 Hello everyone and welcome Mr. Kevan with Online Trader Central. We'll be starting in just two minutes. What is the armour I'll share with us today from thedocchrist.com and we'll be starting in just two minutes. You may have started time everyone. Thank you and welcome. Remember that it is exactly three p.m. each percent of time here in the Boston area or wherever you may be around the world, it is time to begin. Please put your hands together and welcome from thedocchrist.com. Thank you so much Kevin and welcome everyone. My name is Melissa Armo and I own a company called The Stocks WUSH LLC and today I'm here to talk to you and give you a little bit of a lecture about trends. You know trend trading is one of these things that a lot of people don't think about that often because they're focusing so much on maybe a specific play they're doing or strategy but the main reason that traders are successful, the ones that are successful in the market is when they trade with the trend and today we're going to talk about how to do that and how to figure out the trend in the first place. So if you'd like more information you can go to my website www.thesdocswush.com or email me at melissa at the stockswush.com as well. I'm going to do a live market review after the webinar today if we have time before we're done and if not then we'll just go into my live trading room. Kevin and Kathy can plop everyone over in there and we'll go over some picks for tonight and the market as well. So train the trend. First of all ask yourself do you know how to read trends? I mean do you have confidence in your own ability to read trends or are you not quite sure sometimes? Trading the trend is the only way to make consistent gains and money in the market and yet many traders miss the importance of trading with the trend on a daily basis. Also many traders misread and misinterpret the trend in a chart. In fact reading the trend in a chart is a concept that is so important that it often gets overlooked. Again like I was saying at the beginning it often gets overlooked because people assume that they are reading the trend right but there's more to it than that. Understanding the trend in a chart is vital to the success of the trade and it's so much more than just looking at pivots or highs and lows and this is what we're going to review today as well because I think a lot of people think higher highs and higher lows lower lows and lower highs means that something isn't a certain trend but it's not enough information. Again the importance of the trend is that the trend is your friend this is an old adage of course I didn't make this up this is something that traders have been saying for a long long time trading with the trend is going to help you be successful and it is your friend and you want to learn how to trade with it. I clicked a picture here of the market and this is the overall view of the QQQs. The Qs are an uptrend and have been an uptrend but if you were looking at pivots there were many many pivots that were broken here and I just clipped a brief period here back from the last two months of the market but let's take this rally that happened back here from the beginning of September. Market rallied up here came in and did a pivot okay now this is a nice pivot it's a higher low market did a higher high went over the area came in made another pivot but it broke it and then it didn't make a new high now did that mean the market was all of a sudden then not in an uptrend or in a downtrend no the answer is no the market was still in an uptrend and even here do you see this pulled all the way back in here and the market was still in an uptrend and how do I know well I was calling the market to break out to new highs it did it here was a nice bullish gap the market made here and then the market was facing out here and broke out to highs which we're trading up and through now so there were many pivots in here that were broken but the market continued to stay in the nice trend that it's in and has this pretty much this entire year I wanted to do a clip just here of the market overview for 2013 because the market started the calendar year this is january 2nd right here 2013 in a bullish gap this is a view of the market for this year I mean talk about a trend the market has been in a beautiful bullish uptrend and there were many times in here the beginning of the year also through this dip in here and then different periods in here where I would be doing videos on YouTube and talking different people that they said no we're too we're too extended we're gonna come in we're gonna come in or we're trading down and we're getting topping but the market continued and why why did the market continue and how was I able to read it so well because I'm good at reading trends and we're going to talk about this today and what has enabled me to read trends well is my analysis of gaps this is actually how I determine what something is trending in what direction not the pivots and you can see here how many pivots in the market here were all broken but the market didn't come in it continued higher than how in a bullish gap that happened here and continued bullish gaps that happen all the way up so it's about getting the correct read and I have been trading gaps which is a strategy that I do and how I use the information I'm going to talk about today but I've been trading them for five years and I've realized more and more and more that the way to correctly read the trend of stock of the market is to identify and read price gaps because gaps are their price gaps are having it's a gap reading gaps tells you what institutional money is doing in the chart now and it gives an indication of what it will do in the future the technical analysis reading of gaps gives you an edge to take positions with the trend gaps make the trend they set the trend and they can even change the trend in a stock chart trend trading accurately provides multiple purposes for traders and you can swing trader core trader day trade gaps with a trend in a chart and this is a great thing about gaps is number one you can use them to train but also you're going