Stock Market Fundamentals | Zac Hartley | Skillshare
Play Speed
  • 0.5x
  • 1x (Normal)
  • 1.25x
  • 1.5x
  • 2x
64 Lessons (9h 24m)
    • 1. Course Intro

      0:53
    • 2. History of the Stock Market

      3:24
    • 3. What are Stocks and Bonds?

      9:17
    • 4. What is an Index?

      6:44
    • 5. How the stock market works

      11:05
    • 6. Types of Analysis

      7:52
    • 7. Price is King!

      8:35
    • 8. Trend Lines

      11:35
    • 9. Patterns

      7:12
    • 10. Volume

      8:45
    • 11. Moving Averages

      8:36
    • 12. MACD

      12:10
    • 13. RSI

      4:25
    • 14. Using Indicators

      6:36
    • 15. Strategy

      9:49
    • 16. Stop Loss

      5:55
    • 17. Options

      14:59
    • 18. Setting up the charts

      10:00
    • 19. Making the trade

      10:26
    • 20. ETF's and Mutual Funds

      4:07
    • 21. Execution

      16:06
    • 22. Buying ETF's and Index Funds

      6:46
    • 23. Chart Lists and Routine

      12:21
    • 24. Day Trading basics

      7:48
    • 25. 55 Setting Up the Dashboard

      16:46
    • 26. Trading Journal

      6:41
    • 27. Hot Keys

      7:18
    • 28. Day Trading Order Types

      8:20
    • 29. Order Duration

      5:17
    • 30. Setting up indicators

      6:11
    • 31. Uber Trade

      8:21
    • 32. 5 Things I wish I knew when I started day trading and swing trading

      6:38
    • 33. 1 page trading strategy

      10:17
    • 34. How I set my stop loss

      13:08
    • 35. Position size vs diversification

      11:38
    • 36. Technical Summary

      11:17
    • 37. Intro to Fundamental Analysis

      7:02
    • 38. Finding the Financials

      10:59
    • 39. Reading Financial Statements

      15:06
    • 40. What are Ratios?

      10:35
    • 41. Comparing Companies Using Ratios

      9:46
    • 42. Market Cap and Share Price

      8:38
    • 43. How Dividends work

      6:14
    • 44. Dividend Investing

      12:14
    • 45. Importance of Diversification

      13:57
    • 46. Real Estate and REIT's

      12:31
    • 47. Short Selling

      5:47
    • 48. Practice Accounts

      4:49
    • 49. Starting Your Portfolio

      13:35
    • 50. Managing a portfolio

      8:36
    • 51. How to handle down days

      6:25
    • 52. FOMO

      4:26
    • 53. What is an IPO?

      15:00
    • 54. Averaging Down

      9:25
    • 55. Course Summary

      9:09
    • 56. 42% Profit- Beyond Meat Trade

      6:42
    • 57. The Most Important Lesson

      9:55
    • 58. Stocks to watch during Covid-19

      11:46
    • 59. Buying FB and LULU

      8:14
    • 60. Buying Shopify Options

      4:40
    • 61. Taking Profit- LULU

      3:06
    • 62. How to use the VIX

      5:28
    • 63. 73% Profit Trade

      5:54
    • 64. Buying into an IPO

      6:44
325 students are watching this class

About This Class

Hi Everyone!

My name is Zac Hartley and in this course I am going to teach you everything you need to know in order to feel confident making your first investments in the stock market. 

In lesson 21 I am going to make a trade using the methods that I have taught in the course and in lesson 34 I close that trade with a 44% profit in under 10 days of trading using just the knowledge and strategies that I outline in this course

This is the perfect course for somebody interested in getting into day trading, swing trading or dividend investing and we are going to cover all of the fundamentals to get you started.

We are going to start at the beginning and talk about how the stock market was founded, what a stock is, and the history of the stock market.

After we get through the easy stuff we are going to start looking at how to read charts, make decisions, and actually invest our money in a way that helps us achieve our time based financial goals.

We are going to finish the course by looking at fundamental investing and understanding the financials statements so that you have a full range and understanding when it comes to looking at a company stock.

I started trading 7 years ago and I began making courses in 2019.  Since then I have helped over 200 students learn how the stock market works and helped them take that first step in their plan to financial freedom.

Join my trading group chat and get access to my weekly analysis, trading journal, investment spreadsheet and much more: www.zachartley.com

You can reach out to me for questions and feedback at anytime by e-mailing me at [email protected]

