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ICT Mentorship Core Content - Month 11 - Stock Mega-Trades
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ICT Mentorship Core Content - Month 11 - Stock Mega-Trades

Introduction

The instructor introduces the lesson and explains what Mega trades are.

What are Mega Trades?

  • Mega trades are significant in magnitude and usually last for six to nine months or more.
  • Quarterly shifts in earnings have a great impact on the stock market, making it crucial to anticipate the next big movers based on their respective earnings.
  • Seasonal tendencies show that the best times for stock investing are the first half of the year and then the latter portion of the year.

Coupling Quarterly Earnings with Seasonal Tendencies

The instructor explains how coupling quarterly earnings with seasonal tendencies can help find explosive market moves.

How to Find Explosive Market Moves

  • Overlapping Mega trade conditions with quarterly earnings is crucial to finding explosive market moves.
  • Blending these two times of the year with earnings seasonal tendency and other facets will recover in this teaching that make up a mega trade you have a greater degree of odds stacked in your favor whether you're going to be successful and selecting high-flying stocks.

Major Market Direction

The instructor discusses how major market direction affects significant movers in the stock market.

Understanding Major Market Direction

  • Every significant mover in the stock market has its momentum increased by general market direction.
  • Strong stocks can rally higher without assistance from major market direction but typically accelerate when broad markets move higher.
  • It's easier to find high flyers in the marketplace when we understand the direction of the marketplace.

Conclusion

The instructor concludes by explaining that mega trades are specifically aimed at looking for buys because the stock market is predisposed to go up.

Final Thoughts

  • The stock market is a Ponzi scheme meant to get people to buy, so mega trades are aimed at looking for buys.
  • Understanding quarterly earnings, seasonal tendencies, and major market direction can help find explosive market moves.

Identifying Mega Trades and Stocks

In this section, the speaker discusses how to identify Mega trades and stocks. The speaker emphasizes that it is important to wait for certain conditions or know what to look for before making a trade.

Support of Trade Idea

  • It's important to depend on the support of your trade idea when looking for Mega trades and stocks.
  • Seeing Major Market Direction will help determine whether a stock is a qualified Mega trade candidate or not.

General Market Movement

  • Generally, if all three General averages are moving up as a whole, it will support a strong buying opportunity for stocks.
  • Look for conditions when the General market is poised to trade higher.

Fundamental Screen

  • There is a fundamental impact on stock prices and their respective movements.
  • Having a systematic approach to screening stocks fundamentally can be advantageous to your bottom line.
  • Use technology as a resource to screen stocks fundamentally.
  • Keep it simple and don't inundate yourself with too many tasks.

Can Slim Approach

  • William J O'Neill's Can Slim approach uses quarterly numbers and annual numbers which are important in determining fundamental scans.
  • Investors Business Daily provides valuable insights into sector and Industry groups by doing all the number crunching for you.

Simplifying Fundamental Scans

In this section, the speaker discusses ways to simplify fundamental scans. The speaker emphasizes that it's important not to overcomplicate the process of selecting stocks based on fundamentals.

Shortcut Approach

  • The speaker admits that he doesn't have the aptitude personally to go through all the fundamentals.
  • He looks for shortcuts that give him directional bias based on Fundamentals by smarter folks than him.

Technology as Resource

  • Technology provides more information and insights available at our fingertips than ever before.
  • By having a systematic approach using technology to screen stocks fundamentally, it's going to be advantageous to your bottom line.

Keep It Simple

  • Don't inundate yourself with so many tasks that you won't come to the conclusion of having a selection made.
  • Have a very simple approach to determining what it is you want to buy.

Conclusion

In this section, the speaker concludes by discussing how he determines when to buy and sell stocks.

Determining What To Buy

  • Once you know whether you want to be a buyer or seller, have a very simple approach in determining what it is you want to buy.
  • Once you know what that is, you'll have no problem or fear going in and buying it.