to read the trend and it's going to help you make decisions like if you want to get out of the position not just get into a position because there's so much more to trends than pivots look at all the lower lows and lower highs the market made this year but carried through in the uptrend and kept breaking higher and if you try to short the market like at this topping tail here or up here when it was becoming topping made the base then you know you were you were losing you were down money because the market was blowing on through these things and I know the market had a deep pulling back here this was in the summer but it fixed itself really quickly how in gaps in bullish gaps to continue I remember that first chart I showed you where the market started out the year with a bullish gap it was a sign it was a sign it was a sign of things to come if you actually went long the first bullish gap of the year in January 2nd you were in the market long all year and look how much you would have gotten paid so again trading with the trend and reading it right reading what is there and what you wish was there are two different things I wish I could say gosh you know every single thing is what it seems to be but that's not the case if it was that simple to just look at pivots to determine a directional reading something well then no one would ever make a mistake in reading trends no one ever would because it's very easy to read pivots it's very easy to read higher highs and higher lows and lower highs and lower lows it's the easiest thing in the world and yet that doesn't tell us the right information that we need in order to read trends correctly so we can wish and hope that something is in a certain way but in the end at the end of the story we have to look at what is really actually there it's the core belief systems that are behind these gaps that make them real that are real in the price charts of the market and stocks specifically in companies when they gap there's a core belief system that's going on when a price gaps when the price does gap and it's that people are upset for example if a stock gaps down and then they kind of panic and then a sell-off activity may happen and people sell out of it it's it's about a core belief system i believe this thing then i should sell out of my long or i believe this thing is going higher so i'm going to buy it it trading is about understanding price and also core belief systems and charts setting up in the price because this is how people make decisions and who are the people i'm talking about to make the decisions well the people that are in control of the market and it's power money power money in the market is the one that sets the trends and rules the moves of stocks and the market power money in the market is created by institutions who set the tone for a stocks trend if you become a specialist in defining what institutions are buying or selling then you'll have a huge advantage in your trading because power money sets the trend and makes the trend and changes the trend and charts and it can do it at will at will so you really have to read things in real-life time what's going on and there's nothing more lifetime than reading what price if you're not trading on the side of institutions in the market then you will have a hard time seeing lasting and consistent success in your trading you have to learn how to read and trade on the side of institutional money the hoping and wishing mentality which many traders have it goes away once you gain an understanding of what is going on in the price for the side of power and and here's just this is over and above and beyond technical analysis understanding what goes through your mind when you trade and I know because I trade myself when some you take a position in something you know we all want it to work but how do we get past this idea of the hoping and the wishing and the fear type of mentality we have to have something called conviction we're going to talk about this a little bit later but this idea of conviction helps us take positions where we're risking money and trade because there's never a time where we don't make money by risking money as traders we must risk money if we're going to make money and that's the whole philosophy of the market so how do we do that and do that not in fear we have to have conviction and that comes from an understanding an understanding of what is going on with the price and an understanding of not only that the core belief systems that are setting up and that are making these price adjustments in charts so why is reading institutional money so important well because we need it to be able to read this to make money correctly it's the thing that sets the trend and it's very important to read the flow is an institutional money in the market so you can make money from their moves trading is very easy when you get in the move at the right place and get out at the right place then it's it's actually very simple it's very easy so you've got to learn how to read it right when you're trading with this power you're like in the flow you are following the trail of the money flow and you're just playing along with it as one person a big flow of money going in a certain direction is what moves the market and stocks it also creates long lasting momentum and sets trends when you're looking for institutional money you are really reading the side of the power in a stock and you want to be in the side of the power in order for you to make money trading and if you've ever taken a trade it hasn't worked out and you've gone back and looked at what you did you'll see it probably more clearly after the markets closed gosh you know I wasn't on the right side of this thing I wasn't on the right side of the trend I wasn't on the side of the power the key is to be able to read that before you take the position in the first place so institutional money is in charge in the market and stocks at all times institutional money sets the trend and this is where we need to be with when we're making decisions to trade so how can you read the side of institutions in the market as I was saying earlier