Trading with Technical Indicators

Hello and welcome to Trading with Technical Indicators. My name is James Boyd. We welcome you on this Monday morning. Behind me, a little bit of snow here in Salt Lake City. So if you're a skier, that might be a good sign. Now we'd like to welcome Greg Wiley, AP514. David says he went to the workshop in Dallas this weekend and they mispronounced resistance. Well, it's true. That's probably why it's hard for them to see it, but not us. All right. Let's go ahead and hop right in. We also have Michael Fairbourn in the chat. We welcome him. And I'll also show us where you can find us on X in just a moment and share those links with you. Now, just real quick, remember that when we talk about information here, share that information.

It's provided for general informational purposes only. And actually, a quick heads up. This class is not a one-off. I teach this every Monday, live and recorded. Also, remember that our examinations. Examples here today are not to be considered as individualized recommendations. We do run a paid money portfolio that we set up and we're going to be building more here today. They're not they're not recommendations. They're examples. Remember that options carry a high level risk, not suitable for all investors. When we talk about examples, we will use the Paid Money software application for educational purposes only. Investing involves risk, including loss of principle. And today, what I want to do is I want to really talk about kind of some of the updates. We're really seeing on indexes and sectors.

And then what I really want to talk about is this is indicators versus price. What do you focus more on? Should I look at indicators or should I look at price first and then confirmation of indicators? I'm going to have a little fun with you here today. Now, the big thing, what I want to do is before we hop on, get into the material, I want to kind of make sure that you all have this page. Many of you do. And what you're now going to notice is this is the link to our YouTube page. So I want you to share this. Share this with a friend, a cousin, a brother, a sister, a mom, dad, whatever, son, daughter. Right. Let them know that actually we're on YouTube.

You can actually follow us right there. When you pull up this page right in the middle of the page, you're going to see the subscribe. Subscribe does not mean you pay. Just you follow us on YouTube. You can see all of our content. Anything that you subscribe to on the left hand side is going to be there. And when you click on Charles Schwab, etc., or anything that you subscribe to, that's like the channel of the YouTube page. So it's kind of nice. Now, also, quick heads up that if you do not have the webcast schedule, you're going to see that webcast schedule right there on that link. And it's going to show you a calendar and the calendar has a couple of things like, well, what coach do you want to follow?

What products do you want to know about? What type of skill level? So you get to choose. This is a buffet and every one of us is hungry. So you get to kind of actually pick what you want to learn, etc. And who you. Who you consume that information from? Last but not least, we also have, for example, a page here. Mike, if you could share your link as well for X. Just remember that on like Mike's, it will be at Mike. OK, capital M, Fairborn, capital F and then C. S. OK, Mike and I post also on X and you could see our content there as well. Quick heads up a difference. And I always tell people. I share any schedule updates, etc. This week will be a little different for me.

OK, this week, this week, this week I'll be doing some extra webcast. I'll have my normal schedule, but on Wednesday I'll be teaching trading price patterns in lieu of Barbara Armstrong. OK, also, I'll be teaching in lieu of Barbara Armstrong after I was traded. And also I'll be teaching in lieu of Barbara Armstrong trading a smaller account. And in lieu of Ben Watson, I'll actually be teaching market movers, which we did last week as well. So that will be on top of what I normally teach. So we're just going to have like a live online workshop here together. OK, this week, why not? Now, let's go ahead here and just kind of hop in to some of the material that we want to cover. OK, now.

I also want to kind of set an expectation when you come and watch me do a webcast. I don't want you to think. That every week it's going to be something different. If I were you and I saw that, knowing what I know, I'd be really concerned because I would be thinking, 'Well, why is it changing all the time?' We want to have a routine of what we do and talk about, why do we actually do that routine, and what we're trying to get out of that. So, obviously, if we're talking about investing, we're going to start with the indexes, work our way down to the sectors. And then we're going to talk about kind of looking at price versus indicators and some of the setups that we're seeing in the current market.

And the moral of the story is we're just going to get to the point and answer the question, what's the potential setup trade? OK, now, when we take a look at first off this list, does anybody notice something that's a little different than last week? You notice anything that's different? Now, also, I want to set an expectation when you come to my class. You know, I don't mind if you don't know the answer. If you make it and you answer it's wrong, it's OK. OK, we just want to all learn together. And we have a nice community here online where we can all get together and help each other improve. OK, I lived abroad. I know what it feels like to say things that didn't make any sense. Oh, it's funny.