Knowing When To Sell

  • You may not know exactly when to get out; it may go way farther than you want to hold on to it.

Screening Process and Institutional Tools

In this section, the speaker advises keeping the screening process short and simple to avoid wasting time and energy. They recommend using institutional tools that are relatively inexpensive to invest in your insights and trust your own decisions.

Key Points:

  • Keeping the screening process short and simple is best to avoid wasted time and energy.
  • Institutional tools are available that are relatively inexpensive.
  • Investing in your insights and trusting your own decisions is better than turning all of your money over to someone else to manage it.

Funds vs Self-Investment

In this section, the speaker explains why it's better for investors to spend a little bit of money investing in their insights rather than turning all of their money over to someone else to manage it.

Key Points:

  • Funds by far and large are just turning everyone else's money, they get fees, but they're not in a position to guarantee a positive outcome.
  • It's better for investors to spend a little bit of money investing in their insights rather than turning all of their money over to someone else to manage it.
  • No one will mind the store or mind your business better than you as an investor or trader.

Importance of Informational Scan Fundamentally

In this section, the speaker emphasizes the importance of doing an informational scan fundamentally on one's own when investing.

Key Points:

  • Investors should do an informational scan fundamentally on their own because no one cares about their family needs or time horizons more than they do themselves.
  • The best advice for investors and traders is to mind their own business and trust their own decisions.
  • Investors should keep the informational scan simple and short, avoiding overcomplicating it.

Relative Strength Analysis

In this section, the speaker explains the importance of relative strength analysis when investing in a bullish market.

Key Points:

  • In a bullish market, investors should look for bullish sectors in the marketplace and inside those sectors, they want to find the strongest industry groups that are going up.
  • Investors should focus on the strongest outperforming stocks in those industry groups.
  • The best way to do relative strength analysis is by focusing on leadership industry groups that make up a sector go up.

Investing in Stocks

In this section, the speaker discusses how to increase your net worth by investing in stocks. He emphasizes the importance of focusing on areas that already have predisposed movement to go higher and finding stocks that are leaders of their respective industry groups.

Key Points:

  • It's better to focus on areas that already have predisposed movement to go higher.
  • Look for stocks that are leaders of their respective industry groups.
  • Search for stocks that outperform or are going up stronger than all the other ones in their Industry Group.
  • Coupling with SMT Divergence seen in indices can help fine-tune attention to what all institutions are doing.

Finding Mega Trades

In this section, the speaker talks about finding mega trades in stocks. He explains how he anticipates new earnings leaders and plans seasonal tendency overlaps for annual movements.

Key Points:

  • To find mega trades, anticipate new earnings leaders.
  • Plan seasonal tendency overlaps for annual movements.
  • A mega trade is a short span of time where a stock puts out a lot of energy, covers a lot of ground, and moves.
  • Fundamental strength is crucial when looking for mega trades.

Introduction to Stock Trading

In this section, the speaker introduces the process of stock trading and highlights the importance of market direction and fundamental screening.

Market Direction and Fundamental Screening

  • The market direction is crucial for successful stock trading.
  • Perform fundamental screening to identify stocks that are poised fundamentally to go higher.
  • High-flying stocks that go up are the ones that make tons of money.
  • Look for highly profitable stocks with increasing annual sales and new products coming out.

Relative Strength Analysis

In this section, the speaker explains how to perform a relative strength analysis to filter out leadership stocks based on sector and industry groups.

Performing Relative Strength Analysis

  • Use Investors Business Daily to perform a relative strength analysis.
  • Identify the stocks you like and look at the Greeks in the options chain to determine which option and what strike price you would trade for an opportunity.
  • By having these ingredients, you can get amazing big pops in the stock market in these respective stocks.

Using SMT Divergence in Major Averages

In this section, the speaker discusses using SMT divergence in major averages to time buying opportunities during consolidation times.

