 Good afternoon everyone and welcome. This is Melissa Armo with the Stock Swoosh, and today I'm answering a question from a student This is from Erin. She said how do you stay focused and charts only and ignore the news? Thanks, Erin Let me answer that right now in the video for her. I just do I mean You know all ever since the beginning when I very first started trading back in 2008 I've never never really paid attention to earnings reports fundamentals Whether there was Positive or negative news out on a stock. I never looked at any of that information. I Always tell people to come if they want to learn and trade with me that if you're used to doing fundamentals If you're used to focusing on that if you like to watch the news and read stuff about stocks then fine You can use that with my system if it helps you However, that being said if the information that you're reading or the news that you hear Tells you something different than my golden gap system does For the direction the stock will go on the day that we're day trading it then follow my system because price is a far far more accurate and non-biased analysis of anything that you'd see in reference to news or Reading fundamentals is something because there's always opinion and interpretation involved with news events and And the earnings reports as well Sometimes a stock will gap down and the earnings will be great and the stock will fall on the day gap down and Nobody understands why Theoretically you say well this you know had great earnings should have gapped up you know And it doesn't make sense to people that follow fundamentals But a lot of it has to do with expectations So for example a company might report their earnings the expectations might have been a certain number Company still strong everything's still good But because they didn't meet the expectations the stock gaps down and sells off on the day But there's really nothing wrong with the stock Nothing really wrong with it in the longer term and maybe the stock is still strong or a holding an uptrend And I'm just talking theoretically here different examples of things that could happen And why really it's best to follow the price you won't you have a non-biased information when you're following a chart And I'm just gonna talk about yesterday's Momo. I don't I don't even know what this company is Okay, I don't know what this is. I don't know what they do. I you know, I don't look at any of that stuff So let's look here what happened the 21st the stock closed here at forty five oh eight and Then a gap down in the morning here. This was Tuesday and opened at forty thirty seven so the stock gap down not quite five bucks overnight but almost and Let me just double check if this was a night gap or a morning gap. I forget there's a morning So Momo gapped in the morning. So this happened Tuesday morning looks like around 8 a.m Okay so The stock gap down My system is I rated in the morning and I don't look up and read what's happening with it in reference to the fundamentals of Or the news if the news was positive or negative If you're like to watch television in the morning if you'd like to watch certain financial channels if you're in the habit of doing that having the TV on in the morning when you're trading or You know listening to things on the internet or some of these channels are reading different financial articles in the morning Or even the paper, you know, say you read the Wall Street Journal in the morning before you before you trade That's okay. What I'm saying though is don't allow yourself to get distracted by something that you may read or hear That has nothing to do with the chart You're gonna get non-biased information when you're looking at the price of a stock That's gonna help tell you what's really going on with it And that is the most important thing if you're a day trader So my system looks at 26 points in a daily chart in a pre-market gap You can look at it at the post market, but I'm still not playing it until the following morning on the live day after 9 30 However, my gap ratings system will go through all the points Rate it tally them up when I'm looking at the points I'm looking to predict what the price action is going to do next Next meeting after 9 30 as a result of the gap itself happening now Momo gap down and it very well could have rallied. Okay, this gap down here This very well could have rallied very swiftly was not that far away from the 50 per moving average Which is a green line it had it did gap down here to a support level You can see the support all the way back gapped right to it This is perfect here with this gap to the support and yet the stock fell off of the day And actually it sold off very swiftly and open and swushed and I shorted this yesterday But anyways, it could have been along but my system predicted it was a short I don't know again like I said what the earnings said yesterday. In fact, let's just look it up Let's just look it up here just out of curiosity now since I'm talking about this Let me quick look it up. Let me see what I can pull up very quickly here Yesterday was the 22nd Oh, this is interesting So this is very interesting here. Maybe this is why Erin asked me this although she didn't she didn't mention any specific stocks Uh, Momo's trading sharply lower. This was the this was news that came out yesterday at 10 21 And obviously the stock fell into the close fell all day into four In early trading after reporting q2 results this morning despite reporting a nice beat and guiding q3 revenue above expectations Here it is. This is what they do in terms of quick background operates. Momo one of china's largest mobile based social networking platforms That's interesting So there you have it. I'm going back to 22nd Momo reports better than capital IQ consensus. Yeah revenues rose So maybe that's why she asked me this actually because we shorted momo yesterday and she emailed me this this morning I'll have to ask her in any event that just goes to prove what i'm saying apparently In reference to yesterday's momo It issued upside guidance and had better than expected reports and yet It fell all day like a banshee And actually from the high of the day here 40 46 this is yesterday low was 36 bucks So the stock fell more than four dollars in one day Not even including the move that it had from the prior day's gap So if you just look at the night before from monday night The stock has dropped almost 10 bucks within a 24 hour period That's a dramatic dramatic move that the stock had it gapped down in the earnings Tuesday morning and fell all Day then Tuesday So very very weak pattern in here for the stock and that's how we were able to make money in it yesterday by shorting it We shorted the selling action that came into the stock and it you know again I didn't look at the fundamentals And that's one of the reasons why it's not good too because if you had looked at that And the stock happy to support you might have thought it was a long or a buy And yet it wasn't it was clearly assured and that was the only way to play this yesterday And today is a very weak rally. I don't know where it goes from here Overall mo mo is still a strong stock. It's still on an uptrend. It doesn't have a lot of data history here But that was a dramatic fall that it happened yesterday And you can't really ignore it in the gap and on the day itself So how do I how do I ignore it because I don't need it? I guess that's the most the simplest answer I can give erin is I ignore it news Or what the reports do are fundamentals because I don't need them to trade I do not All that I need is my golden gap 26 point rating system because that tells me exactly what's happening in the price of a stock In a non-biased way where I'm just looking at the price and making a determination based on the price action People could love this stock all day long It could report upside guidance It could report anything at once but the fact is and you can't get away from this That the stock right now today is trading at 36 75 So that is a fact and that we know and yesterday morning when I was looking to short it and rating the gap in the morning It was I mean it was moving in the morning. It was in an area, but it opened yesterday at 40 37 And that's a fact. So the stock gap down five dollars overnight last night fact It's nothing that you need to you know Interpret in reference to the price it the stock lost five dollars overnight of the gap Now what you have to figure out is where is it going to go from there? So you could take the trade in it if in fact you want to Which which I did But the price we see everyone can see it right now here today and yesterday morning in live time You can see the price of the stock. It's non-biased What you have to do is find a method in a way to predict where it's going to go next And that's what I that's what I figured out. I mean, that's why my 26 points are so great So, you know for the most part I get it right, you know eight out of every 10 trades not every trade that I take as a winner I wish that it was but it's not but I will tell you that my system Accurately predicts where stocks are going to go way more than anything I've ever seen And it did take me a long time to figure this out But it is because I'm focusing on price action in the chart And not only that in the daily chart, which is the most important chart here to be looking at So that answer is hopefully Erin's question. I don't Pay attention to news because I don't need to it's not necessary. So I don't feel I don't feel the need to do it If you're in the habit of doing that and it's taken away from your trading then stop doing it That's the best thing I can say If you find that it helps you the days the gaps rate well then great But what if it doesn't and clearly MoMo was one of those ones that didn't I would I didn't even know that until I looked it up Right now, and I'm not sure that's why she asked but I'll find out when I email her today So good little question here and anybody has any other questions students or otherwise feel free to email me and I'll Get back to you when I have a chance if you're interested in the golden gap class You can email me at melissa at the stocks wish.com. Have a great day everyone