Best regards,

Zac Hartley

Transcripts

1. Course Intro: welcome to stock market fundamentals. Mining is Zachary Hartley, and in this course I'm going to teach you everything you need to know about the stock market, starting with the history of the market, what a stock is and how they trade and finishing with how to find the right companies and build a diversified portfolio to set yourself up for success. We're going to help you set goals, find strategies and methods to meet those goals and knocked them out of the park. And in this course, you're gonna have everything you need to feel confident, making your first trade, taking control of your own financial freedom and setting yourself up for long term financial success. My name is Zak Harley, and I've been day trading and swing trading in the stock market for the last seven years, and my goal here is to share as much knowledge as I possibly can with you. Welcome to stock market fundamentals. 2. History of the Stock Market: What's up, everybody? Zack here again, And today we're talking about the history of the stock market. So I'm really excited about this. There's one of my favorite subjects. Cut is a kind of It's a cool story, and it tells you about how it started and how we got to where we are today. So let's get into it. The history of the stock market is kind of cool. It actually started with ships, and it started in Amsterdam in 16 02 Back then, merchants were trying to send ships overseas to trade for goods and products and bring them back into Europe and sell them to make money. Now, what was kind of tricky about this business model back in the day is about 25% of the ships never made it back. So for a merchant to save up all of his money, send out a ship to go and do this and possibly not have it come back was a big risk. So what they did instead was instead of sending a one ship that send out five ships, but that cost much more money so they will go out and they would raise money from the general population and from businesses, and in return for or for that up front money they would issue shares. Those shares looked like this. So this share here was issued by the Dutch East India company. This was the 1st 1 that's actually ever being recorded in the oldest one. We confined, and this was a share for anybody that invested to get a return of the profit from that ship . Now this was a great system, and it really helped them expand and grow the amount of ships that they could send and receive. Eventually, more and more businesses began to do this, and soon it was common practice to raise money through issuing shares to start your business. This eventually led to lots of companies having shares and trading the shares, and it grew across Europe. So much so that in London there was a coffeehouse where people would meet every single week to trade their shares in exchange and meet up and talk about it. And after a couple of years, the traders that went there every week actually took over that coffeehouse and established it as the world's first stock exchange. That was in 17 73. Fast forward a couple of years, and this premise or this idea had expanded across the globe. In New York, they started Wall Street and the New York Stock Exchange, which was located on Wall Street. And that was in 17 92. That was the first organic kind of stock trade market on on North American soil. So since then, there's also been a lot of different markets opening around the world, and those include the NASDAQ, which is an electronic exchange. Also based in New York. It's actually the second largest exchange in the world. Excuse me. There's also the Toronto Stock Exchange for Canadian companies in North America. There's the Japanese Stock Exchange, the Shanghai Stock Exchange, in the Hong Kong Stock Exchange. All in Europe, you have the Euronext and London Stock Exchange in Europe. Now the advantage here is that you now have stock exchanges on multiple continents around the globe, which allow you to trade almost 24 7 So if you're up in the middle of the night and you want to make a trade, you can do it. On the Asian stock exchanges Monday to Friday. Now it's great because it allows global markets to interact with each other, and it also gives you liquidity and accessibility to the markets, depending on where you are in the world. So it's pretty cool. We started with one single ship. We expanded that premise into multiple businesses and that and then opened a stock exchange at a coffee house in London and that expanded into what we now know as a different exchanges around the world. So pretty cool story. That was the quick version of 300 years. But I'm really a fan of it, and I hope you enjoyed it so onto the next lesson and we'll see you there. 3. What are Stocks and Bonds?: all right with up y'all that Zack here today. We're talking about stocks and bonds. What they are, what you can do with them and how they work. So let's get into it right away here, So stocks is pretty exciting. Another word for them is equity shares per senator ownership. Tell me in the exact same thing, usually in different contexts. But what they are is a means that you own or this stock represents part of a company. It means that if there's 100 shares and you own five, whom you on 5% of the ownership of the shares of the equity in that company you own 5% of that company. And now with that, you get a couple of things. So this is what Apple Computer stock looked like back in the day. This was the original one. This is the paper copy one. You can still get paper copies usually get them. When you incorporate your business, you get a copy of what the paper copy of the stock actually looks like. But nowadays everything's electron ICS. When you buy and sell shares to your banker through training platform, you're not getting any paper copies like this, you're literally just doing everything electronically. This is what the share actually looks like. But everything now when your trading and I'm going through the process is Elektronik. When you do share transfers and actually incorporated business, that's what they look like. And they do keep a document of this still. So what can you do with a stock? Well, there's a couple of different things. Since you own X percent of the company, you are entitled toe X percent of the profits or of the dividend. So if you own 5% you get 5%. That's sort of how it works. So in the corporate world, all of the profits air called your net earnings or retained earnings, and a company can decide now on Lee if they want to. They can issue a dividend that dividend as part of the profits that were generated from that company, usually in the quarter, and that dividend is a chunk of money that then gets paid back to the shareholders. You'll get five cents or $1 or $2 for every share that you own, and that's how your pay out of the profits is determined. Usually they're done in quarterly dividend. Some oil and gas companies do it monthly, but usually it's accordingly thing, and that dividend is an option of the company. They do not have to do that now. Where you see the difference is if it's a large blue chip company or it's a large oil and gas producing company, they'll usually pay a consistent dividend because that's what their investors are looking for. But if it's a small young startup, if it's uber or Apple back in the day or any of these young up and coming cos they're never gonna pay a dividend because they decide to put that money back into the company. So when you're looking at this, you really need to be aware of what you're getting with these companies. And when you buy their stock, what else do you get with a stock? Well, you can vote on certain decisions. So if the company decides to sell emerge, if the company decides to elect a new chairman of the board or new board directors, any type of decision like that, that's not a day to day operation. You actually vote on it. You can also attend the annual shareholders meeting, which is a once a year meeting usually done at the company headquarters, where all the investors from around the world can come in. The most famous one is the Berkshire Hathaway annual general meeting that's run by Warren Buffett, and he actually hosts one day where all the companies come in the exhibit, their products and all of the investors come in to basically here, Warren speak. It's definitely one of the biggest A GM in the world by himself. You could buy and sell your stocks, and you can trade them, hopefully buy them at a lower price, and you sell them at a higher price. And that's definitely one of the options you can do with them now. Another thing that most people don't know is they are considered an asset class. So just like your home is considered an asset. Your cash in the bank is considered an asset, so where your stocks so if you need to borrow money or you need to get a loan for a mortgage, what you can do is you can use these stocks as part of your asset base. That was a good store of money. So if you don't want to sit on cash, you don't want to be subject to inflation. But you want to make a somewhat steady return. You can invest into a diversified portfolio or an index fund. You convert your cash into stocks. It's great way to story and money. So that's the summary of stocks. Next up is gonna be bonds, so a bond is very different than a stock. A stock is ownership in a company, but it bond is pure debt. So if a company needs to go out and let's say you're a ship manufacturer and you need to go out and buy a bunch of inventory for a new type of ship that you want to fund, well, you can do that through issuing bonds. What it is is you issue basically a note that says I owe you $1000 and I'm gonna pay you back $1000 on X Date, and I'm gonna pay you interest in between. So that's what a bond is. A bond is debt and a share or a stock is equity in the company and ownership. Every bond that you buy is gonna have an interest rate. That interest rate is basically what that person or that entity that company in this case is going to pay you to allow you to let them borrow the money and that money is usually board over a certain time period. So let's say it was a $1000 bond over five years at 5%. Well, that 5% is actually considered a coupon, and that bond pays you a coupon rate of 5%. So at the end of each year, you can go in and collect your 5% coupon, and at the end of the bond, you're gonna get all of your money back. So that's the key here with the bun is you're gonna loan them $1000. You get 5% back every single year, and then you're gonna get $1000 back at the end of it. That 5% is what you're using. Eyes what you're gaining to allow that company to bore your money. Bond is not equity, but it can be bought and sold. I got a little spelling air in the in the power point here, but don't mind that what it's saying is, it can be bought and sold it similar to a stock. There are markets for it can be bought or sold, and there is one big difference. You can buy government bonds so their government bonds for one year, two year, three year, five years, 10 years, 20 years, 30 year. And these were generally considered the most safe bombs and generally the most safe assets that you can really invest into. Now they pay you a much lower interest rate, usually between 0.8% and maybe two or 3% depending on the rates at the time. But what's nice is it's a super secure way to do. Do your basically storing your money. You can buy bond that's still gonna pay you an interest rate and the only way that it defaults of the entire US economy crashes. So lots of security there but still completely different than a stock, and you can buy these bonds. Companies can issue them to go out and buy new ships, for instance, or governments can issue them. Teoh put some money into the markets, so a U. S. A. Bond. This is what it looks like. This was actually done by the United States of America. This is a little bit back in the olden days where they still have the coupons actually attached to the bond. So the reason it's called a coupon is because you literally tear it off the bond. All these little blocks here at the bottom are individual coupons that this customer take back into the bank, and they would get a X dollar amount for that coupon. So that's the reason that it's still called a coupon, and the bond is basically that top piece of the top. So when somebody would go in, they give $1000. They'd get this entire sheet back, that taking the coupon every quarter every year to redeem that money. And then at the end they would take back that large bond. And then we get the principal amount back, and that's how bonds work. Basically, all over the world, they all work almost the same way. They do change where the paint mints come in, but that's pretty much the general premise. So just to summarize, how are they different stocks or equity in the company and bonds or company or government debt? They're completely different. There is no time horizon on a stock. You can own it for as long as you live. You can even pass it on to your Children. But there is a set time horizon on a bond. Every bond has a certain period of time, as well as an interest rate in between. That's your coupon rate on stocks is a variable return. You