today the method that I use is through gaps it's in gaps these gaps are just magical to me I don't know how I would ever trade if I didn't know how to read gaps or understand gaps I would be very it will be very challenging to trade if you didn't know how to read gaps why for the rare reason that I was saying earlier this idea of pivots if they don't always work and and gaps are something that has so much consistency why because there's such a powerful thing that's happening in the price in a chart that's like a secret ingredient grabs are a secret ingredient charts that many people overlook and yet they hold a lot of significance and if you don't know what a gap is if you've never heard of it well I'm going to show you here today because it's very interesting gaps make the trend set the trend and also continue the trend in stocks in the market they set the trend because they are a definitive and demonstrative change and show price in what is called an event and gaps are a real show of the power of money gaps either continue the trend or in fact change the trend so if you follow the gap you'll be following the power money and why do you want to do that because that's going to help you make money when you're in the flow of the momentum so what is it that makes this move it's money that's the only thing that makes a stock move it's money people are putting money in people are taking money out that's what makes a stock move in the first place sometimes people putting money in they're buying sometimes people are taking money out they're are selling so what is the thing that makes a trend it's money too the same thing money and it's money going in a certain direction it's all see how it all focuses around money but you know what the interesting thing is if we are too focused on money in our trade and not focused enough on what's going on in the chart in the price we won't make as much money we make more money when we're less focused on the money and yet it's the very money the very essence of the money that's in these stocks in the first place that's paying us so there's only one thing and one thing only that can move the direction of a stock it's money and not a little money but a lot of money or what I call power money power money is in charge it's in charge it's like the king the king that's in charge of everyone power money is in charge of the stock's direction and trends are set and moved by the power money people and you want to be friends with the king you don't want to be against the king so you want to be on this side on the side of the power money people and there's a lot of them in the market there's just a lot of them a huge amount of them so learn to trade with the trend and with institutions so you can be successful and as one person you can if you just understand how to read these things and play them right so let's talk about gaps and what they are and I'll show you some charts here and if anyone has any questions you can just plot them down here in the room here I just typed a note you can just ask me questions there as we go along so this concept of gaps what is it it's a strategy in the market it's a read of price which I'm going to show you in a minute but they happen all the time I mean every single day I get up there's lots and lots of gaps they happen on a regular basis but the thing is that some are better than others I mean some are just nothing gaps and some gaps are very powerful displays of institutional money the most important gaps in the market are gaps that signify a change in direction or not only that a bigger move in the same direction which is very exciting because when you can see that something is going to have a big move you want to get into it so you can get paid understanding which gaps are meaningful which gaps are not meaningful in the market will help you to know what to do and when the change is occurring so comprehending gaps will help you decide whether to go long or short whether to sell or buy it's an overall comprehensive read of the price this is actually how I've become very good at reading charts a lot of people said to me well how did you know this thing was going to do that well because I was reading the gaps just like I was showing you about the market so gaps really help you get out of this confusion the confusion I don't know what to do which direction I'm confused I can't figure it out is this a square is this a circle is it a star I don't know I'm confused take away the confusion stop looking at these pivots all right they don't serve a purpose of reading trends they serve a purpose when you're managing a trade okay but they don't serve a purpose for trend directional reading pivots serve another purpose but it has nothing to do with how to take a position in a chart okay I want to look here at this Cisco and I'm going to show you a gap this is Cisco this gap I shorted Cisco I guess what it failed it failed as a short I'm putting this in the class today because I really want to do some quality teaching with people to help help them understand what I'm talking about here Cisco this was back here in November okay I loved this gap on Cisco I wanted to short it I did short it I Cisco was a short okay now as it turns out Cisco did not go red this day did not lose value from where it opened it went down a tiny little bit and then it flipped on through and rally okay so I took a loss in this I got stopped out in Cisco this was back in November but my directional read on the chart in Cisco and the gap was correct how do I know everything that's going on here and this is continuing to break now how am I what am I really looking at here what is going on with this thing let's review it okay the stock closed up here this is the night before in Cisco this was the day of the earnings by the way the stock closed here at twenty four dollars approximately the next day like their needs were at night yeah the the next day it opened down here around 21 something what is this action this is an actual bearish action and whether Cisco rallies on the day or whether Cisco drops more in the day or whatever Cisco does here at all by by four o'clock closed