Hello, everyone, and welcome to Schwab Coaching. My name is Cameron May. I'm a senior manager and education coach here at Schwab, and this is Getting Started with Technical Analysis. And over the last seven weeks, this is a weekly webcast series, we've been working through a series of lessons to help a brand new trader just help to define for themselves an approach to investing. And today, we're putting sort of the icing on the cake, which is a discussion of creating one's own investing plan, bringing those elements of trading together that we learned in the first seven lessons into one written, structured approach. It should be a great discussion. Really looking forward to this one. Before we can get to that, though, first of all, let me say hello to everybody that's out there chatting in on YouTube.
Hello there, Ahmad and Speak Truth, Brian, David, BJ, Josh, Sharon, Tony, Life in the Fast Lane, Krishna, Jay Richardson, Robert, everybody else. Thanks for joining us week after week. I say it. I say it every week, and I mean it every week. We always appreciate your attendance and your contributions to these discussions. If you are here for the very first time, though, of course, I want to welcome you as well. And if you're watching on the YouTube archive after the fact, enjoy the presentation; but be aware that you're invited to join us in the live discussion. This weekly series kicks off at 2 Eastern on Tuesdays, and we'd love to have you here in the live stream. I also want to let you know that my very good friend, Barb Armstrong, is going to be joining us.
She's here in the chats; Her job here. She's here to answer any questions that I can't get to during the natural flow of the presentation. Barb has her own group of webcast series, and she's a great instructor herself, so it's a great resource to have here. Thanks for having my back there, Barb. But let's get right into it. First thing that we always need to do is to consider the risks associated with investing and trading. These risks are real, so bear these disclosures in mind. The information here is for general informational purposes only and should not be considered an individualized recommendation or endorsement. If you have any particular security, chart pattern, or investment strategy, while this webcast discusses technical analysis, other approaches, including fundamental analysis, may assert very different views.
And investing involves risks, including the loss of principle. All right, so with that said, let's just do a quick recap of where we've been and what we're going to be doing today. So over the last seven webcasts, we've covered a range of topics for the new trader, starting with the new trader. We've gone with an introduction to technical analysis, and we got into charts, trend identification, support and resistance, technical indicators, entry and exit signals, price patterns, a lot of stuff covered there. What we're going to attempt to do today is put that all together into what we call an investing plan. Now, if you are new, if this is your first time watching this webcast series, you might think, oh, no, I've started in the wrong place. That's okay.
You can still hang out. There's plenty to learn. Just know that if you want to go back and revisit those first seven lessons, you can go to our Trader Talks. You can go to Trader Talks, webcasts on YouTube, find the playlists, and you'll find those seven lessons there. But let's talk about what we're going to talk about today. Three items on the agenda today. First of all, we want to talk through what might be the components of a typical investing plan. Then we're going to create a sample investing plan while everyone's watching, and then we're going to go demonstrate how that might be implemented on a chart, on an example chart on Thinker. So identify the investing plan components, create a sample investing plan, and demonstrate how to implement on a chart.
So let's get to that. First thing, what are the typical components of an investing plan? The example components that I'll be using today, there are going to be five components. Let's just say this is not the only way to structure a plan to approach the markets. Of course, there are going to be some of you watching. You can say, those are great. However, I might take your fourth one and replace it with something else, or I might add a sixth element. That's okay. Whatever. We should all feel empowered to structure our plans as we see fit. But a typical five-component layout might include watch list criteria, entry rules, exit rules, risk management, and routines. So let's start at the top here. What are watch list criteria?
The way that I look at this is this is sort of routine. What to buy, when to buy, when to sell, how much to buy, and then revisiting to see whether the whole thing's working or not. That's the point of the routines. So starting with watch list criteria, this sort of is what we might call our what to buy. And this sort of pre-qualifies a stock before we even look at the chart. What do we like to see that's attracting us to that stock? Now, for some people, they'll use a combination of technical tools or technical indicators of strength, and they'll combine that with what we call fundamental criteria. Fundamentals are sort of the company behind the stock or the shares. So we'll talk about some hypothetical fundamental criteria in a moment.
But in addition to fundamental criteria, we might look at what's going on with the chart, what's the stock going up or down for bullish or bearish trade scenarios, and what's the liquidity. With stocks, maybe a little bit more difficult to trade than stocks that have lots of trading volume. So those are just some examples of some typical watch list criteria. So once a trader has defined for themselves what they intend to buy, then they might try to define when they intend to buy it. What are the rules for entry? Right? And we've talked about some of these earlier in the webcast series, but these might include, as we look at a chart, a bounce coming up off the port, breakout through resistance, or we might use some indicator that hasn't necessarily been discussed.