have no idea if that stock's gonna go up or down, or whether or not they're going to continue to pay that dividend. That's right. If a company is currently paying a dividend, that could decide to not pay a dividend at any point. So there's variability, even if they're paying a dividend. A. A bond, on the other hand, has a set time period and given return race, you can pretty much forecast what you're gonna make on it on. The stocks may pay a dividend. They may not, and the bonds that coupon is guaranteed, so it's definitely a lot more secure. There are no government stocks, but you can buy bonds from the government that generally considered the safest type of investments, and they go over long time periods. A stock can also be any price. You've heard the woeful Wall Street talk about penny stocks. You can also buy Berkshire Hathaway, Warren Buffett's company, for about 200 to $300,000 per share right now. So the stock price can be any price basically, in between there and it doesn't really matter what that price is, because it depends more so on how many shares are issued. We'll talk about that a little bit later on in the videos. Bonds, on the other hand, come in multiples of 100 or $1000 they set coupon rate usually between one and 5 to 6%. If you're really lucky s o those, the difference is we're gonna focus primarily on stocks in this course. But you do need to know that bonds air there as basically a slightly safer kind of asset class compared to stocks, they're definitely not quite as exciting, but they are actually bigger market in stocks just because of how much institutional money has gone into them. So that's a summary for stocks and bonds. Next video is about how the stock market actually works and how the price of those stocks are are gathered. So stay with us quick onto the next one will see you soon 4. What is an Index?: What's up, everybody? My name is Zak Hartley, and today we're talking about indexes. Now what is an index and index? Is a group of companies basically what it is. If you're trying to look at the solar industry, for instance, you can look at an index that has 10 or 15 different solar companies in it to give you an idea of what that group is doing, as in general, they usually described in points. So when you look at an index, what it does is it says Okay, here's the 10 companies. Here's what they're worth That means they're worth X amount of points. This is where the index starts, and then it trades from there. Once those companies appreciate or depreciate in value, that's how the S and P 500 works is how the Dow Jones work. And that's how the NASDAQ works as well. So what is an index, or why were they here? While they usually focus on a certain geographic region and they're there to give you a reference of what that region or group of companies is doing as a whole? So what is an index? Well, one example of them is Dow Jones. You've probably seen this on the news. You probably heard of it before, but this is usually the most common one and the one that most people know about. And the Dow Jones is 30 blue chip stocks that are some of the largest and most influential in America. It is the second oldest out there, and it is also one of the most popular these blue chip stocks. What I mean by that is a stock that is not new. That is very large, that is well known, and that is basically an industrial powerhouse in the United States. One that's fairly steady, fairly stable in is done well over the years. Now the Dow Jones is really interesting because it's one of the best reasons to get into the market. The Dow Jones started in the mid 18 eighties at 62.62 point 76 points. It hits 78.38 in 18 96 years later, it felt toe 1/3 of that. Excuse me. It fell all the way down to 28.48 points in 18 96. Now, since then, the Dow Jones has had a phenomenally amazing run. It hit 29,551 points on February 12th of 2020. That was the actual all time high, were trading at about 24 25,000 points right now and the annualized gain, or the annualized return of the Dow Jones over that period of time from inception to today's 9.69%. So what that means is that if you had invested in the Dow Jones you put $100 in, you would have made, on average 9.69% every single year. Now, obviously, some years it went up way more than that in some years that lost money. But on average, over the long time period, you made 9.69%. And that is one of the biggest reasons to get into stocks early. And to start to understand them is because the market and the return that you can get here . If you could make 9.69% on your money every single year, you would do very, very well. You'd be financially stable in a short, short number of years. So this is these are the companies that are in the Dow Jones thes air. The 30 companies, you should be able to recognize a lot of these. You've got apple right here. Johnson. Johnson, You got Walt Disney Coca Cola. So there's a lot of big names in here, and these are the fundamental Dow Jones 30 companies, and this is what the chart looks like right now. So we're doing really well. We had a big kind of drop off here to be getting a march because of Cove it and we're slowly starting to climb back up were 24,242 points today. But as you can see here High was around 29,000 and we started at about 60 points, which is just unbelievable their returns over the long period. So another in next fun that you can look at is the S and P 500. This is 500 of the large companies listed in the United States. This is generally referred to as the best kind of cumulative representative of how the United States is doing. Because you have 500 companies in there, you're very well diversified. You have a broad range of different companies, and you have a lot of different companies in each industry, so it is considered the best representation. It started in 1926 with an annualized return to date of 9.8% so really close to the Dow Jones but 9.8. Instead, it's posted an annual increased 70% of the time. So what that means is seven out of 10 years that this is operating it posted, increase or return or the opening amount is higher or is lower than the closing amount on that year. It made money in that year is what it's saying seven out of 10 times so you can expect if you hold this stock for 10 years, three of those years, you're probably gonna lose money on it, but but with a long term, you're gonna return 9.8%. So the last one I'm gonna look at in kind of depth, here's the TSX Competent Index. This is the Toronto Stock Exchange Composite index. It's basically the same idea, but in Canda it only has 235 companies listed in this index, and it makes up roughly 70% of the market cap on the Toronto Stock Exchange, which has about 1500 companies. So these small to group of 235 make up the majority of the market cap on the Toronto Stock Exchange. So it has a really good broad depth of what the Canadian market looks like because it makes up so much of that Canadian market. It started in 1960 from 1960 to 2018 it had an annualized return of 9.3. So slightly lower than the Dow Jones Industrial and the S and P 500. But still almost in the exact same ballpark is what the TSX looks like right now. So same almost the exact same chart. You can see it doing pretty steady all the way up here. It hits 17,500 points, and then it dropped all the way down to 11,000 here at the beginning of March because of the covert pandemic. Again, we're working up just like we are in the Dow Jones index. So this is the Canadian version of the S and P 500. We don't really have a Canadian version of the Dow Jones but this gives us almost the exact same information in summary indexes or group of companies. They're basically a representation of what that group of companies that industry or that geographic region is doing. It's used to look at larger trends. So when you look at that group of companies or you look at those companies within that country, you can usually get a reference for how that country or industry is doing it. Can those indexes can contain companies from just one country? You can also look at a global index, so you could look at Excuse me, a global index that has countries or companies from countries all over the world. Or you can also focus on just specific industries. You could focus on just solar indexes, just cannabis in back indexes, just energy indexes. There's an index for almost every single industry, and they could be traded through index funds or E. T. F. S. And that's what we're gonna look at it another video. So lots more to come. Please stay tuned 5. How the stock market works: all right. What's up, everybody? Today we're going through how the stock market actually works. What I mean by that is how we the shares traded. And how is the price determined? So, first of all, the first thing we need to talk about is the initial public offering. Now what happens is when you go out and start a company, you can raise money through private means so you can go to your friends family, and you can raise money, go up to investors and raise money. But you need to really raise a large amount of money. 500 $1,000,000,000. The best way to do that is on the public market, so you can have access to everybody around the world through the stock market. And how you do that is you take you your company through an initial public offering, also called an I P O. And, like our slideshow says here, it says it's used to raise money. That's exactly what it is. It's a fundraising metric for a company to raise money through global investors. And then what happens after that is once they go through the i p o their shares air, then traded on a stock exchange. It happens on an exchange like the NASDAQ, the New York Stock Exchange, the Hong Kong Stock Exchange, any of them all do it. Companies issue these shares in return for capital, and the shares have been traded on the exchange exactly Like what? We're gonna be going through trading stocks on the stock market. So all of these trades happen after a company is going through an initial public offering. And when a company goes through the I P O process and the shares can be traded, it means that they're a public company if you can not buy the shares and they have not gone through nine p o means there are private company. And the difference is that AH, public company is open to investors from around the world, and they also have to report their financials and a lot of other metrics on a quarterly basis. So there's a lot of reporting requirements and financial requirements. They call along with being a public company, which is one of the reasons only big companies do it versus private. You don't have to tell anybody anything so you could be a private company don't have to report your financials to anybody. You can basically operate basically in the dark, so it's kind of grateful. The only people you have to worry about the i. R s or the c r A. So this is what the Facebook I feel it looks like when the eye peeled, I field on the NASDAQ and see that logo down in the front there. This is Mark Zuckerberg, the CEO, and he basically goes at the market open on the day that they're gonna aipo and he hits the button for the NASDAQ that says, OK, we're live. This is our I, P o or on the New York Stock Exchange. Isabel. So ringing the opening bell. You've heard that before. That's on the New York Stock Exchange. So the stock price, once a company has gone through their initial public offering and their shares have then traded on a stock exchange, how do you determine the value of those shares over these stock price? Well, the truth is, is that it's completely determined by supply and demand. The market opens at 9 a.m. and it closes at 3:30 p.m. In different areas of the world, and that price can fluctuate between that time. And also after that time, when the market is closed, the prices can also change. The price quote that you see in that we're gonna go through is the last executed trades. So if the price quote is $20 it does not mean that your trade is gonna execute it. $20 means that the last trade happened at $20 years, could execute a $20.1 and five cents whatever the prices at the time now, the big thing here is that we have to start to understand the difference between the types of stock trades. So when you go in to make a stock trader going to buy or sell a stock, we actually doing is placing an order in the market. Now there's two different types of orders the market order and a limit order. A market order means that you're gonna go in and buy and sell, buy or sell your shares at the easiest available transaction price. So the closest transaction price that you can instantly transact with on that stock exchange. So if the stock is $20 you go in with a market order to buy five shares, it is going to basically sell you those shares at the closest price possible to $20 no matter what. Just gonna instantly transact that that basically order that you placed and you're going to get in or out of that position at the market price at the time, usually pretty close to that quoted price. But it might not always be the same. Ah, limit order is a little bit different when you're buying shares and you place a limit order , you're going to say I want to buy 10 shares