Trading S&P 500 Futures with Michael Obucina | Twitch #6


[MUSIC PLAYING] [BEEPING] Hello, and welcome once again
to TD Ameritrade on Twitch. I am your co-host Anthony
Panzeca, joined always by– Bill Ruby. Bill, we had quite a weekend. We did. We did. In every sense of the word. I know. We have so many news
events going on right now, I don’t even know
where to start. Yeah. Well, the market is letting
us know what to think of that. Yeah. We got markets down. We got free trades
at TD Ameritrade now. We have TwitchCon. I don’t know, Bill. Where do you want
to go with this? I don’t know. Let’s start with the markets. I mean, we got the Dow down 548. Get a new follower! Hey, SteakMan4,
thanks for following. Just right out of the
gate, SteakMan storming in. We got the Dow down 547
right now to 26,025. You had the NASDAQ
down 149 to 7,758, and the SPX is down 59 to 2,880. Hammered. Yeah. And that was after not a great
day yesterday too, you know? Not a great day. Make sure you guys join
us every Wednesday. We’re going to be live from
1:00 to 2:00 PM central. We’ll be looking at markets,
discussing trade strategies. We’re going to be looking at
the trades we did last week, whether they were good or bad. And last week we had some
really pretty good ones that we’re going
to take a look at, and we closed some
things that were– we closed them when we
were live on the stream. Right. It’s the first time
we’ve done that. Thank to Etherol and
Crandell24 to following too. Oh, thanks, guys. Appreciate it. You can follow
along with us too. There should be
a link down below to open a paperMoney account
so you guys can follow along at home, and you guys can shadow
trade us at home if you want. But I don’t know about doing
that in your real money account. You’re going to want to do that
in your paperMoney account. OK, guys? All right, so let’s
get started here. We checked the markets. We’re getting
hammered pretty good. What are some of our
new followers, Bill? Well, we had quite a few. Some people filing
in from TwitchCon. Some new people outside. We got TheGThatGives– Oh, welcome all
those TwitchCon guys. Yeah, really
appreciate the follow. We got TheGThatGives, Toria,
PsychicIM, OpenMetal2, SpeedDog, Lurking– It’s SpeedyDog. Ooh, SpeedyDog. Excuse me, excuse me. We got Picasweets, LurkingDemon,
DGAFToday, TradeStar, Avlac, ASmalls, IronMonger, BoogaJason,
Juggernaut, Mbeard, KodiakJack, PeterWhiz, Cleota,
Doobs1983, DGong. I mean, it keeps coming here. Yeah, no, you can keep going. You know I always laugh
at some of these names. Yeah, they’re great. I love them. And yeah, and– you know. Really appreciate the follow. We’re looking forward to
chatting with you guys. The chat is always open. If you guys think of a
question, think of something, or want to interrupt us while
we’re talking, feel free. That’s what we’re here for. There are no stupid
questions, Bill. No stupid questions. We want basic or advanced. You guys just throw it in a
chat and we’ll address it. Bill, what is your user ID? I like yours. Mine is Billdozer2019. So it’s like that’s
a play on bulldozer. So I don’t stream
underneath it yet. I’ve been thinking
about doing that. But right now, I’m
exclusively on TD Ameritrade. I totally forgot
what my user ID was, and then when they
printed out our badges– I actually have mine here. I don’t know if that’s–
can you guys see that? made2trade. And I actually thought of
that like 20 years ago, or like 15 years ago, when I
like started like a Yahoo chat account or something. Ugh, great. At least it wasn’t AOL. Yeah. I think it actually
might have been. It might have been AOL. I think I know somebody that
has an AOL account still. Is he in the room? He is in the room. We’re going to– What do you know, our producer. We’ll get to him. We’ll get to– and I can’t
believe that we have– Don’t want to bring
him in just yet, huh? I can’t believe we’ve
deprived the audience of that beautiful
face for this long. I don’t know how– Well, today’s the day. We’re going to have to do it
for another minute or two, guys, OK? So we’re going to put
on our weekly MES trade. Well, let’s not– wait, wait,
I want to look at our trades from last week that
we took off too. Cool, let’s do that. Let’s start. Which symbol you
want to start with? Well, let’s go into
Account Statement underneath the Monitor tab. You take the wheel, Bill. Otherwise, we’re
going to be fighting. And let’s go back a few days. No, so we had quite a few. This is our MES. We took off VLO. This was all during the
stream, I think, the 25th. Close the sidebar there. There you go. –real estate. So we took off Beyond Meat. We took off our Apple. Let’s take a look at those
trades in the trade history too. So this one, VLO, that one
we did during the stream. That one, we took
off a small loser. Kind of took it off early. And it looks like it may
have been the right trade, but let’s see what else. So we bought back
our Apple calls, because those worked out. We bought them back
for under $0.04, so we did not pay commission
on that, because there’s a $0.05 or less buyback. We don’t pay commission on that. We had the Beyond Meat, which
came off a winner as well. We bought that back for $0.05. And the MU– Now, the Beyond Meat
was interesting, because we actually had– when we had Larry
BB on last week, that trade was
like a small loser. And we were fortunate
enough– so that was a bold vertical
put, which means we wanted the stock to go up. Vertical put spread. We put it out as a
spread defined risk. Right, defined risk strategy. And some news came
out that McDonald’s is testing some of their meat and
the stock really skyrocketed. Yeah, really crazy. So we were fortunate enough
to get the move in our favor, and we closed it out almost
immediately at a– really at nice– Yeah, let’s take a look at
the chart from it that day. We’ll be able to
see it on there. Biandi. Biandi. BYND. There we go. So let’s go down to a one-day. I think this is the pop right
here, [INAUDIBLE] big on us, right? Was that the 26? You could go to a five-day. Is that– Yeah, let’s go five-day. Probably be a little bit
more clear in there, 5 or 10. Yeah, there we go. There it is right there. There’s our guy. Yeah, so when Larry was on, we
were right down in this area, here and we got that huge pop. Again, a fortunate trade there. Yeah, that was kind
of a lucky one. Came back, popped up, and we
took advantage of the move. And I think we did OK here. It’s gone down a bit. If we’d held that, might
not have worked out as well. Sometimes it’s good
to just cut it out. Yep. I think we’re working on those– let’s see, we flew out
for TwitchCon on Thursday, so when I got up early,
I was texting with Bill, and we were going over
some of these trades and closing them out
right on my phone. It’s so cool you could
trade from your phone now. Yeah, we’re going to
try and update you on Twitter when we do that
too, so if you’re interested what’s happening and what
we’re thinking between streams, you can always check
us out on Twitter too. Is that a new follower? No, it wasn’t. We already said that one. So that one worked out. And then we had the Apple
as well, which we took off, and Tesla, the $230 put. That one was rolling off,
and we took it off too. Another fortunate
move there too, because that one was
kind of going against us. And when we had Larry
on the stream last week, we were talking about
how we could possibly manage that position. We really didn’t come up
with anything that was viable or anything that was
going to be doable, so we just kind of let it ride. And again there, we did
get a fortunate move, and we did close that
out when it was a winner. That’s right. We did have one more,
the Micron position. That’s right. Very interesting there. So they had some
earnings last week. We were a little bit– we took a bearish
standpoint, and we actually put out what’s called a put
calendar on the $45 strike. Right. So it’s a bearish
volatility play. So it comes down. The volatility in
the front month comes in after earnings
because of the ball crush, is what it’s called. And then we took
advantage of that. Kind of the difference between
the volatility in the front one and the amount of premium that
stays in the further-out month. So that one broke
down a little bit. Almost a dream trade. Went down right to our strike. A little through,
actually, which is OK. But it worked out great. It was an immediate winner. Yeah. Yeah. It was an immediate winner. I think we bought that
one at like $0.59. And then when I got up, there
were two hours’ difference over there, so when I got up,
I think the market was just about to be open. Yeah, just about opening, yeah. And so we bought it at $0.59. I immediately saw
it was like $1.10. But the stock was far
below the $45 strike there, and I felt like it
