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T R A N S C R I P T

Charting in Active Trader Pro®

Sam Short: Thank you Jonathan, definitely welcome everyone to join us for an hour

to talk about Active Trader Pro. As Jonathan mentioned, I’m with Fidelity’s

Trading Strategy Desk, so is Nick here. And really, we’re here to help with

education, to make you a self-directed investor who has a more repeatable

process that you can work with. And certainly, Active Trader Pro is a really

essential tool for a lot of active traders who are utilizing technical analysis and

utilizing charting as part of their process. So the focus today on charting in

Active Trader Pro definitely very much toward that end. The representatives

on our Trading Strategy Desk all are either chartered market technicians or

chartered market technician candidates. We all have years of experience here

at Fidelity. Personally, I’ve been here for just a little over nine years, over eight

of those years working with Fidelity’s active trader clientele.

And we do also offer four-week courses for people who are beginners, who

are new to both technical analysis and for those who are just starting out with

option trading. In addition to those classes, we also offer standalone courses,

which you can access at Fidelity.com/coaching. Usually we have three or four

of those a day, so certainly these webinars are a fantastic resource, but really

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on top of these webinars, you have these additional classes that you can

attend, these coaching sessions, for sort of more specialized learning on

different topics.

As Jonathan mentioned, you can access the install file for Active Trader Pro on

Fidelity.com, and a really common question we often get is how do I log in?

And it uses the same login credentials as on Fidelity.com. You don’t lose

access to Fidelity.com, nothing of that sort, but you’re able to use both

interchangeably and even at the same time, if you wish.

So, for the session today, we’re going to try to cover really all of the charting

functionality in Active Trader Pro. Especially with an eye toward using that

functionality to help with risk management in your trading process. If there are

follow-up questions, certainly reach out to us here at Fidelity. You can reach

out to your local branch, you can reach out to us at the Trading Strategy Desk,

and with our active trader team. And we’re a fantastic ongoing resource that

you should utilize, you’re never really on an island with your trading, we want

to make sure that you’re able to maximize everything that we have to help you

be the most successful trader that you can be. With that, let me let Nick

introduce himself, and then let’s get started on taking a look at looking at

some of the charting tools in Active Trader Pro.

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Nick DeLisse: I really appreciate that Sam, and good afternoon everybody on the

East Coast, good morning to everybody else. My name is Nicholas DeLisse,

I’m with Fidelity’s Trading Strategy Desk. And I just have a passion for

education just like Sam does. Haven’t been with Fidelity quite as long, I’ve

been with Fidelity for about seven years, but my journey to the Trading

Strategy Desk kind of mimics Sam’s. I’m also a chartered financial analyst, in

addition to pursuing the CMT designation, and I really see that, you know,

charting, understanding price movement, can really help with that timing

decision, and also with risk management. And it’s tools that a lot of traders,

they forego, because they -- you might focus just on security selection, rather

than that timing decision.

Now, we’ve gone ahead and we’ve shared our Active Trader Pro screen, and

let’s go ahead and get into the swing of things when it comes to, you know,

when it comes to charting. Active Trader Pro really is a powerful platform and

a powerful tool. One really quick and easy thing that a lot of traders, they

might miss when it comes to Active Trader Pro, is our linking tool. If you look

at the very top left-hand corner of the chart, you’re going to see something

that says unlink, or change link, if it’s not linked. Currently, this is, of course,

set to the gray link tools. The importance of this being gray is a default. So

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let’s say you have a watchlist or a positions list, you can just double click on the

positions list, and it will then automatically load that in the chart, you see the

stocks change to OEX, and we can change it to SPX, and even go back to the

semiconductor select sector. So it’s just something that’s really quick, easy to

use, from, you know, looking down your positions if you’re charting. But let’s

go and jump into some of the other really important settings of a chart.

Very bottom left-hand corner, this will control your timeframe. In essence,

what this part of the chart is doing is, this kind of zooms you in, and zooms you

out. Right now, we’re just on a six-month basis, but if you wanted to go out to

a one-year, you know, two-year basis, or even, you know, jump into a one-

month basis, you have that ability to do that down here. Now if your chart is

smaller, or if it’s not quite as expanded like ours is, you might actually have to

click and have a little bit of a dropdown menu. Let me go ahead and make this

a little bit smaller, that you see that right now, it’s set on today, you might have

to click on this dropdown menu like this, to actually get that change.

So kind of expanding this out, just the right of this, you can see something that

says frequency. What this is going to control is the different bars up here.

Right now, we do have it set up to be candlestick versus the default open

high/low close, that you might actually see when you log into Active Trader

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Pro for the first time. This frequency is very important, because this is what any

indicators you might add to Active Trader Pro are going to be based on. Right

now, the frequency is set at daily, meaning each of these bars represent one

day’s worth of information, of course, over the last six months. Now we can

change this frequency to a minute, so that each of these bars now represent

one minute’s worth of information. The important part of this is that let’s say

you have a simple moving average on your chart. It’s a 20 period simple

moving average. Well if we change the frequency to one minute, that moving

average is now a 20-minute moving average. It is no longer a 20-day moving

average. The same thing if you change frequency to maybe an hour. It’s now

a 20-hour moving average, and it’s definitely something important that you

have to keep in mind.

