, a little bit over 8%. But remember that' s the whole sector that includes the stocks that are doing well, and the stocks may be not doing so well, right? All of those that are in the S& P 500 in that sector.

What if we, I mean, we can use that, but what if we' re kind of like of the opinion that we want to know. So we' ve got a number of different options. When things are changing hands, when leadership is changing, then we might use something a little smaller in terms of timeframe and sorted on that. So I' m going to sort this based on the one month and let' s see how much of a change there is. Remember utilities, communication, and information technology. As we go to the one month. Oops, that' s the worst one on top. I' m going to click it again. Now we have information technology is number one, then utilities, then communication. Services. Now, one thing that' s interesting is many times, well, I' m going to say it this way.

Usually, these three sectors are not usually the best performing sectors together. Why is that? Utilities has a tendency to be a little bit more on the side of things that are conservative, okay? Meaning maybe the rest of the market' s not doing well, and so people maybe shift into something more conservative, like utilities. Now, I don' t want my water cut off, or something like staples, consumer sector. What do we call that? Consumer staples is what we call that, right? I' m going to eat food. I still want that, those types of things, and so sometimes we' ll see a shift of money, so it' s unusual to see both of these here. However, I will tell you, I did a little bit of research why some of the utility stocks were doing so well, and it' s because they Re- adding in some AI technology to help them become more efficient,

and I thought that was kind of a cool thing to learn that that was going on with some of the stocks in that sector. All right, now we' re going to take our search, and we' re going to say, great, let' s focus on these guys, those particular sectors. So, our scan is going to be the same. We' re going to look at all stocks, but we' re going to intersect with, we' re going to come down to buy industry, and information technology is the best in the last month. Come down here to information technology. We' re going to grab all, these are all the industry groups within there, but we want to grab all of them, okay? Now, with this added in, we' re going to rerun our scan, and we have quite a few.

We' ve got 14 stocks in that sector that also meet this criteria, so we are going to save it to a watch list, all right? I' m going to click on this little, let me highlight that, 14 stocks in that sector, and we' re going to click on this little, let me highlight that, sometimes when I point, it' s a little hard for you to tell exactly where I' m pointing, okay? There' s a box around that icon, that menu bar, and we' re going to hit save as a watch list, and we' re going to give it a name, and I' m going to give it today' s name, or today' s date, rather. So, I' m going to put in May 24, 24', all right?

You guys will help me find it. Sometimes I have to name it easy stuff so I can go find it again. All right, now we' re going to update our watch list here. Instead of having to do this, I' m going to click on this little, let me highlight that, having the sectors, we' re going to open that watch list. We' re going to open our personal. I' ve got to go down to the M' s, and here is our May 24', all right? So, these are the stocks, and now we' re probably a little bit more interested in just the ticker symbol. We don' You need to see the name of the company so much, and we can see what some of these stocks have been doing over the last one month and the last three months.

So, some of them, you' ll be able to see maybe they' ve been trending really well for a long time, or maybe some of them, maybe you' re doing well in the one month, but not the three months, and so maybe it' s something that' s just starting to come into favor, starting to perform a little bit better. Now, let me check the chat here, make sure that I have not missed any questions. Yeah, since the cycle rotation seems to be doing something here. It is, and so that' s why we kind of want to keep track of it, right? Which ones are the better performing stocks? All right. Now, we We are going to do something really quick, which is we' re going to say, okay, we also have communication services and utility stocks.

Let' s just run it quickly and intersect it with those two sectors as well. So, we' re going to go come down here to utilities first. I' m going to select all utilities, rerun scan. There' s only one stock that comes back, PEG, okay, that meets all of this criteria. Again, some of it, fairly aggressive. So, I' m going to come to the bottom of our watch list and I' m going to add PEG, okay? Next, we' ll do communication services, alright? So, we' re going to intersect with by industry communication services. We Re going to do all the industry groups. Same thing, we' re going to scan. We get two stocks, which are the same company, Google and Google, right? So, we will add those. Some might just only want one ticker symbol.

