June 6 2016 Swing Trading with Gil Morales — Transcript

Hi everybody, this is Gil, and I'm doing a little swing trading basics webinar for all of you. Swing trading has become the obvious approach to this market now that certain people are trying to sell you a product, a swing trading product that supposedly will bring you riches.

that supposedly will bring you riches um but swing trading is more involved than that and I think uh it would be appropriate for me to talk about how I approach swing trading and I've been advocating a swing trading approach for

But swing trading is more involved than that, and I think it would be appropriate for me to talk about how I approach swing trading. I've been advocating a swing trading approach for the last couple of years or more in my reports and my websites, and it's been very effective in this market.

video here and go through this uh and also just review my moving averages so you aren't confused the magenta moving average you'll see on the charts is a 10day simple the green is a 20-day exponential the blue is a 50-day simple

So before we get going, though, a couple of administrative items: the obligatory legal disclaimer, so you can stop the video here and go through this, and also just review my moving averages so you aren't confused. The magenta moving average you'll see on the charts is a 10-day simple. The green is a 20-day exponential. The blue is a 50-day simple, and the red moving average is a 200-day simple moving average.

not a road to uh instant riches it uh is a little more involved than the idea of buying breakouts and then sitting there making four for five times your money you're basically looking to take profits of 10 to 30% when you get them and there

So let's talk about swing trading. What is it? Well, in simple terms, it's a short-term trading-oriented approach. It's as old as the hills. There's nothing magical about it. It's not a road to instant riches. It is a little more involved than the idea of buying breakouts and then sitting there making four or five times your money.

ShakeOut type Maneuvers undercut and rally type things white coffee and springs uh pocket pivots within the bases roundabout marcket pivots etc etc and because swing trading is looking to take shorter term profits you're obviously going to be trading more often

You're basically looking to take profits of 10 to 30% when you get them, and there are a variety of ways to do this. You are going to exploit a wide variety of trading setups. So you're not just going to be buying breakouts. There's a lot of other ways to buy stocks that would include shakeout-type maneuvers, undercut and rally type things, Wyckoff springs, pocket pivots within the bases, roundabout market pivots, etc., etc.

the same time have a 78% stop-loss rule as a matter of policy that's kind of silly uh you have to employ tighter risk management uh because if you're looking at a 10% gain against an 8% loss uh the

And because swing trading is looking to take shorter-term profits, you're obviously going to be trading more often, so you're going to have to accept the fact that you will have increased trading frequency, and your activity is going to increase.

10 20 or 50-day moving averages uh or prior area of support as a guide for a stop rather than a just a strict mindless sort of 78% stoploss so you're asking for trouble if you're looking to make smaller profits

You're also going to need to keep tighter risk management. You cannot look to be taking 10 to 20% profits and at the same time have a 7 or 8% stop-loss rule as a matter of policy. That's kind of silly. You have to employ tighter risk management because if you're looking at a 10% gain against an 8% loss, the odds are not stacked in your favor, and the risk-reward equation is really working against you in that case.

Capital isn't tied up in something and you're waiting around for something to move you want to be able to catch inflection points you want to be able to catch breakouts just before they happen or as they're occurr uh and you need to know in order to

So you need to be able to keep your risk and your stops much tighter. I prefer using a nearby moving average like the 10, 20, or 50-day moving averages, or prior areas of support as a guide for a stop rather than just a strict, mindless sort of 7 or 8% stop-loss. So you're asking for trouble if you're looking to make smaller profits and keeping a loss stop-loss policy that's about the same percentage or very close to it.

with the other indexes has been very choppy you see this big swinging back and forth movement and a lot of stocks will emulate this sort of movement you can also see that there are no real breakouts to new highs every time the

We also have to have greater consideration of time value. You want to be optimizing your trades and trying to pick them off at the right time so your capital isn't tied up in something and you're waiting around for something to move. You want to be able to catch inflection points. You want to be able to catch breakouts just before they happen or as they're occurring, and you need to know, in order to accomplish this, the signs to look for that a move may be imminent. I'll get into some of this in just a little bit.

remember uh last August was fantastic August 2015 uh where you broke down sharply into the end of the month and and then you've had these bottoms that produce equally sharp upside moves and a lot of the stocks will look the same as

We can see that over the last year and a half, the Nasdaq composite, along with the other indexes, has been very choppy. You see this big swinging back and forth movement, and a lot of stocks will emulate this sort of movement. You can also see that there are no real breakouts to new highs. Every time the markets come up to a high, it rolls over again, where the moves occur in between all of that.