Now, if you noticed when I changed the frequency to one minute, I’m no

longer on that six-month time horizon. That’s because different timeframes

allow different frequencies. Of course, you can’t look back and have one

minute bars going back three months, and so it’s going to reduce that to the

appropriate timeframe, where you can get those one minute bars. And to

really get that sub-day, to see a frequency less than one day, you need to be

on a one month or less. So as we go to one month, we see we have this 60-

minute frequency, but as soon as we kick it up to three months, this frequency

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drops to daily. And what this will also do is you get this warning, frequencies

below will change the timeframe, and you’ll notice we change the 30 minutes,

this of course adjusts that timeframe appropriately so that you’re able to see

the information you’re looking for.

So kind of coming back to a six month, one other thing that a lot of traders will

notice is there’s a histogram, there’s this history viewer down here.

Sometimes, Sam and I will speak with clients, and they’ll say, we see this

mountain graph at the very bottom, what does it mean? Is it special? And all

this is, is this is just a different viewer, showing you different information. So

what this has done is this picture right here represents this information we get

up in the top screen. And as opposed to changing the date and timeframe in

the bottom right, we can actually drag this left and right to see different times.

We can drag this wider, if you want to. And it’s just a different way to enable

us to see the data that we want to, to zoom in data that we want to, that

maybe we specifically want to take a look at this little peak part right here, well

we can do this with the history viewer. So if you want to hide the history

viewer, you’re simply looking at the little triangle in the bottom left-hand

corner of the chart. I’m going to go ahead and go back to six months.

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In addition, if you want to zoom in other ways, the very top right-hand corner

of the chart, you’re going to see the zoom in feature, just click the plus

magnifying glass, this lets you zoom into exactly what you’re looking for, you

can click the minus magnifying glass, and this’ll back you up a little bit more.

An incredibly useful tool to take a look at maybe a specific part of the chart

that you’re wanting to dive into.

Now, settings. There are a lot of different settings, of course you can change

in the chart. Most of these settings, of course, are accessed at the settings

menu that you see at the very top. We click on settings, this will load up the

menu, this is where you can easily change from that candlestick, to open

high/low close, to mountain. As we see these changes apply in the

background, you can hit cancel, of course it will cancel all these changes. But

this is where you might change the different views of your chart. From here,

this could also be where you might add different parts of the chart. So right

now, of course, we’re on a daily frequency, so if you wanted to show extended

hours, we could check this box, and once we go to a one-month or shorter

timeframe, and we change that frequency to maybe hourly, it will actually

show us the extended hours information. Of course right now, since we’re on

a daily frequency, it is not going to show that for you right now.

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Volume chart is also something that a lot of traders like to see. They want to

see the volume that’s going on, and of course, we have an index loaded up, so

it’s not really showing that volume information like it would if we had an

individual security. And we can definitely show you some additional aspects

of that. Price volume distribution is something else that a lot of traders might

like to see in addition to showing that previous close. And so let me go ahead

and add all of these features on, I’m going to hit apply, and maybe we actually

take a look at an ETF that is actively traded compared to an index, and now we

can see the volume panes, in addition to price volume distribution, that kind of

shows you which aspects and which price points had a lot of that particular

volume.

Now coming back up to the settings page, if of course we don’t want to show

price volume distribution, we can check that box, want to change any kind of

the gridline opacity. Maybe you don’t like the gridlines. You can remove that,

or you can make them darker by dragging this back and forth. It’s the same

thing with the watermark and the background that lists the particular company

symbol. If you don’t want to see that, you can show that, and you can hide

that, of course.

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Now, in addition to that, you can also, if you want to remove the volume pane,

like any of the other indicators, you can simply click on the X button here in the

top right-hand corner, and that will also remove that. So, something else, of

course, with the settings, is some traders, they might like to change the colors

that are used, and so if we go to, you know, candlestick fill, you know, maybe

you want to look at the more traditional candlesticks. And so, as opposed to

down being red, down might be black. And as opposed to up being green,

you might use more of a gray. So it kind of shows that white if you’re doing

the filled. Of course, if we go to white, that’s going to blend everything back

into it, and you won’t really be able to see much of that information. But

there’s a lot that you can, of course, customize from this particular menu.

Now you can also access a lot of the settings menu information by a simple

right-click. If you right-click and come down here to settings, you’re going to

see some more information, if you want to hide or show volume, hide or show

extended hours, and everything else, you can change the styles from here.