at $19. So if that share price switches from $20 to 19 then you're trade executes. You can also do it the other way. You can do a cellar where I want to sell my shares at $21 and if the price goes up to $21 and his 21 minute execute your trade so market order will execute your trade instantly at the closest price possible, depending on the last quoted price. And a limit order is placing an order to buy or sell shares at a certain price that is gonna make more sense in the next slide. But this is what the order form actually looks like. So when I buy my shares do RBC Investment Banking Canada here. It's one of the platforms I use. This is the actual screenshot of an order Form off what it looks like. So instead of doing it just kind of walking through here, I'm actually going to show you what it looks like. So we type in Tesla, you test the ink so detailed stock quote right here. Let's see if this comes up. Here we go. So Tesla, 40 or $57.47 dollars USD. It was down 5.63% in the last trade of the day. As of today, April 2nd 2020 was $454.47. Now that price can open up anywhere tomorrow. But this quote here is the last quoted the last executed transaction. That's how they get that price. So now let's say we want to go buy a Tesla stock. It's really simple. It takes us to this page here. We're gonna choose our account. I'm using a practice account for this one just cause it gives me money. So here's that same screen you saw in my power point We're gonna go with buy, buy one share of Tesla. We've got the that take her symbol on their that four digit abbreviation that you see, for every stock is called taker symbol. That's basically what we used to establish that stock. Instead of writing out Tesla Motors, we read out TSL We choose our market, we're gonna go in the U. S. Markets. And then here's what I was talking about. So market price or limit price, there's a couple different things you can do here. So if I go market price, what it's gonna do is it's gonna place in this order. Now it's 8 30 right now PM So if I go market price, what it's gonna do is place in order for the opening price of wherever that stock opens tomorrow. So it was at $454. If it opens at $440 tomorrow, it's gonna execute that trade for me. However, if I go with a market price and I set a limit price, let's say I want to buy this share when it gets to $450 I want to get an at $450. I can place this order and this order will sit in the system until it is executed. So if that stock goes all the way up to 607 100 my order is just going to sit there and nothing's gonna happen to it. And it drops to 4 50 which is the number I put in there than that trade is gonna execute. So that's the big difference here at the market. Price is going to execute. The closest prices came and the limit price is gonna execute at a certain dollar amount. You can also say, if you only want it good for the day or if you want a good through. So that's where you can kind of play with the timeframes there, and then any part or all or none, we're gonna go through that here in a minute. But this is the actual order for for RBC. If you want a place and buy a stock, you if you continue and then you just confirm your but back the slide show. So boom This is the order form that we just went through. Market price and limit price. The next thing is the bid and ask. So this is what's happening in behind the scenes. So let's say that are basically last executed. Price was at $20. Okay, and we have somebody that has a limit order for $10. They want to buy the share at $20 they're willing to buy 10 of them. So that's their order. It was Tesla's 10 shares, $20 limit order, good for however long. That's what the market looks like right now. On the other side of it, we have people that are asking $21 for 10 shares were also people that are asking at $22. They want to show Self five shares $23. They want to sell 10 shares. And so what happens is we have a difference right now. We don't have buyers willing to sell it. 20 and sellers willing to sell a 20. We don't have that right now, So the last quarter prices $20 and the cheapest anybody is willing to sell it out right now is $21 so as of right now, no trades would be executed, however some he puts in a new market order for this, and we have somebody willing to sell at 21 somebody wants to buy right away. If somebody placed a market order, it would close that order at 21 and our new market price would now be 21. If somebody wanted to sell their shares and they put in a market order, the only way they would be to sell their shares is if they sold at $20 they would only be able to sell 10 shares. If they wanted to sell 20 shares, they would have to sell 10 shares at $20.10 shares at $19. Same thing on the other side. So what the market does the New York Stock Exchange? The NASDAQ? They basically hold this system and everybody from around the world can put their orders in . And as soon as two orders match up boom, the trade gets executed, and now you've bought or sold your ships. So market orders always the easiest, quickest, cleanest way to get into the market. Whereas if you pick a limit order and you put a specific number on it. The stock price may or may not execute that order, and that's the real thing here on that you need to monitor. So what's important here is that you understand how this works, because now you can see that's completely influenced by supply and demand. As everybody is trying to sell their shares and trying to sell them at lower and lower prices just to get out, the value of that share is gonna drastically plummet. But if everybody wants to buy into those shares, they're gonna have to spend more and more and more to get into those shares. And that's how the price of a stock goes up and down. All right, So this is the price quote that we saw earlier for Tesla for 53 99 then this is what it also looks like on an iPhone. So same information here for 54. They were taking a different times, but that is the last executed trade on that date. You can also see underneath here. We've got a chart, the shows that basically the action of the price over one month period, that's highlighted there. Underneath you get a little bit of information about the chart itself in some of the financials of the company. So we're gonna go through all of that in a later video. I'm really excited to talk about it, but now you have the basics off. What is the stock? How does it work? How is it priced? And how did the markets actually work? So pretty exciting. Lots more information. Stay tuned for the next videos. 6. Types of Analysis: What's up, everybody? Zack here and today we're talking about stock analysis. Know what I mean by that is how do you figure out which stocks to buy and sell what method of analysis and methodology do you use to decide which stocks to get into or get out of, So let's get right into it. There's two types of analysis you congenitally conduct. The 1st 1 is technical, and the 2nd 1 is fundamental. Technical analysis is using charts to make investment decisions. Now that's my personal definition of it, and that's what I think it is. Google seems to think it's a training discipline employed to evaluate investments and identified trading opportunities by analysing statistical trends gathered from trading activities such as price, movement and volume. All of that information then gets displayed onto a chart, and that's how you make decisions. So I kind of summarized it. But basically what it is is it's taking the price that the stock trades after out a certain time period and overlaying it with the volume of trades during that time period and then extrapolating information from that to gather enough information to make a solid investment choice. Either buy it or don't buy it or sell it. It looks like in practice is taking a chart that looks like this in the middle, you can see the red and white and black dots. That is the price movement over basically a six month time period. The red and black bar chart underneath that is the volume, and then the rest of the information on there is a basically extrapolation of that price movement over time. What technical analysis is is taking all of that information that's in this chart and then deciding when to buy and when to sell? Now there's lots of different patterns and formulas you can use to start to figure that out , and we're going to really deeply explore that in the next couple sections of this course. But the idea here is technical analysis is using a chart like this to make your investment decisions so usually done on a shorter time frame compared to fundamental investing from the metal analysis is using financial statements to make investment decisions. That's the Zach Hartley definition. Again, The Google definition is a method of determining a stocks really fair market value. Fundamental analysis. Search for stock that are currently trading at prices that are higher or lower than their riel value. Now what that means is, all it is is you're trying to go out and your China establish your own value for that stock and then see, with the market prices at at higher or lower and it's higher, you might want a short sod. And if it's lower, you might want to buy it so that you can make some money. So fundamental analysis is the idea of looking at the financial statements. The financial statements include the income statement, balance sheet, statement of cash flows and the conference call. Now, when we're looking at public companies, one of the reporting requirements after their I pose that they have to submit all this information on a quarterly basis, and it's really convenient for us because now we can know exactly how much all these companies make. So if we just go to Google real quick and we type in Tessa investor relations, we can go in and we can see exactly how much money this company made in the last quarter or in the last year or the last three years. It's basically all available since their i p o. And it's one of the basically big reporting requirements and big kind of burdens that a company has once they go public. So quarterly financials Q 4 19 updates So this is their pretty version of it. Basically, here's the highlights and the financial summary So highlights here. Financial summary Boom right here, So financial summary in millions of dollars. Automotive revenues Q. 4 2019 6 billion $368 million. Really cool. We now know exactly how much money this company makes. We also know that their net income or loss afterwards was $105 million. So Tesla made money and looks like the last 2/4. They lost money to quarters before that, and they made money in Q 4 2018 Now what fundamental analysis is taking all of this information that we gather from the financial statements and comparing it against other companies to see which one is the most valuable, or which one is the most underpriced compared to their actual stock value? So that's the financial statements, the other factors that you also need to consider when you're buying anything, and making an actual investment is the global and national economies. For instance, right now we're in the middle of Cove in 19 and the global economy is drastically slowing down. Everything is slowing down, is consumer spending is slowing down and people are staying at home, so you might not want to be in a tourism industry right now. You might not want to be in the airlines right now because nobody's gonna be flying. So when you make your investment decisions, things like that don't come up in the technical with the fundamental analysis. But they come up in the real world, and that's where you need to pull that experience and that knowledge into every decision that you make. After that, you've got the industry in the product. So if you're in oil and gas company and the price of a barrel is drastically falling, you probably don't want to be investing more money into that industry and into that product line. You also have business models, so Google advertising, all they do is consistently run ads online, and it cost him absolutely nothing. Other companies that, like Tesla, they have to sell in produce cars and hopefully sell them at a margin. It's a little bit more of a difficult business model, but still lots of potential. But what you might want to think about is what types of business models do you want to be? A. Do you want to be in recurring revenue ones where cash flows fairly stable? Or do you want to be in consumer products where it's completely safe? Cyclical. Based on how good your product is that year, it really depends. Are the factors you might want to look at our management? Does that team have any actual experience executing a business model like this? Trends and social impact? Are they in line with the trends? Are they finding against them? And how good are they for the environment? Last ones are regulations. If you're in the cannabis industry, for instance, you are completely governed and regulated by the Canadian or U. S government. You need to abide by all those laws which is going to cost money. It's gonna cost labour and it's gonna cost ah, lot of resources to basically just fit within those regulations. The last one's competition, How saturated is this market? Is