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Trade The Open Like A Boss! Part 20 * When To Average Down In Your Position - YouTube
Channel: Oliver Velez Trading
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hi traders welcome to another trade the
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open like a boss Monday on Mondays we
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delve deeply into all of the trades I
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took for the morning session and today
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we're gonna look at each and every
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individual trade I took in the first 30
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minutes of trading today the reasons
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behind each one of the actions and the
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mindset before the trade and during the
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trade alright so without further ado
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let's delve into the trading
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[Music]
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now what's really interesting about this
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morning's trading session is that number
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one it took me a little bit longer than
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normal to establish my positions this
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morning and number two almost
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immediately after I established two
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trading positions they went negative on
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me so we're gonna actually talk quite
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thoroughly about the mindset that's
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required to sustain proper market play
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even when you are negative so this is
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going to be our theme today being in
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negative territory and still maintaining
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your proper trading mindset the
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composure and the confidence in the
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trade take a look okay traders we are
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off now the first thing I want you to
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take note of is the fact that I have 10
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individual chart windows displayed on my
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command center and this is a topic that
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I spend a great deal of time on
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explaining to my traders and some of my
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supporters I believe it's a very big
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mistake for a trader to actually search
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for opportunities the mindset of a
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master is one in which there is a
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waiting for opportunities to present
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themselves the novice approach is to go
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into the market with the idea of
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searching for something finding
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something and the masters mindset is one
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in which opportunities are viewed as
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finding you and this is a very very
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important point because
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command comes from you waiting for the
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opportunity to step forward and present
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themselves to you and the only way that
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can happen is if your focus is narrowed
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down to about six to ten things and I've
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found that that is basically the sweet
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spot we don't look at 100 items we don't
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frantically search at the open amongst
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50 different things we sit in wait for
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opportunities to present themselves
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within our own individualized family of
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stocks and so each one of my traders is
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encouraged to select amongst a list of
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100 things 6 to 10 favorite things
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these favorite items these favorite
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stocks become their family members they
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become so intimate with the daily
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activity of these specialized six to ten
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things that based up into the market
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every day with a distinct advantage over
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the person who trades unfamiliar things
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now what I almost instantly see is three
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stocks out of my ten producing or
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presenting what I call the elephant bar
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occurrence and this is another concept
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that I spend a great deal of my time
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talking about and teaching on the
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elephant bar occurrence the bar that
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steps forward and produces more green or
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red than the vast majority of the other
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bars forming on your window we must
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become elephant bar hunters because the
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elephant bar occurrence represents for
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us about 60
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percent of our trading opportunities
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they produce the vast majority of what
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kicks off our action in the markets and
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what I see here is Apple developing that
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elephant bar occurrence on its 200
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period moving average I see the same
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occurrence happening in PayPal the
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elephant bar occurring on its 200 period
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moving average in a very similar
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scenario with Microsoft the elephant bar
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occurring on its 200 period moving
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average so out of my 10 things I have
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three stocks that are stepping forward
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and saying Oliver I am producing your
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elephant bar occurrence and so these are
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the three at this moment that I am
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zeroing in on these are the three like
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food for a lion in praying that I'm
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going to focus on with all of my might
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all of my attention now I like the way
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all three are holding up the elephant
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bars are holding up but it's Microsoft
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that I like the most I'm gonna look to
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buy right above the high the first
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elephant bar and boom there we go 2300
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shares it was just one little nick above
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the high of the elephant bar it's coming
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off a little bit but that's okay
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Apple if you can look very carefully has
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come off of the high a little bit here
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so that's why I did not go initially
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into Apple and PayPal there's a feeling
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for me and their through experience that
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that's not the one I'm going to do Apple
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above the high as well boom there we go
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I picked up a little over 4,000 shares
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above the high and so I am now long both
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Apple and Microsoft based on the
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elephant bar concept now what you will
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notice right off the bat is that neither
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Microsoft nor Apple is experiencing any
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additional momentum to the upside in
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fact they're pulling back and I am now
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in negative territory so I'll freeze the
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action here
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because I want to talk about this most
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important topic which is what's the
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difference between a pullback in going
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into negative territory that is actually
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a favorable scenario versus of pullback
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and going into negative territory that
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pinpoints the beginning of trouble and
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right now in these two positions I
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regard this pullback as a favorable
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pullback I'm gonna use this pullback to
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increase my position because it is not a
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negative or troublesome pullback now one
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of the key things in both of these
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positions is the fact that I have the
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200 period moving averages of each of
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them beneath the stock activity and this
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moving average is the granddaddy of all
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moving averages it tends to serve as
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support when the stock is above it and
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it tends to serve as significant
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resistance when the stock is below it in
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this case the stocks are being above
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their their respective 200 period moving
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averages and I believe that this
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pullback toward those moving averages
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are are likely to hold and if they
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display holding characteristics I'm
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going to use these pull backs to bring
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my share position higher now I tend to
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do a two-layered
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by my average position is anywhere
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between six and eight thousand shares I
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will typically go into less as you can
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see I have about 4,800 shares an apple
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and a little shy of 3,000 shares in
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Microsoft so that's my first move into
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the stocks I would really like to beef
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that size up and so in the event that I
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get these normal pull backs which is the
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case in this today I'm gonna use that
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normal pullback to bring my share size
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into the normal six to eight thousand
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range or so sometimes a little bit more
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sometimes a little bit less but this is
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the $64,000 question that separates
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novice traders from master traders
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master traders know when a pullback is
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healthy when a pullback is a gift if you
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will and they also know
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when a pullback is dangerous when a
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pullback is signaling something is wrong
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and this is not the case to the left of
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each of these positions there is power
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there's that elephant bar like strength
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there are bullish gaps to the upside and
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we had that 200 period moving average
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support beneath us so let's see how
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these things develop from here just keep
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in mind that if these things show
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support at their 200 period moving
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averages if they start to show strength
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and show green you're gonna see me add
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and pick up my share size to profit from
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that stability boom there's Microsoft
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[Music]
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driving by so there you have it traders
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another trade be open like a boss video
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training session I want to really let
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you know that you can do this that this
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is not rocket science trading is simple
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but not easy but it is simple all it
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takes is some proper guidance from a
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mentor or a very experienced trader who
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can guide you through many of the land
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mines that capture and snare the average
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novice trader you can do this
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I intend each Monday to provide an
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educational training video for you that
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will help elevate your trading to the
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next level so if you found some value
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here during this video hit that like
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button if you did not find any value I'm
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okay with you smashing that dislike
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button twice okay until next week trade
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well
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