With this, you can, of course, change the pricing axis from linear to logarithmic

if you wanted to. Or this can apply as some traders, they might to take a look

at a long timeframe of information, and when you start to do that, when you’re

looking at a very, very long timeframe, logarithmic can help identify that,

because a, you know, as you might see in the news, a maybe 500 point

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movement in the Dow today, yes that’s a bigger movement, but that’s not

outrageous, where a 500 point movement in the Dow back in, you know, 1995,

you know, that might be in essence it doubling overnight, if it went up 500

points, or dropping, so it’s definitely something that, you know, traders will

look at when looking at longer term time horizons, and you can, of course,

change that back by coming back to settings, pricing access, and going to

logarithmic.

SHORT: Yeah, one other thing that’s also important to recognize is some people may

not have a layout, or they’ve already put a chart into it. If you’re ever wanting

to open up a chart, what you can do, of course, is click on charts in the menu

along the top, and then new chart. Or, let’s say we’re at our layout for Active

Trader Pro, and we’re looking at the VIX, and we want to pull a chart up for the

VIX. Next to each of the symbols, there’s going to be a little button that you

can click on. When you click on that menu button, third selection there is

going to be charts, and it’ll pull up a new window with a chart for you to then

go in and start customizing. So there’s a lot of different ways to get to the

chart, and then of course, one you’re there, you have the customization that’s

available in all of those settings.

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So now let’s start to take a look at the ways that we’ll utilize the price data that

we’re seeing on the chart with what we’re going to refer to as the drawing

tools. So we’re going to go through most of the menus here along the top of

our charts, let me go ahead and maximize the chart again. So we’re looking at

a nice big chart, easy to identify. And along the top of the chart, we have a

listing here that says draw. The first couple links in the draw menu aren’t really

drawing tools, per se, but allow different ways to interact with the chart. So as

a default, it’s going to have the little arrow, like most of you are probably

familiar with any sort of Windows-based program, you have your little arrow.

But let’s say you’re having trouble identifying exact price points and dates

when looking at the chart. There’s two ways that you can really help yourself

with that. One is, if you put your mouse on a given bar, in the upper left-hand

corner of the chart, it will tell you, numerically, what date you’re on. So right

now, I’m on the 1st, or probably the 15th of January from this year. And then it

also gives you the numerical data for the open, high, low, and close. But what

you can alternatively do is if you go to the draw menu, and select the crosshair,

you’re going to notice it gives you a crosshair on the chart. And then, you can

drag that crosshair to whatever point you want on the chart. It can be along

the bar, so you can say here’s what was going on, on January the 31st. Or you

can even look at points where there’s not even a bar to see what the price

point would be at that given point. Maybe you’re trying to draw a line across,

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and having a little bit of a difficulty identifying well, what price point would that

have me at, the crosshair can help with that.

As well in the drawing tools, we have our little hand that we can choose from.

And here’s where we can scroll along the chart. And this is the way we can

add white space to the top of the chart. There’s going to be a little bar where

if you put your mouse over it, you’ll get the double-sided arrow, or on the

right-hand side of the chart, we can add extra white space to that side of the

chart, as well. If we ever want to go back to what we were on, all we have to

do is go up here, click on the name of our chart again, and it’s going to bring it

back for us.

So, with drawing on the chart, one of the most common things that traders are

going to look for is what is the trend of the security? I’m even going to back it

out a little bit further while we’re doing this trend identification. And the way

that they’ll identify a trend on a security is by plotting a trend line. And that

trend line, for a stock that’s in an uptrend, will connect the value of the troughs

that exist in the price action. If we’re in a downtrend, you’re going to be

connecting the peaks. So in our drawing menu, we have our little sort of

barbell looking icons, you’ll notice if you put your mouse over any of these

icons, you get a little tool tip that gives you a description of what it is, but if we

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click on that, and then if we left-click on a point on the chart, we can drag our

trend line out. So let’s say we want to drag our trend line to, let’s do it to this

price point here. On the trend line, at the top of it, it’s going to tell you what is

the percentage price move that that trend line is showing. So here, that’s a

17% increase in price from where I started the trend line around Christmas Eve

of last year, to that early March date that the trend line is on now.

Certainly, if you draw a trend line and it’s something you want to get rid of, or

maybe we want to adjust it in some way, if you put your mouse over the trend

line, it’ll get a shadow around it, and you can either grab the end of the trend

line and drag it to a different point. You’ll notice, you can also drag it to points

where it’s not right on the price. Or, if we left-click on the trend line, we’ll get a

little menu. And this is one of the features of plotting trend lines that I know I

personally have a lot of trouble with, very handy thing to change, is if you

select snap to price, it’s going to go ahead and adjust the beginning and end

point of your trend line to be along the price of the security. So if you can’t

exactly drop the trend line in the right place, highly suggest going in here,

choose snap to price, hit apply, and now you’ll notice when we’re dragging

our trend line along, it’s moving along the prices that exist for the security.