There are hundreds of potential indicators, MACD, stochastic, RSI, moving averages, all sorts of different indicators that individual traders might use to tailor their specific approach to trading stocks. Right? But in any case, whatever the preferred approach is for an entry, the trader might want to write that down to introduce discipline and structure to when they enter. And similarly, they want that discipline and structure when they exit those positions. Now some of these trades once taken are going to work out, some are not going to go according to plan. Right? They want to consider when they actively manage the risk of the trade as it's going. So a few elements, typical elements of exit rules might be what we call a price target, which is a plan for when to take profits, a stop, which is a plan for when to take losses, and when a trader might choose to adjust that stop if the trade is going well, but it hasn't gotten all the way to the target.
So we'll talk about that in a little bit greater detail. Then we have our risk management rules. So we have what to buy, when to buy, when to sell. Risk management is sort of, okay, I've decided that I'm going to buy what I'm going to buy. I've decided when I'm going to buy it. Now, how many shares am I going to commit to in the case of a stock trade? This is a way to help control one's emotions as they're associated with trading. How many of us have seen what we think, oh, this is a fantastic stock, I think I've done a thorough analysis, I'm convinced that this thing is going to work, so I'm not just going to buy. I'm going to go all in. I'm going to buy a bunch of shares.
And then I have another stock that's giving a, maybe it's a signal, I'm not as confident in it. Maybe I'm not as thrilled with the stock. So load up on one and undersize on the other one. Buy a smaller position size on the other one. The other stock. Which one of those do you think is going to command all the attention, get all the focus, while the other one is just sort of left to do its thing? Yeah. When we overcommit to a great number of shares, we tend to make excuses for those trades if they don't go well. And we also tend to get nervous if they do go well, maybe have a tendency to cut those off prematurely. But in any case, inconsistent sizing management, risk management.
In a trade can lead one to all sorts of trade mismanagement behaviors. So what a trader will commonly do here is just predetermine, regardless of how ideal a trade looks or how kind of iffy it looks, as long as the trades are qualified, trader might decide on a dollar amount or a percentage amount of their overall portfolio they're willing to invest in a single trade. It might be 5%. It might be 10%. It might be more. It might be less. But in any case, the purpose here is to be consistent in the sizing of each trade, trade after trade after trade. And then finally, the fifth element here are the trader's routines. When are we out there looking for trades?
How often are we checking to see when trades need to be, or when stops need to be moved? How often are we assessing market conditions and changing the outlook? How frequently do we go back over our trade history? How often do we go back over our trade history? And try to learn from it and improve upon it for future trades and refine our approach overall. So all of those fall into routines. So let's break down each one of these one at a time. We're going to start with the watch list criteria. So watch list criteria. What is it? Well, a watch list is a list of stocks that meet your parameters and that you're willing to invest in or trade if they generate an entry signal. Different strategies may have different watch lists.
So traders might have a short-term approach and they have a list of stock candidates for their short-term approach to trading. They at the same time may have longer-term trades that have a different set of criteria. For example, short-term traders commonly don't pay as much attention to the fundamental strength or weakness of a company as maybe a long-term investor who might be committing for a longer period to a stock. Okay. So generating our watch list criteria. That's what watch list criteria are. What are some example watch list criteria? Well, for a bullish trader, maybe they're looking at the stock trend and they want to confirm that it's in an uptrend or at least a sideways trend. A bearish trader might look for a downtrend or a sideways trend.
Regardless of bullish or bearish outlook though, a trader might really put an emphasis on liquidity, which is just the daily volume. The stock is trading very illiquid stocks, as I mentioned, might be a little bit more difficult to trade. And finally, among the watch list criteria are what we call those fundamental criteria, the company behind the stock. And this can include such things as the price, market capitalization or the size of the company, valuation ratios for traders who are trying to look for underpriced securities, growth ratios or rates. For those that are looking for maybe more aggressive approaches to trading or investing, earnings per share, dividends, the industry strength or weakness, all of those can be elements of fundamental criteria. So of course you might want to say, well, Cameron, so which ones should I choose?