was a little oversold. Yeah, it might pop up. Bill looked at the
chart and he’s like, I think maybe it’ll pop back
up to $44.50, and it did, and we got out right at the
top, so another fortunate close there. A little short-term technical
analysis kind of worked out, and we were able to take action
when we thought it was right. Bill, a broken watch
is right twice a day. [CHUCKLES] Yeah, I think
I’m right three times a day. You’re a little bit better
than a broken watch. So that’s the thing. If you go into it and
things are going your way, it’s good to have a plan. We are waiting for a signal. When we got the signal– and that’s something you always
want to be thinking about. Don’t want to be going
in there all willy nilly. You want to have a plan for
if things don’t work out, if things do work out. Entry, exit, that kind of thing. Is willy nilly a new follower? And if does come to it– No, I’m just playing. –if it does come to happen,
you don’t stick to your guns. Get out when you
say you’re going to or get in when you
say you’re going to. So important. It’s good. That kind of
discipline can really help you out in the long run. Yeah, it’s so important
to have an exit strategy. When you go in,
you should know how you’re going to get out,
for better or for worse. You could say, you know what,
if this goes against me, I want to get out here. If this goes for me, I
want to get out here. And a lot of people, they
open up a paperMoney account. And that’s the biggest thing. I think probably the hardest
thing to transition from, from a paper money to
a live money account, is the emotion
that gets involved. Oh, yeah. If you test a strategy and
it works in paper money, it should theoretically
work in live money. But the thing is, when
real money’s on the line, sometimes you don’t
make the same decision. You got to have
that discipline– Yeah, you trade–
a lot of people tend to take off
winners too early or just hold onto
losers too long. It’s hard to do. That’s why you want to have an
entry and exit point before you enter the trade. Yeah, I agree. So it’s good discipline. And a reminder that hope
is not a trading strategy. Yes. Hope is not a trading strategy. I love that. But I also wanted
to say, hey, we’ve got another trade on right now. GIS working out great. Yeah. We were hating this
trade last week. Yeah, it was not in our
favor, but it’s really taken a swing in– right where we need it to be. It’s $53.17 right
now, and we’re coming in right between our strikes. Yeah. We need it a little
lower, right? Yeah. Yeah, we do. We do. So it’s going our way,
and it’s working out now. So that was a chat one. That was a chat symbol. That was The Stock Guy. Right. Let’s take– The Stock Guy. The Stock Guy– one of his guys
actually suggested that symbol for us. Right, that’s right. And so thank you to
our Stock Guy viewers. Yeah, the check called
it, and what do you know? We’re seeing a
bearish move here. Don’t fade the chat. Don’t fade the chat. I like it. Well, that– We could put on our MES. Producer over here wanted to– I think he wanted us to
put on the MES trade, and then he was going to teach
us little school kids how to really sling futures. Yeah, so let’s take a look. I mean, down 55 here in the MES. Wow. That chart is pretty
aggressively lower. Let’s see the intraday. That’s– yeah, well. This is what we’re
looking at here. Hmm. Almost like a half a teacup
type of pattern forming, right? Yeah. I mean, we’d have to see
it swing all the way back for a full teacup, but– Yeah, that’s true. But we’re trying to predict
the rest of the teacup, right? Yes, yes. Yeah. It’s not just a song, Bill. This week, it’s– I don’t know– I’d like to see you
sing that on camera. I think– No one wants to see me sing. No one. I would. [CHUCKLING] This one, I don’t know. It’s kind of leveling off
here, maybe, you could say. And it’s– I know which way you’re– The market is pretty
aggressively down intraday, though. Maybe there’s more to go. Yeah. Hey, but let’s
hear from the chat. Chat, what do you guys think? Bull or bear on the MES? Apparently, the trader wants
me to sing, and that’s not– See? It’s not just me that
wants you to sing, Bill. We’ve all heard you sing
outside this building. Well, yeah, most
people in my life have heard me sing,
unfortunately. [CHUCKLING] It’s shockingly pretty good. Oh, now you’re being too kind. You’re being too kind. You have quite a
range there, Bill. I know. I’ve got a nice falsetto. [CHUCKLING] All right. All right, guys. See? I’m a little teapot. That’s what I was thinking. Oh, no. I’m no teapot. All right, yeah, yeah. So this– this one– OK, which way are
we going, guys? Bull or bear? I would say bear. Let’s see what the chat says. You’re going to say bear? Really? Yeah. I know it’s leveling
off here, but– I’m actually authentically
going to say bull on this one. Bull. Well– Chat, you guess bull or bear? If we’re keeping a tight,
I’m thinking more downside. But I’ve been wrong before. We got a bull vote
from the chat. You know what? Where are we at with our
breakfast sandwich tally? I think– I’m up one. I’m up one. So it looks like Crandell24’s
agreeing with you, so I’ll just– let’s
pop this baby in. Oh, SteakMan says bear. OK, well, if we get a deciding
vote in the next 30 seconds– Next vote takes it. –we’ll put it on for you guys. Next vote takes it. We’re on like a 10 second– JordanNotMack. JordanNotMack. Well, next vote takes it. Next vote takes it. All right. Well, let’s set it up in
the Active Trader Ladder. Active Trader Ladder. Yeah. We’re going to put this on. Do you still have the old– oh, of course. Yeah. I didn’t change it this week. I was too busy. Let’s keep it with
the [INAUDIBLE],, like we usually do. I think we’re going
to start doing a little bit smaller size
on some of our other trades, though. Yeah. That’s fine. Just for examples’ sake. All right, well, we
don’t have a third vote, so I’m going to go bull because
Crandell24 said it first, so let’s do it. [INAUDIBLE] buy it in there. And we got it. We’re filled. We got five on either side. We’ll see what happens. All right. Well, we’ll see what happens. And hopefully, I can even–
well, MichelleMarie said bull, so that’s the deciding– Yeah, it was the
deciding vote anyway. Is there another member
of the Ruby family? Who knows? I believe it is. It probably is. It’s an extensive family. Well, we do have–
we always promised that we’re going to bring
you a guest every week. And so– Crandell says vote
[INAUDIBLE] didn’t work out. –without further
ado, we’re going to bring in the man
that does it all. Everything that you see
here, he has basically created from scratch. All of the little
graphics, the room. It’s really incredible
what he’s done. And five, six months ago,
I didn’t know who he was, and I’m glad to have met him. He’s a senior producer over
at TD Ameritrade Network. He actually helped launch
the TD Ameritrade Network, launch Twitch. He’s held just about every
position at TD Ameritrade. Let’s welcome Michael
Obucina, a.k.a. Obi to the show. Obi, how you doing
today, my brother? You’re too kind, Anthony. You’re way too kind. One clarification, I don’t
work for the network. I do work for the broker dealer. Oh. Ooh. But yeah, senior producer
over at the education team here at TD Ameritrade. But yeah, I was a part of the
team that helped build the TD Ameritrade Network. And the TD Ameritrade
Network is part of our– is under our media
affiliate, so it’s not a part of the broker dealer. But that was– Nice disclaimer there, Obi. Yeah, and putting the
disclaimer up on the screen too. So I’m doing everything today. I’m switching the show,
I’m producing the show– You’re wearing many
hats today, sir. Many hats. He’s spinning
plates on his feet. [CHUCKLING] How he’s even doing it. But no, that team was a
pleasure to work with. I learned so much from them. We brought in a lot
of talented TV people to come in and help
us build that project. And what I learned from that,
I basically applied to Twitch. So we took this
little small room– it’s hard to tell, but we’re in
a eight-by-eight closet here. It’s a coat closet, pretty much. And we’ve got, like– I love that it is, though. Me too. I call it the high stakes
game of Tetris in here. It’s like, we’ve got
desks, we’ve got monitors. We can’t really see anything. But it was fun to build this
project and work with you guys for sure. Yeah. Oh, nice. You’re too kind. You’re too kind, sir. So how did you get started
in the business in general? Like in the trade–
obviously, you’re licensed, and you’ve been with the
company for how long? It was 12 years in August. GGerber, thanks for the follow. Thanks for the follow, GGerb. Thanks, appreciate it. So how’d you get
started in the business? It’s an interesting story. Actually, out of college, I