this day whatever it did which we see what it did but just pretend you didn't know there's nothing that takes away from the fact that this is a bearish gap it's a bearish action why because Cisco sold off three dollars plus and that's not bullish it's bearish so I'm reading the price here so I'm figuring out what's going on in the trend of Cisco okay something's going on here something obviously is going on to make the stock go down that much overnight by between the pre-market post-market hours and the pre-market in the morning before the market opens at 9 30 something happened here now I just want to go back and look here at something else that happened in Cisco there was another gap here that didn't work correctly right on Cisco was a short here this worked better as a short than this guy this is back in august but it was jerky it didn't have a nice fat red bar but again it was bearish look closed up here 26 25 opened down here 24 50 and it held it broke it ran down it came down in went almost to the swing trade target which by the way was here 23 which it did reach later rallied up here retested retested what retested the height of the gap the resistance of the gap and guess what gapped again dropped down rallied again drop down rallied again and broke and here's the gap that I was looking to play now let's go over and look at just pretend you don't see this candlestick when I'm reading what's going on when I get up in the morning when I decide I want to watch a gap when I want to read a trend when I'm when I'm looking at something okay and I'm getting directional read market stocks anything this is what I am seeing this is visually what meaningless armor this is what I see and this is what I saw in the Cisco so Cisco's up here at 24 it is getting sold off this is happening you see it happening it's happening there it goes then the stock opens now on the day the stock opens it doesn't go red we'll go back to in a minute you see it's rallying up here it's not red now it's green on the day it's a bust that's a shame I wanted to short it but do you see this is actually then what was happening with the price it was backing up a little bit here now what happened then after that selling pressure came in and pushed it down onto the level of resistance back on top of it and I hear where is where it's flattened out so when you read this if pretend you don't know what a candlestick is at all okay just forget it this is basic just price read 101 this is how you read price here what's happening is the selling's coming in to push it down onto a level of resistance that's holding and is holding that's what happened here this was pushing down it held see that's what happened here then it pushed down on top of it it's holding and this is going to break again okay so you know it's it's really just about breaking price down in a way that is so basic that anyone anyone in the world a fifth grader could you see this and they say yeah obviously I mean this this thing lost value and you have many many traders find this so confusing because of the pivot concept the higher highs and the higher lows and all the stuff that's going on but in the end it's not going to show you consistent profits what is this this thing here that I'm just explaining right now this is so basic but this is really I woke up in the middle of the night I woke up in the middle of the night it was after the Cisco gap and I actually drew this little chart then the next day and I talked about it in the trading room because I said gosh this is this is exactly what I'm seeing like I saw the picture in the middle of the night and I and I got up and drew it this is it this is the concept here and if we were looking to do bullish things I'd have a different a different chart here I like to show but this is how price works and this is why things do sometimes the things that they do like Cisco backed up but it doesn't take away from the read okay and why is that so important to get the read right so you know how to trade something so you know that you kill a trade if if you're in it and you see something's not right or you know to retake a second setup and something if it's setting up right so you know what to do the directional bias because that's important because that's how you're gonna make money here's another one here this is a really really good one as well this is racks and I just clip this and plot this in here for today why racks had a incredible move after this gap that happened here and this wasn't even that big of one racks closed the night before up here at 49 something I forget the reason for this gap things got for many reasons not just earnings had a humongous move and this never looked back rolled off the planet and fell like crazy from this gap this is almost a ten dollar move this is this is a beautiful swing trade by the way if you had taken the racks a hold you could have held it overnight rallying up here now what are you thinking you're thinking this is going to retrace you're thinking this is done guess what it gapped and again now it went and ran today this is today's activity in the racks dropped fell on through had a beautiful move hit down on 34 bounced a little bit off of it and now it's green now are you going to buy this is this change in these going on in here no yes it closed green of the day yes it bounced yes whenever hi the day yes it is a green body yes this is extended to the downward direction but you cannot buy the stock it is a short it is a short and it's a beautiful short by the way because this thing is almost had a vertical drop really since this move back here in the 12 so again read reading this is so important so what do you do with this guy here nothing you let it figure itself out the short play is over you don't buy it racks is in a downtrend and you want to stay away from it now until it sets up again so golden gaps are very useful I term the type of gap that I trade I call them golden gaps why because I feel like when I find a gap that is a really good gap it's like finding gold it's like finding gold in the market it's something like that I is unexpected something surprising something