They look and track very closely to each other. What' s the difference? One has voting rights as a shareholder, and the other one doesn' t, okay? So, the one that' s the GL is the one that has the voting rights for those that are interested in that. Sometimes people could care less, all right? But both of them trade quite a bit. They trade similarly with each other, and you can kind of see over here over the last one month and three months, yeah, they' re pretty very similar, especially in that three- month column. All right. Next thing, once we find some stocks we' re interested in, next, we want to be looking for some entry signals. So, that takes us to technical analysis.

So, we' re going to start out here, and we are going to go to the charts. I think that was the first one we had on our list there. We' re going to start with a different stock that we' re going to take a look at, simply because it has some good technical pieces. So, we' re going to start with a different stock that we I' m going to take a look at this stock simply because it has some good technical pieces in here that might be helpful to us, okay? This stock, I looked back, I looked at its maximum history, and it' s at all-time highs. So, everything we' re seeing on here has been getting higher, higher, higher. Sometimes we can see patterns out on the chart.

We can see where it' s maybe trending. You can see I drew a channel in here because it seems to have a significant low point that it comes down to and bounces back up. This top line here, and I should just maybe show you how I did that. This is our drawing tools. I hit my mouse button in the middle, and then I picked the ski's, okay? This slanted line, double line, okay, is a channel, and I' m just kind of eyeballing it here, decided where it looked like maybe this move was coming from at this angle, and all I did was this. Now, I' m going to be redrawing it kind of close to it, okay? So, I' ve got, I' m connecting it, and I' m going to be drawing it in the middle.

I' m connecting the bottoms here, might be almost right on top of it, and then you click, and it anchors it in, and then you can start pulling in the other side for it to create a channel. Make sure you connect at least two points, okay? You don' t want, for example, to grab this outlier clear up here because it' s the only touch on it. So, bring it down here where you get several touches, okay? There' s our channel. That can be a form of support and resistance. Clearly, it was upward trending almost the whole time. So, not a little bit of a pullback here recently, but just went to another all-time high last week. I' m going to get rid of one of these lines.

I think this was the second one I drew. It' s not as perfect, so I' m just going to get rid of it. We also have areas that act as support and resistance, and remember resistance is when the stock runs to a certain place; it could be diagonally. We focus a lot on horizontal, but it could be diagonal like what we' re seeing here, right? That that could be resistance. These areas could be support, but also horizontally, right? We may see, I' m going to pick a point here. It looks like maybe that was resistance for a while, or maybe that was resistance for a while. That very short while, you know, we see this peak where it ran up to this area, and so we' re trying to see where we notice that because when the price runs up, and then it kind of stalls out and pulls back, that' s because short-term people in the market are selling off and causing that basically a place where sellers start selling, okay?

When the price bounces up, that' s a price where buyers start buying again after sellers are done selling, okay? So this is a little bit tricky. We' re going to draw using the tools, our drawing tools that we have in our charts. I' m going to draw in some support-resistance areas like what we talked about. Now, I' m going to come here to this area. Click, click, draw, anchor it in place, and what' s interesting is it kind of looked like maybe it was support for the short-term. Support and resistance are ranges, right? Think of this. I' m drawing it with a big old Sharpie or a big crayon or something like that so that it' s not exactly 306 .45, okay?

So it could be a range, but it' s not exactly 306. 45. So it could be a range, but it could be a range, but what' s interesting to me is then it kind of came through this range, and then it tested it again. Oh, were you going to be my support? You were resistance. Are you my support now? And then today, well, yesterday, it closed down below this, so now it' s going to become resistance again, all right? And, you know, sometimes, remember, it' s an area, but many times people might say, well, I don' t really want to get in at resistance. I want to get in after it busts above resistance, right? Kind of like a day like here where the stock really pushed through, clearly closed above, had some good decent volume that day in terms of what we call breakout volume or volume sustaining the breakout, right?