Now, it wasn't funny before. Now, if we take a look at this, some of the differences we see here, we see the Nasdaq and we look at the socks. What is the sock? Tell me what the socks is. OK, we talk about socks on our feet, are we OK? Now, I'm just looking at the trend column for just a second. OK, so when I look at this trend, and what you're going to notice is that's a trend three on the Nasdaq. Now, that's just price above both moving averages, OK, but not at an area of resistance. Now, when we take a look at the socks, what are we talking about? The socks is the semiconductor index. We kind of use that as a proxy for maybe is there risk taking out there?

If the market is going up, you'd like to see some participation from the semiconductors. Now, I said on Friday with Kevin, we talked about. Well. Well, maybe the semis kind of being a little softer. Is there maybe a stock or two in there that is leading that semiconductor move to the upside? I need to know in the chat what semiconductors today popped to the upside. Any could you think of any if you're watching, it'd be hard not to see it. OK, now, if you also take a look at, let's say, this SPX, that's trending to price about the 10-day moving average, but not the 30-day Russell in the two. And also we see in this case the Dow.

Jones, now, the other two that we're not pointing out yet, but I will now, if we look and say, well, the VIX is a little softer or I should say flat, OK, trend five, OK, falling below the 10. And you also I added here so we could kind of be a little continual conversation, the Japanese yen a little lower. OK, so we would like to see really the VIX. OK, think of this as fear. We'd like to see fear drop. If fear drops, people tend to buy stuff. OK, we'd also like to see what I call the international VIX. We'd also like to see that drop, which is the Japanese yen. OK, now we're not trading the future. We're just kind of looking at the price of the Japanese yen on a future product.

And so if you take a look at that, we'd like to see those go down, because if those go down, that could actually mean the NDX might go up, the SPX and so on. Now, the difference we see this week is we see a little bit better coloration in the relative strength here. As for relative strength, the SOX has actually been a little stronger as well. And also the SPX and the RUT in the last two weeks. The area that's still been marshmallow soft has been the Dow Jones. And this is the relative strength, not the Dow itself. This is really to, in this case, the S &P 500. So if you're seeing red there, it just means the Dow relative to the S&P 500. Right. It's pretty soft.

OK, now let's kind of go over just real quick to the sectors. And then we're going to talk about individual stocks. So if I bring up again and we pull this up. And by the way, this would be a great thing for you to do yourself each day as well. And don't tell me you're too busy. OK. Nobody's too busy. Not with mobile app. No, no. OK, now, is there any difference we actually see on the sectors? What was the lone sector last week that was green? Can you remember what that was? I know you can. I'll give you a hint. It starts with an I, then X, and then the last letter's A, no. OK. U, no. E, energy. That was the only sector last week that was positive.

The only one. There it is. For the week, it's up 3. 46%. But what we see different here, utilities. We see health care, financials. I think that's something that's kind of important to watch with financials. Consumer, consumer, excuse me, communications, a little push on communications. And when you also take a look at the SPX, we're using that as a benchmark. But probably the big difference we really see, and actually, excuse me, I meant to say communications right there. And if you take a look at that, technology. Both technology, and this is going to be a loaded question. I need to make sure you get it, OK? Technology, if we're really going to see a tradable market bottom, you can't. You probably have to see. Or highly likely, you need to see technology.

I'll put T. And you need to see discretionary to kind of get some footing, OK? IXI, it's right there, OK? If we're talking about we're seeing a material tradable bottom, those two areas, you usually need to get some footing and lead the market higher. Now, when we also take a look at this, if you look at the communications, IXC. Can anyone actually tell me the top three? Three stocks, or four, or five, that represent the communications sector, OK? I'm going to play a little online webcast Jeopardy. Repeat the question. What are the top five stocks that represent that sector? This is going to be very important, because it's going to come to our trade example. We're not looking at these sectors to trade necessarily the sectors.

We're looking at the sectors that actually trade the stocks in the sectors, OK? Now, I want us to kind of work with that question, what are the stocks that dominate that communications sector, OK? Now, Lisa actually says Meta, Netflix, Google, OK? Lisa's, she's not allowed to play anymore. Lisa is the biggest White Sox fan ever. I'm joking, okay? She's a Cubby fan. Now, Sia, TMO, Jim actually says Meta. Okay, so let's kind of go with this a little bit. So one of the areas that's kind of, stepping out to us a little bit is communications and technology. Now, I'm not saying that energy, that's a bad area. We talked about that last week. But I want to kind of spend some of the bulk of the conversation talking about some tech stocks and also some communication stocks.

