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Week four options bootcamp July 28, 2020. We are going to go into actual strategy application and I'm going to show you guys a nice way to use thinkorswim in order to kind of get used to how to pick strike prices, how to pick and see what was happening prior to the market open as it formulates as it goes. This is just your own way of back testing, your own way of going back in history and seeing it play out that way that in real time you can actually apply everything. So we've gone through every piece of terminology we can possibly go through. We've gone through every example of how every basic classroom setting type of breakdown. So now it's going to come down to actually seeing it in what it appears as it appears in a chart. Okay. All right. So here we have pre-market on July 20th, pre-market on July 20th, walking into the day. Always what I'm doing more recently is I'm looking at tech stocks every single day, every single tech name, like big tech name that runs with the QQQ because of the big parabolic run that it had during that period of time. It was still just to the moon. So as of July 20th, five minutes before the market opens, the market is trading slightly green. So 259.42 was the previous closing price. I don't know why there's a difference there, but there is a difference there. Spy opening slightly red, but basically at breakeven. Just for reference guys, just for reference, what I've seen lately is when the market is gapping down and for those of you that are going to watch this in the future, this is not always a play that just blatantly like this. The market moves in cycles. The market is ever changing. Currently as it sits, when the market gaps up too much, it tends to fill the gap for the long side. If that makes any sense. It's a better short day when the market gaps up a lot, just in a rule of thumb. There are going to be outliers where that is not the case. And then on the other side of that, for longs, I'm going to teach mostly long in this, mostly long because that's just inherently how the market works. And that's been, to be honest with you, that has been 90% of my trading over the last two months probably. Ever since there was really good first red days, I've just been longing everything. Long, long, long, long. Every freaking day, longing something, using calls and that's been where I've stuck to it. Let's get into that. Break even basically, which is great for either side. Mostly to the long side though. When it's just flat, oh man, that's the best. That is the best because then you know you're going to get a good trend type of day. Not always a case, but I'll explain some scenarios there. So we're coming into the day and we're looking for a potential long, okay? It doesn't matter whether I want to look for a potential long or a potential short, just as a rule of thumb, a rule of thumb since the market is designed to go up, everybody's trying to guess the top. I'm not going to try to guess the top. When the top is set, I'm just going to react. I'm not going to guess where it's going to be. I'm not going to put $100 million bet on where the top of the market is because people tried that for fucking 20 years and it grinded them out until finally in 2020 they were right. Finally, 19 years later, they picked a top and then we get a 35% correction and a crazy worldwide pandemic and a blah, blah, blah, blah, blah, and a whole shit storm. Bottom line, I'm just not going to pick a top. It's not a healthy strategy. It's not healthy for anybody, all right? Currently, as we stand the tech market, QQQ, when you're playing tech stocks, you need to look at the Qs, all right? Currently as we are standing, we are slightly green, all right? We gap down and we are now grinding green. The spy, the overall big companies, we recovered from an overnight lows, from overnight lows and we are now breaking even. We are testing green, which is very strong for the long side, very strong catalyst for the long side. Now, if there's big catalysts coming up, that's a different thing. But going into the day, I'm looking for a potential long, okay? And inside that, I'm looking at stuff such as Amazon, Netflix, Roku, Zoom. Those are like my favorites, Apple, Nvidia, got to throw those into the basket. And those are going to be the ones with good option movement each day when the market has a good day, okay? And then Tesla too, of course, you're not a real person if you don't watch Tesla from time to time. So, Amazon. We're using on-demand. So I've gone into on-demand here in Thinkorswim by just clicking the on-demand button, which will be over here in the right side. If you're not in on-demand, you're not in on-demand, just click on-demand. And it's just like TiVo, it's just like rewinding, okay? So I've gone back to July 20th at 9.25 market time. I've paused it. We're going to play in a moment, okay? I want to show you where we stand during pre-market. Now we're going to jump ahead to the market open in a moment. But first, we're going to do a brief recap, okay? My favorite setup right now is the opening range breaks, even alongside just opening range breaks. Opening range breaks and first balances, those are my things that's what I love, okay? So let's real quick recap what an opening range break looks like. Hey, guys. My name is Tosh Bradley. I'm one of the head mentors and moderators of my investing club. If you have any questions about getting started in trading, getting started in MIC, MIC in general, text me at 2-1-3-4-5-8-5-9-9-7. This is not