These uh larger chart patterns because the movements never break out they just swing back and forth so we'll get back to this idea of what is time value in simple terms it's the profit you make uh divided by the

And as a short seller as well as a longside trader, some of the breakdowns have been great on the short side. Some of you may remember last August was fantastic, August 2015, where you broke down sharply into the end of the month. And then you've had these bottoms that produce equally sharp upside moves, and a lot of the stocks will look the same as the indexes.

how much time is basically what time value is so let's look at a quick example and this would be um trade a for example here 10% profit in three days okay not too bad 10% divided by 3 days

In other words, they're moving around in their bases rather than breaking out and moving to new highs. So you have to be able to catch these moves off the bottoms or as stocks are turning up off the lows and are still within these larger chart patterns because the movements never break out. They just swing back and forth.

time value and so you'd like to be able to string together more trade A's relative to trade B's now from a practical perspective a concrete way of going about this is trying to understand when the inflection points are occurring and

So we'll get back to this idea of what is time value. In simple terms, it's the profit you make divided by the duration of the trade. So if you're a mathematician, put it in real simple terms: TV equals P over D. Time value is profit over duration. That's for the engineers, but for the rest of us, how much money you make and how much time is basically what time value is.

first being Amazon here so what we can see here is you have this Bible Gap up right here and that occurs on earnings so the stock takes uh 1 two 3 four five six nine days to get up 10% so you get a

So let's look at a quick example, and this would be trade A, for example, here: 10% profit in three days. Okay, not too bad. 10% divided by 3 days equals 3.33. You can pull out your calculator to confirm that if you need to.

LinkedIn and you can see LinkedIn had a breakout here on earnings and then pulls into the 20-day moving average so you get this breakout here on a on a big volume Gap Type move that sort of closes near the lows but it drifts into the

Trade B: 18% profit in 17 days, and that has a time value of 1.05. So while trade B has a bigger profit, trade A actually has a higher time value, and so you'd like to be able to string together more trade A's relative to trade B's.

10% profit in three days and that has very high time value relative to the trade in Amazon so you know if given a choice between the two I would pick the LinkedIn trade every time other aspects of Swing trading are

Now, from a practical perspective, a concrete way of going about this is trying to understand when the inflection points are occurring and when stocks are liable to have big moves, and there are some ways to do this which I'll get into in just a second.

kind of pointless and everybody already knows it you know in an age where information is everywhere and everybody knows everything all the time especially when it's already happened uh what everybody knows doesn't give you any Edge so I find fundamentals to be less

We can look at an illustration of this in a couple of stock examples, the first being Amazon here. So what we can see here is you have this big gap up right here, and that occurs on earnings. So the stock takes one, two, three, four, five, six, nine days to get up 10%. So you get a 10% profit in 10 days. You could sell into that if you want to and then buy back at the 10-day line, but the basic idea here is you get a 10% profit in about nine days.

and I'll show you uh at least one setup in in one oil related name uh that is a profitable swing trade and the companies these companies these oil companies are losing money so you don't have to put any emphasis on fundamentals and I think

And we'll look at this second example of LinkedIn, and you can see LinkedIn had a breakout here on earnings and then pulls into the 20-day moving average. So you get this breakout here on a big volume gap-type move that sort of closes near the lows, but it drifts into the 20-day line. The volume is drying up.

or three years the company's going to earn $30 a share close to that and that's what it's trading on on the basis of the forward-looking story so you don't need to operate on the basis of fundamentals but but you will rely more

I like to buy stocks after you see strength and you see a pullback into the 20 line. So you buy here, and boom, in three days you get a 10% move. So that is a 10% profit in three days, and that has very high time value relative to the trade in Amazon.

months ago when the price of oil bottomed that would be a thematic Factor um another example would be this Wolfpack theme where I'd look for stocks that are all moving together a couple of months ago maybe a little longer than