it easy to rip off. Do you have lots of competitors? And are there substitute products that people can buy a few hours is too expensive or not working? Those are all things that you want to consider because they are factors that will not be shown in the financial statements, and he will not be shown on the charts. All right, value both, and we should put this into slide show mode, the valuable. So this is where things really separate one from the other. When you look a technical analysis, you can look at those charts on any time frame. So this is what day traders use when they trade by the hour. For instance, this is what people use when they trade by the day or the week or the month, for instance. But over the longer term on the technical analysis doesn't help us much because it's more governed by earnings. And that's where the fundamental side of things come in. Now the advantage here is that you can use the technical analysis to find the perfect entry point when you've identified a stock that is basically you want to get into. That is good value right now, so you can wait on hold off on your decision until you find an entry point using technical analysis to get into one. We've identified using fundamental analysis, and that's how you improve your returns by combining them two together, you also need to basically understand both of them. If a company's making money, you need to understand what the ratios are so that you can compare it and use it in comparison between other companies. There's also lots of other factors that you need to consider. And both of these using both of them together as well as your real world experience with what's actually happening is going to give you the best, best, best, best investment results. So stick with us. We're going to dive into technical analysis as well. It's fundamental analysis in the next couple videos, and we're gonna go on a deep dive into what it really means to analyze the stock. So stay tuned 7. Price is King!: What's up, everybody? Zack here and today we're going over technical analysis with a focus on price. So let's get into it. Technical analysis is using charts to make investment decisions. What that means is we're taking the price on the volume data from that trading day. We're putting it onto a chart with the rest of the trading days, and then we're going to extrapolated as much information as we can to make a buy, sell or hold decision. So what does this look like? And how do we get into it? Well, before we start, we need to talk about a couple of definitions. The 1st 2 are bull and bear. Now, these kind of unique terms. You're only gonna hear them on Wall Street or CNBC or Bloomberg, but they're extremely common in their way of defining and describing the market. So when we talk about a bull, we are talking about the animal. That's what it represents. And when we say it, we're talking about a bullish market or a bull market, and what that means is that the market is going up. We're seeing a trend line from low value, toe high value. We're seeing and accelerate. Over time, we talk about bear markets or bearish markets. We mean that the market is going down and means we're losing value. We're going into a recession. We're going into a depression. Something bad is happening, and the value of that stock or those stocks are driving down. Now the only reason and and the only way that I could do some research on this. I typed it into Google to figure out why it's called The Bull and the Bear. The only information I could find us, that the Bulls tops their horns up and the bear swipe their paws down. Kind of unique and interesting. But it goes back a long ways, and everybody uses these terms. And it's also the reason that there's a bull on Wall Street. So that is why that there's a giant bowl sitting in the in the middle of Wall Street. It is there to represent, hopefully a market going up over the long term, and so far it has were definitely in a little rough, rough spot right now with Cove in 19. But that's okay. That's why there's a bull in New York City, and so when you hear somebody say it's a bullish market, It's a bull market. We're doing well. That's a good thing. If something ever says anything about a bear, it's definitely a bad thing when you're talking about stocks. So how do we look at price on the chart? This is a really good point right here, so because it's different, Um, I took a screenshot of my Tesla shares on myself on the other day. Over one month time period. The price was for $54 this is what it looks like. We can see the price chart on the right hand side here, 7 86 down to 4 55 And this red line is representative of the price over that one month time period. Now, how do they plot out this red line throughout that period? Well, they take the closing price at the end of each day, and then they take the closing price of the next day, and they just draw a line in between them. They draw a line to the next one. And that's how you get peace. Basically spiking line that goes all the way through Tesla for the last month that is the price action of the last month. Now, this is really good. But for instance, if we started here and the price went way up and way down and then closed right here, you would never be it to see that kind of information on this chart. So stock traders and investment guys have developed a little bit of a different system and it's called the Candlestick or or the Real Body and Shadow Method. And it looks like this. So it is this funny looking thing on the right hand side here, and every candlestick is willing to call these. Every candlestick represents one period. So if you're looking at a 30 day period, kind of like what we just did A Tessa, you would see 30 of these candles. And instead of it just being one line, you would see this candle here as that one day time period. How it works is your opening price is where the candle starts and you're closing prices where the body of that candle. And so if you start a tent and you finish at eight, it's gonna look like this. If you go the other way, it looks the other way. But what's interesting about this is if that price goes above or below the opener. Close price. Throughout today, it appears as this line on the top or the bottom. So if we start at $10 we go up to 15 we go down to five. When we finish at 12 you're going to see a body of a candle that looks like this. You see a long wick on the top and a long wick on the bottom. And what that does is it shows you the entire price movement throughout the day, but where it opened and closed at so a really good example of this and the bullish and bearish concept is the apple chart. So this is really nice here. We can look at this Apple stock price right here. It started at around $150 it finished at $300. We're looking at a time period of January 2019 to January 2020. So one year time period and the stock has done phenomenally well. It's up almost 100%. We've got a clear trajectory where the stock is going from the bottom left to the upper right, So this is a 100% bullish stock were in a bullish market. When we look at this, this is completely bullish. So we use those terms to just get identify whether the stock is going up or down and talk about the market in general. And this is the perfect example of a bullish stock. We can also see all of the candlesticks inside of here. So when we look at June right here, we can see that it it opened around that 1 70 market closed around the 1 80 mark, and we've got a candlestick on the top in a candlestick on the bottom. So we know that that price went all the way down. I went all the way up and it closed rate in that middle section there somewhere. Now it's great about this charters. It also highlights it between white and red. So when we look at these red little candle bars, what that means is that the closing price of today was lower than the closing price of yesterday. It means that the stock went down on this day. When we look at the white candles right here means that the opening price, this line right here or its story the closing price. This line right here was higher than the closing price of yesterday, which would have been this one here. So we see a white candle. It's usually a little bit better. It means stock went up when we see a red candle. It means the stock went down on that day compared to the day before. Here's a great example of it right here. So the stock opened right here at the 2 10 mark and it closed right here at the almost 200 mark, which was lower than the closing of the day before. Therefore, that candle is red. And so this helps you see that while Apple in 2019 was almost all white, they're in a clear, bullish direction. And this company did phenomenally well this year. So really good to see a really great representation of the candle, the candlesticks as well as a bullish market. So where we go So a couple more things for a technical analysis that I just want to cover a couple things that we just got to say. So technical analysis, It could be used over any time, period, all the way down to one minute. So when we looked at those candlesticks, those were representative of one day each. However, you can change the time period on any of these charts, and you can look at all these stocks all the way down to a one minute time period. So you could be looking at a stock as its live trading, and that candle is gonna be going up and down with the actual price of it. You can also extended out over a long period of time. You could look at Apple over the last 30 years and in turn, every candle in tow. One month, the same rules, patterns and and and everything applies. So it's the exact same techniques. It's the exact same systems, the exact same methodology. However, it just allows you to give a very short time frame. We're very large time frame and still get all of that information between now these rules and these methodologies that I'm going to talk about and all these skills that we're gonna learn over the next couple lessons here. Excuse me in technical analysis can be applied to any stock, any currency parent, any commodity. They can also be applied to a lesser extent, the index funds and large groups of companies. But the idea here is you're looking for trends, you looking for patterns, and you're looking for different things in these charts that you can use to signal their A buy or sell. Now the big thing here is it's never gonna be perfect. There's never one pattern that always works. There is never one strategy that always works. And if your company releases terrible financials, rate is you're setting up for a perfect trade because the charts look good. You're gonna be creeped deeply disappointed. So you need to be aware of all these different situations because anything I teach you hear on the charts is never gonna be perfect. But it is going to be, ah, signal an indicator or a nudge that says, this is a good buyer. This is a good cell. So we got lots more to come. In the next few videos, we're gonna dive into technical analysis pretty deeply. Please stay tuned and we'll see there 8. Trend Lines: everybody. My name is Zak Hartley, and today we're diving into the charts were going into technical analysis and we're looking at trend lines now. What is a trendline? Trendline is connecting the higher low points on a chart to form a line of support or resistance. What I mean by that I mean drawing literally drawing a line on the chart to establish where the price has support and my support. I mean, it's not going to drop below X amount, my resistance. I mean, it's not gonna go above X amount, so let's see what that actually looks like in practice. We're gonna look at the test, the chart. Now, this is just a screenshot of it. I'm going to go into my Internet browsers so we can start to draw on it. So I'm using stock charts dot com. You can go to the website, just type in T S L. A. And we'll pull up a chart where you can start to play with the exact same tools I'm using here. So there's the same chart that we saw in my power point, and now I'm going to do is click on the word and rotate and it's gonna let me draw on this chart. So we're talking about trend lines. We're talking about connecting the high and low points. So all I'm going to do now is start to draw a couple of lines and talking through what's going through my head when I look at this chart. So on the left here, we're coming in. We're seeing a little bit of a bearish pattern. We have one high. The next high is a little bit lower than this, and it looks like we're just basically coming into a bearish pattern. And then we hit a low point right here. Now Thistle's kind of a good sign because the next points after that are higher, a little bit lower and then higher than the previous high. Now, what that means is that it looks like we're probably seeing a trend reversal. We're going from a bearish pattern coming into a bullish pattern going out. So I'm gonna mark This is their low point at a quick glance through the rest of the chart, I can see we also have a low point over here in April, so I'm gonna draw a horizontal line right here And now I can say we have a line of support at about that $180 price level where the price has come down