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Now, when we’ve identified our trends, a lot of times we want to see an

extension of well, what does the slope of this trend look like if it continues? So

if we go back to our menu here, some of you may have cheated ahead a little

bit, and you can choose to extend this to the right, and we’ll see it project that

out to the right-hand side. Alternatively, we can extend it to the left, and

here’s also where we can make adjustments to the coloration. So let’s make it

this really sort of dotty kind of pink. And we can even make it bolder.

Now, when using trend lines, certainly they have a very handy risk

management purpose of, if you’ve identified a stock that’s on an uptrend,

you’ve entered that position. Well, the stock breaking that trend line can be a

circumstance where you’re looking to exit that position. Some traders, if

they’re really worried about sort of a stock that may whipsaw or bounce

around on that trend line a little bit, will apply what’s commonly referred to as

the filter. So they’ll look for maybe one close, or two closes beneath that trend

line, or maybe they’re looking for a certain percentage below the trend line.

And in doing so, it can be very handy to go ahead and sometimes set stop

prices based upon that, maybe you want to set up a price alert so that you

know well, when it exceeds this price point, I want to look at exiting the

security. So for instance, while the NDX is not a tradeable security in and of

itself, if we had a position in the NDX, so to speak, perhaps when it breaks

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through this trend line, if we had entered around Christmas Eve, or maybe we

even entered in that March timeframe, perhaps we would have looked at

exiting in the early May timeframe.

Of course technical analysis is going to be one approach to analyzing stocks,

there are a lot of approaches you should use. You should always use the one

that you’re most comfortable with, and certainly using NDX here is really an

illustration. We’re not trying to say you should sell NDX if you own NDX

positions, NDX-based positions right now, or anything of that sort. But it really

gives us a good example here of a security that was in an uptrend, based on

the trend line that we drew, and then it’s breaking through that trend line. To

delete the trend line, you can just click on it, and you may have noticed there’s

a remove button here along that trend line.

So, also in our drawing menu, there are a few other things we can choose

from. Another common thing that traders are going to draw on their chart are

going to be support and resistance lines. So price points where the stock

commonly seems to reverse. So if it’s above the price of the stock, or above

the price of the market for an index, or ETF, or what have you, that’s going to

be our resistance point, where it seems that excess supply seems to be

coming in, and the price has trouble exceeding it. Conversely, to the

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downside, we’ll have support levels that we’ll draw, and those’ll be price

points where the stock has trouble getting below, because all of a sudden we

see supply coming in when that occurs. So, we can do that with sort of

identifies, resistance lines, and support lines here, and it’ll give certain

coloration to them. Or, you have the ability just to draw a horizontal line. So

maybe we draw a horizontal line here for us along these peaks that we’ve seen

from roughly the past year.

Now, there’s going to be a flag that shows up on the right-hand side, giving us

the exact price point. And sometimes it can be a little difficult to sort of drag

this horizontal line to exactly where you want it to be. If you left-click on it

when it has that little shadow, similar to the trend line, we can remove it, or we

can adjust how it looks, whether it’s a bold line, or a dash line, or green, or

pink, or blue, or what have you. But we can also set an exact value. So if we

say we want this trend line to be at a round number, so we’ll put it at 7,700, all

we have to do is go in here, type in 7,700, hit apply, and it’ll move that trend

line immediately to the point where we’ve identified. In our drawing tool, or

drawing menu, here’s also where we’re going to have, if there’s tools that

you’re familiar with, the various Fibonacci tools, both time zones and

retracements. The Gann fan is also available in here. These are probably

slightly lesser used tools than trend lines or horizontal lines. But for those of

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you who are looking for, or familiar with those tools, here’s where you can

access them.

The couple other drawing tools that I want to show is, we can draw a

regression channel, so very similar to how we drew a trend line, if we begin at

one point, drag and then release on an endpoint, it’s going to draw a

regression line based on the price action that occurred in the range of time

that you picked, and then it’s going to draw a channel around that line, based

on the furthest distance that the stock reached in that period, and plotting that

above and below that line. If you want to do just the regression line itself, you

don’t want it to draw the channel, let’s go ahead and remove this, you’ll notice

there was also a regression drawing tool to the right of where we had the

regression channel.

The last couple of things here are going to be if you want to draw shapes. So

perhaps you’re someone who realizes maybe for my support and resistance

levels, I don’t necessarily want to draw a specific line, I want to interpret it

more as a range of prices. And I don’t want to sort of be psychologically

pigeonholed into thinking it’s just one line, versus a range. We can draw a

rectangle to recognize our resistance level to the upside, and that resistance

level, if we think we’re trading in a range, might be where we’re looking to exit

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at our profit target, conversely if we had drawn a support level, maybe that’s

where we’re looking to exit, to try to avoid additional downside losses if we

break beneath the support level that we’ve identified.

