lystn

Hey everyone. This is Kirk here again and welcome back to the daily call. On today’s call, we’re going to talk about how you can setup price target or technical alerts if you can’t actually get to the markets or actually trade. Where this topic comes out of is that I realized obviously that people have really busy schedules and your work or your work schedule may not allow you actually to monitor the markets every single day. Now, first thing I’ll actually say on this is if you have the ability, the easiest way to actually monitor things is actually to download your broker’s trading app or your mobile app. Of course, we’re all carrying our phones around, it’s glued to our ears or glued to our hands pretty much every day and so, that’s the easiest way to monitor positions. That’s how I generally do it. If I’m traveling, I’ll still have my phone with me obviously. If I’m speaking or at an event, I’ll still have my phone with me. I don’t have a situation where I don’t have access generally to the markets. I realized though that if you work in a job where maybe you work for the government or a government contractor, you may not have the ability to access the markets or your internet maybe restricted wherever you are. This is a really easy way to get notifications in case something happens that you need to be aware of and obviously make an adjustment to. Now, I’ll generally talk about inside of this podcast the Thinkorswim platform which is what we use for this. I think they have the best setup for alerts and the most triggers that you can possibly have. Obviously, other broker platforms might have it, but I’m not as familiar with those since I mainly use Thinkorswim. Inside of Thinkorswim, there’s a tab called “market watch” and underneath the market watch tab, there’s a sub-tab called “alerts.” What’s really cool about this is that you can basically setup and alert on any type of parameter around a stock, either the actual stock itself or the actual options contracts, the individual strikes, different months, etcetera. There’s probably hundreds of variations in here that you could actually do. I’ll tell you a couple of ways that I actually use this for my own trading or have used it before in the past and maybe that might help out. The first thing that you can do is you can obviously setup alerts on just simple price triggers. Right now, I just typed in SMH because we’re looking at a trade in SMH and right now, the last traded price in SMH is 96.73. I could setup an alert that says, “Hey, notify me if SMH goes up to $98.” I can setup that alert. That sends me an email or a text message or a web notification, whatever it is that SMH now has increased in value to 98. Okay, great, easy way to monitor different price changes. Again, not that relevant, you may not use it all the time, but it is a way to say – Hey, if I am looking at a stock that maybe you want to buy long-term for your IRA or whatever the case is, you might want to use these as simple price triggers. Another way that you can do this inside of the actual stock is you can actually use technical indicator alerts. This is what I actually use for some of our main ETFs and indexes that we follow. I’ve gone in and I’ve setup all these technical indicator alerts and they’re based off of the signals research that we did which you guys can find online. I do this because we don’t often get signals because our indicators are a little bit longer, medium to longer term indicators for trend changes and momentum changes which is good for me because I’m not getting bombarded with emails all day, but it does take a little bit of time to go in and set these up. But once you go in and set these up for technical indicators, it will actually send you alerts that lets you know if a stock has reached a technical level that you’ve pre-described or pre-inputted into the system. If I get an alert that SMH is now overbought, then I can go in and potentially make a trade or an adjustment, add a new position, adjust an existing position based on that information. I can also get alerts if SMH is oversold. I’ve gone and I’ve done these for a handful of our ETFs and indexes that we follow and so, oftentimes we’ll get alerts like we recently got alerts in the past month or so on EWZ and XHP and entered trades in those. Our EWZ trade worked out really well. XHP, we just entered a couple of days ago still generally is going in the right direction, but it’s just been too early. But that’s how we’ve been alerted to some of these possible directional trades that we can add to our portfolio. Again, adding those technical alerts is a good way to automate some of the things that you do, so you don’t always have to monitor and click through all the indicators every day. Again, it does take a little bit of time to setup, but I think it’s well worth it. The other way that you can use alerts is with actual option price target alerts or option Delta alerts. In fact, there’s a lot of different choices within the actual option strikes or contracts. This is one area that I think as a newbie, if you’re getting started in options trading, you can definitely use because you can setup alerts to let you know if the Delta of a short strike or the Delta of a long strike has increased or decreased to a certain level. Let me tell you how I would set this up and how I’ve set this up before in the past when I’ve been traveling and know I won’t have as much access and won’t be checking the markets that often. Let’s say that I sold a strangle in SMH and I did the 15 Delta on each side. I sold the 15 Delta put, sold the 15 Delta call. Well, I can go in and under the alerts tab, setup an alert by just clicking on the actual strike prices that I’ve sold and tell the system to let me know if the Delta of either of those strike prices goes up to 30, so if the Delta goes from 15 to 30, meaning that the risk on one side has doubled. This would only happen if the markets have moved against me. Now, you can set your parameters to 40 or 50 or whatever the case is. I usually do a doubling of risk. If I sell a 20 Delta, I’ll set an alert for a 40 Delta, etcetera. This lets me know – “Hey, I’ve been challenged on one side.” Now, I just get a notification via email and that doesn’t always mean that I’ll go in and make a trade adjustment, but at least it alerts me to the fact that I’m being challenged on one side by the market. Now, I can go in and take a reactive stance against that position, maybe adjust it, maybe look at adding a new position, rolling the contract, whatever. It’s just trying to get you into the mode of maybe not having to analyze it as much or if you’re short on time, having the system let you know when you need to come in and mess around with things, when you need to stick your nose in there and see what’s going on. If you don’t get an alert, then you know that neither of those strikes have ever been challenged, so you don’t need to do anything. Again, it’s a really good way if you have the ability to set these up in advance before you go to work or after you go to work in the evening and then just let them work for you and alert you when you need to come back to the markets and maybe help out and adjust your portfolio. Hopefully this has been helpful. Like I said, I don’t use alerts all that often. I do have the technical alerts setup, but I will setup the actual option trade alerts when I’m traveling or when I know I have limited access to the markets or if I’m at an event and I know that it’s just going to be crazy and I won’t have much time to actually sit down and monitor the markets that day. I will setup alerts for those. I think that it’s helpful. It’s definitely helpful if you’re new to trading or if you’ve been trading for a while. Go in there and play around with it. I think you’ll find some pretty interesting stuff and stuff that might help save a little bit of time for you. As always, hopefully you guys enjoy these. Until next time, happy trading!