So, you know, if given a choice between the two, I would pick the LinkedIn trade every time. Other aspects of swing trading are that there's less emphasis on fundamentals. I find these days in particular that looking for, you know, five quarters of earnings up 20% and sales up 20% or more, or return on equity 16% or blah, blah, blah, all this stuff is kind of pointless, and everybody already knows it.

wolf packs that reinforces uh the longside uh argument for those for those particular stocks more recently I've had Cloud stocks have been a Wolfpack type of move so you know you have to use some creativity uh in terms of understanding

You know, in an age where information is everywhere and everybody knows everything all the time, especially when it's already happened, what everybody knows doesn't give you any edge. So I find fundamentals to be less important when swing trading.

manner and you're looking for a lot of different setups besides just plain vanilla breakouts so types of trading setups that we look for outside of standard issue breakouts which are one setup you know this pretty obvious one I think um pocket pivots that allow

And I give you an example: if you look at some of the oil stocks, they've rallied pretty well over the last couple of months since the price of oil bottomed, and all these oil stocks have had playable moves, and I'll show you at least one setup in one oil-related name that is a profitable swing trade.

so you know your typical base breakout buyer won't buy more than 5% past the so-called pivot point and if a b Bible Gap up occurs it takes a stock 10% above the top of the base then it's supposedly

And the companies, these oil companies, are losing money, so you don't have to put any emphasis on fundamentals. And I think these days stocks move more on forward-looking stories. Like an example would be Amazon, which people love to complain about: its high PE or the fact that it doesn't make any money, but they overlook the fact that over the next two or three years, the company's going to earn $30 a share, close to that, and that's what it's trading on on the basis of the forward-looking...

where I'll see a stock moving tight sideways or pulling back and the volume drives up to extreme levels uh whop the undercut and rally springboard setups where you're undercutting a prior low and you turn back up through that low and bounce back

to the upside you'll see these a lot in this market I think buying breakouts alone is for the slow animals in the herd sorry if you're solely a breakout buyer but I encourage you if you are just a breakout

buyer to expand your horizons and learn about some of these other setups I think you can improve as a Trader and just overall understanding how price volume action works or can work in varying Market environments is very critical to

uh be just improving as a Trader overall and and improving your CH eye and your ability to make money in the market so for that reason you have to have a broader array of technical tools at your disposal if you don't you're just buying

breakouts well your success rate is going to be lower and the number of setups that you're going to be able to find is also going to be lower so let's look at basic braas base breakouts say that 10 times fast uh here

we see aago it's a you see the double bottom here and you have the breakout through the midpoint here right there and you pull in for a couple days turn around and go out so that's a base breakout you could buy that now as a

swing Trader how are you going to uh approach this you're you're looking to take a profit now uh as as it moves up say 10 15% you notice you get yeah say you bought around 140 and uh it gets up to about 160 now

you're looking at about um you know 14% profit or so and it's been following the 10day moving average for some time once it violates that that that could be used as your uh guide for a quick stop and

then you might look to re-enter if the stock came back up through the 10day line but that's a base breakout and it produces a reasonable gain there and if you trade it uh you can capture that gain if you sit too long for those of

you been watching Vago lately it broke down and gave up uh came all the way back to this breakout point and so you know your gains if you sit there too long your gains just disappear let's look at Smith and Wesson

this is one where it broke out up here and had a nice uh say 20% % move here up to the 30 level maybe 15 uh 16 17 depending on where you might have sold it but you see you have the breakout

here and the stock pulls back to the 10day so I'd look to buy on that pullback so notice how it fakes you out and it goes higher and uh and you take the gain now that's another break at it and that works but

notice how you don't get much movement uh beyond the 30 level there so uh your profits more or less Limited about 15% maybe a little more um here's a square now square is a cup with handle formation uh it's a new issue so

thematically you know new issues can be hot you can see the cup with handle right there uh we actually bought it at 1205 that's when I recommended buying it at that point because you're seeing volume drawing up here uh as it was

holding tight along the 10day that's the voodoo setup and it breaks out and pulls back so it gives you two chances to buy if you bought here you see it run up it comes back in you buy it at the 10day

line and boom in a matter of five days you get this uh do the math on this one you're going from about 1231 say to 1230 1220 up to 16 uh so you're getting four points out of that

that's about a 30% move 30 something percent move that's very nice now keep in mind that square didn't have earnings I don't believe yet it had a very nice price move and that's one of the best plays that we've had all year in terms of