We see a lot of volume in here than the stock is more likely to stay there. If it' s weak volume, you know, below average volume, then sometimes it has a bigger chance to not really, stay that it' s just a short period of time above resistance, and then many times you' ll see it fall back. So that can just be something that you look for additionally. Now, I need to come check the comments here, see if there' s some things that I need to address. Oh, Sim is sharing his experience with you about importing. Thank you for doing that, Sim. Sheena is happy about that. Sheena, are you having difficulty finding the videos? Sim wrote, and I would say that you hope you figure out when you watch the video again later.

Oh, maybe it was a certain point. You know, Sheena, you retracted your message, so maybe you figured it out. All right, let' s move on. Now, some people might hesitate about getting in here. They might say, ' You know, I like the trend of the 30-day moving average is coming back, up again, and of course, it' s a lagging indicator, right?' But we can see higher highs, higher lows, all -time high just last week. But this might scare some people, and so you might keep it on your watch list and say, let me get in after it gets above this resistance, okay? So that' s a good stock to maybe keep an eye on, see if it does meet an entry signal like a breakout.

Now, if somebody did not notice the resistance being there, I' ll just remove this. Some people might look at this as, man, a nice little breakout. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' t know. I don' It not little kind of, you know, a nice steep run up, a pullback, and then what was this candle we had yesterday? Do you guys remember from our candlestick discussion? In a pullback, when a stock is at support or possible support, and it has a real long shadow and a smaller body in comparison to the shadow, we call that a hammer candle, that can be a reversal point.

Then we look for confirmation the next day. The next day, we look for confirmation the next day. The next day, we look for confirmation the next day. The next day was today, and we definitely had a bullish candle here. So did today confirm the hammer? Yeah, it actually did. What else is it? Supposing you weren' t, say you weren' t in that stock, what would you do? It' s notice maybe some short-term resistance there, okay? Well, it might meet an entry signal for some traders because it is closing above the high of the low date today. Well, let' s make sure that' s the case. It was earlier. That looks like it barely did. This is our low day in the pullback of an uptrending stock. The high is 30,607.

And where did it close today? 30,655. So today at the closing, we got a close above the high of the low day. This was our low day candle. So some people might consider that for an entry. All right. We' re going to use it as an entry. If we have an opportunity to look at another stock, we will do so. I' Ve got several. From this list that some people might use as opportunities, they have a little bit different signals on them. All right. Next step, we have to decide things go wrong. Where do we get out? We decide this even before we place the trade. We' re going to go through that analysis. Now we had our support and our resistance.

Something that some people will do is they' ll, they might identify support and go a bit below that. Or in this case, we' re going to do, what we call a short-term swing trade, where we put in a target. We haven' t done a lot of these in this class. We' ve done a lot of swing trading, what we call trend trading, where we let the stock swing up and pull back and swing up and pull back. And as long as the trend stays intact, we stay in the trade. Okay. This one, we are going to put a particular target here. Let' s put it up here at 329. Although, could it go past there? Yeah, absolutely. If it went that high, certainly could go past there.

It' s been making higher highs and higher lows. Okay. So let' s walk through the next step. Where should we get out? Since this candle here is confirming kind of the hold entry, if it were to come down below, it' s low and close below there, some traders might want to get out. Or even if it starts trading down there, some traders would go, oh, the momentum' s changing. It' s weakening. We only want to be in if it' s continuing in a positive momentum. Okay. So for our purposes today, we' re going to see what today' s low is. Looks like it' s 301. 40. Let' s go a little bit below 300. Let' s go 299. 50, because sometimes things bounce at even numbers. I don' t know if you' ve noticed that.