Now, what I want to do is I want to have a little fun with you, okay? And I should be able to have a little fun with you, okay? Now, what I want to do is I want to kind of pull up some indicators, OK? And I want to kind of pull this up if I can. And let me just bring up, if I can, I'm going to pull up just a couple of indicators, OK? Stochastics, if you don't mind, I'll just kind of use that as an example. I'll use the stochastics. We have a MACD on the chart. I'm going to put a CCI on this, OK? Which many of you know about a CCI, right? You know about a CCI. And let's just, OK, so we got a CCI.

I'm going to put an RSI. I mean, that's a pretty common technical indicator, right? RSI. RSI. RSI right there. Now, I'm going to put, like, another one. What's another indicator that you like to look at? Now, some people like to look at what's called the awesome oscillator. OK, fine. What's another one? You know, if we kind of said, what's another one? Some might kind of say, what? Now, so far, I have a MACD, stochastic, CCI, RSI, awesome oscillator. And what's another one that we could pull up? Now, if I kind of looked at this and said, hey, I'm going to use the, you know, the Chaikin oscillator or the Chaikin money flow. Now, what's my point? You're about ready to find out, OK?

Now, in coming to the classes that Mike and I teach, you know, we want to make sure that we spend ample time on talking about the price. The price is what's moving the oscillators. The price. I do not ever want to give the misunderstanding that indicators, come before price, OK? So hold that thought. Now, let me kind of show you something, OK? Now, let me do this. I'm going to pull up a stock, if you don't mind. I'm going to pull up NVDA, just for an example. Now, we talked about this on Friday, which I'll reteach again this Friday, because Ben's gone. And I want to kind of show you something, OK? Let me have a little fun with you, OK? So first off, if I ask you, what is the price doing on Nvidia?

What would you say? What's the price doing? And I think we would all agree, OK? The price is going up. Well, when we look at the MACD, and I'll expand it so we can see it, the MACD is going up. Matter of fact, the MACD never went below zero. And the MACD, why is it light green? Why is it dark green? And then it goes light green again. Well, green in general, light or dark, is just saying the MACD is above the zero line, OK? Light green means it's higher than the day before and above zero. Darker green just means, in this case, the MACD is still above zero. But the MACD is lower than yesterday. That's all that means. Now, if you have the MACD to go down, and it doesn't go below zero, OK?

And it goes back up, the momentum, and what's the favorite word of the day? Momentum, OK? So we see that it doesn't go below zero, and it pops back to the upside. Now, what is the stochastic showing? Oh, my gosh. It's actually showing that it's pointed up, kind of like what price is showing, and kind of like what the MACD was showing. Hey, I bet if we use the CCI, that's going to be the secret sauce. My gosh. I mean, this blend of barbecue sauce of technical indicators is going to tell me something completely different. It's pointed up. And if we look at the RSI, that's going to tell me something completely different. No, it's pointed up. And if we take a look at the awesome indicator, look, it's up as well.

And then in the last one, if we look at this, the Chaikin money flow, it's been up and a little elevated. What's my point in telling you this? My point in telling you this is, look, it's up. What's my point in telling you this is, a lot of people, they're overly spending time on indicators. And they should be looking at the trend, support resistance, and the price. And where that is in relationship to the moving averages. That's what we teach. Okay? So I'm never going to teach you that there's some secret hot sauce of some indicator. The indicators for the bulk majority of the time are going to be showing the exact same thing. That the price is going to be showing you.

So, I will not be explaining to you this year in 2025, how to read the side view mirrors. I'm going to read you how to look out the windshield and read the price. Because that's what's kind of most important. Okay? Now, along with it, as we say that, we want to make sure that we're good at reading the trend. Good at reading support resistance. And we want to make sure that we can look and see what's the trend. And we want to make sure that we're good at reading the momentum as well. Okay? Now, what I want to do here, and this is very important. And the reason why I did this is because lately, I feel like I've been pulling my hair out.

