10 Minute Read

Stock Report August 12th 2017

August 12, 2017

By

The Stock Report is a weekly report delivered to PRO members of Tackle Trading. In this report, you’ll receive information, guidance, education, and content that will help you develop as a trader, and learn how to use options to protect, cash flow and speculate in the market. This week, Brad May a stock and options trading veteran discusses what he looks for in a stock chart.

So as Tyler explained in the option report, all this volatility buildup during the week is great for option sellers who want to take on new positions due to inflated option pricing, but is volatility good if we are just trading stock?

The answer is, it depends…

If you are a shorter-term trader, it can bring plenty of opportunity due to larger, quicker moves. (That can also be a double-edged sword if you are not position sizing correctly. 😉)

If you are a longer-term stock trader who wets his pants every time the S&P 500 drops 1%, then it’s probably not good for you.

The way I see it right now, in the short-term, there is potential for further downside… But if all this talk about nuclear ward breaking out is just that – talk… Then say hello to more upside when the fear mongering is over.

Bull Watchlist: TAP, MSFT, ATVI, FSLR, AA, RICE

Bear Watchlist: BAX, APC, UNP, FAST, DY, CNI

This week in my video I want to continue the discussion on the “character” of a security.

When I look for opportunities in the market, I look for two things in a chart.

The first is symmetry or sameness. Meaning is this stock acting the same way it typically has recently. For example, does it keep pulling back into the 20-day Moving Average and then bouncing higher? If so, I am comfortable trading the bullish retracement setup.

The second is the exact opposite. Is the stock breaking “character?” i.e. if the stock has been retracing into the 50-day Moving Average consistently and then moving to higher highs, but now it is starting to close under the 50MA… we may have an opportunity to make money there as well.

Honestly, anything in between is usually thrown out with the bath water and I shout, “NEXT.” Maybe not out loud, but for sure in my head… 😊

Trade safe, my friends. Cya in the clubhouse!

Position size and allocation is HUGE.  Refer to the calculator below if you haven’t mastered your position size.


VIDEO:

———

Position sizing template for stock & option trading.  This helps give you an idea of the max size to trade depending on risk tolerance.  I usually do less than the calculator equates to factor in commissions, slippage, and time decay for options.  Position sizing is your first defense in your trade. You can download this with the link at the bottom of the pic.  Just plug in the Risk tolerance level at top, then the rest of the excel fields. There is a tab for both bulls & bears. Hope this tool helps.

Download (XLS, 55KB)



Brad May started his trading journey in 2012 as a Rich Dad student and is currently generating weekly Scouting Reports for Tackle Trading. The core of Brad’s trading style consists of option strategies along with technical and analytical analysis. His knack for programming has enabled him to code several unique indicators, primarily focused on Vega trading around earnings events, using the Think or Swim trading platform.

Brad May Photo

– – – – – – – – – – – –

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

1 Reply to “Stock Report August 12th 2017”

Leave a Reply

Chart Modal