buying a breakout so but it does show you that that you can buy breakouts but the moves are are measured and you notice it breaks down here and uh and that's pretty much uh All She Wrote now here's Hawaiian uh Holdings

this one broke out up here you can see you got some volume in here as it's coming up uh and it runs up now here's another example where you followed the 10day moving average but once you start to falter and break down you could be

out of the stock and bag in your profit and you're going to make about a 10 15% gain there but you know you see these breakouts and you get 10 15% moves now you can get on ear get on board earlier

by using the pocket pivot Advantage as I call it so let's look at Smith and Wesson remember we talked about this as a breakout up here and uh it broke out it has a nice move right there but you

could actually bought it here on the pocket pivot so you'd be buying it as it's rounding out the bottom of the base and buying this pocket pivot and getting in early so you're buying it within the base structure and well before you

either get this breakout you could call that a little cup with handle type breakout but you're in in before then you're definitely in before here so you're getting much more capturing much more of this trend okay so that's the

pocket pivot Advantage at work for you let's look at another one um I think we can go back to uh Hawaiian Holdings yeah Hawaiian Holdings rather than waiting for the breakout up here so instead of waiting for it to

break out through here you can buy this pocket pivot right here and that gets you in about five points four or five points earlier so you know about 10% earlier and then you capture this trend notice how it holds along the 10day

moving average it actually never violates the 10day moving average and you can read uh our book trade like an O'Neal disciple to understand how uh moving average violations work but it never violates the 10day moving average and it continuously holds a 20-day line

so you could have used that as your stop to take your profit on that on the way up but that that's a good example of the pocket pivot Advantage energy recovery now here's a little stock $6 stock has a

pocket pivot as it's building this base and you can see here you're trying to round out this base here and you're still well off the highs okay but you're buying it in here and you get a 50% move

higher and notice how it holds along the 10day line all the way up and now it violates up here so you could be out you bag your profit that's a very nice move um and if you're buying it around six

and half it's actually a double uh believe it or not and of course this is an example of a stock that does not fit the so-called can slim rules where you need uh to have earnings and price has

to be over eight I think earnings here were there was a little bit of earnings here a couple of s cents but there was a thematic driver here in that these guys create pumps or make pumps for companies

like halberton uh for the fracking industry and also pumps that are used in desalinization plants so there's a thematic thing going on there and it coincided with the bottom in oil as well and this stock had a nice big move uh

it's currently basing again I think it's somewhere around 11 1011 might take a look at that one it may set up again and go but you can see the pocket pivot Advantage gets you in way before the breakout even though you would have done

pretty well with the breakout and you can see how the 10day line Works uh like a champ here in terms of keeping you in the stock until it finally gets way let's look at uh the next set of uh setups pocket

pivot variants roundabout pocket pivots which are essentially uh pocket pivots like the ER that are coming around uh bases and then uh the lows of bases and then bottom fishing pocket pivots the difference between the two is a bottom fishing pocket pivot will occur

later in the pattern so for example here's mobile eye and you can see this thing broke down and it flashes this big volume pocket pivot coming up through the 10 and the 20day and that's viable and the stock

heads higher from there so that's a bottom fishing type pocket pivot this is more of a roundabout type pocket pivot where the stocks already come up off the low so it's trying to round out uh the new base and you have a

pocket pivot on a supporting day at the 50-day moving average you could buy it there stock moves higher now notice how it tends to hold the 20-day pretty well and then when it breaks that's pretty much all she wrote and so again you get

it uh maybe 15% profit at the peak notice how when it's trying to break out and getting up to the left side peak of the base over here um to this left side Peak when it's getting up here it's getting a little

long the the tooth but you can capture that move and that's not too bad uh in this market so you know 10 15% gains if you can get them in this market uh or more uh then you you you are doing

reasonably well given that that's basically what the Market's going to give you let's look at some others uh silica Holdings this an oil related name now in February a lot of these bottomed with the market and then as the price of oil

started to turn you started to see some pocket pivots so here's a pocket pivot if you go through here you may find other pocket pivots in the pattern let's take a look here I think this looks like a pocket pivot here which would have

been right at the 10day line here I believe no I'm sorry right here and then you see another pocket pivot here and it's continued higher I think today it got over over 28 um as the price of oil has gotten up to