We can also add notes to our chart. So if we go in here, click note, and let’s

say we want to add a note right here for that low. So we’ll call this “Christmas

Low.” And we can hit apply, and you’ll notice puts it right there on the chart,

so it’s always easy for us to identify later. Though one thing to keep in mind

about the note tool is it is going to stay as such. So if you click somewhere

else, it’s going to have you draw another note. So, we’ll call this the “Spring

Low,” because that happened towards the very end of spring, beginning of

summer. And then if you ever want to get rid of notes, we’ll go back up to

draw, set our arrow to normal again, you’ll get a shaded box around it, you can

click on it, and go ahead and remove that note. And of course, if you put

those notes on a given security, those notes are going to stay there. So if I

close Active Trader Pro, come back to it two weeks from now, open up my

NDX chart, I’m going to have my “Spring Low” identified there with the text

box that I drew. Or maybe I put a note there, if I was eyeing a certain security

inside the NASDAQ 100 during that time. Or maybe I realized the same time

the NASDAQ 100 made that low, maybe some other index like the Russell or

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the Dow also made a low, or something of that sort. Anything where I want to

note immediately on the chart, where I can constantly refer back to it.

So, the drawing tools certainly offer a lot of power to be able to really draw

your eye to things on a chart, and even set a context for some of these entry

and exit decisions around the trend a security is in, around support and

resistance levels, but really, the other types of usage that we have, and of

course our next menu along the right-hand side here, is really going to take us

into starting to use some of the indicators. So breaking down price action into

looking at it in different ways, in different technical studies on the chart.

DE LISSE: So, one interesting thing about the indicators that we add to charts,

compared to the draw tools, is of course, if we change the symbol, all of our

indicators we’ve added will stay where the draw tools don’t. So now, let’s say

you’ve added a whole bunch of draw tools like Sam has done in the chart, you

want to remove them. Well as Sam showed earlier, we can just come up here,

and we can reload the chart that we have, and all of the sudden we have that

blank default chart that we’ve saved in the past.

Now, indicators are a really important tool when it comes to charting, when it

comes to analyzing price, when it comes to analyzing information. In essence,

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what they’re doing is they’re helping digest the information that you see. I’m

sure a lot of you have heard that saying about, you know, missing the forest for

the trees, this can, indicators can help you kind of take a step back to really

look at the information you’re seeing, and look at it from a potentially different

viewpoint. It can be just critical to helping you manage your risk like what Sam

was saying.

Now of course, there are three main types of indicators that traders have

historically used with a fourth type coming to the scene a little bit recently.

You know, those are, of course, trend indicators, momentum indicators, and

volume indicators are the three big different types of indicators. With that,

that fourth one that’s a little bit newer, of course, with being able to use

computer technology, being volatility indicators. And that’s just because of

calculating volatility, calculating standard deviation, is very calculation-

intensive, and you know, if you went back 40 years ago, it’s a lot more difficult

to calculate that by hand than maybe adjusting a simple moving average.

Now of course, if you want to add something like a simple moving average to

your chart, all you’d have to do is come up here, you can click on indicators,

you can then find that particular indicator on the chart. Now as you noticed, as

I’m moving my mouse over all these different indicators, it is giving you kind of

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a demonstration view of how it would be added to your chart. If we’re looking

for a simple moving average, we can simply scroll to the right until we find it,

it’s all, of course, alphabetically. And with that, we can then add simple

moving average, or SMA.

Now this has, of course, added one to the chart. You know, we see it’s already

been added. And from this, we might want to add more than one to the chart,

and there are many different ways you can, of course, add them to a chart. So

coming up to indicators, we could also type the search, we can simply type

SMA, and that reduces down, of course, what we’re seeing, and we can add

one that way.

In addition to that, we can even come over here, and we can click on recently

used, and this will show some of the more recently used indicators that we’ve

added, of course, to our chart. So we want to add a third SMA, or simple

moving average line, that way.

Now, it’s also important to know how to modify and change these particular

indicators that you’re adding to your chart. Because not everybody only wants

to use a 20 period simple moving average. If we come up to the very top

where it lists these, you’ll see in parenthesis, it’s showing 20, meaning this is a

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20 period simple moving average. If we left-click on this, and we come to

modify, we can actually change that information. And maybe in addition to

having a 20 period moving average, we want a 50 period moving average. We

can change that to 50, and we can hit apply, and now we have a 20 and a 50

period moving average. Let’s go ahead and modify this third one, and we’ll

make this a 200 period moving average. With this, as Sam showed with trend

lines, we can change the color, we can change the thickness, we can change

the style, we can even change the source information, of course, if you want, if

you want to have this based on, you know, the open, the low, the high,

something else other than the close. We can, of course, change that source

information.

Now most traders, of course, they’re going to leave something like this at at

the close, but there’s a lot that you can do when it comes to customizing these

particular moving averages. And now we have the, you know, two of the more

common moving averages that you might see, you know, when you’re

watching the news on TV. Of course that 50-day, and that 200-day moving

average. It’s important to note, again, that if we come to daily, and we go to

one minute, that now these are no longer a 50-day and a 200-day moving

average, these are now a 50-minute and a 200-minute moving average, which

are very, very, very different. So kind of coming back to, you know, six

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months, we now have shifted back to that frequency. And from a risk

management tool, a lot of traders, they might use a moving average kind of

like a support or resistance line. You know, in essence, giving you a period

where you might place a stop order, you know, just like Sam was showing with

those resistance, or those support lines you might draw on a chart, just give

you some more tools to help you manage your risk.