That's going to be up to the individual trader or investor. We'll outline some examples here in today's discussion. But I would really suggest that one is always on the lookout to make sure that their defined list of watch list criteria actually suits their preferred approach to trading. Now next element, the entry rules, and this includes something called the setup. The setup is the price behavior before the entry signal itself. So what is it? An entry rule or a signal causes the trader to take action. Today's the day to buy. A setup is what the stock price looks like prior to giving that signal. So an example that we've explored in this webcast series is the setup might be an upward trending stock for a potential bullish entry signal.
The entry signal itself might be a breakout or a bounce. So that takes us to the second bullet point here. A breakout or a bounce can be either bullish or bearish, but it just defines for us specific parameters for when we're going to take a trade. So, for example, a breakout trader might be looking at a stock that's upward trending. Maybe it's at a price ceiling on a few occasions, and maybe their rule is that we close at least 1% above that price ceiling as a specific entry. Now for other traders, though, their trade signals may be more indicator based, and these might include such things as what we call crossovers, two moving averages sort of intertwining with one another.
One rising up above the other might generate an entry signal, a change in direction of the trend, a stock that was making lower highs and lower lows now making higher highs and higher lows. Maybe any signal, what we call a green arrow signal, when an indicator crosses through a signal line. And lots of our oscillators have oversold and overbought areas. RSI, CCI. Wiley, thank you. Yes, we do have written courses to supplement this on Thinkorswim, also on Schwab. com. So we'll give you some examples, more precise entry rules in just a moment, but these are just sort of an outline of typical characteristics of entry rules. So when might a trader exit once they have an entry? So what is an exit?
An exit rule identifies when you will exit or close a position or adjust a stop order in an attempt to minimize the risk or to capture potential profits. Initially, the objective is to minimize the downside. If the trade starts to progress in the intended direction, the new signal may be an effort to just to manage risk, help it to decrease or to manage the profits as they're starting to be achieved. Exit rules include price targets, stop prices and stop adjustments. A price target is a price where the trader plans to sell and take profits in the case of a stock purchase or just a price level at which the trader plans to exit with profits. So let's say, for example, a trader gets in.
He's been in a stock on a stock that's been going back and forth between 40 and $50. Buy at 40. The plan is to get out at 50. Well, that plan means it has a target of $50. Now on the flip side of that coin, the stop price is where we plan to take losses. So if the trader thinks we're going up to 50, but instead we slip and maybe they have a predefined plan to get out down at 37. Right. Now that's what we'd call a stop. So price targets can be price pattern targets. They can be old support and resistance levels, or they can just be dollar or percentage gains. Stops can be triggered by the initial exit if the forecast doesn't go as expected.
Stop adjustments are made as the price approaches the targets on its way in the right direction. Right. But they're made when the stock establishes new levels of support or resistance, or maybe it's a prescribed length of time after entry. But just keep in mind, no matter how we're placing our stops, initially or on adjustment, stops are not guaranteed to fill at a specific price. We just have to be aware of that. Right. So we've talked about watch list criteria, entry rules, exit rules, that's what to buy, when to buy, when to sell. Now what about how many shares to buy? This is what we call the risk management part of the trade. And it really is vital because if we're oversizing on one trade and undersizing on another trade, it can lead to trade mismanagement behaviors.
So what is risk management? Risk management guidelines help investors or traders to know how much to invest in a new trade, how many shares to use. And to really help manage those emotions of trade fear, that's commonly associated with fear and greed associated with these oversized trades or just neglect on the undersized trades. Risk management includes a dollar amount that's established, or possibly just a percentage amount per trade or investment. So as I mentioned earlier, maybe for some traders though, they'll decide. And they'll decide. And in advance, it'll be part of their plan that when I get an entry signal on a qualified stock from my watch list, maybe I'll buy 5% of my portfolio value in that one trade, or 10% of my portfolio value. Just a couple of examples.
Could be more if a trader is trying to aggressively grow a smaller portfolio and they're willing to take on larger risk. It might be less than 5% if they have a very large portfolio, for example, and they're trying to minimize the risk exposure on an individual. If they have an individual trade basis, maybe their preference at that point has grown to where they just want more diversification. So four of our five elements of our trade plans have been discussed. The last thing, last element are our investing plan routines. So what are these? Routines are those activities that an investor or trader does each day or each week, possibly each month or each quarter to manage existing positions. And to prepare for new opportunities, and I will add here as well, also to seek to refine their existing trade plan.