$50 but there's a thematic basis here uh for this play here and you see the the bottom fishing round about pocket pivot as it's trying to round out the lows of its pattern energy recovery again there's the this is a also an example of a

roundabout or bottom fishing pocket pivot I already discussed that Bible Gap UPS pretty straightforward uh here's one Bible Gap up in Nvidia coming off the lows that's a bottom fishing Bible Gap up but it holds a 50-day line and you notice how

if you bought it which you could have uh and you could use the 50-day line as your guide for a stop maybe another 1% once it was able to clamber back above it and as it's moving up it holds the

20-day line and then back to the 50 line then you get another Gap up here and that was viable and the basic rule for buying a viable Gap up is that you're going to use the low the intraday low of

the Gap up day as your selling guide so you can buy it on that day and use the low of the day as your stop and then you catch this nice move and this is you know if you're buying this here around

30 say 39 and you're getting up to 45 I think this thing got as high as 46 47 recently uh you're getting much better than a 10% move there so close to 15 but you can see how uh this is you know this might be

considered extended from the breakout Point um Electronic Arts was a similar situation where it's a bable gap up it actually opens here um and then runs up and I think today this stock was running around 7778 but you can see if you

bought it on the Bible Gap up day and I actually did blog to my members that it was probably buyable that day uh you've had gotten a nice 10% move out of it over the last couple three week so not

exceptional time value but it is showing you how uh this looks extended but it's not really it's quite viable uh using the typical rules for playing a viable Gap up here's the voodoo principle now Voodoo is a cute uh term but it

basically comes from the idea of a volume dry up which you can then distill down to the acronym vdu uh and then if you want to get cute uh with inspiration from my friend Ian Woodward who passed away a little over a week ago and he's

he was famous for coming up with these colorful names for different technical setups and phenomenon um you turn that into Voodoo so you can sort of see how that evolves um if you can't then you're probably totally left

brained but here's a great example and this is one I blog to my members about here's uh the stock holding tight weebo which is the Chinese Twitter holding tight right at the 10day and the 20-day moving average volume is the lightest in

the pattern uh or in this base so it's drying up in the extreme that's an entry point and this stock had has had great time value because it was buyable around 2350 or so maybe a little lower and I

think uh today it hit 29 got above 29 so you know that's a good 20 30% move in uh just a few days and so that's exceptional time value but that's a voodoo type setup where you're looking to buy this kind of

volume dry up in a tip formation um now Voodoo also can occur on a pullback so we'll go back to this H broadcom example aago used to be aago I call it a Vago because the symbol's still AV

that's kind of clever though the two companies merge and they use one company's name and the other company's symbol which only serves to confuse me but in any case you get this pullback the volume dries up here I consider a voodoo pullback to be

volume that's minus 35% below average volume or or less so you know the lower the better so minus 60% minus 70 is an extreme Voodoo type of move but you buy the pullback here and it gets you in at

a better price you're filling the Gap here uh and riding the stock from there so I I look for those types of pullbacks so the voodoo pullback is one of my favorite ways to buy or the tight Voodoo

action along the moving average like you saw with the with the weebo or weo I'm not sure how you pronounce that Max linear here's another example of a you have a uh a gap up move here on big

volume see that right here and you pull into the 20 uh the 50-day line I'm sorry right here this 50-day line you pull in right here and the volume dries up right here and you buy it right there now a

lot of times when you're buying these Voodoo pullbacks you'll see the setup but the market may be pulling in and so you may be scared away but you sort of have to grit your teeth and buy the stock on the basis of the setup because

what you know here is that if it fails to hold the 50-day line if it pulls back on light volume and it closes just above the 50-day line you can buy it there and maybe use the low of this range here as

a tight stop or the 20-day moving average is a tight stop if it doesn't work so a lot of times the market is not really looking all that wonderful when you see these pullbacks you and that's generally when stocks will pull back

they'll pull back with the Market um you want to step in and just buy it on the basis of the vooodoo pullback and not be afraid um as long as you understand that you have a quick out in terms of a tight stop so in that case

with um max linear it would have been the 20-day line or the 50-day line so here you have a silicon motion on a breakout now notice the breakout fails and it pulls in to the 10day moving average on extremely light volume and

then takes off from there so you know a lot of people be scared away they look at this oh it's a failed breakout but it breaks out pulls in just a hair you get extreme volume dry up right here on the

pullback and you buy that that's one of my favorite ways to buy and even after a breakout I look for a pullback like with the uh broadcom aago uh that's one example and this is another good example undercut and rally setups now

these are all the the stocks uh the stock setup or the long setups coming off a lows of patterns so you get undercut and rally setups you get woff spring very similar just different terminologies and Livermore ShakeOut plus three so these