worked in retail at Best Buy. And one day– I believe it was a
Christmas Eve in 2005, someone came in to buy a TV. And turns out this guy worked
for this small little brokerage firm called thinkorswim. Never heard of it. I was like, think or what? Like, sink or what? And because we did a
really good job with him, he came back after
Christmas, and he’s like, hey, I need to buy 10 TVs
for my company’s trade desk. And I’m like, well, what
do you mean, trade desk? And turns out he worked
here at thinkorswim, or when it was thinkorswim. And over a period of two
years, I sold thinkorswim and him a bunch of stuff. And eventually, I got sick of
the retail life and schedule, and I was like, get me a job. So that’s how I ended up here. So did he ask you,
or you just like– just sick and tired
of what you were doing and you wanted to get out of it? It was a combination of– anyone who’s worked retail– the hours. You’re working nights, weekends. You really don’t
have a set schedule. And working in markets,
it’s definitely more of a routine 8:00 to
5:00, 8:00 to 4:00 schedule. So that appealed to me. And I graduated with a degree
in accounting and finance, so it was like, maybe put
some of that to work for once. But yeah. That’s how I ended up here. And the really cool
part about that story is, we recruited probably
another 10 or 15 people from the stores here in Chicago. And so a lot of the people
that actually still work in this office were former
Best Buy people, and– Wow, poaching Best Buy guys. Yeah. But it worked out
great, because there’s so many people’s lives
that are impacted because I walked up to that
one guy and sold him a TV. Yeah. That’s crazy. And I distinctly
remember, I almost turned and walked away from him. It was late in the
day on Christmas Eve– That’s not good service. –late in the day
at Christmas Eve. We were checked out. And I was like, ah, I should
probably help this guy, but– Yeah, you started that
story with, ah, it was a blustery evening,
Christmas Eve– 2005, Christmas Eve. Yeah. But you held a few
different positions here. Where did you start out? You were in the futures
forex trade desk. You’re in the auto trade desk. And then you transitioned
into production. How did that transition
take place for you? Was that something that
you’ve always wanted to do, or were you asked to do it? How’d that transition go? It’s kind of the story
of my career in general. Whatever opportunity’s
been presented to me, I’ve either just made a
choice to follow it or not. With working at
thinkorswim, remember, we were our own broker dealer
before TD Ameritrade bought us in 2009. And then officially, I think
it went through in 2010, and clearing conversion
was maybe a year later. But I started out in the banking
department at thinkorswim. So I processed checks
and wires for customers. And then the accounting
staff needed some help, and they heard I had a degree. And that was the only
time in my working career that I actually used
my accounting degree for about a year and a half. And then TD Ameritrade acquired
us, and that kind of shook everything up. And I had a choice to make– I could have worked on a
specific email desk here, and then there was this other
position that opened up, which was the overnight
futures and forex desk. And back then, you wanted
to be on the trade desk. That was the premier
spot to be in. And instead of taking the
long way, I bit the bullet and went to overnights
for almost two years. They were dark times. But it helped me
learn how to trade. It helped me learn the platform. I got more licenses. It propelled my career
into a different direction. And it was– to
this day, I still learn a ton from that shift,
working that overnight desk. That’s awesome. Well, that’s trial by fire too. You’re going straight
into futures, which can be a dangerous thing. Definitely not for
everyone, futures. No, definitely not. Especially me. And we’ll talk about
that a little bit today. It’s definitely– I
think one of the things we learned at
TwitchCon this weekend was that there
are tons of people out there doing streams on
Twitch and making content. And I know when I told people
what we were doing here, everyone seemed to
be pretty surprised. Like, oh, wow, TD Ameritrade’s
doing a Twitch stream. And then we told them
what we were doing, and the initial response
was, I would really like to learn how to do that,
how to trade stocks and invest. Because you guys
know the importance of saving for retirement,
and managing your money. But that barrier
to entrance I think is tough for a lot of people. And at TD Ameritrade, we
try to do our best to make that as easy as possible. We have great
educational resources. We do streams like this. And I think as we go
along with the stream, I know we’re going to do some
more advanced stuff today. But over time, if anyone in
the chat room, if you guys have questions, that’s the
point of the chat room. You guys interact. You’ve got two former
floor traders here. You’ve got a producer who’s
filling in for the day here. And we try to make it a
great experience for you as you’re listening. Nice. Yeah, absolutely. And that’s one of
the things I really took away from
TwitchCon, is that it can be used for anything. Like I said, it’s been used– we met people that were
using it for everything from beekeeping to brewing beer. One guy was a falconer. Yeah, falconry. I think he was the most
interesting man in the world. The falconer. And he had a great beard. He had a great beard. If you have a
mental image of what a falconer would look like, this
guy hit the nail on the head. He was the ultimate man’s man. He was, he was. Very cool guy. Falconer, a beekeeper,
and a blacksmith. And a blacksmith. And Bill, you and I, we went
to a great panel on Sunday. It was put on by the– let me get this right,
The Knowledge Fellowship. That’s right. Which is a group
of people on Twitch that all do educational streams,
from geology, to mechanics, sitting, talking about– Yeah, science. Physics, chemistry. Physics, chemistry,
rocket science. So– And there was a mechanic too. He did a stream on
how to fix cars. I mean, it’s amazing. And that’s my biggest
takeaway from TwitchCon, was, it’s not just a gaming
platform, which is the elevator pitch that most people hear. It is, if you are
willing and able to get in front of a camera,
set up some equipment, and you have a
skill or a passion, you can get behind that
camera and all of a sudden build an audience
or a community. And that was the big
takeaway, was the community. And that’s what we’re
hoping to build here, is a community of traders
that can come in every week, talk about trading,
learn some things. So I’m excited. I’m pretty excited too. It really rubbed my
engine a little bit more about this Twitch thing,
so I’m pretty excited. Yeah. From the novice trader
to the advanced, we want to take you guys,
and we want to walk you through what everything is. And we came across some
people that really– and I was kind of surprised. They didn’t really
know what a stock was. And if you think
about it, for us, we take that
knowledge for granted. But I get that. I get not understanding that. Like, why would you
want to do that? You’re speculating on
the company going up. You’re actually owning
equity in the company. That’s what a lot of
people– they own stocks and they don’t even know it. Because if you have a 401(k),
odds are you own stocks. Yeah. Stocks or bonds. And that’s a great point. If you have that 401(k),
that’s the account vehicle, but you’re probably invested
in some type of a mutual fund, and within that mutual
fund are probably stocks you’ve heard of. So having your finger on
the pulse of the market, whether you’re a casual
investor, or someone that’s just doing this
for the long run, or a more active trader, which
will be some of the stuff we talk about today– that’s the thing I tell
new beginners of getting into the stock market, is
you have to start somewhere. Uh-oh. Ooh. Ooh. What did we get? $128.89. What was our entry point? I think it was $84. We made money. Yeah, we’re– Big winner for me in the chat! Wow, Crandell24. Thank you, chat. Good call, good call. MichelleMarie too. Yeah. Once again, paper money profits. This is an example trade. Love it. So it looks like we’re get– Profit’s a profit. Don’t disparage it, OK? Even, I don’t owe this
guy a breakfast sandwich. Not today. Oh, yeah, we’re back
again, back to zero. We got to start paying
out weekly on these. We’re waiting for a
monthly expiration, but we’re not getting it. So Obi, you’re on the
education team, obviously, and I think you’re probably the
perfect person to ask for this. If somebody was
just starting out as a trader or a new
investor, where would they go? How would they get started? I’m a big analogy person. If anyone who’s listening