Daily routines might include things like reviewing your watch list for setups and entry signals, reviewing your open positions for targets and stop adjustments. Weekly routines might be where we do maybe a deeper analysis of what's going on with the sectors and with the markets, and we take a look at our longer term positions that maybe don't require a lot of time. And then maybe on a monthly or a quarterly basis, the trader might look over how their trade plan has been performing and see if there are refinements that need to be made. So for example, let's say that our trader is three months into the implementation of a new investing plan, and they've had 50 trades where they've gone in and they've concluded those trades. They've been in and out.
Completed trades, and they notice on those, maybe 30 of them, let's say it just wasn't a very good run, 30 of those got stopped out, but on the majority of those, they got stopped out and then the stock just took off and left them in the dust. What might that be telling them about their stock placement? Well, maybe they've been a little bit aggressive. They placed their stops a little bit too tight, and in the future, maybe they want to loosen those stops up a little bit and avoid so many, what we'd call a whipsaw event. Those little things. Yeah. Those little things can really only be discovered in hindsight with some experience, and hopefully they can lead to improvement of an investing plan over time. So those routines can be really vital elements.
So I want to start to implement. We've now discussed the five typical characteristics of an investing plan. Let's create a sample investing plan, starting with our example watch list criteria. Let's just suppose for this example, our trader is bullish and they're looking for a trend that's uptrending, or maybe a stock that's recently broken resistance out of a sideways trend and possibly above its 200-day moving average. Let's also say as a liquidity requirement, our shares need at least 500,000 shares of average daily volume, and for fundamentals, a PE ratio and a PEG ratio near industry averages, and you might say, well, that's a good idea. Let's just say, okay, is this the plan for trading stocks? No, this is just an example, but this might provide a baseline for how a trader begins to select their stocks.
And I see a question here by Ms. Street Fortune. I'm not familiar with that one. It may just be a difference in terms, so I'll say no without talking about what it is, but thanks for the request there. And Barb, thank you for the link to your trade management mini-sessions. That's excellent. Barb, for the benefit of those that are here in the live stream, Barb has just added a link where she gives five example trading plans, and there's a link to a YouTube video there. Barb, if you want to chat in the name of that video, I can then tell our audience after the fact what they might go to YouTube and look for if they don't have access to that link. All right. So let's say that we found a bunch of stocks.
We found a bunch of stocks that meet these criteria, uptrending, maybe they've broken through resistance, they're above their 200-period moving averages, 500,000 shares trading on an average daily basis, and they have the qualifying fundamentals. When might we buy those shares? What are the entry rules? And then on the other side of that coin, what are the exit rules? For example, entry rules, we could choose from the two that we discussed earlier in this webcast series, breakout entries or bounce entries. So a breakout entry. Just to recap, it's for stocks that are trading in a channel or they're below a resistance line and we enter when the price is pushed up through, broken out, and closed above that resistance. And let's just say it needs to close at least 1% above.
Not every trader is going to use that as a qualifier. Let's just try to be explicit here just to illustrate how a trader might add some flavor to a trading plan. So 1% above. 1% above resistance is a breakout entry, or a bounce entry is for stocks that are already in an uptrend, and we enter new positions after the stock is pulled back down to support and the stock price closes above the high of the low day by, again, let's say at least 1%. The acronym that we use here is CAHOLD, which is a close above the high of the low day. C-A-H-O-L-D. So that's our entry rule. Our exit rules. When might we get out? Well, we might have a short-term price target. We might have an intermediate-term price target.
In either case, let's have a plan for a stop and when we might adjust that stop. So for a short-term target, we might calculate the potential price target off of, let's say, a price pattern and set a limit order to sell the shares at that price right along with that entry order. For an intermediate plan, maybe we identify resistance levels. On a longer-term chart, let's say a three-year weekly chart, and set limit orders to sell shares up at the resistance levels on a weekly chart. The one that I'll be using for today's example is going to be the short-term example. Mohamed says, is this being recorded? Yep, it is. Yeah. The vast majority of our webcasts are recorded and then posted to our YouTube channel on, well, on YouTube, but it's called Trader Talks.
