Options Wealth

I remember when I discovered the power of swing points… each holding more information than a library.

At first, I wanted to know how to pick off the top or bottom of a reversal. Turns out I was asking the wrong question.

The right question is: what can swing points tell me?

The answer – key support and resistance levels!

People who study charts swear by these reference points… and for good reason. These areas work with any chart on any time frame. This versatility means more money in your trading account.

Take DOCU for example, a stock that recently had its IPO. Look at how the swing points on the daily chart highlighted levels that acted as support and resistance.

I use these all the time to set up my swing trades in Weekly Money Multiplier. 

I want to show you how you can use these on any chart and any time-frame to find great setups.

How to identify swing points

Before you use them for setups, you need to know how to spot these swing points. So let’s quickly go over what they look like.

Swing points and pivot points are often used interchangeably. You need three candles to form a swing point. For swing highs you want the middle candle’s high to be higher than the highest point on the other two candles. With a swing low, the candle should be lower than the lowest point on the other two candles.

It looks something like this:

A lot of traders struggle to identify the correct swing points. It does take some practice. But here’s some basic rules to work with.

• You can have multiple candles with the exact same high or low. Those work fine as long as the highs or lows of the candles adjacent are below/above them.
• The longer it’s been since that swing point, the more important it is.
• Swing points from longer-time frames are more important than ones from lower time frames.
• Multiple swing points in the same area indicate an important level

Let’s check out how this might work in a sample chart. I pulled an hourly chart of DOCU for our example. The arrows point to different swing points on the chart. This isn’t every swing point, just some of them.

DOCU hourly chart

You should quickly see some patterns here. Notice how 2 & 3 come in at near the same level. When 3 was formed, it used 2 as a reference. Look at number 1. Notice how 6 and 7 work at similar areas. Why did 4 move past that? It happens sometimes.

But here’s where the magic really happens. Notice how 8 & 9 are pretty close to one another. Now, imagine a line drawn between 1, 6 & 7. That would come right to the underside of 8 & 9!

Pretty cool stuff!

Now that we know how to identify these levels, let’s talk about how to use them to create trades.

Use them in conjunction to find setups

Trade setups contain several components: timing, levels, and patterns. The swing points give us the levels to work with. So, we need to then decide on the timing and patterns.

My strategy finds stocks that have strong trends, show a consolidation pattern, and are undergoing a squeeze. I often use swing points to identify my targets and stops.

Let’s look at a recent example. Here is an email that I sent to Weekly Money Multiplier members outlining the trade on… you guessed it, DOCU.

I want you to look at the red arrows. Those point to key swing points in my trade. I knew that if DOCU closed daily below the bottom swing point, that support failed, and it would head lower. Conversely, if it broke through the swing high, then the resistance failed.

My TPS system works on the premise that these setups build enough energy to punch through the upper resistance. I found a stock that had a clear uptrend established over several weeks. Then, I looked for a consolidation pattern, which I drew in the chart. Lastly, I wanted to see a squeeze, which the red dots at the bottom indicate.

Note: A squeeze is where the Bollinger Band indicator trades inside the Keltner Channel indicator. This delivers my timing component.

In this case, it worked out beautifully.

Not a bad swing trade!

Charts speak volumes if you know how to listen. That’s why I like my live sessions in Weekly Money Multiplier, where I get to go over these examples and field questions from members.

Click Here to Join Weekly Money Multiplier.

Source: Ragingbull.com | Original Link

As traders, we often get caught up in the internals—chart patterns, price action, volume, and volatility, etc. However, news catalysts often are what drives stocks to make the moves they make.

One way you can become a faster trader is becoming more knowledgeable about the companies you trade. That is, understanding its business, how it makes money, and other fundamentals.

I know it’s often neglected. But today, we’re going to take some time and discuss one of my favorite sectors in entertainment—streaming providers.

The fierce competition between streaming providers creates plenty of volatility and trading opportunities for stocks in the sector.

One of my favorite ways to play the group… hold on… wait for it…

… you guessed it, ROKU.

I could trade this stock all day… every day.

These are trades I stream live for Weekly Money Multiplier clients.

Netflix long dominated the streaming market. Their hold seemed absolute. They layered original content in among hundreds of B-rated movies.

Eventually, Amazon had enough. They burst onto the scene with the Oscar worthy film— Manchester By the Sea, along with several other critically acclaimed series.