has worked with me, you know I’m chock
full of analogies. And I was an athlete growing up. Played baseball through
college and after college. And so I always try to break
things down, especially in kind of a sports analogy. And I would say, let’s
imagine we were trying to learn how to play golf. You have to start by
buying some golf clubs. It’s one thing to watch videos
or go to a tournament– you got to buy golf clubs. You got to swing the club. So the first thing I tell
people is, open an account. If you open an
account, you at least have that vehicle
to start practicing. And at TD Ameritrade,
if you open an account, you can create a
paperMoney account. And that’s really– what
we do here on the stream is in a virtual
paperMoney account, so it’s not real money. It allows you to practice
strategies, try things. Essentially allows you to
practice without putting anything at risk. And just like in golf, the
first thing you have to learn is how to grip the club. You have to learn the basics. You got to practice. You have to learn
the fundamentals. So what is a stock? What is an option? The thinkorswim platform
can be intimidating, so you got to learn
how to use that. But we have tons
of resources here at TD Ameritrade,
from free courses– so that’s why I really
say open an account, because it’ll give you access
to those educational resources. The team I work on,
we write courses. We create videos for TD
Ameritrade, for social, as well as stuff like this. So the resources are there. Now it’s up to you to, like
I said, buy some golf clubs, and show up at a range, and
start working on your swing. Yeah. And this show is like
another outlet for education. You can interact with us. You can ask questions
in the chat. And I hate to put you on the
spot, Obi, but I got to ask. Sometimes we all
have good trades. Sometimes we have bad trades. And I don’t know, I was
talking to somebody else– maybe there was one that you
were maybe not too proud of. What was your worst
trade that you ever– Just one, huh? Yeah. It’s more than one. But there’s one that
sticks out in particular, and it’s actually going
to tie in really nicely to what we talk about today. I had– so as I was
on the futures desk, I started educating myself– obviously all the stuff we did
for our licenses and whatnot, but learning how to actually
trade futures, as opposed to just buying, hoping it
goes up or selling, hoping it goes down– Kind of like we do with
our breakfast sandwich bet. Kind of. And so I discovered a
well-known futures trader. He wrote a book. I read the book. I basically started
practicing all of these– what he would call
this mythology in terms of how to trade futures. And I probably practiced this
for six months overnight. I’m– Paper money, right? It was paper money, but
it was more than anything, just watching the
market every day. Sure. When you’re trading a
market like S&P 500 futures, you have to watch it every day. It has a rhythm. It’s like watching
waves in the ocean. You can tell– Ebbs and flows, yeah. You can tell when
it’s high tide. You can tell when all
that stuff’s happening. So I basically– I was
ready to go, right? Six months in. I was like, I practiced. I had my account funded. And I left work at
6:00 in the morning, because I was still
on overnights. Uh-oh. I think I know this. And I get home, and
market opens at 8:30. And this particular strategy,
we’ll talk about it. It’s based on the opening
range of the product. And then once you
hit a certain level, essentially, you either
go long or short, and you have some
levels for your stops. And I got the signal. I sold the future. And this was October
maybe 8, 2010. And what’s so important
about that date, it was the date that
Ben Bernanke came on TV and announced QE. And futures just– Oh, quantitative easing. Whoosh. Just blew right
through everything. And so in a instant, I lost
a few thousand dollars. And it was like– What’d you have on? Just the one lot, or? Just the one lot, and it moved. It moved on me. And– You got to be
careful in futures. And the lesson there is, you
could have the perfect system, you could practice, you could– but if you have that
tunnel vision– like, I didn’t realize Bernanke
was speaking that morning. And you had no stop in? I had to stop in. It just– It blew through. With this particular system, I
had put on too much risk that– I mean, I was
comfortable with it, but the fact that it did a 180. It was moving down
in my favor, and then it just shot straight up. Ugh. Kind of like Larry’s
story last week, right? You know, don’t– Yeah, he did the same thing. So moral of the story, I don’t
trade when the Fed’s speaking. I just don’t trade. Right. Right. But you did mention
something very important. So if you’re starting to do a
product, you want to watch it. Every product is going to
have these characteristics. If you watch them
for long enough, you can kind of pick
up that subtlety. Obviously some news, or a
report, or something unexpected could change the way
it functions normally. But a lot of times, there’s
like a certain rhythm. There’s a breathing motion
that that market will have, and you can kind of
get a feel for that. And just watching a chart
on an intraday for a while can really help you, moving
forward, choose your entry and exit points too. Just kind of getting to know
the product really well. Exactly. Yeah. And specifically with
S&P 500 futures– remember, it’s called
the S&P 500 for a reason. There’s actually, I think,
now 505 stocks in the S&P 500. And they’re weighted based on
market cap weighted, right? So what that means
is the highest market caps in the index are going
to swing the index more than other stocks. So I think Anthony– Some companies are bigger
than others, right? Yeah. Anthony, you and I
were talking earlier. We looked at the list. Your top five
right now are what? Microsoft– Amazon. –Amazon, Apple,
Facebook, JPMorgan. The top 10 I think is,
weighting-wise, about 20% of the index. So out of 505 stocks, those
10 stocks sway the index more. So what that means as a futures
trader, if you’re trading S&P, you got to know when those
companies have announcements, earnings. If Apple’s doing
their product release. You need to cover
all that on top of the general
economic information. Yesterday was a prime example. The ISM manufacturing
number came out at– what was it–
like 10:00 PM. And futures just
sold off, and they’ve been selling off
the last two days. So knowing the
economic data, knowing when the Fed’s speaking. There’s a lot of
variables if you’re going to be an S&P 500 trader. Yeah. And again, it’s
not for everybody. It’s not, no. Well, show us a little
bit of your expertise. I know we have a few different
studies and things that we’re going to look at in the chart. And I believe you do
have control of them– I don’t. I’m not driving. I’m producing the
show right now, so I only have so many hands. That’s not enough. [CHUCKLING] So first thing first I want to
talk about is, this is not– I don’t want to
call this a system. I don’t want to– this
is not a recommendation. This is simply the
methodology that I have used over the last
few years for trading. It’s one of many methods. And, yeah. Many people have their
way to trade anything. This particular one came from a
specific legendary floor trader at the NYMEX, a guy
named Mark Fisher. He wrote a book called
The Logical Trader right around 2000, 2001. So some of the stuff in
the book is based off when markets were open outcry,
especially the futures market. But a lot of it
still applies today, and I’m pretty sure he’s
updated this particular way to look at futures. So I’m just going to
go over the basics. And the point of sitting
with you guys today– because we do these MES
breakfast sandwich trades every week– is, can
you be a little bit more informed on where you
want to maybe enter and where you want to put
your stops and limits? In other words, we’re stupid. No. No. Good producer– you guys are– We are kind of throwing
it against the wall. No, no, yeah, a lot
of times, we are. A little bit. Just for fun, really. We’re trying to throw it on. It is more of a bit of a
novelty trade sometimes, but– Yeah. What’s a good word for it. Yeah. And I think that if you’re
going to trade futures– and the micros are great. You guys do this
stuff in the micros. That day of the Fed
trade, I would’ve loved to have the micro to
trade instead of the full ES, because of the size of it. A one-point move
in the ES is $50. A one-point move
in the MES is $5. It’s 10 times smaller. So hopefully, that when you
guys do these MES trades, you’ll maybe look at something
like this and get a feel for, are we at a point where we’re
going to break out for the day? Are we going to turn