a robot. It is me directly on the other end of my business line. And we'll get you in the club. We also have special promotions going on that I can get to you depending on your trading needs. Hit me up. Back to the video. All right. So an opening range break is going to be very similar to something along these lines. All right. So during pre-market, we have what we have, okay? Hi, Faye. All right. At the market open, we set a high. All right. This is market open right here. So we set a high. We pull back, we test, we pull back, we break. That becomes an opening range break, which generally happens before 10 a.m. So are we buying the break? You can if you want to, but you really got to get used to it, okay? You really got to get used to how it looks when it can be strong, okay? So if you're going to buy the break, you have to do it with a starter size, okay? So if you're going to trade it in options, that is one contract maximum, especially as a new person, especially new, okay? For me, when I buy a break, I usually love like my sweet spot is like five contracts. If I do a starter, it's going to be one or two contracts in the beginnings of these types of setups because I'm paying three, four or five dollars per contract. And so that's a $6,000, $8,000 position, something like a $6,800 or a $1,000 position. And so, dude, Jeff, I know that nobody can see the chat right now, but Jeff says one contract is full size for me. Dude, when I started options, I was like, I just want to be able to sell half of a fucking contract. Why can I not sell half a contract? Why do I have to sell the entire thing? Why do I have to get in the entire thing? I just want to sell half of it. But I mean, like, you know, you can't, you can't do that. Wish you could. All right. So anyway, getting back to this. So opening range break and ideally what you can do, okay, what you can do, and I'm not going to discourage this because honestly, to be honest with you, I've been doing it a bit myself because I've come to really know what I want to see. What I will do, yeah, yeah, critique, yeah, let's introduce fractional contracts. Let's open a brokerage. We're going to introduce fractional contracts. Fuck all this education stuff. And we're just going to jump into the broker business. Fuck all that. Too much work, bro. All right. So you can take a starter into that. All right. You can take a starter into this right here, into that break. And then once you get the dip, okay, once you get the dip, I think that maybe to be honest with you, you can take a starter there. Okay. I like the X. That's better. If you're on that break or as it's prepping to break, usually for me, the indication to do something like that just recently has become that, let's say that this is VWAP, right? It's that when it breaks to the upside, VWAP isn't like this. It's not like right up against the price. So that tells me people are not chasing the breakout. That is all fresh money. People down here are not bringing averages up or anything like that. The question is, do you usually track five minute charts for the break? Yes, personally. What's up, Vic? What up, Vic? For me personally, five minute charts clean it up, okay? And they keep you patient, all right? The key with opening range breaks is patience and not anticipating the breakout on the first five minute candle. Opening range breaks do not occur in the first five minutes, okay? They take time. They take in between five to 15 minutes to form, all right? So after the first five minutes of the market open, to be honest with you, if you only traded opening range breaks, you would not really pay much attention to the market open, all right? You wouldn't be trying to trade the first five minutes. You would just be watching. You'd be sitting back, watching charts form. What up, Trev? You'd be watching charts form, waiting for things to occur. All right, so let's get back to the option stuff. All right, so you can take a starter there, all right? If VWAP is not hugging close like that, if VWAP is just doing this, you can take a starter into that. And then what you're looking for is you're then looking for the dip, all right? You're looking for the dip, the dip back, and you can start to scale in and do whatever you want to do along those lines. So once you start to do that, you can start to grab shares here, here, start adding there, and so on and so forth. And the risk, the risk in this potential case becomes a break of the whole dollar under VWAP, okay? So let's say this, for example, is like 30, 20. So we're going to use Amazon as a real life example here. And let's say this is Amazon, okay? All right, now I'm going to use the break of 30, 20 and VWAP roughly kind of, if VWAP tests and it just barely dips under it, I'm watching for a real break, okay? I'm waiting for a real break to where all of a sudden the chart, if it's doing this and I get my orders and then it pops and then it bounces and then if it does something like this or it just kind of trickles around it, I'm not going to stop out in those cases, okay? I'm going to sit there and I'm going to hold through it. What I want to see, I want to see it go, I want to see a candle that actually breaks, okay? Maybe not be that exaggerated. It might be something where it just goes, and then finally loses. That would be like a loss of VWAP and a loss of the whole dollar. And that would be like, okay, I'm done. No, I'm done. Moving on, okay? It's a weak chart. I'm not getting in it. All right, folks, if that's all you got, then I will see you down the trail.