Which, by the way, as you get older, you don't want to pull your hair out. That hair is precious. Don't, maybe not have a lot left. Okay? And I want some snow on the roof. Eventually, you know, eventually. Maybe as I get a little grayer. But my point in saying this is I feel like, lately, people have been looking for this secret indicator. There's no secret indicator. If there was a secret indicator, it'd be called 'price'. And so today, I want to focus the next 30 minutes on looking at price. I think there's just too many people that I've seen in the general world out there looking for the favorite indicator. What is your favorite indicator? It's called the price. Okay?

And I don't ever want to give the idea that the indicator, the indicator's more important than the price. Okay? Now, as I said that, I got that off my chest. And if you want to ask me, James, do you feel better? Dang right, I feel better. Okay? Okay, good. Let's go. Now, I want to kind of talk about a couple stocks to begin with. Okay? So on Friday, I made some comments about tradable technical bottoms. Okay? Does anybody know what those kind of four key points were? Could you remind me just real quick? So one of the indicators that's kind of interesting is a bullish MAC, the divergence. Okay? And if I misspell, I apologize. Okay? That's a bullish MAC, the divergence. And that typically happens, okay, when the price falls down to support.

That's a sign that we could be nearing a tradable bottom, where the price was going down, and maybe it's starting to come up a little bit. Now, the second point is where the price starts to near horizontal, horizontal support. Now, when you start to get that price nearing horizontal support, could you start to see some divergence, some indicators in the oversold area? Sure. Let's just say we use the bullish MACD divergence, and we have the MACD on there. Then you're probably going to start to see some bullish MACD divergences on the chart. Now, I do not concur to that the bullish MACD divergence can't look something like this. I think if you kind of spread it out a little bit, if one was the lowest point, and this is shallower, we might still say, hey, the price was making lower lows, but the MACD was actually kind of showing that the second trough was not as far down as the first trough, which means, what does that even mean?

Why does it matter? Well, because it probably stands a greater chance of reversal. That's why we made those comments on Friday, okay? Now, the third point I want to bring up, what's the third point? The third point we talked about is Ws. What's your favorite letter of the alphabet? W patterns, okay? Double bottoms. We talked about slanted down bottoms, which are channels, and also tilted up bottoms, okay? Talked about those. And then if you look at this, the fourth, this is where you start to get DBOs, diagonal break of resistance. This is where trend was number one, okay? Price below both moving averages. But price snaps back above the 10% day moving average. And if you get that, you're now starting to get more trending number twos.

By the way, that's, now that's interesting, okay? Now, let me kind of show you something before we look at a couple trades. How many trades are we going to put on? Probably three or four, okay? Now, what I'm going to do is I'm going to go down to just really quick the public list. Now, we know that the Dow is not the strongest, but let me just kind of use it as a sentiment gauge. If I bought the Dow Jones Industrial Average, and I said, are there any stocks in the Dow Jones Industrial Average that are breaking the diagonal line, or in other words, trend number two? Yeah, there's a couple of them, okay? There are. Are there any stocks in the Dow that are, for example, trend number three, price above both moving averages?

Price, okay? There are, okay? Now, what I want to do in this case is if we pull up this chart, and now this is where I need us to put on our technical analysis goggles. Let's go, okay? Now, are these glasses? Well, they're glasses, but they're really more, like, blue light glasses, okay, if you look at screens a lot. Now, I want to kind of ask you a question. Now, remember, any trade that we do, we're going to put in the paid money portfolio. So, if we do a paid money trade, which is not a recommendation, we've got to actually think that this stock might have a potential upside present, okay? Do we know it's going to go up? We don't know it's going to go up, okay?

Now, let me ask you a quick question. Is this something that you would say, Ricebird, Lisa, Mark, Lola, is this something that you see as potentially bullish? I'll just take a yes or no, okay? Would you say that this is something potentially bullish on the chart? Okay? Now, if you kind of look at this, it kind of fell back down, rallied up. If we close here, it's the highest close that we've actually seen in a while. Now, we said before in our trading accounts, okay, let's kind of pull this back up. Let's kind of look to do some trade examples here. When we talked about, for example, the account that we're in right now, the account size margin at 30,000, okay? The IRA is sitting at about 105,000.

And what you're going to notice is if we risk 1% of the 30,000, this is the acceptable loss. Now, wait, as I say this, does that mean that the loss cannot be bigger than that if I have a stop? Well, we know for sure a stop doesn't guarantee anything, okay? It's a trigger to sell. Okay. Okay. So, let's say in the margin count, 30,000, okay, cash balance, 1%, we're going to risk of that, and the acceptable loss is going to be $300. Now, remember, in that type of account, we're probably going to be doing a bunch of short put verticals or long call verticals if we're bullish, okay? In the IRA, if we said, hey, we're going to risk three-quarters of 1%, which is consistent with what we did last year, then we could take up to, let's say, $787 if we did three-quarters of 1%.