exciting and I feel like this is my opportunity this is my opportunity to make money today in the market and I feel appreciative and grateful and thankful that I even get these things in the first place as many as I get and the other thing is I only day trade but gaps can be used to swing horror day trade I have friends I've taught how to do this and they are taking the overnight in gaps you do have to you know have an account size to be able to withstand this because the margin on overnights is only two to one but you can take these things overnight for a week or even for several months and even racks I mean look at this rats who could have entered it the day the gap and look how it fell on through so I mean there's just some really really nice uses for gaps not just for day trading even though that's my favorite thing to do but also for core or swing trading as well now how do I pick the gaps that I like well I qualify them they have to be qualified by rating them using a checklist why because not every gap in the world that happens in a chart has is meaningful okay some are and some are and this checklist tells you what to look for in the price of a stock and I use a checklist every morning when I trade I'm very old fashioned with what I do you can see here the pictures I use to describe what I mean what I'm teaching and also that drawing I just made of Cisco you know I think it's really important to have paper and pencils and rulers and you know a list of things to do this may helps you be organized it takes away from the anxiety when you're trading of the risk patterns and the wishy-washiness and the hoping and all this other crazy stuff that people do having an actual business outline of what you're doing and not only not following it really really helps you being a true professional so this was a gap back here this was a really nice one and I did two plays in this this was back in the early November going to go over this now um nice bearish gap that happened here this is the one that I did follow through in this one too look how it followed all the way through it's still going down you could be in this one as well as a carry through again for a swing trader or trade or you just day trade the chart right here and this is the one we're going to go over sometimes when I do a trade I get two setups sometimes I get one setup sometimes you get a bunch of setups sometimes something goes all day sometimes it's done in 15 minutes you just never know so you have targets that you look for and you play the stock into the reversal times in the case of o w w had hit on so fast this was at 931 I took the trade here put the stop over the high that I actually got out so fast I just got out because it had such a big move so quickly and went to the first area and actually we'll get within a couple pennies of the first area 760 was the first target the entry time was 931 price was 796 stop was over 805 the risk was nine cents so this is an advanced risk okay this is not for beginners I will go over beginner example a little bit 540 exit is 765 total profit 1860 risk to reward and this is 3.4 now the thing about trend trading is that when you are trading with the trend you're looking for to get number one the right direction to read but also you want some momentum with something so you are you are looking for as your goal your goal should be every day if you want a day trade to get at least a three risk unit payout and something a three risk unit payout and something is a good profit you can stop for the day after that now this is a nice profit 1860 but what happened and certainly in three minutes by the way it's set up again so I did a second trade in this it's very quickly too it's wrapped down here got out rally back to the resistance held in here and I shorted this again and then got the second full on move this did not go to the dream target of seven dollars in this move but again this is a nice beautiful move you're up a lot of money in this the first play the second play into the 10 o'clock reversal time you're out so entry time for this was still very very early quality time to get in trains 938 price was 789 stop over 797 on 7000 shares same risk here 560 exit is a 725 uh it would broke on through every area I'll go back and look at it too total profit 4480 and this is an eight our trade an eight our trade in 22 minutes this is all one stop so worst case scenario you did the first trade okay let's go back and look at this you did the first trade you made 1860 so then your plan of action is well I'm I'm not gonna you know get risk the whole 1860 I'm gonna risk one risk unit okay so the worst case scenario if this had failed you would have made $1300 well $1300 is $1300 so as it turns out it did work and then you ended up making more and this whole move that looks like next to nothing and actually if you look at the daily chart here this is hard to believe this is really hard to believe that you could have pull out in this little guy right here like over 11 hours but that's exactly what I did because it did two trades one trade out boom three plus our second trade out boom eight hours this is 11 plus our move in here if you know how to get in right and how to get out right and this looks like next to nothing it's an eight dollar stop didn't even go to the dream target of seven dollars in the day so again it's about consistency it's about accuracy it's about getting the entries right and not only that it's about position sizing correctly because how do you make this kind of money well well you take size you take size and you got to have the guts to do it you can't get to the point where you're doing this until you know what to do but if you do it is so great to trade I mean to be able to make almost $2,000 three minutes I mean it's you know I never did that in my mortgage job you know for me to make $2,000 when I used to do mortgages I would not have to do a loan and take me three months I'd be doing a loan for four months till I got paid you know it's this easy money once you know how to trade well so the total for this play one 1860 play 24480 and then the total on OWW 6340 and then