Ignite 2015 Opening Session

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Aron Jones
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1 Ignite 2015 Opening Session Overview Conference Overview Current Trading Environment Trading vs. Investing Tools you need Intro to charting Action Steps Currently Trading Environment The only thing certain in the financial markets is uncertainty. That s why you should buy and hold for years right? PAGE 1

2 Fall 2015 Ignite Trading Conference Keynote - 1 If you invested $100,000 on Jan. 1, 2000 Worth over $150,000 in 2015 Date Increase/Decrease Balance Cumulative Gain/Loss January $100,000 0 January $38,000 $62,000 -$38,000 October 2007 $57,040 $119,040 +$19,040 March $59,520 $59,520 -$40,480 June 2015 $93,446 $152,966 $52,966 June 2017????????? Between Aug , 2015 the DJIA lost 10% in 4 days! PAGE 2

3 Traditional Investors Buy & Hold Want the market to go up Trust others to manage their money Hold trades 2-5 years or more Focus on saving money Hope for 15-20% annual profit Trading vs. Investing We have already seen what would happen if you were in index funds. Let s pick a stock. Solid company Pays dividends Long history Well diversified Good earnings Buy CAT Jan 1 at $ % profit in 5 years CAT June 2015 $85.00 PAGE 3

4 Buy XOM Jan 1 at $ years later Bumpy at Best What if you did not have to pick a winning stock? What if you could just pick something you like? What if you could have FUN instead of stress? PAGE 4

5 $40/Share $20/Share $20/Share $80/share profits in 5 years (133% ROI) $75+ per share trading the downside Moving Averages are just one of the many tools we have to determine turns This tool has only given 1 false signal since 1993, and 1 very early. Early bear signal False bear signal PAGE 5

6 Active Traders Constantly buy & sell Want the market to move Manage their own money Hold trades days up to months Focus on creating money Measure monthly and per trade ROI Traditional vs. Active Traders Buy & Hold Want the market to go up Trust others to manage money Hold trades 2-5 years + Focus on saving money Hope for 15-20% per year Scared during bear markets Buy & Sell Want the market to move Manage their own money Hold trades days up to months Focus on creating money Looking for monthly and per trade profits Have fun and prosper during bear markets What tools do you need? Education! Charting Software Broker Virtual Trading Tools You Need Charting Software Many great softwares I use Trade Navigator We also suggest Motive Wave Some brokers provide good charting software (most don t) Good charting is a must! PAGE 6

7 Broker Brokers bring you to the table Make sure you like them They are here to serve you (not you serving them) If you do not like them SWITCH! Broker Recommendations My Picks: OptionsXpress TradeStation Other favorites: Think or Swim Options House Interactive Brokers Virtual Trading Allows you to trade without risking any real money! The ideal place to hone your skills The key to learning to trade Real money brings with it emotion which is risky Where to get V. Trade? OptionsXpress Options House Think or Swim TradeStation PAGE 7

8 Intro to Charting What is a price chart? Plotting of the historical prices of a stock as they happen Useful in identifying trends Useful in identifying sentiment Useful in anticipating future price action How to read a price chart Encompasses 4 key price points: Open High Low Close Three main views: Line chart Bar chart Candlestick chart PAGE 8

9 The Line Chart Only uses the closing price of the day Created by plotting the closing price and drawing a line from point to point $50 $45 $40 $35 $30 $25 Date 6/1 6/2 6/3 6/4 6/5 6/8 6/9 6/10 6/11 6/12 Closing Price $45 $47 $50 $46 $40 $44 $50 $45 $40 $30 Benefits: Easy to see price action form Ideal for drawing support and resistance lines Easy to see overall trend/direction Weaknesses: Only shows the closing price Does not reveal sentiment Hard to trade from the line chart alone PAGE 9

10 Bar Chart Encompasses all of the information for the day (open, High, Low, Close) Easier to see overall sentiment Helps us make better trading decisions (High) (Close) (Open) (Low) Benefits: Reveals all of the key information (OHLC) Shows market sentiment Easy to see overall trend Weaknesses: A lot of bars get confusing Bars start to run together There s a better way PAGE 10

11 The Candlestick Chart Comes from the Japanese rice traders Encompasses all of the OHLC Adds color to the bars Offers benefits of the bar chart but with added clarity Created by plotting the Open, High, Low, & Closing prices High High Closing Open Open Closing Low Up (White) Candle Low Down (Dark) Candle (High) (Closing) $ (Open) $ (Low) Up (White) Candle Allow us to see all of the price data we need (OHLC) Colors make it easy to identify Patterns are easily recognizable PAGE 11

12 Line Chart Example Bar Chart Example Candlestick Chart Example PAGE 12

Class 2: Buying Stock & Intro to Charting. Buying Stock

Class 2: Buying Stock & Intro to Charting Today s Class Buying Stock Intro to Charting Real World Analysis Buying Stock What Is a Stock? Share of ownership in a company Publicly traded Holds monetary value