Sometimes people may have automatic orders sitting there to go off at even numbers, like 300 is an even number or 390 would be an even number. Okay. So we' re going to go a little bit lower than that. We' re going to go to 299.50, right? That is going to be our stop. So I' m going to say target, which we haven' t done a lot of here is going to be 329. Stop is going to be, what did I say? 299 . 50. And just put your mouse in that area and make sure, yeah, if the stock really goes there, you want to be out. If the stock, maybe you calculate it and you put your mouse there and you' re like, I think that' s a little too close.

Adjust it. Okay. I' m going a little bit below that 300 number. Many times we' ll just go a little bit under the low. So here were the lows, 301 . 40. Maybe somebody would go, well, let' s do, you know, 301 . 20, you know, go 20 cents lower, right? You get to determine how, how much wiggle room you want to give the stock and not put it tight, choking the stock, that it can' t even move. What would be an example of choking it? I would say if I put my stop at one penny below the low, that does not give it much wiggle room. Okay. So you' re trying to balance that. Where would you want to get out? So we' ve got our target. We' ve got our stop.

Now we can decide how many shares to buy. And I' ll tell you, this is one of the most important pieces to trading is to manage your risk. Okay. You can get good at spotting entries. You can get good at spotting exits. You can get good at spotting what industry you' re in. You can get good at spotting what industries you' re in. You can get good at spotting groups are stronger, sectors are stronger. But if you lack discipline in saying, I' m going to treat every trade the same, I' m going to risk only what I should and not overcommit, that will be so helpful to you to making it a longer term situation for you versus, oh man, I just didn' t follow any rules and I didn' t exercise any discipline and you could have some problems with your account.

So in our class, we are assuming we have $150,000 portfolio and we' re assuming, and you' ll see this out on that sample investing plan. We. Assuming that we could risk, you know, some people use, you know, 1% or half a percent in terms of what they are willing to risk. Risk means lose potentially in a trade. And you think of it, you know, if you lost this amount, say five times in a row, would it break you? Would it like do real damage to your account? Well, suppose we only risked a half of a percent each time and say we had five bad trades in a row. Could we recover from that? Well, then our account could possibly theoretically be down two and a half percent.

That' s not a big hit, right? That' s something that I think most people would feel comfortable they could manage that. But say you didn' t exercise in a discipline and you said, I' ll take a 5% loss per trade. Well, that' s a lot different, right? Then we' re talking, if it' s a 5%, we' re talking a $7,500 hit per trade, which means you have five in a row. Whoa, that is painful. Okay. So in your thought process, think more protection, protecting your account and getting out when it looks like things just aren' t going the way we needed them to go. Doesn' t mean you' re a bad trader. Doesn' t mean you' re not good.

Just means the stock isn' t following through with what we thought it did or news came out. Right. All those types of things. So on this trade, we' re going to walk through the process. We' re going to bring up our calculator here. We' ve got our 750 that we can risk per trade. It' s called our portfolio risk, right? Your number could be different. Your portfolio could be different. You know, I have an example, you know, down here. Well, where did it go? I have another example here that basically says, okay, if you have a $20,000 account, just do the same thing, right? Whatever that percentage, you' re comfortable with that. And then have that be your risk for your trades.

And as your account grows or if your account goes down, then you Going to adjust that number all the time. You' re going to continually make changes there. But for right now, we' re going to risk 750. Now the risk we have in the trade, we' re going to figure out from our entry price and our stop price. So we' re going to assume we could get in on Monday, well, Tuesday at $306. 55. That was our last price. So we' re going to assume we could get in pretty close to that. So let' s go $306. 55 minus our stop $299. 50. That gives us risk of $7. 05 per share. We' re going to take a $7. 05, divide that into $750.

So $750 divided by $705. We don' t want to trade any more shares than this is saying $106. And that' s probably pretty close. That would be rule number one. We wouldn' t want to buy more than 106 shares. But what if by buying 106 shares, we stayed within our risk management, but we were putting too much of one trade into our portfolio? Some people don' t want a particular trade to take up more than 10% of their portfolio. Some people will go, they don' t want it to be more than 7. 5% of their portfolio. So let' s just see if we bought 106 shares here times $306, what would we be spending? We' d be spending $32,000 of our $150,000 portfolio.