and tested it and it has bounced back and it looks like it comes down and tested again. So first things first I look at this chart, I say, OK, we've got support at 1 80 now what happens? So we've come in here with tested that 1 80 line and now we've got basically an upward pattern here, a bullish pattern where I'd say this stock is trading within a channel off resistance and support, and it looks like it's doing pretty good. So move this a little bit like that a little bit like that and I'd say, OK, we've established a channel here where this prices moving up and down within this channel and all of that looks pretty good. We're in a blues pattern. Even a little bit of change in that stock isn't changing the general trend upwards. That's really good. That's what we want to see here. Now, what we are going to notice here in this month here is that the price crosses back through that line of support it tested it at low. It tested again and two months later and now tested it once it bounced up a little bit. And it has crossed through that line of support and has broken the line of support. And that means that we're seeing a change in the trend. We're no longer within that channel upwards. So we have got a new trend forming. It's time to draw a new trend line. I'm gonna take my little marker. I'm gonna draw a new trend line and connect the tops here. It looks like we've got one high, too high, three high four highs where we're testing out a line of resistance right here and will connect the last low to this low here. And we've also got two more down here, and we've got a new channel forming in this stock here. So what's really great is we had a clear line where it was moving upwards. We've got a clear channel where it's moving downwards, and it's been really easy to map this out literally by connecting the dots of the highs and lows. So 1234 on the top 1234 on the bottom. We've got a clear channel, and that price is now moving in a downward trend through that channel in a bearish trend, just like where we started. Now it's kind of cool is we can see that price come down. It almost test that 1 80 level. It comes back up and it pushes up against the support level twice, and then it comes all the way back down, and it tests that 1 80 level. The price touches that $180 level now and now why this is kind of important is because in the real world, in the real market, what's probably happening is ah, lot of traders. A lot of people in a lot of investors have it set in their systems where if Tesla hits $180 I'm going to buy it just because at $180 I think you can't go wrong with it, and it's a great value company, so I'm gonna buy it, and I'm going to just leave that trade in there, and that could be what's happening. It could also be that people are making that decision that day that it hits one e But what's happening is at 1 80 people feel like it's a great company, and that's why we're seeing support established in the chart. So we're going through March. We're going through April. We test that 1 80 level, we see a little bit of a bounce back, and then we see a big movement up from 1 80 all the way to that 200 mark and then consistently up to that to 10 mark all the way through, breaking through that line of resistance and that is glorious. That is exactly what we want to see, because that indicates a change in trend. Now we're moving upwards in. The charts were out of that bearish pattern, and it is time to possibly make a buying opportunity. So we're breaking through a breaking through and we fall a little bit by a couple of percentage, almost back to 200. But that low here is much higher than our previous high, so we still have confidence. If you wait a couple more days, you're 2 10 to 20 on. The Stark is clearly established a new channel. It is time to buy that stock if you haven't already, and it's time to ride out that wave. Now, this is a really nice chart because it clears those to show clearly shows those two channels and it shows your perfect buying opportunity which is located right there. So if you had this on your chart, if you had this mapped out in your system, if you were watching this Stark every day, you would have known Okay, it just broke through that line of resistance. It even tested it at the end of May. Hear it is time to buy this stock. This is the perfect opportunity. And if you did it, you could have had returns all the way up like that, which would have bean just phenomenal. Not only that, but Tesla later have $400 just this year hit $900. So in the matter of just a couple of years, when in 2015 to 2020 you could have made at least 304 100% on your stock. So great opportunity here. Just one thing that we want to show you. In one great example, I've got one more here. That's a Shopify. This is a really great stock. It's an Internet stock out of Canada. It's basically being our unicorn. So what I'm gonna do is I'm gonna annotated and I'm gonna walk you through the exact same thing. So this one's a little bit different. Were coming in basically on a high, were coming in on a bullish trend. We're looking good. And then all of a sudden, we kind of break through this line of support and our next couple highs here are nowhere. They're nowhere near higher than they were before. So we're now trading and basically ah, horizontal channel that looks something like this. It's the exact same ideas what were in before where it was, a channel that was going vertically like this. But now it's just completely horizontal. It's completely stagnant. Nothing is happening to this price. And you know what? This just happens from time to time in stocks. If no news is coming out, financials aren't due for a while. The industry's a little bit slow. Nothing biggest happening. This is totally normal stock and just trade like this for even sometimes years. So you got to be aware of it, and when you can recognize it, it gives you a great opportunity to trade that stock when it breaks up or down. Excuse me from this channel. So let's look at what it's about to do here. This is really need to see, and it's a really good opportunity. So socks coming in, Okay, it's broken through this line of supporting resistance. We've got one peak here. We've got two peaks here and now we've got one peak, one bottom one low point here and another one right after it. So at this point here, you can clearly say we're trading within a channel. He dropped these two lines, and now you're all set to go. Another couple months goes by, you're still within that channel. And then all of a sudden you get this one big day right here. Where's my Where's my little circle tool? Yet this one big day right here that changes everything. You see, there's one big white day right here, and that is like, holy cow. We have just broken out of this channel. We're just moving up. Something's about to happen. And if you saw this as a buy signal and you're willing to put your money into it, it could have given you some great returns because this stock went from $40 to over $94 in less than a year, less than six months, this stock doubled in price. So you're getting 100% return in less than six months because you were able to identify the training pattern that this stock was in. Gerard. The trend lines on inappropriately recognized the signal when it broke free out of this trend line and then capitalize on the gains above that and you would have done phenomenally well, even if you have got in at $50 here and then it got to $94 he would have made $45 on. You're not on your $50 trade, so pretty close to 100%. Even if you got in ah, week and 1/2 after you saw that after you saw that breakthrough, you could've waited for more and more confidence in you still would have done phenomenally well. So this trend line methodology and these patterns and what you're looking for here, is connecting the highs and lows, trying to establish what channel you're in, whether it's bullish barrister or its horizontal And then as soon as you break that support or resistance, that's when your opportunity to make a trade identifies itself. So to really good charts here. Really exciting things, couple more things just to finish it off. So here's the test. The chart we looked at with the big gains on the right side. The Shopify charge here, where it went from $40 to $94 just by identifying the horizontal trading pattern and the last couple things I want to touch on her that thes trading patterns. And these channels can go in horizontal or directional patterns. You can also just establish horizontal lines of support and resistance based on price levels. Now, the more times that the price tests the supporter resistance, the stronger the supporter. Resistance is what I mean by that is, if your Tesla stock is testing that $180 price level three times and it still hasn't broken down below that 1 80 level, that's probably a very strong 1 80 support level. Now, assuming that the company is still doing well in the strategic, the strategic plan is still operating. Then you should be totally fine now, so I would be looking for an opportunity on the upside in that case. Now I do have to say that not these patterns and these thes indicators, and not always perfect. And they're not always exact. If your company reports bad financials in the middle of your trend, things are going to change. If you're bowing and you have two planes crashed in the matter of six months, things were going to drastically change. So they're not always perfect. They're not always exact, and the price levels are always off by five or 10%. So you never admit to draw the perfect line that connects all the dots. Exactly. So what you're looking for is patterns and channels and trends here, and then China identify the trading opportunities based on when it breaks through those support and resistance signs. So if you have any questions, send me an email. Is that hartley at hotmail dot c A. Otherwise, I'm gonna dive into this, and I'm gonna be using this tool for the rest of the videos throughout the course. So please stay tuned. This is a very important one, and you should try and practise this whenever you can't Thanks 9. Patterns: everybody. My name is Zak Hartley. Today we are going over technical analysis and we're looking at chart patterns. So in the last lesson we looked at trend lines in those trend lines helped us look at what direction the stock is going. If it's in a channel or if we're seeing a trend reversal today, we're looking at specific patterns. They're gonna help us decide whether it's a buy, sell or hold at a specific moment. So patterns using trend lines to identify patterns that could signal future movements were using the same principles we learned about trend lines and we just applying them to specific patterns that we're going to keep an eye out for. So the first pattern highlighted this in one of the last videos, but it is consolidation now. This is a completely different stock with almost the same pattern. Lululemon Athletica In 2018 we looked at it for 12345 months. Where was pretty much in consolidation the entire time, bouncing up and down within a specific price range of about 57.5 to $65. It was going up and down for several months before finally breaking out with 12345 positive days, which for experiencing about 20% to 30% growth over the next 30 trading days. So significant break out. And that was because we spent so much time within consolidation. If you look at this stop with stock, we tested the top of the consolidation pattern. One, almost 2345 six times was the breakout. So we tested multiple times. Same thing with the bottom of it. 1234 times were tested support at the bottom of this consolidation pattern. So we condensed for a very long time. We finally had a breakout, and we had a significant return when it did break out. Very great pattern. Just seeing definitely something you want to keep your eyes out for. However, it does take some monitoring over time to find that right by in spot no triangles is another one. We looked at this one looked at Tesla in a previous video, but this one is pretty big, and it's a really telltale sign that something big is about to happen. So he was just a simple diagram of what we can see. A symmetrical triangle basically means it goes right to the side horizontally ascending me and it kind of points up in descending me. The kind of points down here is an example of one from Tesla Inc in 2015. In 2016 we see a clear trend line going down and we can see two spots on the bottom where the price touched a price target of about 185 to 180 $83 bounce back up. And it did it again in January and did it again in April. So we've clearly established supported that $185 price level, and we're seeing the price slowly trickled down there and it bouncing in between. So we're seeing a descending triangle there. In this case, we saw break out to the bullish side we saw break out over $75 from basically starting point of $185. So really good returns on it. Really good metrics. And all you have to do is keep an eye on this and see what pattern was actually going on. So the next one we're gonna look at is a double peak. This could go up or down. In this case, it's going down. Millikan A. Tesla Inc and we can see the stock