the risk was initial risk was like 500 something so really this is a nice nice beautiful 11R plus move in one stock in one gap and why is it so powerful why does it work so well because the quality of reading the price in the gap for the move all right let's look here at another one same type of concept like Cisco except this one had the follow-through on the day let's look at this gap first the stock closed here the night before around $50 and 50 some cents the next morning it opened up down here like 4250 or something it was 4260 I think unlike the Cisco one that failed on the day this had the sell-off okay it had the sell-off it was almost $10 eight bucks down sold off and then instead of backing up on the day like the Cisco did remember this actually had the pressure and then when the stock opened and the market open at 930 the pressure continued and it was forceful pressure this is a huge huge beautiful sign of weakness and you can read it here and you see that nobody cared this thing had that huge pressure cooker and it just continued to fall off continued to fall off the planet just really really big very nice move so here's the TFM you saw the weakness immediately in the first bar of the day this is at 930 this is a one-minute chart it backed up and how did you know it was good well first of all I'm reading my gaps and rating my gaps and it held the high of the day held the high of the day here these are the moving averages their pressure this is the pressure this is the red arrows down pushing pushing selling more people are coming in they're selling that's what this is what's what's happening here that's what's making it go like this that's what's really going on so the entry time was 937 price was 4226 we'll go back and look at it in a minute stock was over 4260 the risk was 34 cents so in 1500 shares it was a 510 dollar risk exits 4018 total profit 3120 risk to reward is 6.1 times the amount risk was made in profit another great trade again you're looking for 3 Rs if you can make 6 Rs that's a really nice trade and this one too had a beautiful beautiful move specifically for this price point so here's where you're looking to get in the trade right in here where it sets up after it comes back up here holds the resistance and you take the trade one and triggers and then you write it on down this actually had several different ads in here you could have taken more you could have taken more you're lowering your stop every time you're doing it why are you doing this you see the weakness in the chart you see the target at hand you see the stock going you see it moving you see it breaking and it just falls off a cliff does anyone have any questions about about these trades specifically or gaps ask me now or you can ask me later I'm going to go over the beginner example because I like to do this just so you can see you don't really have to risk an advanced risk as a trader if you are not in a place where you feel like you can take that type of risk I always tell people you have to have confidence in yourself and your ability to be able to do this and it's important to build on that first once you build your own confidence level and you know that you can do it and you're showing consistent profits then you can up your risk you have all the time in the world to risk more money after you know and can prove to yourself that you can do it so this person here he's a beginner trader he risked 50 bucks 51 dollars instead of taking 1500 shares he took 150 he had a good exit on it same exact trade it's nothing different same time same price same entry same uh stop the only thing that was different was a share size and then of course as a result the monetary risk exit at 4018 total profit 312 it's a six hour trade this is a beautiful beautiful trade for someone that is only wanting to risk 50 dollars he still made six times the amount that he risked that's a quality trade it's a real quality trade so again you don't have to be uh risking a lot of money to be profitable as a trader you have to do what you feel comfortable doing and that's you know up to everybody's personality how much of a risk taker are you what's the size of your account I thought it would show this here this tfm as a swing trade and what you could have made on this is a swing trade you know swing trades typically when people are doing them or our core trades are looking for you know two hours three hours is a dream swing trade like meaning three times the risk amount that they would make typically when people are taking a swing trade they're looking for two hours like one to one or two to one why because the stops are a lot bigger stops are a lot bigger in swing trades they're not tiny stops like day trades so people have uh less uh ideas in their head about the profit potential they're not necessarily trying to make you know six hours or four hours or eight hours in a trade but as it turns out gaps have such nice momentum and follow through with themselves that they can actually make the same type of quality risk to reward as a day trade so let's look at this guy here you get in the trade if you're going to do an overnight or swing trade the same place you would for the day trade you're just going to not get out of the whole thing so when this falls on down before it bounces you're going to not take the whole position off you would hold it on through and it's a paper stop because you don't have a a real stop in because at four o'clock you can't have a stop in in your platform so it is a paper stop then and you're going to get it to the next target well the first next target was 40 and almost got in there and then the next one was of course 39 and the stock got there but the risk was different 74 cents so let's say you had taken several thousand shares in the day trade but you left 400 on the table booked the money from the day trade kept 400 400 shares in the table to make a little bit extra okay and what did you make you made an extra 1300 bucks just holding 400 shares this is a 4r trade right here this is a very good trade because you only risk 296 dollars and actually if you did the day trade you know you were