Not to be outdone, Netflix doubled down on its original content investments, vowing to obliterate the competition.

But then Disney threw down the gauntlet. It brought  back the fabled Marvel brand and expanded with Star Wars… much to the delight of nerds everywhere.

Within moments, Star Wars The Mandalorian trailers followed, and gifs of baby Yoda circled their way around the globe. Putting all the streaming players on notice.

Some quick facts

70% of Americans subscribe to at least one streaming service. But on average, they have around 3 services they use to fulfill their viewing needs. Many customers find it incredibly easy to justify having a few with low monthly subscription fees.

Netflix (NFLX)

Netflix is the gold standard of streaming services. The price tag for Netflix varies and depends on how many people watch or if the content will be Ultra HD.  They’re available in 60 different countries.

Netflix Originals draw huge viewership, with some developing a cult-like following. Big hits like Stranger Things and Orange Is The New Black keep subscribers coming back for more.

Disney (DIS)

The newest streaming service to the game is packing a punch. While Disney+ is brand spanking new, they are no stranger to the streaming game. Disney owns Netflix’s nemesis Hulu. And Disney is appealing to everyone with its marketing strategy.

Hulu already carries a hefty amount of original content and weekly viewing of some cable TV.

Disney+ will be appealing to the masses and not just with an endless supply of classics to keep the kiddos entertained.

Disney also appeals to tight budget. Disney+ costs $6.99 a month. But for a slight increase in price you get Hulu and ESPN+ to…a triple whammy for bargain hunters that has something for the whole family.

Apple (AAPL)

Let’s not forget about the other new guy on the block Apple TV. Apple is its own massive empire. But now, it’s dipping its toes into the streaming business as well. They also are name dropping like crazy and have a low-price tag to peak interest.

But besides star-studded new shows, they don’t have much. There is no library to watch beyond Apple shows. This aspect has deterred some streamers.

Alphabet (GOOG)

Most people forget Google owns YouTube. YouTube TV reaches out to the Walking Dead lovers and fans of cable on the cheap. They offer network television like AMC, CBS, ESPN, HGTV, FX, and more.

Amazon (AMZN)

Then there is Amazon Prime Video. It carries its carefully crafted content, like The Boys and The Man in the High Castle. Plus it has Blockbuster movies that have won numerous awards.

The Rest

But get ready…

There are more streaming services to come!

HBO currently has its own channel, along with HBO Now. It already has on-demand viewing of major hits like Game of Thrones, Westworld, and True Blood.

Yet, HBO is going beyond being an add-on to a current service or a single app that costs $15.99.

HBO is dropping HBO Max next year. It will also have all HBO’s current and past shows in its library as well as Warner Bros’s. The newest shows from both with be on it as they come available.

Competition Is Steep

This war for subscribers costs money… lots of it. Netflix currently has close to 160 million paying subscribers around the world… with another 5 million still working on their free trial. As of now it still sits at the top of the streaming world.

In the past year, Netflix’s revenue was over $18 billion, a 26% increase from last year.

Most years Netflix has had over a 30% increase in revenue every year. They plan to keep the original content rolling with the hope this will draw in more subscribers and even more money.

Hulu has 28 million subscribers, and last year it pulled in $1.5 billion from ad revenue.

However, many subscribers chose to pay a bit more to opt-out of ads. But Hulu has been operating at a loss and Disney knew that when it scooped Hulu up.

Disney+, which debuted November 12, already has over 10 million subscribers.

That’s one-third of what Hulu has, who has been operating for years. And Disney is planning on growth. They project in 5 years 60 to 90 million subscribers for Disney+. 60 million for Hulu, and around 12 million for ESPN+.

Last year Amazon Prime Video had 26 million subscribers, half of which Netflix had in just the US.

This is despite Amazon Prime on its own having more subscribers than Netflix.

These Prime Video numbers isn’t a let down. Amazon is keeping customers in the world of Amazon.

Prime Video subscribers are more likely to spend money on more things Amazon.

Device Providers Making Bank

ROKU is getting ready to see the money start pouring in from this war. Besides having its own streaming service, ROKU receives money from commissions. That means every time you use your ROKU to sign up for a new subscription, a percentage of that goes right into ROKU’s pocket. ROKU already receives money just for offering that service.

ROKU pulled in around $417 million in revenue last year, and is predicting a rise in 2020 of over 30%. Many see a huge part of that coming from Disney+.