Using SMT Divergence in Major Averages

  • Use SMT divergence in major averages to time buying opportunities during consolidation times.
  • Short-term trade these types of stocks using Investors Business Daily fundamental sort and scan and time it with relative strength analysis when the general market is supposed to go higher.
  • Investors Business Daily is one of the best resources for finding amazing stock movers each year.

Using Fundamental Basis and Technical Relative Strength Divergence

In this section, the speaker explains how to use fundamental basis and technical relative strength divergence to determine what stocks to look for.

Using Fundamental Basis and Technical Relative Strength Divergence

  • Use a fundamental basis to determine what stocks you want to be looking through.
  • Look for technical relative strength divergence, which shows real institutional sponsorship and can be seen in price when a stock fails to make a lower low.
  • Finding undervalued call options is the next step after identifying these ingredients.

Using IBD Ranking System to Find Winning Stocks

In this section, the speaker explains how to use the Investors Business Daily (IBD) ranking system to find winning stocks.

Streamlined Process for Finding Winning Stocks

  • The IBD top 50 list provides a complete list of the top 50 stocks sorted by their fundamental ranking system.
  • Research tools are available on the website, including T-A-L and Barchart.com.
  • By sorting T-A-L against the Dow, we can see that while the Dow was making a lower low, T-A-L was consolidating and smart money stepped in and bought it from $100/share to $150/share.
  • This type of price move is enormous in terms of potential gains for stock traders.

Index SMT Divergences at Quarterly Shift Higher Prices

In this section, the speaker discusses index SMT divergences at quarterly shift higher prices.

Index SMT Divergences

  • The NASDAQ did not make a lower low when the Dow did, indicating a divergence.
  • The speaker emphasizes that every single year this method works.
  • L-I-T-E made a lower low while still being in the fundamental sort or screening by IBD. It would not have been an ICT buy for a mega trade because it made a lower low.
  • NTRI recently gapped away from consolidation. Even though there was an ST divergence rate and higher low formed, price could come down here and close in that gap.

Analyzing Stock Gaps Away From Consolidation

In this section, the speaker analyzes stock gaps away from consolidation.

Analyzing Stock Gaps

  • NTRI recently gapped away from consolidation, making it a poor candidate to be a buyer for stocks because the gap could close.
  • The speaker emphasizes that we want to wait for the market to be more of a consolidation and just recently leaving a consolidation.

Technical Analysis of Stocks

In this section, the speaker discusses technical analysis of stocks and how to identify potential trades using ST Divergence.

Identifying Potential Trades

  • The speaker identifies ANET as a potential trade due to its recent consolidation and higher low formation during ST Divergence.
  • The speaker identifies FOXF as another potential trade with a composite rating of 99 and a higher low formation during ST Divergence.
  • PAYC is identified as another potential trade with a higher low formation during ST Divergence.

Criteria for Stock Selection

In this section, the speaker discusses the criteria for stock selection based on fundamental analysis.

Fundamental Analysis Criteria

  • The Smart Select Composite Rating is used to make a composite ranking of earnings per share rating, relative strength rating, industry group relative strength, and accumulation distribution rating.
  • Stocks between $25 and $80 per share are preferred for trading.
  • PYPL is identified as a potential trade with a higher low formation during ST Divergence.

IBD 50 List

In this section, the speaker discusses the IBD 50 list and how it can be used to identify potential trades.

Using IBD 50 List

  • The IBD 50 list is sorted by Smart Select Composite Rating.
  • FOXF is identified as a potential trade with a composite rating of 99 and a higher low formation during ST Divergence.
  • PAYC is identified as another potential trade with a higher low formation during ST Divergence.

IBD50 Stocks Analysis

In this section, the speaker analyzes several stocks from the IBD50 list and provides insights on their price movements.