Of course, there are other types of indicators that traders will use. Simple

moving averages are, just happen to be common trend type indicators. Of

course, these are also price overlay indicators, where it’s displaying on the

price chart. Other indicators are what might be considered oscillators. They’re

not displayed on the price chart.

And another commonly used one that traders might look at is the relative

strength, RSI. We simply type in RSI, or you could type in relative strength

index, that will pull that up. We want to go ahead and click on this to add this

to your chart, and as you see, this is an oscillator that shows up below the

chart, and not as a price overlay. Most oscillators of this type are going to go

between, you know, zero and one, or zero and 100, sometimes have a

negative one to positive one. But they’re in essence going to kind of shift back

and forth, they’re going to oscillate between two separate values.

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With the relative strength index, there are a lot of other things you can, of

course, customize. This is based on the last 14 days worth of information,

because we’re still in frequency. You can customize this by coming up and

going to modify, just like everything else. Some traders, they might look to

change the overbought, oversold levels, for example, of the relative strength

index. Maybe they want overbought to be 60 versus 70, or oversold to be 40

versus 30. And as we see, once we made these changes, we see these

changes being displayed below, and as they’re adjusted. Of course, we can

also change the opacity, right now opacity is set at zero, but once we do this, it

shades that area above those particular overbought and oversold levels. And

then go ahead and cancel this, just to undue the change that we’ve made. If

you want, you can even change the period associated with the relative

strength index. Now, a lot of traders, they won’t modify something like this

unless they become very, very comfortable with the tool, with the information

it’s showing. But it’s definitely something that you have the ability to change if

you’d like to.

In addition to that, what a lot of traders that use our charting tools don’t realize

is you can actually add indicators to other indicators. So let’s say, for example,

this is just really spiky up and down. So let’s maybe go to a today look, and we

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see RSI is just kind of spiky, a little bit more up and down, it’s not quite as

smooth as it was on that daily timeframe. We can actually click, left-click on

RSI, and we can add an indicator. And maybe you might want to add, let’s say,

a simple moving average to RSI to kind of smooth it out. If we left-click on this,

modify, of course again the default is that 20 period, but maybe you might

change it to a 3-period moving average, and so it kind of smooths some of that

information out. Of course, this does make the chart a little bit busier. So we

can always come back, we can modify, we can change the color, and kind of a

nifty trick is if we change the color to being white, it’s going to blend in with

the background, and we’re not going to see the RSI line, we’re only going to

see the moving average that we plotted to smooth information out. And this is

how indicators can help you, they can aid with what you’re seeing, because it’s

going to smooth things out, it’s helping you see the forest, and not just the

trees, not that jerky information, so to speak. And this is how this can be a very

powerful tool for you.

Of course, so far we’ve just covered momentum and trend indicators. Another

very common indicator, of course, is a volume indicator. If you come up to

indicators, you might add something like an on balance volume. On balance

volume, or we’ll do OBV, to pull that up. Now of course, it had that dash in

there, so it didn’t quite come up in the search, you can kind of play with that a

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little bit. And you become more familiar with the different indicators that we

have. So as we add this, on balance volume is now down here below. But

maybe we just want to see this, and we don’t want to see RSI. As I said, we

can click this little X box to remove RSI, or we can even come up to the top

left-hand corner and delete indicator. Maybe we did not want to see moving

average on RSI. We can left click and delete, and it’s been removed. So

jumping back out to six months, again, as you can see this can get a little bit

busy with your chart. You know, maybe you want to see just RSI, so you might

drag this taller, and it’s increased that. Or you could, of course, drag this

smaller, and you see a lot less information, but you see a larger price chart part

of that. A lot of choices, a lot of different ways you can, of course, customize.

You can drag this left and right to see a little bit more information.

Something else, of course, with indicators, is as Sam was showing us the draw

tool, you can even draw on indicators. And a lot of traders might use this to

take a look at, to see if there’s positive or negative divergence between

different indicators, where you might be seeing momentum is trending down,

while price might be trending up. And so you can do a lot of things on

indicators, just like you could, of course, on your price chart.

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Now that fourth type of indicator, of course, that we’ve discussed earlier, was

volatility. And two big volatility indicators traders might look at are historic

volatility, and then of course, a price overlay example might be Bollinger

bands. So if you were to add historic volatility to your chart, it is, of course,

going to add as an oscillator at the bottom. No, but if we come and we add

Bollinger bands to the chart, this adds a price overlay. With this, just like

anything else, you can left-click, you can modify, you can change things. Of

course, this is based on that 20 period moving average that we already have

charted. But maybe you want to change the standard deviations on your

Bollinger bands to be simply one and a half standard deviations, make those

bands a little bit tighter, or a little bit wider. You can also change the opacity if

you want thicker bands, if you want darker bands, or if you just want it to kind

of show you where those outside lines, and you don’t really want to shade it in

the middle, you can, of course, make that modification.