Bottom Buying uh things are based on livermore's work wos work and then my own spin on it as an undercut and rally setup and then there're also short sale setup inv versions and basically those are uh things that I've derived from my

work on the short side so what I've UND learned to understand about short sale Target stocks is that when they break down they'll eventually find places where they bought them like they may undercut a prior low and you can read uh our most

recent book Short Selling with the O'Neal disciples where I go into great detail about this how a stock that's breaking down will have a nice breakdown a shortable trend that you can make a lot of money on the short side and then

eventually it bottoms and we'll have a very sharp rally to the upside and you'll notice a lot of stocks as they're coming down within overall downtrends at certain points in the downtrend they'll have these very sharp upside moves and those

sometimes can be playable as a long setup uh for swing trading purposes so quick examples here let's look at U we look at the ugly ducking principle here on this uh sort of ShakeOut Type move look at faet it's in

a nice base here uh breaks apart hits the 58 on heavy volume so that looks like death but it rall back above the 10day line and then it pulls back into the 10day line on very light volume so there's a

combination of things here there's a ShakeOut so $26 stock maybe use a ShakeOut plus two um I would the way I would handle it though is once it got back above these lows or above the moving averages here then I would watch

a pullback or a retest of the low that's a y cofan retest is what I like to call it and it'll come in on light volume and that's where I'll look to buy it so if you get a shake out this is sort of an

what I call an ugly duckling type move where something looks incredibly ugly and it scares you away but it actually turns into something viable if you keep an open mind and understand how these work in this market where everything

seems to fake you out you know it's a little bit of an Alison Wonderland Market where not everything is as it seems to be and things change form very rapidly so this would be an undercut uh and then a Bible setup on the white

coffee and retest uh which is sort of a combination of the spring and ShakeOut and a pullback a voodoo pullback so I'm using a lot of different concepts here uh to come into these stocks let's look at uh let's see what PA alter networks

is one of my favorite examples here because here you have a stock that loves to undercut prior lows uh so here you undercut this prior these prior lows here and you rally and that that might be a tradable move very short one uh

coming from about 131 up to about one well you're getting a good 78% then it breaks down undercuts this low and then goes onto a long rally up to the 50-day line now see this is pretty typical action for a stock that you might

consider a short sale Target but it's getting these nice rallies after the undercuts and if you play them the way I'll play them is once it rallies above the low I'll use that as my my stop so once it gets above I'll I'll buy into it

and then just use it as my stop generally if they're going to work uh they will hold that low you could add another 1% if you wanted to now if you look at most recently after they announced earnings a couple weeks ago I

think it was they broke broke down hard but it just barely undercut this low here and it's turned and rallied and that's about uh another 8% move so there's all these moves on these undercut and Ries you could even look at

this one here this move even though it didn't undercut this low this low here did not undercut this low here it did pull back on really light volume so it's a retest on light volume which is what I

call a yofan retest I don't know if that's necessarily accurate with respect to wof specific work but I just call it that because it's that sort of a low uh the basic idea is that it's a test for

Supply uh as it push towards a loan it's not finding any Sellers and so what happens is it tests the loan turns back to the upside so those are examples of uh things that'll use on the uh along the lows of a pattern as the

stock is undercutting now here's another example see apple undercuts the lows here and it turns back up to the upside so that's an undercut and rally I guess you could call it a spring and a ShakeOut plus X whatever I I prefer my

rule is much better just using a move back up above the lows to buy and then using that as your stop so the closer you can uh buy to the lows as it pushes back up uh the tighter you can keep your

stop but in this market this setup tends to work now I don't know if it's going to continue to work because uh we may get into a better Trend following type Market who knows I mean now that those

