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ICT Mentorship Core Content - Month 10 - Stock Trading - Building Buy Watchlists
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ICT Mentorship Core Content - Month 10 - Stock Trading - Building Buy Watchlists

Introduction

The instructor introduces the topic of stock trading and building watch lists.

Dow Jones Industrial Composite Stock List

The instructor discusses the Dow Jones Industrial composite stock list, which includes all 30 stocks that presently make up the Dow Jones Industrial Average. He highlights that this discussion will focus on these Dow 30 stocks, as they are sufficient for making all necessary stock trades.

Seasonal Influences and Bullish Months

The instructor reminds students of seasonal influences per calendar month and focuses on buy watch lists. He emphasizes that the primary focus should be on bullish months, specifically in the first half and second half of the year.

Building Watch Lists

  • Filter #1: Determine if the stock market is poised to rally.
  • Filter #2: Select higher low stocks during bullish months.
  • February to May months are ideal long swing setups.
  • October to January months are also ideal long swing setups.
  • Try to narrow selection down to two to four companies during your stock selection process.
  • Leadership stocks aggressively bought by institutions will be found not to drop lower during bullish months when three major indices decline.

Market Trend Change

The instructor explains how market trend changes signal bullishness in certain stocks.

Ideal Scenarios

  • During periods of seasonal tendencies for stocks to move higher, we'll focus primarily on when three averages (NASDAQ, S&P, and Dow Jones Industrial Average) are making lower lows.
  • At same juncture, look for stocks that make higher highs.
  • Apple Inc. is an example of a stock that showed relative strength during the January 2017 to May 2017 period.

Seasonal Tendencies in Stock Trading

In this section, the speaker discusses seasonal tendencies in stock trading and how to use them to identify potential trades.

February to May Bullishness

  • Between February and May, there is typically a bullish trend in the stock market.
  • This trend can be seen in the appreciation of share prices during this period.
  • Boeing is an example of a stock that followed this trend, with a bullish divergence from the Dow Jones Industrial Average (DJIA) in January leading into February.
  • Other stocks that followed this trend include Home Depot, McDonald's, and Visa.

Filtering Out Stocks

  • Verizon, Coca-Cola, General Electric, Microsoft, and Intel are not exciting companies for trading purposes.
  • Six stocks out of 30 were filtered out based on criteria such as higher lows and bucking trends seen with lower lows in DJIA.
  • The remaining six stocks are Apple, Boeing, Disney, Home Depot, McDonald's, and Visa.

Selecting Trades

  • When selecting trades from the list of six stocks above:
  • Call options should be affordable
  • Each stock should be trading within historical terms
  • Stocks that are too extended from weekly or daily market structure should be eliminated from consideration.
  • Institutions like to see big breakouts when looking for stocks to move higher.

Seasonal Trading Process

In this section, the speaker discusses a seasonal trading process for selecting possible winning stocks. The process involves blending simple seasonal fundamental and technical trading processes to select stocks.

Apple Incorporated

  • Apple Inc. is a strong candidate for seasonal trading.
  • The stock was very strong from a weekly standpoint with each bar representing a weekly representation of the share price movement.
  • The overall movement was higher with every down close candle supporting new buying from April 2016 all the way leading up into February where they finally made an expansion and ran right through the 135 and ultimately all the way up to 155 per share.

Boeing

  • Boeing is another strong candidate for seasonal trading.
  • Institutions love this setup as it was sitting right at old highs perfectly ripe for a breakout.
  • From 160 a share all the way up to ultimately 200 a share, it had very good price movement.

Disney

  • Disney has difficulty breaking out above its old high around that 120 level.
  • It has to have a lot more movement to get to a new Breakout institutions won't be that aggressive about buying this type of stock because it's not poised technically regardless of what the fundamentals may be.

Home Depot

  • Home Depot is similar to Boeing in apple at the time of the February 2017 bullishness seasonal tendency and when the Dow was making a lower low Home Depot was not willing to do that and we were real close to the old high.

Stock Market Analysis

In this section, the speaker discusses four potential stocks to invest in based on their performance during the 2017 bullish period.

Potential Stocks to Invest In

  • McDonald's: Price was trading inside a larger consolidation and had already respected a bullish order block around $120. Anticipated low resistance liquidity run to around $132 per share.
  • Apple, Boeing, Home Depot: All very strong candidates for investment during the 2017 bullish period.
  • Visa: Trading close to its highs and ultimately surged through, appreciating about $10 per share. While it didn't deliver as high of a return as the other four stocks mentioned, it still met criteria for higher moves on the weekly chart.

Picking Winning Stocks

  • The process of picking out which stocks have potential weekly breakouts involves looking at seasonality, relative strength ideas supporting with SMT divergence between indices and that stock showing an unwell has to go lower.
  • Statistically speaking and historically speaking these elements are there all the time for winning stocks.
Playlists: 2017 ICT Private Mentorship Core Content Month 10
Video description

2017 Premium ICT Mentorship Core Content Video Lectures Audio and visuals are exactly as they were distributed in June 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.