So if you haven't done that, if you haven't done this yet, make sure that you're subscribed to our YouTube channel and you can go back and you can find the other seven lessons in this webcast series and you'll be able to find this webcast. You know what? I always have to say, assuming there's not some sort of technical glitch that prevents it from being posted to the channel, that's always the case. It hasn't happened to me in a long time, but that's always a possibility. Yeah, but we're going to be using a short-term target example here with an initial stop. Let's set that initial stop. Let's set that initial stop price 3% below our support level. And then if the trade goes well, maybe we adjust that stop or move that stop to breakeven when the stock has moved halfway to the target.
Now, in any case, always keep in mind where stops fill is not guaranteed, but let's go start to put this into practice. So the example trade that I wanted to use today is going to be TJX. Yeah, Mohamed. Yeah. You're certainly welcome. Absolutely. So TJX, what has been the trend? What is the setup for this trade? Well, all year long, pretty much all year, the stock has been going up. More recently though, it settled into a sideways pattern, just trading back and forth between support and resistance, support being right down here around 112, resistance being around here 119. Yeah. And I'm very happy to say, because whenever I choose my examples, I never know what they're going to do between the time that I choose them and the time that I go live and actually do the webcast.
This one's cooperating. You'll notice it's pushing up through that resistance. It seems to be in prime position to close at least 1% above that old price ceiling. So let's just assume that it does. Right now, there's still an hour and a half in trading. Maybe a trader who's waiting for the close. Might be placing their trades a little bit closer to closing time. But yeah, it looks like we're closing up above that 119 resistance. So there's our breakout signal for our short-term entry. So according to our plan, where might we plan to take our profits? Well, if our trading pattern, in this case, it looks like kind of a rectangle, had a depth of $7. In other words, we're trading between 112 and 119. A $7 range.
If we break out of that range, a common assumption is, well, let's see if we can go up another $7. So from 119, that will carry us up to 126. Let's make a mental note of that. 126 is going to be our target price. Now it's entirely possible, maybe the stock reverses and instead of continuing in the new breakout direction, it could turn right around and break back down below 119 and head back down toward this support. So. So according to our plan, we're going to place our stop 3% below this broken resistance, which is assumed to be a new support. This broken price ceiling, which is assumed to be a new price floor. Let's do some quick math here. Let's come over to our calculator.
Let's be as precise as possible. $ 119 is resistance. Let's multiply that by 0. 97, which has the effect of subtracting 3% from it. So 3% below is going to be about 1. 5%. I'm going to round it off a few pennies here. Let's place our stop at $1. 15. Okay. So that's going to be our plan for this trade. So how do we implement this plan? Well, we go to our trade tab and we get ready to buy some shares. But first thing that we need to do before that is determine how many shares to buy. So continue with art, with the creation of our example, a sample investing plan, we need to discuss our risk management. So for this plan, let's say that we're going to risk up to 1.
5% of the portfolio size. And our portfolio has grown and shrunk and it's actually larger than what we started with right now. But let's just say we have a $100,000 portfolio so we can keep it nice and clean and easy. And we'll say that our trader is willing to risk no more than 0. 5% on a trade and invest, no more than 5% on a trade. And it might sound like I just said two percentages for the same thing because aren't risk and investment the same thing? Not necessarily. Let's suppose we buy a stock at 10 bucks and we don't know when we're going to sell it. We just hope it goes up. But if it goes down, we don't have a plan in place for getting out.
How much are we risking of that $10? Probably the full 10 bucks, right? But what if we instead had a plan? Buying at 10, hoping it goes up, but if it goes down, let's say our plan is to sell at $9. Well, we're investing 10, but planning to risk 1. So you can see how an investment and a risk can be different things. So for this example plan, let's say that we're willing to risk 0. 5% per trade and invest 5% per trade. So if we have a $100,000 portfolio. Our trade risk, half a percent, it's going to be up $500. And let's assume that our stock, our hypothetical stock that we're buying, I'm not talking about our example trade here.
I'm just running through some numbers just to illustrate how this might be done. Let's say we're looking at a stock and we're looking to buy it at $35 and we're going to put our stop at $31. Well, if we just bought one share at 35 and it fell to our stop at $35. 5. That would be a $4 loss. So in other words, we have a $4 risk per share, but a $35 investment per share. Well, this can help us calculate how many shares to buy if we're obviously $4, not much risk there. How many shares could we still buy and stay within our half a percent risk tolerance? Well, $500 divided by four bucks tells this trader, they could actually buy up to $100.