So, what I'm going to do is I'm going to go to this. I'm going to go to this margin account, okay, and I'm going to look and see, is there like a short put vertical that we could then maybe do in that area? Now, on Friday, we did the trade, okay, of that, and the market was technically, well, the standard market hours were closed. The after hours, which I'm going to teach you after hours, okay, so NVIDIA this morning started trading it. 4 a . m. Eastern, okay? And that kind of creates an interesting conversation on after hours trading, stock trading, that is. Now, what I'm going to do is I'm going to go over here to the, we've got calls on the left, puts on the right.

And what I'm going to do is I'm going to come over and say, look, I'm going to try to sell a strike where the investor might think the stock might stay above. Now, they don't know that. It's all probability-based, okay? Now, that probability is not just set in stone. Things can change the probability. It's volatility, time, and so on, liquidity. We're going to right-click on this. We're going to go sell. We're going to go right over here to vertical. Now, the nice thing is if we pick a stock that is semi-liquid, 165 billion shares of stock on NVIDIA, which is like equivalent to like the S &P 500 product, okay, we don't have to do something like $5 wide. We might say, look, I'm going to try to use this for a lower dollar account size.

We'll go. We'll go margin account. And let's say we kind of said, look, I'm going to sell the 149 and maybe do the 145, okay? When we take a look at the bid-ask spread here, about a penny wide. When we look at the open interest, 16,000. When we take a look at, let's say, the volume of this, which speaking of indicator, let's kind of look and see, is there any volume here? Do you see any volume, Chris B? Paul? See ya? Bill? Do you see any volume here? 2,800 to 1,500? Is this an indicator? Is this maybe an indicator of potential interest and speculation? Now, notice here in this case that that volume today, today, buying and selling volume, that's almost equal to what the open interest is.

That's more than the open interest. That's almost more than the open interest, more, 50% of it, and more. Now, it's not just on the put side. It's also on the call side. You look at the volume, more than the open interest. Volume is today. Open interest is the number of contracts that are open and still un-exercised, okay? More, almost more, almost more than the open interest, and pretty high number. This is just for today. So, we're seeing the price move, but also the volume. Now, that's the option volume. What's the stock volume like? I don't know. You look at it, okay? Now, what I'm going to do in this case, I'm going to sell the 149, buy the 145, got a credit of $1 . 42. Now, given the vertical.

Okay? If we had a $4. 00 spread, and okay, $4. 00 spread minus the credit of $1. 42, max loss given a vertical, 258. Go back to the position sizing. What's the acceptable loss? $300. We could do one contract. On the IRA, if we talked about, hey, that potential acceptable, that loss is 258, we could do about, well, three contracts, okay? So, what I'm going to do is here, is I'm going to go to the single account, go to multiple accounts. And I'm going to do one in the margin, and we're going to push three in the IRA. So, when you look at doing three in the IRA, we want to make sure that number should not be any higher than that number. That's less than by 10 bucks.

Okay? Now, first trade in both accounts. Now, you might say, well, James, that order could have filled on Friday if you would have done an after hours trade. Could have, okay? If we would have had that education and considered that. Maybe some people wouldn't consider. We're going to go ahead and send the order. So, trade number one right there is on NVIDIA. Now, I want to go back to, remind me again of what sector kind of caught our eye to here today that we don't normally talk about. I'm going to say this, that sometimes people don't even really bring up or distinguish the difference. What was it? It was IX, not Connecticut, Colorado. Colorado. Okay. It was NVIDIA. And you said to me, I just read what you wrote. Okay?

You can't blame me. I'm just reading what you wrote. One of the stocks in there was, well, it was Meta. And if you take a look at Meta, I want us to kind of take a quick peeky of what we have. Now, what I would love nothing more, and it's all about me. Okay? At this moment in time, it is. But I would love for you to feel just confidence in. How to read the chart, I mean, if you said I feel confident reading the chart, I would probably get goosebumps, okay, that would, that would really make my day it really would, okay. Now if we take a look at this, we got a 20 period moving average, okay, and I'm gonna assume that we're right here, okay.