just risking part of the profit from the first trade so let's go back and look at this here in the advanced risk for this trader if this trader had wanted to keep 400 on the table they would have taken 1100 out and profited from that and they would have left 400 go the risk would have been 296 but then they would have made more on the back half of it letting it drop on down here for the swing trade see this so this advanced trader could have booked 1100 dollars here or 1100 shares here and then let the rest ride on through the extra 400 their original position the risk was still the same 1500 shares 500 bucks see that and you can have the follow through really really nice so again this is another another useful tool in trading is to swing trade once you know how to retrends right if you know how to retrends you can you can take positions and hold them through if you don't get the trend right you can't take a position like this if you think tfm is a long you can never hold this overnight you know if you don't know what's going on here if you think this is in a bullish up trend or a or if you think this is going to fill the gap or something like that the only way you can take overnight positions if you really understand what's going on in the trend and actually if you do you can hold stuff for bigger targets and longer term time frames not just for two days but for months and years even and that's a great thing so does anyone have any questions about these trades about the day trades here or the swing trades here or or what i'm explaining here in these price action these gaps does anyone have any questions let me know so how am i figuring all this stuff out i i'm looking at the gaps and they're they're just so useful they have multiple purposes because if you're a person that really doesn't like to day trade let's just say you can't sit at a desk um and be focused when things are moving like that so quickly in the morning you really just like to take the time to get in one position a small size and manage it over days or weeks or months say that's your thing you can certainly do that and you can do it as a swing trader or a court rate if you're someone that likes to make the money right away is like i do right away is on the day and i like to be flat every day by the end of the day and you like to day trading you like the faster action which i do then you day trade you day trade them you get out of them into the reversal times you book the money and off you go so they have a lot of purposes and you've got to find a way to find these fine gaps that make the trend and change the trend and have these types of moves so i teach a class the class is december 14th and 15th and it's called the golden gap course this is a class that teaches a solid strategy to trade gaps effectively by reading the side of power and charts which denotes the directional trend the course teaches how to read support and resistance to take positions in the right direction the course teaches a more proficient and advanced way to read charts focusing on technical analysis and gaps and that's really what i do and as you can see by going over these examples today i'm just reading the price but it's more than the pivot analysis the course teaches how to get conviction in your trading and how do i do that how am i able to do that personally because i'm have conviction in what the price is telling me by getting the read by reading it okay so i go through a system where i have a checklist and i rate it and you've got to have conviction in what you do in the market and not only that you have to believe that the market can be a source of wealth for you because if you think the market is something where you're going to lose or if it's gambling you won't do well you have to believe in a confidence in yourself and conviction that the market is something that is a source of wealth and that if you're able to train with the side of the trend then you can make profits and not only profits consistent profits the golden gap course uses a 26 point checklist which tells you how to read the price direction to take the trend so my philosophy is that the better prepared you are the better you're going to do and the more money you make on the day and also you're going to be able to take more size which ultimately is going to be able to leave you have large days so success requires a plan for me for me and this is what i'm teaching people because i believe and i feel very strongly that preparation is important in trading again it takes away from these emotional things that come up on the day so i use a 26 point checklist this checklist tells me whether or not the gap is good and i want to trade it or not and what am i looking to do i'm looking to trade the gap in the direction of the gap so i go through my checklist every morning i just check everything off yes no yes no i go through the whole thing okay if i get 20 s's on the 26 point rating list then i will watch the stock to trade that day if in the in the direction of the gap so the trend of the gap if i get less than 20 then i don't do it then i might not do anything at all okay so it's really about qualifying it for me and my system this is the system i'm teaching in the class is about getting 20 points or more 20 or more that's what i gotta have checklist work they keep you focused they keep you organized and they force you to look at what you need to be looking at all right instead of just you know being totally totally focused on the money and worried about things and the hoping and the wishing and listening to the television set and doing all kinds of things that you're not supposed to be doing when you're trading they help you make the right decisions having a checklist helps assist you with directional bias and having a checklist keeps you on track to reach your goals which you want to do a checklist is a plan of action and everyone that puts money into the market should have a plan of action and should have a checklist no matter what you do you've got to know what your goals are so let's talk a little bit here about the 26 points why do they work well the point rating system