price in a completely different example, hit the bottom at around $180.2 different times. So this is in 2014 and then again in 2015 we and see it heading the bottom and then moving up from there, we can see it on the other side where we can see the Dow Jones industrial rising up to 26 50 on two separate occasions before falling almost 20% down to 2150 just in December of 2019. So really drastic fall after double peaking at 26 50 mark twice, and then a huge drastic fall down over 20%. So that was a scary moment. Back in the day, we did recover from that. But we did have a full almost 20% drop in the Dow Jones industrial and the sign that recognition the hey, something's gonna happen here happened just three months earlier when we had a double top a 26 5 mark. So the next time we're gonna look at is called the head and shoulders. Now this one's a little bit trickier to pick out, but what it involves is one peak, a bigger peak and then another peak. That isn't quite as big. Basically, the idea here is this is a sign of a trend reversal. It means that we're no longer seeing higher and higher peaks in the price we're starting to see. Ah, higher peak and then a trend reversal with a lower peak. And if we see another lower peak, it could be confirmation of the head and shoulders pattern. So basically here what we're looking for is ah, stock that's moving up and then lower peak afterwards. If we see that as a head and shoulders, it could be a telltale sign that the stocks about to go down. What does this look like in practice? Well, we found Costco wholesale in 2016. This was a pretty clear head and shoulders. We had a clear trajectory where the stock was moving in a bullish pattern upwards. We have the first shoulder established in November around 23rd and then we can see the peak on December 14th where the stock rose to $155 we could see another basically little smaller peak that didn't quite goes high. What only went to $150. So that was basically the height of the two shoulders, that original high of 150 hive that was the head. And now we can still see the stock starting to trend down all the way down to $130. So if you recognize this pattern and you realize this was a head and shoulders back in the time, this would've been a great, telltale sign that if you own Costco, it was time to get out. So there's lots of patterns that you can learn. Basically what it is, though, is using the trend lines that we learned in one of previous lessons, too, basically, put together these patterns that we can start to identify as soon as they're made. So here's some that are listed here. The rectangle dependent deflate basically different versions off, drawing the trend lines and connecting them to try and decide is a stocking and go up or down lots of different opportunities again. None of them are perfect, but they can't help give you indicators and signs as to which way it's gonna go. So in summary, patted to the specific movements that can indicate a future trend, we identify them using trend lines that we talked about. They're not always perfect or exact. You could you could have the perfect shape lining up the perfect triangle going. And if your company releases the wrong results, has a big instant or the global markets change, Things can change, not in your favor and outside of that trend pretty easily. There's also lots of patterns for you to identify and try and pick up on. There's long powders we've looked at today. There's also indicators and patterns where those candle charts can be on very short time frames and very, very short candle patterns, even two or three candle pattern. So there's lots of different ways to look at it. These are just some of the main ones that I wanted to highlight on in this course so that you're aware of them. You can always deep dive into any other topics that I'm talking about and go a whole lot further, though, so this is just kind of the introduction to all of these major topics so that you have ah, basic understanding of how to invest when you make those first trades. Thanks for joining. 10. Volume: What's up, everybody? My name is Zak. Hardly. Today we're looking at technical analysis, and we're focusing on volume. So what is Void? Farm is the number of shares traded within a given time period, and you can look at it as the shares traded on that time period. Or you can look at it as an average trading volume over the last X number of days those two ways that is commonly represented. And there's two reasons you want might want to consider looking at the volume when you're investing and making traits. Number one is the quantity. Now here's a stock price I pulled from Tesla Inc This is literally off Yahoo Finance today it is April 7th, and they traded 17 million shares today have an average trading volume of 21 million shares . That means 21 million shares are being traded and executed on a daily basis. Now, if we look at another company, this is one of Canada called Mind Met. It's a little biotech pharma companies small little off it here in Canada, and their volume is only 402,000 shares per day. So it's less than 1/30 of what Tessler is, and why this is important is because if you treated Tesla and let's say it's $300 you put in a trade to execute, you're probably gonna execute out of trade within one or two pennies of Tesla. So not really a big deal, because there's that much volume going back and forth so you can execute that trade easily . When you go to treat a small little biotech company or a small though startup that only has a couple 100,000 shares trading per day. What it means is there's less volume. So for you to execute your trade if you want to buy a couple 1000 shares for you to execute that trade and may not execute right at 40 cents where were quoted today and may execute at 41 42 43 cents because there's just not a volume to fill your entire trade at that given price level, so you may have to pay more, you may have to pay for it in chunks, and you may. It may take longer for you to actually execute that trade. Now, the reason this is important is because if you're two or three cents off on Tesla. That's at $300. It doesn't really make much of a difference, but if you're two or three cents off on a stock, that's only 40 cents. That's 2.5%. Excuse me for every percent that that changes, that's a big difference. So it's one thing to keep in mind because it really comes down to liquidity as well. Can you get out at the price that you want? Stock is generally considered very liquid, but you do need a little bit of volume on that trading day in order to get the price that you want. Now what I mean by liquidity is the ability to convert your asset into cash. So if it's a stalking and traded on the market, that exact date pull out that money you converted into cash very easily. It's a very liquid asset and comparison. Real estate is not a very liquid asset for you. To sell your real estate, you have to put it on the market. You have to get people to come Look at it. You have to get a bid. You have to make a contract, you have to close a deal. It takes a while to sell your real estate and hopefully you get the price that you want. There's no quoted market that you can actually go to, so it's considered a very illiquid asset Now. The reason I bring this up is because those larger companies are going to be much more liquid and the ones with higher volumes will be much more liquid, allowing you to get better trades at the exact price that you want in comparison, a couple cents off the best. While you can also help you figure out if a trend is confirmed or if it is a little bit iffy. And what I mean by that is you can look at the volume and the changes in volume each day to say, Is this a strong movement in the stock? So when we look at it, apple, This is taken up to today, April 7th and we could see a clear bullish trend all the way here until February March. And then what we see is the stock absolutely drops off here around April from looters at February 22nd February 24th kind of mark, we see 123456 really strong down days that finishes the stock and around the tuner $50 mark . Now this is really important, because what you want to figure out is, Is this just a dip where I should buy on the weakness? Because I think it's gonna go up? Or is this a fundamental change in the trend of the stock and how we're going to decide that is by looking at the volume. The key here is that when the volume increases period over period, it means that the trend is confirmed and it's strong. If the volume decreases, it means that the trend is not confirmed because it's very weak. What I mean by that is, if the stock goes up by five or 10% and not many people are buying it at the five or 10 percent increase, it could be because they don't actually believe it's actually worth five or 10% more, which means it's never gonna be worth 15 or 20% more. However, if that stock goes up by five or 10% and the volume drastically increases, it means people really believe that it's probably worth that five or 10% more, and it could keep going that way in the future, especially if more people start to believe that. So that's the fundamental principle of what's actually happening in reality here. So when we look at the stock, we see the end of February here, the stock completely drops off and the volume drastically increases from about 30 million to almost 100 million shares per day. We see a direct correlation. The stock plummets, the volume drastically increases. What that means is, I think we have some issues here. I think we're seeing a trend reversal. I think we're starting to go the other way. I think that this stock has fallen, the volumes drastically increasing. That means that we could be seeing a strong downward trend here. So we come all the way down. We had this to 59 mark and then we see 123 positive days off stock actually increasing in price and in correlation, we see three lower and lower and lower days in volume. What that tells me is this probably isn't another trend reversal. This probably isn't the stock drastically changing directions. I think it's going to continue to go down because it just doesn't have the volume and the strength behind it. And that's exactly what happened. So the star continued to go down for the next basically 15 20 days here, and from that point we can see a basically consistent increase in the volume levels out around the kind of $75 million mark here. And then again, right at the end of March, we can see the stock price start to increase, start to increase, and we can see that volume decrease again. We see it drastically decreases. You know, that price starts to Ingres, and it tells me we're probably not seeing another trend reversal here. We're probably gonna be trading horizontally or we're gonna continue downward for at least a little while unless something drastic happens. So we get to the end of the chart here in a kind of bottoms out, and we have a lot of movement on these last two days here. That's mostly because of the Kobe pandemic and how it's ravaging the US right now. Nobody really knows what's gonna happen, especially as China starts come back online and it feels like the U. S. Is falling off the edge with this covert thing. People are really trying to figure it out. What I also want to point out is as soon as there was unsettlement or unease in the market , what we've saw here at the end of February all the way to today the volume has almost doubled. I find this really interesting because it means more and more people are making trades in and out of the market. I think from the point here toe where we're at today, we've clearly seen a lot of red days. That means more people are selling than they are buying. So I think it's gonna be a tough little right here for Apple. We could be seeing a break out of the trendline, the support line that would basically connect from here to the talk. But we'll see. We'll see how this goes. We had the same volume is yesterday and a drastically lower closed in the open today. So not a great sign, but we'll see kind of where we end up. So I'm definitely keeping my eye on this chart. We've got high volume right now, but all of the trends between the price and the value or pointing in a downward direction. So just to summarize you volume to make sure that you have acquitted in your trade and you make sure you can get in and out of your trades that accurate prices and the level that you want. You do that by just either trading stocks with at least a couple 100,000 trick shares traded per day or knowing that you may not get to get the price you want. If it's any lower than that, secondly, an increase in volume signals that it supports the trend that's happening. A decrease in volume does not support the trend that's happening. So if a stock is going up and the volume is increasing those air to good signs, if the stock is going down and the volume is increasing, you probably about to see this stock continue to go down at least over the next little while, so anything can change. Nothing is perfect, but this is the tool. Even used eggs just give you one more signal in your decision off should you buy, sell or hold this stock so lots more to come. Thanks for