And if we take a look at this, right there, there's the 10 period moving average, okay, fine. If we look at the right-hand side, we just kind of have two red lines now. Usually, if there's two red lines, if someone's buying on price, they might buy on that, but if we're saying we're using the 10 and the 20, 10 being the indicator of momentum and 20 being the indicator for trend, two red lines are not an entry if we're talking about, we're looking for momentum and trend at that point in time. Now what I'm going to do is if I take this A day forward, red still you want to kind of see a little bit more, I'll zoom in for us, okay. Still red, go forward and all of a sudden on the second, okay.

Nvidia fills what you're now going to notice is on the second, we see that the 20-period moving average goes green and the 10 goes green as well. Now the question though is the role through your mind is how do you know that this is a bottom? If you never stop doing that to yourself, you're always going to probably be late in entries. We said on Friday, it doesn't matter how good you are, you're going to be late in entries. You can think, the trade is they all have risks with them. No one can see beyond The right edge, we don't know what the bottom is going to be tomorrow, we don't know what the price is going to do tomorrow, we don't know.

Okay, now if you go forward, what you're going to see is this was uh Friday and now we see for example today, now what do we see on this chart that's a little interesting from an indicator point of view. Number one, there's your closing price; it closed above the high of the low day, this was the lowest most recent down day at that point in time, we closed above the high of that down day, the lowest most recent down day, or in other words, the red candle. Now what do we also see here? Well, other technical forensic pieces. Of information that we don't want to just dust over and say it's not a big deal; we see does anybody see that that forensic technical information that was kind of important here?

Well, a lot of times when you get big green candles, you can get prices where they fall down to the mid-section of the large green candles. I'm telling you, if you, if there's anything that ever sticks to your mind, I want it to be this – okay, at least one of them. If you see a big green candle, the very next day, you go down to the middle of that green candle; for some technicians, they call that support level number one. And they try to buy in the middle of the range of the large green candle. That was the second interesting point that many people would just brush over and not even understand it. That is another clue. Another clue that we actually see on this chart is this, where we closed.

And this, is another clue on the chart, gap on the chart. And now what we see, there it is. Now, what's the last piece of information on this chart that we can see that we're not going to brush over again? Because we just talked about that. Notice how the intraday low again. James, you just yelled when you said that. I know. I'm trying to kind of get it through your mind. Okay? I'm telling you, it's just amazing to me how we can see this stuff for so long, and it never really penetrates the brain. I'm going to get it there, though. I'm going to do my hardest. As long as you listen. Okay? Today, again, what happens? We come down to pretty much the range of yesterday.

The body of the candle, the middle of the candle, and it does it again. Now, if you learn from the past, you say, ha, ha, ha, ha, I've seen this trick before, but I'm going to try to take a potential entry. Well, someone knew about that because it came down to six of fives, said, 'spank you very much', and it knocked right back to the upside. Now, was it guaranteed to do that? Of course not. Okay? But those are four bits of technical indicators that we actually see. We saw on the price. Number one was the moving average. Okay? We could also say with the moving average, we saw a whole dot. We saw a retest of the mid-range. We saw a gap. We saw a retest of the mid-range again.

And all of a sudden, here we are. Now, another bit of information we could kind of say on this is this is one of the bigger stocks in the communication sector. Now, this is all great and dandy, but I now have to remember, like, do we have any money? Ha, ha, ha, ha. I mean, isn't that the question? I mean, how many of you have lots? Lots of ideas, but sometimes are a little short on money. Now, that doesn't mean you don't have any money. I'm not saying that. But sometimes your investments are tied up, and we know how you feel. Okay? That's a joke for all of us. Okay? Now, I'm going to go back to kind of thinking like, okay, this is a $620 stock.

What strategies are going to be probably going to be a vertical? Okay? The second part of this is. Maybe it's too big of a dollar stock for, let's say, the margin count. It might be. Okay? Now, what I'm going to do is I'm going to go to the trade tab. Calls on the left, puts on the right. Now, if we said, hey, you know what? I would like to do something a little bit farther out, maybe like the 21st February. I don't want everything the same expiration. And what I'm going to do is I'm going to come down here to, let's say, the at-the-money strike. Okay? Now, if you go to the at-the-money strike, you're trying to get something with some intrinsic value. Okay? Now, we're going to right-click.