works because it is such a detailed analysis of the price action it also works because everything that is being looked at in the each point uses a daily chart of the stock so the daily chart of the stock has the most powerful and real indication as to the trend in the stock for any trader of any kind it doesn't matter if your day swing or anything the price reading on the daily chart tells you everything you need to know about who is controlling stock and in what direction you must get the direction right on the daily chart if you want to make money trading you must trade with the trend and correctly read the trend in order to make money trading you've got to do that I just can't tell you enough you know there's people that occasionally will take a trade against what's going on in the trend make money in their mind then they remember that large amount of money they made on that day and it's it's fluke like the day that Cisco actually rallied and was green but it failed completely in the chart and continued down in the bearish direction one time does not make a trader you have to be able to get into the market and train the trend all the time because that's what's going to give you the consistent days trading is a journey I love having big days whenever I have them do I have big days every day no no I don't but I chunk it out I make money consistently that's what you have to do if you want to do this for a career so you play the days you get things big and they work out and you take two great trades like an OWW and all of a sudden you're up 11 hours and boom then there's some days where you're chunking it out it's about consistency but if you're against the trend you're never going to be consistent you're never going to be consistent and one big day is never going to wash out all the negative days playing against the trend so you've got to be able to read what's going on right and I use this checklist the 26-point checklist tells you what to look for tells you how to be focused on a checklist is effective it's effective to do what to bank results consistently over and over and over again and that's what you want to do the time to learn to trade is now it's time a lot of people want to trade the market but they're not sure where to start they don't know what to do we've got to learn you've got to learn you've got to learn from somewhere you have to start somewhere and why because this is how you're going to make money I mean you've got to learn what to do so you can make them money and not only that so you can win you want to win it's about winning at the end of the day you're in these positions people are against you you want to be the winner in the end so learn how to read trends so you can make money in the market and not only that be a winner and the great thing I love about trading which I'm sure most of you who who are doing it already know is that you can do it by working from home it's the great thing about trading is you can do it from home it's fantastic the fact that you can work from home and make this kind of money is just great and I'm personally you I love being my own boss if you're working for somebody else and you have a boss right now you know sometimes it can be very very stressful being your own boss is great and when you're a trader you're your own boss so the class is called the golden gap course it is a complete system of how to trade I teach how to rate the gaps how to pick the stocks how to take the entries where to put the stops and then how to read to where the targets are the class is called the golden gap course is a full two-day course and how to strategically find pick and play stocks that are professional bearish gaps it's an online class I teach it online so you can be anywhere in the world and retakes are free so after you sign up for the class the first time you can retake it anytime after that for free the dates of the class are December 14th and 15th from 9 a.m to 5 p.m eastern time the cost is 24.99 if you're interested you can email me at melissa at the stockswish.com if you'd like more information on the class or if you want to sign up it's next weekend so get on the right path to success how do you do that get a strategy that enables you to be able to read directional trend because then you can take positions and feel more relaxed about the risks that you're taking in the market the class I'm doing December 14th and 15th is the last class of the year this is the last class of the year to learn how to trade if you want to get revved up and get ready to go to trade in 2014 it's really about a new year and new you how to get conviction in your training you got to learn it learn it from a mentor you know I've been able to mentor people teaching them how to have this type of confidence level themselves and get their reads on these things right you've got to lift your trade into a higher level now people I just can't believe the people that I've talked to that have been trading on and off for years and years that just have no sense of what they're doing it's time to do it it's time to make money the time to make money is now the time to learn what to do is now the time to be successful is now the time to be profitable is now if not now when if not now when now now right now before the new year before the turn of the century before 2020 you know if your dream is to become a trader then you've got to do it it's about a new year a new you so get on the right path to trade successfully for 2014 thank you everyone so much for listening to the lecture here's my email if anyone has any questions you can ask me now before we go over the market analysis does anyone have any questions about anything anything at all anything I talked about today anything about trends or gaps let me know okay so Kathy are you there what I'm gonna do is I'm gonna ask Kathy to you are okay well actually hang on Kathy I'm gonna put my chart up here I think I have time to go over the market right here now I'm just gonna take my PowerPoint off just one second I just want to make sure you're there I'm gonna bring up a live chart of the market so hang on and I'm still here everybody