around and pivot? Is there any intraday support
and resistance happening? So essentially, what
I want you to do, Anthony, is if we
close the Active Trader Ladder for a second, what
we’re looking at here is the intraday. We’ve got a one-minute chart. Let’s switch this
to a five-minute, do like a five-day
five-minute, so we can get a– So what you’re looking
at, the dark thin bars are the intraday movement. And the– That’s here and here. Yes. And the lighter larger sections
are the overnight movement. So what I want you to
do, let’s change it from a five-day to
two-day five-minute, and just focus on
the last two days, and hopefully this looks good. There we go. Perfect. So if we take our
mouse and just expand into where you’re at to the
end of the day, Anthony. Like this way? Yeah. This is the tape today, right? We had a sell-off at the open. We had a strong
downtrend for the day. And it looks like– and we’re almost taking
out the recent lows on that last down move. That’s an initial– that’s
a sign that we might be turning around for the day. But how– Oh, sorry. So how can you really tell? If you guys were going to buy
or sell a futures contract here, essentially, you’re
flipping a coin. And the first thing that I
learned about trading futures was, always know where you’re
going to put your stop. And one disclaimer
about stop orders. Just because you have
a stop market in, you’re not going to get filled
at that price necessarily. Never guaranteed. Never guaranteed. You’re guaranteed a fill. You’re not guaranteed a price. But for the purposes
of this conversation, let’s just assume we
have nice stable markets, and our stop orders are going
to fill at or around that price. So the first question
you have to ask yourself is, if I’m going
to go long or short here, where am I going to put my stop? And so I ask you guys. Based on just
looking at this plane chart, where would you put it? Where would you put the stop? Now, so is this
for entry or exit? So the entry– let’s just
assume we’re buying or selling a market order. So let’s go– I would probably do it– since we’ve already gotten
through this little level here– If we were getting
long, you’re saying? If I was getting long, right. I think there could be– you could interpret
this as like a level that it fought and
then didn’t get to. Sometimes it’s good to
place a stop just above that and maybe let it run. So if there’s a large– a lot of times, people– you got to think of this. A lot of times,
I think that it’s a self-fulfilling prophecy, and
I’ve heard others say the same. People may think this has a
resistance point up on the top, so there’d be a large
order, so they’re going to have to fight
to get through it. And then a lot of people
buying to get through that could push it
through, and then you get a move up running
with that same movement. And there’s a large ask there. If they push through it, they
kind of relieve some pressure, and then you can go up. That’s assuming you get
through it, though, of course. Yeah, and there’s actually
a study on thinkorswim you can do to potentially
give you some insight to that. That’s the volume profile. So real quick, if you want to
throw that study on and then take it off, you just go
to the beaker in the list there on the left,
just type in– Oh, volume profile? –volume profile, yeah. It might distort the chart. Yeah, it’s down
there at the bottom. Yeah, I see. There we go. Just add that, and
just sit Apply. OK. This is good. These inputs here? Yeah, sure. Let’s just go standard. So what this is showing
you is the volume at these price levels. So you have to maneuver
your mouse a little bit, but you can see there’s tons
of volume at a few price points today. That is something
you can use however– yeah, that’s a better view
if you zoom out a little bit. So Bill, to your
point, right now we’re in the thick
of the volume today. So in order for this market
to really get anywhere, we’re going to need some size
to come in, and either bid up and break through some
of those offers above us, or if someone’s going
to come in and sell, you’re going to need some volume
to really come through and move the price below the low,
which today is $20.74. So why don’t we take that
study off real quick? And instead, I’m
going to show you guys what is essentially
a strategy based off of the opening range. Opening range trading is pretty
common amongst futures traders. Like I said, it’s
part of that method that I learned by following
a certain futures trader and learning that. So if we go to our beaker
again, we’re going to– actually, remember, our
chart’s detached, Anthony. Ah, yes. We’re going to bring that
one in from the side here. And there we go. Yeah, I think this way
we can attach a chart to have a separate window too. It’s good if you want
to have multiple charts. So under the ACD, which is
the name of this method– the ACD trading method– we’re going to show
this study now, and we’re going to play it. And now we’re going to
see a bunch of stuff. Oh, wow. That looks like in grade
school, when I learned how to– like handwriting. You’re pulling a Kevin
Hincks here every time you put something on the chart. It’s like, it’s a
Jackson Pollock painting. [CHUCKLING] But I’m going to
walk you through what you’re seeing here. So that big gray
rectangle in the middle. That’s the opening
range for the day. And what I mean by that is,
if you look at the first four bars of the day– those are five-minute bars. So that’s 20 minutes. And for equities, 20 minutes
is a pretty good opening range to use. And what do we mean
by the opening range? Well, you guys worked
on the floor, right? Yeah. Explain to the viewers what
happens in those first 15, 20 minutes of the day
when the market opens. Brokers come in
with their paper. They see if anyone’s interested. They start working through
opening paper on that. So there’ll be orders that
are filled in the pit. And the opening
range is when you get through that initial paper. And it’s also like
a area on the chart where, that’s where you
were during that time. Yeah. Tends to be a lot of volatility
during that time as well. Not always the most
liquidity that you’ll see throughout the day. The first, I would
say, probably 10 or 15 minutes and the last 10
or 15 minutes in a day, probably a little bit less
liquidity in those times, so therefore, you do get
a little more volatility. Yeah. And what you also
get is volume, right? You probably get– besides
the close or any strange event in the middle of the day, it’s
going to be the highest volume. So what Fisher studied and
essentially built this upon is the fact that if the
market was random, meaning if any given
20-minute period of the day– let’s just say the random walk
theory, I think it’s called. You would suspect that– how many 20-minute periods
are in a trading day? 20, 30. Three 20-minute periods per
hour, six and a half hours a day, whatever it is. 18. So it would be 1
divided by total. To figure out your
percentage, you would expect that any
given 20-minute period would be the high or
low for the day, right? Right. Yeah. Well, what Fisher
found out– he studied this– is that the
opening range was roughly close to 20% of the
time the high or low for any given trading day. So it makes it
statistically significant. So today’s a perfect
example, and yesterday was a perfect example,
where the opening range is the high range for the day. The market sold off. It hasn’t returned
to the opening range or reversed and broken
through the opening range. Looks like it’s trying. So trying to get back up there. Yeah. And we’ll get to that. I think the– what we
want to understand here is that the opening
range is that gray box. Now, there’s these other two
lines, this green and red line above and below. And really– Up here and down here. Yeah. Really, the ACD methodology
is a breakout strategy. So what you’re hoping is that
the market moves away from the opening range–
either up or down– with conviction and you
get a trend for the day. And that’s actually,
if you look, what happened this morning. It’s exactly– Right after the opening
range, we hit that A down, which is that first red line. That’s what it’s
called, is the A. Is it this one here? Yeah, so you see
that red dashed line? Oh, this– OK. See how we straddled that
for about 20 minutes there? And then we tried to go
back into the opening range around 9:30,
and then it just fell. So the idea is, once we get
past that red line, you are– and if it trades below that red
line out of the opening range, you would then have a
short bias for the day. You could see it right away,
capitulation to the downside. Just falls of a cliff. Yep, right through it. And the way you
could do this is, let’s say it trades below
that red line for half of the amount of the open