Is that very comfortable to you? Or does that kind of feel like, gee, we' re putting too many eggs in that basket? Yeah, we might be putting too many eggs in that basket. So then what we do, we' re just going to scale back. And we' re going to say we don' t want to put more than $10 ,000 into any trade. So we' ll put in 10 ,000 here, not 32. Divide that by our 306 . 55 entry price. We' re only going to do 32 shares. So some of you might feel, oh, that' s a little bit more comfortable. We' re not loading the boat on just one stock. Let' s go put our order in. Always want to show you a sample trade if we can.

The ask price. Order is a little bit higher than the last price. So we' re going to change that. But I' m going to do a right mouse click, buy custom. We haven' T done a lot of these in this class. We' re going to do an OCO bracket. OCO stands for one cancels other. And it gives us the opportunity to put in our stop loss and get out there if we need to. Or remember that target I told you we' re going to shoot for, which is 329. We' re going to put that on one side. So we' re going to change our shares to 32 here. And I click on this link to make those equal. The green is our buy order. These are our two exit orders.

And we' ll see which one gets hit first. OK. I am going to change our entry price. Try to get in a little bit closer to where it closed at. So 306.55. And then we said, all right, this first order here is intended to be our stop loss. OK. It takes up two rows. Well, I take it back. First one' s intended to be our target. The second one is intended to be our stop. So we set our target. It' s going to be 329. I' m going to get that number right. We' re going to make this good until canceled. We have it for about six months. Hopefully, we' d be out before six months. Then we' re going to put in our stop loss price here to $99.

50 or whatever number you' re comfortable with. We' re going to make it good until canceled. If it gets to this price or lower, it triggers a market order. And a market order says, get me out of the next available price. It' s not necessarily going to get me out of the next available price. It' s going to get me out of the next available price. It' s going to get filled at that price. That' s never guaranteed. So I want you to be aware of that. We' re going to hit confirm and send. Make sure we remember this is reminding us that with stops, it' s not a guaranteed price. It just lets us know that. We' re going to send it on. All right.

We just covered the key takeaways from this class, from the course. Did we cover absolutely every little dinky thing? No, I' m not that good. OK. But I was definitely trying. To cover as much as we possibly could. I' m going to check and see if we have any questions that I need to answer as we wrap up. Frankie said, ' Hey, it kind of looks like the 20-day seems to be acting as support. Very well. Could be. I only have the 30-day moving average on there. But absolutely, you can use different moving averages. Sim noted we had a couple of flags in there. They weren' t pertinent exactly to where we were trading. So I didn' t tell you about that. Sometimes protective puts can be good as well.

This is a beginner class, so I don' t even go there. All right. But certainly, use all the knowledge that you have. OK. So Hicks, I don't know. I probably masquerade that name. You imported the three-month script, but you can' t find it. What did you call it? You have to go look for what you called it. OK. And what you could do is you could go over to the columns in your watch list, customize that, and then look for the if you put three-month return or whatever, then you can pull it up there. That' s how you' re going to find it. All right. Very good. Well, Lee, thank you for helping us out today. These guys didn' t wear you out too much with questions, but that' s all right as we go into the long weekend.

Remember, markets are closed on Monday. Therefore, we won' t be here. You should be out having a barbecue with friends or family doing something fun. Alright. That' s my encouragement to you today. So we did our overview. Went through all those steps in a quick fashion and, of course, looked at a couple of examples. What do I want you to do? I want you to practice trading in your paper money account if you haven' t started. Or some of you that are trading live, then maybe the next step is really tracking those trades so you can learn from them. You want to do paper trading with a purpose. Alright, you guys. We' re going to turn you loose. We. ll see you back here Tuesday morning, 9:30 Eastern Time, right at the opening bell. We' ll be there with our Trader Talks. Have a good one. Have a good weekend.