who claim to know uh suddenly are jumping on the swing trading ba uh bandw and maybe that means that it won't be as effective so I don't know we'll find out won't we and then here's another undercut you

see Alaska Air and this is when the airlines were all bottoming together and you see the undercut so again once it undercuts you can use this low once it gets back above that low uh you can come after the stock and use that as your

stop so around 64 6418 on the low here would have been uh your your entry point and then using that as your trailing stop this also had some pocket pivots on the way up you might notice that if you're watching

here I think there's uh pocket pivot here uh not sure one of these moves could be considered a pocket pivot since they're all up days and so you're getting these pocket pivots here which also could be considered roundabout pocket pivots but

notice how once it gets up to the highs boom that's all she wrote so if you're waiting around for a breakout you're not going to get it you're better off trying to do shake out uh and this is actually more of a liver morian uh

pivotal point or reversal pivotal point where he talked about the ShakeOut plus three uh as if a stock made a low and then went three points past that low at least so in this case it it doesn't quite get there but it's close and it

turns back above that by three points you could buy it back that's a lot of gobble to me I think you can just use the uh buy this on the basis of the undercut and then then uh use that prior

low as your guide for soft once it moves back above that low so you know to me that's pretty uh straightforward and less trying to figure out oh do I use three points or four points or five points that's all to

me that's all unsubstantiated bunk workday is a short sale in inversion I've noticed that when stocks a lot of stocks that are breaking down and I'm working on the short side and workday was one of these when they turn

they'll have an earnings report sometimes and the thing will Gap up and if it if it's pushing up to a moving average like workday was on the day after earnings it was pushing right into this 50-day moving average here and I

was actually trying to short the stock but I could feel that the bid in this thing was very strong every time I would try to pull back a little bit it the buyers would come back in and push it so

what do you do well if you can sense that in sort of liverm morian fashion you can sense that there's a strong bid and a lot of buying demand coming into the stock every time it pulls down or pulls back a little bit on an

intraday basis you can come in and just buy it and I buy it right there at the 50-day line and boom that's around 66 and you've got within three four days you've got a 10% plus move easy so you know I would say maybe 12 13

14% in just a few days so I'll play those types of moves too it's a little more complicated requires some judgment but if you've shorted as much as I have and you've had your head hand to you as

many times as I have in the past uh you learn fast when something is pushing against you and when you're much better off just flipping long and going with the flow and in this case that's what I did and those are what I call short sale

inversions so you know I've covered pretty much all of the types of buy setups if if you're interested in finding more I or learning more rather I would uh suggest these books following resources we'll call them uh the first

you should read is a complete guide to volume price analysis by Anna cooling very good book and Anna cooling's work is also uh embedded in the hgs investor software program that I like to use these days I don't use Marcus Smith or Wanda anymore

I use hgs investor software and uh there are lots of canned screens and chart views and whatnot uh that can be accessed on HS investor software and anac coolings volume price analysis or vpa is on there uh next you should read

trades about to happen by David Hy this is a very good but very detailed and very thick shall we say You're Gonna you're going to be slogging through it but the information is very good in terms of covering all the different woff

types of setups and technicals and whatnot so that's the second book you should read and then finally price action breakdown which is a real interesting uh treaties on swing Trading uh price action and understanding uh ranges and whe When demand and Supply

are out of balance or inbalance or whatnot and I think it's very important these are all very important Concepts rather for swing trading so those are the three books I recommend reading um and I would not you know don't get

sucked into buying some expensive product I think spend a little time studying what I've talked about here but also read some of these books um and if you really driven to uh you can go to Gilmore report.com or you can

go to Virtual selfish investing.com if you're real lazy about typing out long URLs you can just shorten that to selfish investing.com because we talk about a lot of the Swing trading stuff and it's all included in our basic

service which I think for Gilmore report is 50 bucks a month and selfish investing 60 bucks a month a lot cheaper if you do a quarterly plan but we're just here to uh educate people without creating dependence on our products and

uh the whole idea of people learning to trade for themselves and to make their own decisions is what I find attractive about trying to teach people how to trade rather than making them dependent on my incredible Guru likee wisdom which

I think is a bunch of baloney and anybody who's trying to sell you on that sort of stuff is full of baloney as well so on that note thanks for sitting through this presentation I hope it was helpful um and good luck Trading