range, so 10 minutes. So if two bars are trading
below that red line, we now have a short
bias for the day. Because once again, this
is a breakout strategy, so we’re saying, well,
if we have a short bias, we expect a strong move
to the downside today, or we hope for a strong move. Now– Is that considered
a pivot point? Was that the same– Yeah. And what these lines
are based off of are the 10- and 20-day
average true range and a certain percentage
of that average true range. So when markets
are more volatile, that range expands every day. So VIX is now over 20. If we continue to have
markets like this, you’ll see these lines stretch
further away from the opening range. In sideways markets,
you’ll see them come in, because the average true range
for the last 10 and 20 days are either expanding
or decreasing. Yeah, average true
range is another study. This is based off–
or similar idea. I don’t know if
it’s based off it. But as things tighten,
typically, the market tightens up. And then if it breaks
outside of that, that may be a signal
to people, essentially. Yeah. And different– we have
studies on the platform. I think Person’s Pivots and
a few others similar to this. It’s just the math’s a
little bit different. But the main rule with
this is, whatever you do, stick with your numbers. Don’t change your opening
range from day to day. I use a 20-minute opening range. If you want to do
shorter-term trading, you could knock that
down to 10 minutes. You can make it an hour. It’s uncanny how
this worked in here. It’s almost as if other
people were looking at it too, and recognize the same thing,
and all got short at one time. Yeah. And that’s actually
one of the reasons why Fisher believes the
more people that use this, it actually makes
it more reliable. But once again, this is– I’m not recommending
this strategy. I’m just saying this is
something that a futures trader– One of many. One of many. One of many strategies. So the question becomes,
now that we have this signal around 9:30 this morning– OK. That’s right here. Right. Let’s just say we
got short somewhere in that five-minute bar. Pick an even number for us. 2,895? Let’s split the middle. Let’s split the
middle of that bar. Let’s just use 2,900 even, just
so we have some even numbers. Let’s say we got short
right around there. The question becomes,
where do you put your stop? And when you have a short
bias and a confirmation, your stop in this
particular system goes one tick above the
top of the opening range. So from 2,900 to the top
of the opening range, we’ll just call it 2,924. That’s a big opening
range, right? Yeah, it is. Yeah. That’s 24 handles on ES. That’s $1,200. That’s a big move. Now, if you’re
trading the big ES, then you got to ask yourself,
do you have the account size? Do you want that type of risk? Or in this case, we have
a product called the Micro E-Minis, right? Yeah. Yes. So even if you did one, now
your risk is $120 for the day. If you’re a smaller account,
and you’re a small trader, and you’re willing
to take on that risk, then that’s where your
stock would be placed. And the idea is that once we’ve
broken down to the downside, we are not going to return
back through the opening range. That would be a reversal, and
that’s a whole different thing. Now– So we’d have a
reversal of a trend. Then our trend would be biased
to the upside after that. And you just led me
into my next point. So when would we change that
bias from short to long? That purple line above
the green line, that’s the C. That’s the C point. If we saw– let’s say
an announcement came out right now. Interest rates are getting
lowered or something. China trade deal
is on, whatever. And we saw a massive spike
through the opening range, through the A up, and
through the C, that would indicate a reversal point. That’s when we would
then go from a short bias to a long bias. Just as we went to a short
bias down here on the red, through the green on
the upside would be– No, through the purple. It’s got to go all the way back. OK. Now, this is– so once
again, the green and red line are called the As. So this system’s called ACD. The A is the A up or A down. The B is your stop. So our B would be that
stop just above the opening range that we talked about. The C is the reversal point. And then our stop– It’s like A, B, C, right? So A is the green
line and the red line. A up, A down. Oh, there you go. OK. Let’s say we went short
at 2,900 this morning. Our B stop would be one tick
above the opening range. There’s the B. Right around here. And then now let’s say we get a
massive reversal to the upside. That C is that purple line. Top C. That’s where
we switch our bias. The D is now– if we reverse and went long– let’s say we got all the way up
to 2,932 and went long there. Our stop goes back
below the opening range. And that becomes the D. So
that’s the basis of the ACD. Which is back down here, right? The purple again? No, that would be– the bottom of the opening
range is the stops. That’d be the top gray. Or bottom gray, I should say. So that’s kind of the standard
setup for trading ACD. Now, you could do
other things as opposed to– for example, if we look
at that 9:00 AM tick that bounced off the A, that’s called
a failed A. You could go long there and put your stop
right below the red line, hoping for a quick turnaround. And there are– sometimes
you’ll see S&P just go in between two points
throughout the day. It’s uncanny how many
times those turnaround points are the A up and A down. I’ve just watched
it so many times. It’s uncanny to see that market
just pinball between those two lines on some days. And once again, you’re
hoping for a quick turnaround in that particular instance. The other thing I want to throw
in this if we go to the studies again. If you open up the one-day
pivot range, and let’s just apply that to the study. And this might move our
chart around a little bit. So what you’re seeing there,
this blue rectangle at the top here– This here? Yes. It’s called the
one-day pivot range. And what it is is it’s taking
yesterday’s high-low and close, averaging it, and then
taking the high and low, averaging that, and
then creating a range. And what this
essentially becomes is support or resistance
for the intraday tape. And think of it like a
wall where you have– A hard time getting outside of? Yeah. So a wall– most people
use support resistance as specific numbers. Support resistance on a pivot
range is more like a wall where, if we wanted to
get through the wall and go to the other
room next door, we’d have to punch through
a piece of drywall, some insulation, probably
some studs, then the drywall– You just built a studio, though. Why do you want to do that? Right. So we would have to go
through both barriers and what’s in between it. So you might see, if we– and
it’s not going to happen today. It’s a wall here,
wall on the upside, and everything in between. So tomorrow, you see that
one-day pivot range is starting to set up right now at 20– if you got the bottom
of that range– 2,900. So Bill, earlier
when you were just ballparking if we
went short here, where would you put your stop? I said like down here, yeah. It’s fighting to get
through it right now. Look at that. Come on. We can maybe then– if we
went short here, if we think we’re going to get another move
down before the end of the day, we could potentially
put that stop at the top of the blue
rectangle for tomorrow. Mm-hmm. Right? At the top of it. And so OK, so that’s
your breakout. If it gets through that,
that’s your breakout, and you want to
get in, then maybe. Wouldn’t you get short at the
bottom of this level here? Well, sometimes– To hope for a bounce
down, another leg down? Yeah, so you see a lot
in this particular study where the tape will go into
the one-day pivot range, and try to get through,
but then fail and come out. So sometimes, if you see the
tape go into the blue square, you would actually
almost maybe put an order at the top and bottom,
and let it run through or come break through and break out. So once again, the
point of this study is to give you
levels to look at. To give you an idea,
like, all right, if I go long or short
here, where’s my stop? Where are we looking
at resistance? And the one other
studies that I’ll have you throw on
here, Anthony, let’s add the three-day pivot range. This is essentially the
same thing as the one-day. It’s just taking the high-low
close of the last three days. And it’s actually funny. Today’s one-day and
three-day pivot range is the same because
yesterday’s range was so big. Oh, yeah. It was the high and
low for both yesterday and the three-day period. Well, that’s another thing
that I want to point out, that a lot of people,
when they think trading– especially day trading– they’re thinking, OK,