We're going to right-click on this right here. Right-click. We're going to go to where it says buy. Got a menu. And we're going to go right to where it says single vertical. I'm going to tell you something else. Okay? It's not enough to talk about technical analysis and indicators and then think that you could be mediocre on strategy. Because strategy comes into consideration when you've got to say, well, what accounts am I going to use? Well, I'm going to see if we could do one of these in the margin account and the IRA. Okay? Now, we already know what we're willing to risk. If I've got a $30,000 account, I'm willing to risk 1% of it, $300. If I come over here to, let's say, the IRA account, $787.

Can I do this? Could I consider it? Now, we know from strategy that if we did, like, a long-call vertical, that reward to risk is usually one-to-one. Are you with me? Okay? Now, if we take a look at this, we've got a spread of $5. Well. If we look at, let's say, what the debit is. Debit, like what you paid for it. That's what the max loss is. $245. Right there. So, could we do that trade in the margin account, even though it's a $635 stock? $620 stock. Excuse me. The answer is yes. We could consider it. We're going to. Second, could we do more than one contract in the IRA? We could. Okay? We could do probably three of them. Let's go to single account.

We're going to go to multiple accounts. Okay? And what I'm going to do is we're going to do one contract in the margin and three of those. Okay? Right here. Great. And I'll bring back up so we can all see this. So, what we're thinking about is, hey, on the margin account, there's 30. Acceptable loss is 300. Think of the buying power effect as that's the max loss. Okay? Given one contract, well, if I look at the max loss in the IRA. Given three contracts, it's 735. Is that less than the acceptable loss? It is. Okay? So, we're talking about given a vertical. Okay? So, I'm going to go ahead and say send that order. Now, remember, if you do one contract and three contracts, the commissions are going to be for four contracts.

Okay? Not one. This is spread out four contracts over two accounts. Now, wait, James. I wonder if you had a kid account. I wonder if you had a wife account. I wonder if you had a grand kid account. Whatever. Could you have multiple accounts in there? You could. Okay? Send the order. So, the second trade we actually did was on Meta. Now, what I want to do is I want to kind of just show a couple stocks that are maybe catching some investors' eye. Now, is Google, and I need to know this as far as the question, is Google, okay, the fills, is Google in the communication sector? I'll just take a guess. I don't know. I'm just an easy guy, okay? Someone has to be right. It might as well be you.

Tell your spouse that. All right. Here we go. So, let me kind of just show something just real quick on Google. I am on a three-year weekly chart. Do you see any pattern that kind of is just hitting you right in the face? Anything? Now, when we look at this pattern, you're kind of seeing like we had a prior high, okay, and then it falls down, okay, kind of went up, fell back down, and by the way, you can even kind of say it went up a little bit right there, fell back down. You can even argue, and I think it would be good to argue, a higher low right there, a higher low right there. This is a high relative to that, and if we look at this, ran back up, falling back down, green candles near the 20-week.

Weak moving average, and that's a higher low relative to that. Now, how many of you look at this chart and say, it's so easy when you draw it? It's so easy. Well, here's the thing I'm going to tell you. Most of us are looking at all types of different stocks all the time. I mean, just completely different stocks. I'm not sure if that's the greatest idea. I think that kind of the approach we talked about, looking at the Dow, the NASDAQ 100, S &P 100. How about a smaller list? And kind of seeing some redundancy of ticker symbols. That way you get used to those trends, and you've also done some legwork on kind of finding out, are they really profitable companies?

And do they kind of really have growth, a balance sheet stance, growth in their income statement, a balance sheet? And is the chart supporting what they see on the fundamentals? Historically. And also looking into the future as well, as far as expectations. Expectation doesn't mean actual. Now, what I'm going to do is on our third trade example. We're going to go back to this. Now, Mark says exactly. Good, Mark. Let me know how that turns out. All right, here we go. Now, so if I said to you, is there a setup on Google? Now, Google kind of looks like on the one-year daily chart. Kind of like a horizontal resistance. If you said it like that, we say resistance, okay? This kind of has like a bull flag, okay?

You could kind of say like an ascending triangle, if you will, price. If we kind of said of the entries of entry number one, two, or three. Entry number one is when the short-term moving average goes green. Second might be the crossover or the 20-period moving average going green. And third is the moving average going green or the 20. We don't know which one is going to come first. Of these three, do we have a number one, two, or three? Well, we would have to say it's a number one, okay? Why do you say it's a number one? Well, because it's only the shorter-term moving average that's gone green. Now, this is more aggressive. Now, aggressive, it sounds bad. But someone might say I'm okay with that because if I go aggressive, they might actually be potentially risking less.