If we multiply $125 shares by $35 per share, that would be a $4,375 investment. Hey, 4,375 bucks is less than 5% of a $100,000 portfolio. So this would qualify, that would be okay for the right number of, or the right amount to be invested. Okay. But also the, we're staying inside the maximum amount of risk. So let's go apply this to our example trade here. And I think there's going to be a bit of an adjustment to be made. Let's see, we determined that we were going to, if let's say we buy right now, it's pretty close to $120. Let's just assume we wind up paying $120 for this. And we have our stop down there at $115.5.
That's four dollars, four and a half dollars of risk per share. So if we have $500 that we're willing to risk, half a percent of a $100,000 portfolio, we divide that by four and a half, that'll tell us we can buy up to, up to as a maximum 111 shares. Let's see if that 111 shares though, is going to exceed our $11. 5. Let's see if that's going to exceed our maximum amount that we can invest here. Let's take 111, multiply that by roughly 120 bucks, 111 shares at 120 bucks per share is going to be $13,320. That's 13. 3%. That is a pretty big position for a $100,000 portfolio if the trader's preference is to keep it under 5%, right?
So what we might need to do here is let's take our 5%. Okay. That's the investment maximum. Let's divide that by 120 and maybe we should cap it here for at 41 shares, 41 shares. If we wind up getting stopped out four and a half bucks per share, it's $184. That's only about 2% or two tenths of 1% of the portfolio at risk. That's inside our half a percent risk tolerance. So that's going to be $115. 5. We're going to do 41 shares with the plan to sell at 126 with our target, the plan to take losses down at 115. 50. Let's go put that trade into practice. We're going to go to the trade tab.
If you've never placed a trade before on thinkorswim, here's how we might do this to enter an order to buy with two sell orders attached. Go to the trade tab. Make sure that we're looking at the right symbol here, and then we're going to go right to the ask price and right-click directly on that. Ask price, and we get a pop-up menu and I'm going to choose from that menu, 'Buy custom with OCO bracket.' Watch what that does. As I select that, it creates for us now two, it creates for us a buy order with two sell orders. So let's start to fill this in how we intend to submit it. Let's change first of all, the quantity from the default 100 shares.
Let's change that to 41 and you may have noticed that I clicked on the little chain link and I repaired it. What that does is it links the number of shares to be purchased with the number of shares to be sold. So when I go fill in the rest of my order, automatically my two sell orders default to minus 41, selling 41 shares. So now I'm going to come over and change. Let's switch this to a market order. Market order means we're willing to pay whatever the current price is. When our order gets to the front of the line, we'll just pay that. It might be. You know, it might be $119. 93. It might be less. It might be more.
Just be aware that a market order does carry a risk that we might not be thrilled with the price we pay, but it does also elevate the likelihood of a quick fill on the order. Now, once that order is filled, we're going to have two sell orders in place. The first one is going to be a limit order to take our profits if they happen. So I'm going to use this limit order. If I'm in a limit order field, 126 is going to be the price and I'm going to make that good till cancelled. So limit order means I want to sell it this price or better. 126 is the lowest I'm going to go. That's my limit. Now our stop is to manage the downside of the trade and we decided to put that at 115.
50 and let's make sure that's a good till cancelled order. So with a stop, this means, hey, this is a good price. This is for if the stock starts to fall instead of it starting to rise. If it falls down to 115, it triggers a market order to be sent to the market. And then we sell, might be less than $115. 50, might be more than $115. 50, but this is just our trigger order to get out, try to manage that downside. Both of these two sellers, we're gonna make those good till canceled. And let's click confirm and send. So as we go to our order confirmation screen, putting it in order to buy 41 shares of the market, sell at a 126 limit, that's our target price, or sell at a $115.
50 stop. Now, there are no commissions to be paid on this trade, but there are a couple of important notes to be made here. Number one, with market orders, as we've discussed, prices can change quickly in fast market conditions, resulting in execution prices that can be different from the quotes displayed at order entry. And with stop orders, there's no guarantee that the entry or the execution price will be equal to, or even near the activation price, that being 115. 50 in this case. So let's send this order off and we're putting this plan into practice. Let's send that off. And we just bought 41 shares at $119.90. We'll see if they can get up to 126, try to take some profit, or if they fall down to 115.