here’s your number. Here’s your number. This is where it’s going to go. But I think that’s
kind of a misnomer, because it really
is like a range. Markets and people
push, and they battle at certain price levels. So you’re never really– that’s why it’s extremely
hard to call the high or call the low,
because people push, and it’s like this
battle in certain areas. Like down here, like
look at right here. This was that resistance
point I was talking about. It pushed through, and
now people are coming– they’re trying to push it back. It’s not necessarily
a single price. It’s an area. That’s why if you are trading
and you’re choosing your entry and exit points, you definitely
want to have a little range. Maybe give it some
breathing room. Maybe– I think it’s going
to get all the way up to here tomorrow, or
something, or through here. But just to be safe,
if it doesn’t battle its way all the
way up there, I’ll get a little bit closer down. I’ll get a little bit– As your exit to take the profit? As my exit, exactly. Because I don’t need it. Look, I want to get
out– if I’m profitable, I want to get out of an
area where I’m profitable. I don’t need to get
every cent, but I still want to take some money. You know what I mean? So that’s not– That makes sense. Yeah, you want to
choose a range, and then maybe put
in a little padding. Same with your sell stop. If, let’s say, we did get in. Well, this would be all the
way up here with the strategy you were talking about. But let’s say something
like right here. Let’s say we did get in
here, and we had our stop. We put it in. We– So we get long? Yeah, so I got naturally there. And I think I’m going
to give it down to here. Maybe I put my stop
a little bit lower so it can battle that area. And then if it does test
it and then turn the corner and start going my
direction again, I didn’t just get chopped out. Yeah. Yeah, and if we were going to
put on another MES trade here, nothing has changed. We still have a
short bias because we made that A down earlier. The question is, we are starting
to come up against tomorrow’s one-day pivot range. And that’s the beauty
of the three-day. You can kind of see, once you’re
below this three-day range, it almost acts as this
staircase that the market– so if you– scroll up– see
how we dropped yesterday? Overnight we ran into the
three-day pivot range. If we continue this
downward trend, you’re going to start seeing
the yellow and blue boxes slowly descend. And it’s actually–
if you’re going to swing trade this
versus day trade, meaning hold it for a few days
or a week, if we got it now and we put our stop above one
of these three-day pivot ranges and we kept getting
moves down, we could just slide the stop
down with the three-day pivot, until eventually,
we get a turnaround. So once again, this is all about
knowing levels, and knowing where you can place a stop. But if we wanted to
do one here before– we’re closing up on time
here, but if we wanted to sell another
MES and, say, put that stop above the
top of the opening range, show everyone what
it looks like from an order standpoint if we open up
the Active Trader Ladder– What level is that at? So we would do a single. Let’s do a single. Let’s just do a single,
Anthony, and then, yeah. I would do– also, we’re
on one handle stops. Maybe just use our template. Yeah, sure. You guys want to
use the template? Yeah, let’s just– Just use a single for me. Oh, OK. Yeah, just use this– This one here? No, the singles. Yep. Let’s just sell one here. This is a Micro E-mini
paper money trade. Sell at the market. OK. Let’s do it. And we have auto send on,
so we’re filled [INAUDIBLE].. If you scroll up the ladder– just scroll all the
way up the ladder. And what’s the top of our
opening range, Anthony, if you put your mouse at
the top of the opening range for the day. Bill, you got it? Oh. What did you say? The top of the opening range. Oh, got you. 2,923. 2,923. Yeah, let’s put it there. So scroll up all the way, 2,923. 2,923. That’s a long way. And now, because we’re short,
we’re putting in a buy stop. And this is my favorite
thing about the Active Trader Ladder– new traders
out there, if you want to learn how to
do orders correctly, the Active Trader
Ladder will tell you. So if you hover your mouse
over the bid, below the price there will be a buy limit. Above the price,
it’s a buy stop. Sell limit above,
sell stop below. It’s like trading 101. You got to know orders. So if you see now on our
chart, our stop is one– basically at the top
of the opening range. So what we’re hoping
here is that we get a nice extended down
move of this two-day trend. And then what we would
do over time if– let’s say we get another 40-point move
down tomorrow and overnight. We would start sliding our
stop down slowly but surely, taking in some potential profit
but then reducing our risk. Yeah, exactly. So– And look at this. So we kind of get a
change of polarity here. It looks like it
tested it down here. So we might be in for a little
bit of a short-term rally. But this is– we’re position
trading this, sort of. Yeah. So one other– We’re screen
trading, if you will. One other thing I want
you to throw on, Anthony. We have, under this chart,
some hidden moving averages, if we go to the beaker. And just turn on– oh, did I put it on? Yeah, moving average
exponential at the top there. This one here, the 14? Yeah, the 14, 30, and
there should be a 50. Let’s show all three of those. And the 50, there’s the 50. Yep, and then the 30
was just up there too. Do we want to put
that one on as well? Yes. OK. So what we’re doing
is we’re putting on three moving averages. A 14-period moving average,
a 50-period moving average, and a 30-period. And if we scroll out a
little bit– zoom out for me. So a moving average is a study. It’s a pretty common study. It’s based on the
number of periods that you’re on, and the
high-low close at those periods. So that’s kind of
predicting– well, I wouldn’t say it’s
necessarily predictive. It’s displaying an area that
might be considered support or resistance based
on where it’s moved, how wide the ranges have been. Right now we’re on– looks like you’ve got a 14, so
we’re on a five-minute chart, so that’d be 14
five-minute periods. And we’ve got a few different
ones too, so keep that in mind. So usually, you’re going to
see the shorter-range ones. 14 in this case. This is our shortest range. You’re going to see
that hugging the chart, just like it is there. And as you average in
deeper and longer periods, you’re going to see it probably
be less reactive, because it has a larger data
set, so you can’t swing that mean as easily. Yeah, and you got to be
able to do some math. It’s just a
mathematical equation. And the one thing I
want to point out, if we look at today’s
action, those lines get basically all in formation. We had the– Right here? Excuse me, yeah. So we had the opening bar
today of the opening range. We saw the moving averages flip. So the 14 period moving
average is now at the bottom, the 30’s in the middle,
and the 50’s on top. That’s a bearish indicator. So let’s just assume– When you have the shorter
term below the longer term, that is– yeah. Yep. When they flip and 14’s on
top, 30’s in the middle, 50’s on the bottom, that’s
more of a bullish indicator. Now– We’re kind of seeing that
a little bit in here. Yeah. So I want to point out
two things on this chart. Let’s just assume we went
short earlier in the day when we said we went short
on whatever– it was 2,900? It was right here, 9:30. The question every
trader asks themselves is, when do I get out? Well, you can use these
moving averages as a way to slide your stop down. So initially, if we
had placed this trade, we said we would have
gone short at 2,900, and our stop would
have been at 29– or excuse me, 2,900,
and 2,924 was our stop, because that was one tick
above the opening range. But when we start
getting a move down, you want to secure
some profit, right? Absolutely. So you can use these
moving averages as levels to place your stop. So let’s say at noon, when
we hit that bottom, we slid– stopped from 2,924 to let’s
just say the 50-period moving that lighter line up
top there, Anthony, we’re now locked in at 2,895. So basically, assuming we get
filled at that stop price, we’ve locked in 15 points. Right. That’s right. And we can keep sliding in
that down throughout the day and see– we just broke through
it during this broadcast. See how it’s leveled out? Mm-hmm. Yeah, right here. So we would’ve
gotten stopped out if we had moved this along with
the market right around 2,887. That’s a 13-point move. That’s a good move in a day. Yeah, great. If you’re trading a ES, that’s– $650. $650. $65 if you’re trading the
minis, not including commission. So once again,