You know, all these tools are, of course, just to help you kind of manage your

risk, help you, you know, take a look at, and then of course digest the

information that you’re seeing on the chart. If you have any questions, of

course, you can always, you know, call in, you can speak with us, be more than

happy to walk you through any of these indicators separately on, you know, a

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one on one basis over the phone. Of course, those group coaching sessions

that we have.

SHORT: Yeah, so another common thing that we’re going to take a look at is how is

our given security performing compared to other securities, and also, what’s

going on with our stock? What is the, when did earnings come out? When are

there dividends? When did we buy it? We want to see all that information on

the chart. So in our sort of dummy account here, I’m going to go ahead and

change the stock that we’re looking at to Bank of America, because our

dummy account has a share of Bank of America in it. And maybe if the chart’s

looking a little busy, we can go back in here, clear it off, so go back to our

default, so all of the sudden, very boring looking chart. We just have one year

of price history of our stock.

In the events menu, we can go in and it’ll allow us to draw on the chart, or it’ll

draw for us on the chart, really, when dividends have paid out, when the stock

has had earnings, and we can also identify any tax loss that may exist. There’s

also a selection for splits, although of course in the past year, there has not

been a split on Bank of America. So you’ll notice, for each of the dividends,

you get this gray box. If you put your mouse over it, it’ll give you the details

about the X date for the dividend, the pay date, and what the amount of that

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dividend was. With each of the earnings announcements, and this is really a

common question that we’ll get, is you’ll see it shows up in green for a number

of these. If you put your mouse over it, it’ll give you what was the actual date,

it’ll give you what was the earnings per share, but whether it appears in green

or red, a lot of people for some reason intuitively want to think it’s because

they beat or they missed the consensus estimate. And actually, what we’re

doing in Active Trader Pro is we’re comparing that quarter’s earnings to the

same quarter from the prior year, and identifying whether the company

earned more or less.

So if we look at each of the past four earnings announcements that it shows

here, so if we take this January announcement, January 2019, the fact that it’s

in green means that they earned more that quarter than the quarter that

reported in January of 2018. It’s not making a statement compared to

consensus estimates, nor is it comparing it to the quarter immediately

preceding. It’s same quarter, prior year is what we’re looking at when we take

a look at that. So certainly, that can come in handy if there was a gap, maybe it

was because of earnings, so we have this gap that occurred on, in January. It

was a gap up, so Bank of America, we know, reports before market open, like

most of the bank stocks do. And so, it started trading at a higher price on that

day. Maybe to help us more easily identify if the gap has closed, we combine

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this with one of the drawing tools. We go in, we can draw a rectangle for that

gap, and then we can see where that gap finally filled come the late March

timeframe. So about three months later or so. We can, of course, delete our

rectangle just as easily.

Now, maybe we want to see if Bank of America is sort of best of breed, or if it’s

doing best compared to other banks. Well, of course we can go in, and we

can find the data, find numerically how it’s been performing by comparison,

but if we click on compare here, we can actually compare it to any other

symbol. So if we want to compare it to another bank, we can plug in C for

Citigroup, and we’ll see we get a second line right on the chart in green, and

that’s showing us the price action of Citigroup. It’s going to change this axis as

a default, as showing what is the price performance over the period of time

that we’re looking at. So this is really a circumstance where the answer to the

question that we’re asking is going to be very dependent on the timeframe

that we’re looking at. So looking at one year, it looks like Citigroup has

outperformed slightly. But if we change our chart to a one month timeframe,

we have a lot more outperformance from Citigroup, up almost 6% versus flat.

And let’s say we zoom out and look at two years, all of the sudden, Bank of

America becomes the leader and Citigroup the laggard. So we’ve got to

remember, whenever we’re looking at these comparisons, it’s always going to

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be a question of well, what is our starting point? What is the period of time

that our comparison is over?

Let’s go ahead and make our chart a little less busy, so we’ll clear off all of the

events that we have. And then, you’ll notice as a default, we can go in and

compare against the index, so maybe we want to compare against the S&P

500, it’s going to add that, and it’ll have it as a different color. And if you want

to remove any of these, you can go up here, up at the top, click the one you’re

wanting to delete, delete it off there, and a common comparison a lot of

traders will do is comparing it to the industry that the company falls within. So

I can go in here, type in the banking industry, hit enter, and it’ll go ahead and

plot Bank of America’s two-year performance compared to the banking

industry, and we can see at the end of the two years, it has outperformed, and

outperformed pretty appreciably with the industry up only 10%, and this given

stock up nearly 20%.