And this just won’t be ROKU pulling in money alone. Other streaming devices work the same way, which makes these devices and smart TVs the new dogs in the war.

Learn how to make some serious money from these companies

I can tell you that I traded one of these companies for a nice profit in the last two weeks. If you want to get in on the action then join me at Weekly Money Multiplier.

Click Here to Join Weekly Money Multiplier.

Source: Ragingbull.com | Original Link

Your success as a trader is determined by your actions more than anything else.

Why?

Because you CONTROL when you’ll enter a trade. You are in charge of how much is risked per trade. And in turn, your destiny lies in your hands.

Believe it or not, you’ll be surprised at how many traders mess this up by not being flexible enough with their entry points.

Now, I can’t speak for all 7-figure traders, but I can tell you that I prefer to use buy/sell zones vs. a hard number as my entry point.

My buy zone is between the 8-period and 21-period exponential moving averages. When I take on a long position, I want to be a buyer below the 8-period average and above the 21-period average.

This zone identifies the space where I’m getting in between a short-term pullback, but above the longer term trend.

Now, it might sound a little fuzzy at first, but I can assure after some practice it becomes second nature.

It’s precisely how Stacey was able to pull off a +300% win in LSRX.

.

Every week I show Weekly Money Multiplier members strategies and techniques to improve their trading. If you’re not a paid-up subscriber and would like to join— then click here to get started.

Let’s not have Stacy have all the fun here. I believe you too can benefit from using buy/sell zones as a way to enter your trades. And I’m going to show you exactly how I set my entries up.

Why these indicators

Some traders use simple moving averages, while others prefer exponential moving averages. It’s generally a matter of preference and how it fits into your trading style.

Simple moving averages weight each price in the specified number of periods the same. For example, a 21-period simple moving average based on closing price would weight all the closing prices for the last 21 periods the same and take an average.

Exponential moving averages are more responsive. They give more weight to recent price action than past price action. I like them for this responsiveness.

My TPS setups work off the premise of a clear trend, a pattern, and a squeeze. As price consolidates in a pattern, the range gets tighter and tighter. The exponential moving averages work better here because they respond faster. With price tightening, I need an indicator that reacts sooner.

Here’s an example of how I used it in a recent Weekly Money Multiplier trade.

Costco (COST) showed a powerful bullish uptrend over the last few weeks. The stock would make a move up, regroup and then another push higher.

COST daily chart

I highlighted the first area that I found where price consolidated between the two moving averages. You can see how they both began sloping higher, but the 8-period turned sooner.

What’s neat about this area is the zone gives you multiple places to scale into the trade. That’s why I like to take a portion when it first enters the zone, and then another when it gets towards the bottom.

That brings me to how I implement these indicators.

Incorporating EMAs into your trading

Large funds and big money tend to look more at simple moving averages to make their decisions. However, they look at weekly charts, and less at daily charts (certainly not intraday charts). So by no means should you ignore those.

These indicators give me a range to enter a trade. Especially when stocks gap up or down in the morning, this zone gives me a shot to enter the trade with some wiggle room.

It’s important to note that I only use these as places to enter trades. I don’t use them for my stops. I figure those out using other analytical tools.

Before I enter the trade, I want to see the three elements of the TPS: trend, pattern, and squeeze.

Let’s look at another example from Weekly Money Multiplier – DOCU. Here’s the chart that I sent out to members breaking down the trade.

DOCU daily chart

I waited for the squeeze to take place before I started getting long. Then, I entered the trade at the 21-period exponential moving average. You can also see how I had an opportunity to add down at the 8-period exponential moving average.

Now, you may ask why I would want to add at higher and higher prices. I mean, that’s what the zone sloping upward means right?

As long as all the elements remain intact, then I’m fine adding at the lower end of the channel.

It’s also worth mentioning that my initial stop was a close under $64. As the channel trends higher, if the stock broke out of the pattern on a squeeze lower, I would also consider exiting the trade above that level.

The results for this one speak for themselves:

One key to working these entries is risk management. Every trader should understand how much they are willing to risk relative to their entire portfolio.

Check out my free article Own the 5% Rule, where I discuss some tips and tricks on how to manage your risk.

Click here to read my free article.

If you want to make trades like these your reality then join me at Weekly Money Multiplier.

Click Here to Join Weekly Money Multiplier.

Source: WeeklyMoneyMultiplier.com | Original Link