this is just a way to give you an idea
of where to get in, where to potentially put your
stop, and then how to manage– if it goes your way, how
to get out of a position. Because we’re seeing those
moving average starting to cross right now. We’re seeing– we’ve taken out
some of those previous lows from around 11:30. We might be in a return back
to 2,900 by the end of the day. Yeah. Predicting the move before
it happens is the key. Do you want to maybe put in
a target on this one too, or you just– Yeah, let’s do that. Yeah, up to you guys. I mean, with the
last two days’ tape, this would be potentially
the start of a larger down move, which is why I– I don’t want to
use the word “I,” but if someone was
looking at this– if you give us some more
expansion to the right here, Anthony, maybe go to
your gear wheel on the chart, and go to Time Access,
and change that to like– I don’t know– 200 bars to
the right, and hit Apply. We’re starting to
set up where we might go into this one-day
and three-day pivot range on the right there. That may just stop this. Just like we did last
night, if you see early in overnight trading– A little tap there
and then it went down. That’s right here. So if we start seeing
this move down, we might be at the start
of a nice downtrend on this short MES. So I don’t want to necessarily
take profits off the table if we’re in a trend. So I think it’s
something maybe we monitor on the phones off-stream
and keep an eye on it. Because once again,
we’re on the MES. We’ve defined our
risk with the stop, assuming we get filled
at the stop price. And what’s our
risk? $120, we said? Yeah. So if you guys are
comfortable with holding $120, or whatever that amount is– I’m good with it, because
we get to stop in there– Yeah, because we got the top. –in case it does go against. Now, it’s important to
make sure that stop’s GTC. Yeah, good idea. So we’re going to flip back
to our monitor tab right here. And it is a day order,
in fact, so we’re going to go ahead and
change that to GTC. And you can change that
on the Active Trader Ladder as your template to
make sure your stuff is GTC. [INAUDIBLE] GTC. Mm-hmm. Let’s see. Going to go back and make sure. And there we are. And the one last thing I
want to show everyone– we’re almost out of time– is
if you go back to the Active Trader Ladder, and we scroll up
all the way to our stop order– It was a 2,923,
I believe, right? Yep. All right, so there it is. You want to change
this really quick? You grab that bubble and just
drag it to your desired price. And yeah, go ahead
and change it. Give it one more handle a room
there, a little breathing room. So we just canceled–
replaced an order by moving that price bubble. And here’s the proof. We’ll go back here,
and you can see it. It changed from 2,923 to 24. Exactly. Yeah. Making it kind of
like a video game. Definitely saw a lot
of those this weekend. This isn’t video games, but– It’s very high stakes. The thinkorswim platform,
especially the active trader feature, is built
for futures trading. That’s why it’s there. And it’s the most
efficient, effective way to put your orders in. If you’re not comfortable,
you can always uncheck that auto send. Yeah, I typically
trade without it on. I like to have
that confirmation. Like, if we’re going
to do something, if we took the auto send off,
boom, it’s going to ask me, and I’m going to be
able to confirm that. And one important
note you mentioned at the top of the broadcast,
Anthony, obviously, the news about commissions
for the brokerage firms. Futures are still going to have
the standard commissions and– That has not changed. –commissions and exchange fees. So there would be
transaction costs here. But you can see, we’re
starting to get that move down. We’re already up about $16
and a quarter, $15 on this. I like having that PNL
open column on the right. It’s just a nice– if you zoom in again back
to our intraday, you– Enter a new chart? No, just the MES chart on the
left there, if you just– yeah, tuck that in there. We’re getting a retracement now. Yeah. So we’re actually–
you got to scroll– you’re a few days away. There you go. There we go. There we go. This, what you’re looking
at here is pretty– is standard for what
a futures trader might have on their screen. Yep. You can move the price here– You can move it on the
chart too, absolutely. So it’s very interactive. I really like that feature. And this one does– because we
took the auto send feature off, it did give us the order
confirmation dialog. Really, if you put
the auto send on, that is for probably the
most advanced trader. Agree. You got to be very
confident, very careful. You’re playing with live
bullets, absolutely. You better know
what you’re doing. You better have experience
with this particular feature. Got a new follow, Copper0225. Hey, Copper. Hey, thanks for
the follow, Copper. /HG right there. Sorry, that’s the futures
symbol for copper. [CHUCKLING] I was like, where’s that? Anyways. But I hope you
guys kind of see– Yeah, that was very
cool, very informative. It gives you– what we
used to have here was a blank slate of
just candlesticks. Now we have some areas
that have potential to be areas for breakout,
pivot, support, resistance. And those moving averages can
help you bring your stop down as the market moves
in your favor. Yeah, and choosing entry
and exit points, really. I can’t believe it. This guy just does it all. Yeah, he does. He’s been switching
cameras on us. Yeah, I can’t believe
we’ve deprived the camera this long
of this beautiful face. I’ve been saying that all day. I’ve been sitting on
the [INAUDIBLE] box too long, so I’ll
switch here, but yeah. We want to thank you so
much for coming on the show. And he’s always here,
you just never see him. He is the man, the myth,
the legend behind– Yeah, he usually
sits to my left, so– Yeah. And he’s usually telling me
what to do, and yelling at me. Bill’s always shaking the desk. I’m shaking the thing. I’m a bit of a mover on stream. But thanks. This was a– That was very cool. Very informative. We should probably use this
stuff on our future trades if we can– Yeah, maybe we’ll take a poke
at it MES, and get this on, and we can maybe use this in
the breakfast sandwich bet. I like it. And these guys say
it all the time. Follow them on Twitter. Yeah. We’ll manage this if
we need to, and we’ll let you know what
we do on Twitter. My handle’s @WRuby_TDA. Very good. Mine is– it’s the
@ symbol, right? You always use that. I’m so new to this. Sure do. @APanzeca_TDA is mine. So check out– It wasn’t a quiz,
Anthony, but you did OK. Well, you know what? It is for me. That’s why I have it
written down here. Because last week, you asked
me, and I was like, uh, and I was like, oh, yeah, that’s
right, I have it written down. Don’t forget to watch
us every Wednesday live. It’s twitch.tv/tdameritrade. We’re on 1:00 to 2:00 PM. Make sure you check out all
the great education content. This show is going to
be archived on YouTube. You can go to TDAmeritrade.com
or the thinkorswim platform on the Education tab
for all kinds of great stuff there. So again, make sure you catch
us Wednesdays live, 1:00 to 2:00 PM. But thanks again,
Obi, for coming on. Thanks, producer Obi. Thanks, guys. One last note, thanks to
everyone we met in San Diego this weekend. Agreed. Thanks to all the cool people. Everyone was super
nice, really informative for a couple of
new guys to Twitch. Really great. We appreciate the follows. Hopefully we’ll check you out. We’ll be checking out a
couple of your streams. I had a blast. Yeah. It instilled a lot
of confidence in me, because we are doing something
a little bit different. Obviously, Twitch is like
the big gaming thing, right? But it was so cool to see that
there’s so many other people– I mean, we met another
girl that was teaching Japanese on the stream. So much great content
going up on the stream. Yeah, but thanks again
to everyone in San Diego. All the new follows,
we appreciate you. Can’t wait to see you
guys next year again. Yeah. And just any feedback on the
stream, put it in the chat. Send Bill and Anthony a message. We want this to be
your guys’ stream, and if we need to slow
down, we’ll slow down. If we want to speed
up, we’ll do that. But hopefully every week,
we bring in someone for you guys that makes the
stream just roll along, and it’s been fun doing it
all today, so appreciate it. Yeah. Awesome. All right. Thanks, guys. Till next week, I’m Anthony
Panzeca along with– Hey, DoctorWD40 said woo. Hey, DoctorWD40. Nice. Thanks for showing up, and
yeah, we’re on our way out, but I’m Bill Ruby, so. Thanks, again, Obi,
for joining us. Till next week,
happy trading, guys. So long. Thanks. [BEEPING] [MUSIC PLAYING]

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