Now, that does not mean they're guaranteed not to lose more because if they set a stop, I'm going to do a stock trade on this. And in this example, I'm going to imagine that we're going to right-click on this, buy custom. We're going to go down to with the OCO bracket. Now, you technicians out there, I need help on the target. Dead serious. I need your help on the target. Tell me how you would set a target. Now, if I saw something like this, I'd be thinking about Fibonacci, okay? I'm going to draw kind of from where this top is. I'm going to draw it all the way down to this prior low. And you know where I'm going with this.

I'm thinking that that area of resistance, right about the 100%, right around the 197, and then draw it down to kind of where this move started recently. What are we going to do? On the right-hand side, we're going to kind of stretch this to the upside. And we're wondering, put it up to the 217. Do I know? I don't know anything, okay? And I'm fine with that. I'm completely fine with not knowing anything, okay? So here we go. We're going to speculate, which is not a four-letter word, okay? You can speculate. You can be wrong. You can be right. What we're going to do is put a target about 215. We're going to wonder, could that stock go up to that area? About ready to find out.

Now, we're going to go buy custom with the OCO bracket. We're going to put a target right around 215, okay? Underneath. So we know that if we get in maybe early based upon just only one of the moving averages going green, the price tends to be closer to support. Well, if you're close to support, you might not be risking as much per share. But there's no confirmation, okay? Now, remember, the confirmation ain't what? It's not free, okay? That confirmation costs something, meaning the price has to go up to get the confirmation. And the price goes up. That means you're farther above support. Now, and you're taking a greater risk per share risk. We're going to set that stop less 2%, 190, 38, less 2%.

And what we're going to do in this case is we're going to set a stop on the stock at $186. 57. Now, $186. 57. Confirm, check, okay? Data GTC, data GTC. Now, the third trade example is on Google. And if you take a look at this, this is one of the second stocks in the communications group. I'm going to go back to the pool balls. Percent, dollar amount. Now, when I do this, I'm going to kind of put in maybe about a $6,500 capital size. If we did $6,500, it's going to be about 33 shares. $6,500 on a $105,000 portfolio size is about $6,500. So, that's going to be about 6-ish percent of the capital of that portfolio for the IRA.

Not going to do this in the margin account. Would be probably too big. And what we're going to notice is we're going to buy about a 6% position. Last year, we did about 5% to 8% on any given stock trade. We're right in the middle here. What we're now going to go ahead and do is we're just going to go ahead and we're going to send this order. So, we have about $6,500. Let me just kind of put this 33 shares there. Got to wrap this up. Confirm and send. This is what our last order is going to look like. Now, as a homework assignment, we talked about those four types of bottoms, right? And those four types of bottoms were bullish divergences, price equaling horizontal support.

I think many of the stocks have probably already seen that. The third thing that we talked about is W patterns. Your homework assignment is to go out and find stocks that are showing examples of tilted updates, W patterns, and diagonal breakouts-those are the two types of indicators or setups I want you to practice finding. Okay? Now, we'll go ahead and send that order so we can put that right in the IRA account. And there it is. So, the three trades we did here today were as follows. Number one was Nvidia. Okay? The second trade we actually did was Meta. And the third trade we actually did was Google. Okay? Now, I also want to give us a quick reminder that has this class been recorded? And the answer to that is yes.

So, remember, you can actually go right on our playlist. And I'll send that to you and see those prior classes that we have actually done. And that is going to be right here. And that playlist is right there. Okay? So, think of this as like TiVo. Okay? Now, if you did not, for example, get the link to TiVo, you can go to the Schwab Coaching webcast page from YouTube. There it is. Okay? And also, if you did not, for example, say, James, can I follow you and Mike right on X? There's our page right there. Mike, make sure you put yours in as well. That way you could actually follow. Now, the question came in on the chat. Was Friday's class recorded? And will it be this week? Yes. It was recorded.

It is posted as well. So, I'm out of my time here today. Now, remember, coming up next, if we go right to the schedule, you're going to see that coming up next, trading cover calls and short puts. We got Cameron May actually doing that. And so, I want to thank Michael Fairbourn for answering those questions in chat. And also, remember that with what we discussed, it was done, for example, illustrative purposes only. Stay tuned for Cameron May coming up next. And this has been the class on trading with technical indicators. Have a great day. Take care. Bye-bye.