We can also go in and instead of having it plotted based off the performance,

if you choose dual axis comparison, it’s going to go in and you’ll notice on the

left-hand axis, we have the different price points for the banking industry. On

the right-hand axis, we have the different price points for Bank of America. So

if we want to do that comparison where it’s more of an overlay, see if they

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have similar patterns that are appearing versus just seeing what is the sheer

performance over that period of time, we’re able to go in and do so. Of

course, if we go in and zoom into a shorter period of time, it pulls the data

similarly, and we can even drop down our frequency if we’re looking at shorter

term data, to see maybe is there a divergence over the past week or maybe if

we’re looking at intradays, they’re a divergence intraday between the given

security that we’re looking at, and maybe the whole market if we’re using the

S&P 500, or in this example right here, versus the given sector, using Bank of

America.

Now, we have some tools that try to automate some of this for you, and help

with some idea generation. And it’s going to be the last sort of tool, the last

functionality that we go through here.

DE LISSE: So with this, this is where Recognia pattern analysis comes into play. And

we have a lot of information from Recognia, of course, on our website, where

we have different securities showing the potential bull or bearish of the day. In

addition, if any of you have used our stock screener to potentially screen for

technicals, it is, of course, pulling from that Recognia information. Now, if you

come up to technical analysis, you have a couple different things you can, of

course, click on. One thing that I found to be, you know, very interesting and a

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lot of traders like, if you come to patterns and events, you have different

choices you can click on, and Recognia, based on of course, algorithms, will

show you different patterns and events that might have happened. And so,

I’m going to go ahead and click on short-term, intermediate term, and just so it

shows us a bunch of information, I’m going to go ahead and hit select all, and

then hit apply. Now, this has, of course, added a different pane, you know,

below the price chart. And I can show this as a bit of a shorter timeframe, so

I’m going to click on six months, and what this will, of course, do, is you’ll be

able to see, you know, green boxes for bullish events, and red boxes for

bearish events. I’m going to go ahead and change this to Citigroup real quick,

the other security that happens to be in this account, and to pull some of that

information.

So with that, traders, they might use this particular tool, you can mouse over it,

and it will pop up a box, and you can even add that, of course, to your

particular window, and maybe have the moving average cross over, it will

actually show that, where there is a bullish or bearish event because it was a

moving average crossover, and then it’ll automatically add those particular

moving averages to your chart, and draw a box around where that particular

change happened. In addition, it will describe kind of the methodology of that

particular event, which of course, you know, could be very useful when you’re

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learning more about technical analysis, and you want to see what is going on

more in the background, and it’ll kind of explain this as bullish because of this,

etc.

What it will also do, come back to technical analysis, and go to patterns and

events, there’s an anticipated events tab right here. You do that, it might then

show you that if price goes above or below a certain point, it will change the

moving average to, in essence, give you a trigger in the future so that you

know that maybe your trading plan is based on if moving average crosses over,

you’re going to get out. Well this would let you know that if price went to that

particular point, you might actually have that particular moving average

crossover.

Something else that is very useful, Sam was of course talking about support

and resistance earlier, we can click on this, and have Recognia add those

particular support and resistance levels for us automatically. In addition, this

will also add, you know, different stop levels that you can talk about, you want

to have very tight stops, very loose stops, where it’s based on, you know, some

volatility information. It will automatically, of course, generate those levels for

you.

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Now, one of the last things that we want to address is maybe you’ve added a

lot of these different indicators to your chart. I’m just going to add a couple

random indicators, just clicking on the chart, and you want to save this

particular chart. Well if you click on this old school floppy disk that you noticed

Sam and I clicking on to kind of load the previous saved charts, you can

actually come down here and you can save chart. And you can name this chart

whatever you’d like. Maybe for example, we might name this chart TA, for

technical analysis. Or we might name it webinar, you know, for webinar. We

can choose what we actually want this to save. You know, we can have it save

indicators that we’ve added, with the different settings we might have

changed. Of course, timeframe or frequency, that way whenever we bring

back up the chart, we don’t have to keep reinventing the wheel and keep

adding the different indicators to the chart.

Something else, of course, is tabs. You see in the very top left-hand corner

where the tab that is the today tab, a lot of times by default in Active Trader

Pro, you’re going to see two tabs on the default chart. One is going to say

today, one is going to say one year, because traders, they might like to quickly

go back and forth between those different timeframes on the same security.

In addition, you might have different tools you might be using on those

different timeframes. You know, maybe you’re using a longer 50 and 200

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period moving averages on that longer timeframe, but on the shorter

timeframe, you’re using something like a 20 period moving average to show

you a little bit of different information. Now you can, of course, simply right-

click, you can come down and copy current tab, and this will very quickly copy

all of the indicators that you’ve used, or you can, of course, simply hit the plus

sign, and it’ll add a new blank tab with nothing having been changed. From

here, you can of course, make all those changes, and of course, save all those

changes however you’d like.

END OF AUDIO FILE