50 and trigger our stop. But I did wanna talk about the routines of once a trading plan has been built, first of all, it should include routines for managing existing trades, looking for new trades, and also for refinement of the trade plan itself. But included in some of those routines might be to monitor the charts in our watch lists for setups or entry signals. Our routines might involve placing orders according to our investing plan rules, using paper money initially while we get some practice. Might include reviewing open positions for price targets and for stop adjustment signals. I wanted to talk about that in our current example. And then we might have some other routines, including looking at the markets and sectors and see where strength or weakness might be, along with other things that we discussed earlier in this webcast.
But these are gonna be our example routines, for this plan. And included in that, in this example, is to review our open positions. We now have an open position. Look to see if we've hit a price target or if we adjust our stops. So if you recall, in our exit plan, our exit plan included a stop adjustment to move our stop price to breakeven when the stock has moved halfway to the target. What does that mean? So as we go back to thinkorswim, let's, let me compress our charts here. I'm gonna right click on our channel tool and activate that, or not activate it, sorry. I wanna duplicate it, right click and duplicate that drawing. And this is gonna help us to establish where our target is. This is up around that 126 level.
So what's halfway between 119 and 126? It's about a $7 move. So halfway would be around 122 and a half. Let's draw in a line right there. Right there. So what if our stock continues to rise, it gets halfway to our target. What does our current investing plan say to do at that moment? That's where we might, we might cancel our stop and move it up to the price that we paid. Move our stop up to, in this case, around, well, 119. 90. So that's helping to manage the downside, turning hopefully what was initial loss risk to now we're sort of just reducing that to loss of profit risk. Okay, Beauty says, if placing a put order, well, so we're not getting into options, I apologize. My apologies.
I'm not going to address options-related questions in this discussion, but I can say, yes, we can use these sorts of approaches on options using OCO and that kind of a thing. But yeah, I will, yeah, just quickly. Yep, the answer is yes. Anyway, so guys with that, we've actually accomplished what I set out to do today. We've talked about taking the elements of the seven lessons that we've gone through up to this point and putting them into a trader's investing plan. Now from here, that trader puts a plan into practice and then on a monthly or maybe a quarterly basis, go back and revisit that plan. See if it's working. See if there are elements of it that might need to be adjusted. Maybe the stops are too tight or too loose.
Maybe the targets are too aggressive or too conservative. Maybe the fundamentals of the stocks don't seem to be panning out or maybe the trader just needs to work on their market analysis. Lots of things that can be conceptually approved, improved in even a written and structured investing plan. But we've identified typical investing plan components. We've created a sample investing plan and we've demonstrated how to implement that plan on a chart. Hope you enjoyed this lesson series. Now this might sound like we're done. Nope, I'm going to come right back again next week and we're going to do another getting started with technical analysis webcast. But next week, I'm just going to choose some other topic related to charting and we're going to explore it in detail starting at the beginner level.
So I hope you'll join me for that. That's very typical of what we do in this webcast series. Sometimes it's structured into a series of lessons. Other times it'll just be topic du jour. But I hope you'll join me next Tuesday. Tuesday, I have some requests for you. Some suggestions for you between now and then though. First thing is to make sure that you're subscribed to our Trader Talks channel. This is where we can go to those playlists. Let me hop into these playlists and we can go right to, let me come down here to our 'Getting Started with Technical Analysis' playlist. This is where we would go find the previous lessons in the series. Seven of eight, six of eight, five of eight, five of eight, four of eight, three of eight.
You can see those right there. And you can find other webcasts on other topics of interest. You can also join the live sessions. So just right here, join those live sessions. It doesn't cost anything to subscribe to our Trader Talks channel. So you can just click that subscribe button right now. Also, make sure that you're following me and Barb on X. You can find Barb here at Barb Armstrong CS. You can find me at Cameron Mays CS. But this is the best place to connect with your favorite presenters in between these live streams. We'd love to have you here as followers. And thank you to all of you who've already clicked the like button. Looks like 32 people have already clicked the like button. Click the thumbs up. That's always really appreciated.
It only takes a second for an attendee. So if you're watching one of our webcasts and you really enjoyed it, make sure you click that like button. That's a pat on the back to the presenter for their efforts. It also helps that webcast. Get a boost in the YouTube algorithm and find a wider audience. So it definitely is appreciated. Barb, thanks for helping out in the chat there. Mike, that's okay that you're late. Thanks for joining us anyway. You know how to find the archives if you need to. So I will see you next Tuesday. I'll also look for you in other webcasts, other days of the week. And I'll look for you on X. But whenever I see you again, until that moment arrives, I wish the very best. Good luck. Happy trading. Bye-bye.