doing 11. Moving Averages: What's up, everybody? My name is Zak Hartley, and today we're looking at moving averages. So what is the moving average? Well, it is taking the price and then averaging it out over X number of time periods. And it's represented on the charts as a line. And it's a really simple to literally. It is just one line on the chart that either goes up or down, and what it's used for is to identify, buy and sell signals and to show the general direction of a stock and help us identify when stocks are correlated. So what I mean by this? Well, if we look at an Apple chart here, this is over one year time period. We can see a blue in a red line coming in right here. Blue line, red line and what those are is the moving averages. So the blue line is a 50 day moving average, and the red line is a 200 day moving average. So if we take the price right here at 2020 January 1st, it's right around that $300 price mark. Now, if you average that price out over the last 50 time periods, That's the blue line. So what this is saying is that the average price of the last 50 time periods is about $265 the average price of the last 200 time periods is about $220. And all that's doing is showing you the average price over the the last time periods on this chart. It's 50 and 200 days now. How does that help us? Well, it can show us buy and sell signals, the buy signals or when the price crosses above the moving averages, such as what happened in June Here, This is a buy signal. This is the price crossing above the 200 day moving average and then the 50 day moving average. This is our buy signal. We also have another bison here when the moving averages crossover each other. When the faster mover moving average crosses over the slower moving average, that is a buy signal. That is a show that the trend is reversing in the stock is going up, so we have one by signal. Here we have one by signal. When the stock crosses above both of these moving averages, so three signals altogether. Great. Look there. And if you would have executed on this trade, you would have gone from about 192 over $330 at the peak. Now it can also show us cell signals. Those cell signals are the exact same, but in reverse. So when the stock price crosses below the 50 day moving average, that is a cell signal. When the stock my stock price crosses below the 200 day moving average like it did right here, that is a cell signal is Well, we can see that it's bounced back here, but the two moving averages are coming close together, so it's pretty indecisive. But we did get one to sell signals here. However, we did have a great run from June of last year, toe basically February of this year. So depending on which signals you picked up, this would have worked out great for it. But we had by signals in the beginning. We have cell signals right now, and this is upto April 13th of 2020. So pretty exciting chart here. Next one, we've got to the Dow Jones Industrial over the exact same time period with the exact same moving averages so we can see coming across the top here. It is almost consistent and steady the whole way through the prices, mostly above the 50 day moving average. It kind of bounces off the 200 day moving average a little bit. It tips in June here, but it comes right back over and pretty steady, consistent trading all the way through, up until we got to February, March, April here and we can see the price drastically plummet through the 50 day moving average and the 200 day moving average and go all the way down below 19,000 points. It's starting to come up, but we're definitely not there yet. The reason I want to bring this chart up is to show you that these moving averages are great for showing long trends, but they're not great as showing short term drastic changes. What I mean by that is the price cross below the 50 day moving average. If you would have traded on that, we probably would have done phenomenally well. He would have saved yourself a lot of money, But if you didn't trade on these two first by signals here. And instead you waited for the 3rd 1 here, you would have basically sold your stock rate at the bottom. So you have to be careful how you use these indicators and the timing around each one. The moving averages aren't quite as short term, consistent, but they are super long term. As you can see here, one more chart I want to show you is Google. Now, this is kind of a similar chart. We have steady, consistent growth all the way leading up to February, March of 2020 and then we have a drastic plummet. Down below are 50 day and 200 day moving average. Now, excuse me, The reason that I wanted to show this chart is because I want to show you how closely related these three stocks are. So we've got Google. We've got the Dow Jones industrial, which is actually an index of 30 different stocks. And we've got apple now. The reason I bring this up is because all three of these stocks are moving in almost the exact same pattern. When I scroll through them, you can see that it's a bullish pattern all the way to February March, and then it drops off drastically going through the 50 day and 200 day moving averages on all three stocks, including Google, right here. Now, the reason is because the entire market is moving similarly, the entire market is very correlated right now because Off Cove in 19 impacting every company. Now, however, if this was oil and gas and the price of a barrel was skyrocketing and these oil and gas companies, we're gonna make a ton of money, he would expect all of the oil and gas companies to move up. But you won't expect cool move up. So the reason I point this out is because some of these stocks moved very similarly, if you can start to pick up the trends in the Dow Jones, that's probably a very good reference off what the trend is going to be in Google and in Apple, especially if they're highly correlated at the time. So we got one more chart here. We got tested here. This is one is a little bit different. Were coming in from the left side here pretty steady and even trading. And then we see the price break above the 50 day above the 200 day, and we see the cross over where the 50 actually crosses over the 200 day moving average. So we've got one by signal, one by signal, one by signal. We got three giant by signals right here on a great opportunity to buy in in November of 2019. You could have bought in at around 3 25 with all those signals and could have road that out to over $900 on this stock. Pretty amazing just from looking at the moving averages. Now, they took a pretty drastic fall all the way back down to about 3 50 But now the stocks trading at about 6 50 And I think as I filmed this, it's almost 700. So pretty amazing example here. This one looks a little bit different than the three that we looked at earlier, because it's a little bit of a smaller company in comparison to Apple and Google. But a great example of the moving averages where we see the price cross over the 50 day, the 200 we see that crossover of the actual moving averages. Those three strong buy signals, and you kind of rolled that out toe over $950 from 275 maybe 250. So pretty amazing and a great example. Now, somebody for this lesson. The moving averages help us show the general trend there a little bit slower than some of the other indicators. But they're great as just a visual observant for what's happening. They do provide some by itself, signals those by signals. And when the price was moves above the moving averages and when one of the moving I would just crosses above the other one itself, the buy signals of the exact opposite. If the price jobs below any of the moving averages, it means we're seeing a trend reversal now. Some stocks are highly correlated. For instance, Apple and Google and sometimes Amazon. They all trade very similarly to each other and to the Dow Jones. Other companies, like a biotech company, is not going to trade anything like Apple, Google, Microsoft companies like that. So what you want to do is try and find a stock that you're interested in, find two or three that are also correlated to it, so that when you can see you think there's a goodbye opportunity for your company, you can check the other ones as well, and it basically reinforces your assumption in your ideas. Now. Some stocks are highly correlated, but the amount of correlation can change over time. Right now, all of those tech companies that I mentioned Apple, Amazon, Google are all being affected fairly. Similarly by Cove in 19 as soon as Cove in 19 is over, the correlation between those stocks could change. It could lessen, and we could be back to kind of business as usual. So the amount of correlation between these socks changes based on what's going on in the environment, and that's something you need to be aware of as well. But we can use the moving averages toe look at the general trends over the long time periods such as one year to see. Are these stocks moving in sync with each other? And if they are one of the next steps, we want to take so lots more to talk about, stated 12. MACD: What's up, everybody? My name is Zak Hartley, and today we're going over one of my favorite subjects. Technical analysis, using the Mac D indicator. So what is the Mac T? The Mac D is a moving average convergence divergence. That's what the letters mean and is. It is a technical indicator that we use when looking at our charts toe, analyze a stock and decide. Is this a buy, sell or hold? So how does it work? A. Uses two different moving averages and plots them on a chart to determine the trend. A moving averages, taking the closing price of a stock over the last X number of periods and averaging that out. If you take one. That's a short time period, such as Nine days. One. That's a long time period as 24. You're going to see differences in those trends, and that's what the Mac Dia's. It also uses a hist a gram to show the difference between those averages. So from one line changes and the other dozen it shows that difference. And the idea here is we're going to use this tool to try and identify, buy and sell opportunities. So when we look at our first chart here. We've got the Dow Jones industrial average on a daily time period over the last three months Here. What we can see is the price comes in on the left hand side here. It's pretty steady around that 29,000 point level, and then it drastically falls toe just below 19,000 points. A pretty significant downfall here. Pretty drastic movement here. And then it finally comes up back to about that 20 to 22 6 mark. So what we're gonna do is I've added in the Mac D indicator to this chart. I'm first gonna walk through it and then I'm gonna analyze it and see, could this have given us any signals as to what was gonna happen? So as you can see here, we've got a black and a red line. These are are moving averages. The red line is the longer moving average. This one is based on 24 days. The black line is the shorter moving average. This one is based on nine days. So as you can see, that red line is a little bit smoother, a little bit more gradual. Whereas that black line is a little bit more choppy, a little bit bumpy all the way down, especially in this area here. And it moves a little bit faster up and down than the red one does. You can also see the blue hissed a gram. Here, this blue hissed a gram represents the difference between the two. So, for instance, the gap between the red and the black is very large. Here, As you can see, a large blue hissed a gram. Here, thedc app over here is much smaller. You can see a smaller blue bar over here. So what that blue line does is it represents the difference between them and where the buy and sell signals come in is when those two lines cross over each other. So when this black line crosses over the red line, that is a buy signal. When the black line crosses below the red line, that is a cell signal. The reason is because that black line is a faster moving average, so it is Mawr, susceptible and sensitive to the price. When the price drops, that line drops very close to it. Now you can imagine with the red line it's a longer moving average. So when the price starts to drop, that red line still kind of comes along and then slowly starts to trail it. The idea here is you've got that red line. That's kind of your steady trend. And this black line that shows you the very short term trends. And so when those lines cross over and that is your buy and sell opportunity So we're going along this prices super steady here at around 29,000 points, supercedes stupor steady. And then all of a sudden, here we see a break break away on the 24th. Here we can see this basically Candlestick really separate from the rest of them, and it approaches that 28,000 mark. The next one is a very drastic drop and basically breaks all the way down to 27,000 points . If we look at our Mackey indicator, we can clearly see we've got pretty steady, were slightly above the zero line and then we go just below, you'll just blow it. And then we have 12 big days where those blue hissed a grams drastically increased downwards. And that means that the short term moving average. The black line here is pulling away and moving away from the red l