Higher Lows and Institutional Buyers

  • A higher low formed during SMT diversions, indicating that institutional buyers are coming in.
  • Consolidation is happening, and the stock is about to break out to a new high.
  • The stock gaps up later after the divergence.
  • Trading around 42 a share up to 59 a share nice move there really nice move.

CNC Stock Analysis

  • CNC trading at 84 a share.
  • A higher low formed here at 70 a share trades up to eighty-six dollars or sixteen dollars a share appreciation nice movement during consolidation ready to break out to higher highs so that's a nice move there.

Dave & Buster's Stock Analysis

  • Dave & Buster's symbol is PLAY.
  • Really nice signal here with higher lows or lows SMT diversions by around 60 a share goes up to 73 dollars a share nice movement there about 13 a share appreciation.

PRA Health Sciences Stock Analysis

  • Higher low formed here, and price moves up about fifteen dollars per share.

Activision Blizzard Incorporated Stock Analysis

  • ATVI is the symbol for Activision Blizzard Incorporated.
  • A higher low formed as well, indicating that institutions are stepping in.
  • Close to this old high so we broke out with gap here went sideways came up and Consolidated again during the smt diversions that's buy at 49/share trades up to 62/share not bad very nice movement there.

Facebook Stock Analysis

  • Facebook symbol is FB.
  • Real clear obvious diversions just above the old highs in here during this consolidation so we didn't really extend too much we were in consolidation again SMT diversions higher low formed big huge institutional stepping in 140 trades up to 164 so 24 a share price move really nice.

Alibaba Stock Analysis

  • Alibaba symbol is BABA.
  • The old high here consolidation small little rally consolidation again smt diversions higher low but by around 112 went to 155 huge huge move folks big big move.

Using Relative Strength Divergence to Find High-Flying Stocks

In this section, the speaker discusses how to use relative strength divergence to find high-performing stocks and sectors.

Using Investors Business Daily and Telecharts

  • Investors Business Daily is a good resource for finding fundamentally strong companies.
  • Just because a company is on the list doesn't mean it will perform well.
  • Investorguy.com provides a list of all the stocks in an individual sector.
  • Telecharts is a screener that allows you to sort through different formulas and come up with a watchlist.

The Silver Bullet: Relative Strength Divergence

  • The best technical pattern in trading is relative strength divergence.
  • When industries diverge across three major averages, look for buying opportunities in the industry that fails to make a lower low.
  • Plotting NASDAQ composite index, S&P cache, and Dow Jones Industrials on a daily basis can help identify when there's a crack in the averages between them.

Understanding Market Conditions

  • Understanding market conditions is crucial before looking for high-flying stocks.
  • Once you understand that the stage is set for the market to go higher, start looking for cracks in the averages between NASDAQ composite index, S&P cache, and Dow Jones Industrials.

Understanding Buying and Selling Opportunities

In this section, the speaker discusses the differences between buying and selling opportunities in the stock market.

Longer Duration for Buying Opportunities

  • Buying opportunities involve investors pouring money into a stock over longer periods of time.
  • These moves are more extended than selling opportunities.

Shorter Duration for Selling Opportunities

  • Selling opportunities involve investors quickly getting out of a stock.
  • These moves are abrupt and short.

Importance of Knowing How to Sell Shortened Stocks

  • It is crucial to know how to sell shortened stocks during selling opportunities.
  • Investors need to understand what they are doing when selling shortened stocks.

Using Investor's Business Daily as a Resource

In this section, the speaker talks about using Investor's Business Daily as a resource for fundamental work in trading.

Using Investor's Business Daily for Fundamental Work

  • Investor's Business Daily can be used as a resource for all fundamental work in trading.
  • This includes blending it with technical approaches to trading.

Blending Fundamental and Technical Approaches

  • By blending fundamental and technical approaches, investors can view smart money's accumulation and distribution patterns.

Conclusion

The speaker concludes by wishing listeners good luck and good trading until next time.

Playlists: 2017 ICT Private Mentorship Core Content Month 11
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in July 2017. CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.