Volume Analysis For Stock Trading & Investing | Travis Rose | Skillshare

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Volume Analysis For Stock Trading & Investing

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

10 Lessons (1h 9m)
    • 1. Introduction

      1:57
    • 2. What is Volume?

      7:16
    • 3. Using VWAP (Volume Weighted Average Price)

      10:51
    • 4. Using OBV (On-Balance Volume)

      6:00
    • 5. Volume Profile

      7:41
    • 6. Supply & Demand

      8:13
    • 7. Stock Breakouts & Volume

      5:23
    • 8. Volume Exhaustion

      6:55
    • 9. Examples & Analysis

      7:39
    • 10. Risk-Free Trading Practice

      6:58
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About This Class

Volume Trading 101: Day Trading Stocks With Volume Analysis access also includes several resources and a free day trading ebook download with in-depth trading strategies and education!

This course will teach you step-by-step how to analyze volume data in the stock market using some of the most effective volume indicators and how you profitably trade stocks using volume analysis!

You'll be learning from a self-taught, full-time day trader on a mission to help other traders avoid the same mistakes that he made early on in his career. The strategies I teach within this course are the same ones I use on a daily basis in my own trading.

If you're interested in learning valuable analysis methods and strategies using volume to improve your trading and investing skills... this class is exactly where you should start!

What You'll Learn:

  • What is Volume?

  • Adding Volume Indicators to Your Charts

  • Using VWAP (Volume Weighted Average Price)

  • Using OBV (On-Balance Volume)

  • Volume Profile

  • Supply & Demand

  • Stock Breakouts & Volume

  • Volume Exhaustion

  • See Live Examples & Analysis

  • + more!

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Transcripts

1. Introduction: All right, so first I wanna say thanks for enrolling in this course day trading stocks with volume and using volume analysis to improve your trading and investing in the market. I'm glad you decided to give this course shot. And I know that there's going to be some very valuable information in here to help you improve your trading and investing with a volume. Now with that being said, I want to get started First off by introducing myself and giving a little bit of background about me and how I got started as a trader, along with how I got started here as an instructor. So first day trading in the market for over five years now. And I'm a self-taught trader, which means basically that I learned everything, quote unquote, of the hardware. And the hardware obviously in the market is by taking a lot of unnecessary losses. And it could have probably avoided by just following the footsteps of someone that already knew what they were doing. And that already had plenty of experience on their own. And really that mindset in thinking about how I should have done things differently is kind of what led me to create these courses to help new traders hopefully be able to avoid the same mistakes that I made and that plenty of other traders make when they first get started trading. So with that being said, the information that I put within my courses is designed to save you countless hours of studying. Potentially thousands of dollars in losses at many new traders face due to the lack of education. And my opinion is very important to study and take courses like this one before getting started in the market. Because again, you don't want to learn everything the hard way like I did. And realistically I could have saved myself thousands of dollars and user practice by taking courses like this one. So with that being said, let's go ahead and get started right now with the first section of this course, which is simply what is volume. And keep in mind that we're going to gradually get a little bit more advanced in each section. So if you already have some experience in the market and you already know the basics of volume. Feel free to, of course, go ahead and get started with one of the later sections with a slightly more advanced topic. 2. What is Volume?: All right, so since the topic of this course is volume, I wanted to start off with the basics and just cover what exactly volume is, as well as some things like relative volume and average volume. Before we actually move on to the more advanced topics in the more advanced Volume indicators. So if you're someone that's brand new to trading and you're brand new to the market, you're not going to feel lost that way once we start talking about those more advanced categories. However, I will say that if you do have some experience with the market and you already know about volume, relative volume and average volume, then you can of course, feel free to skip ahead and get started with the more advanced Volume indicators. But anyway, with that being said, what exactly is volume? So volume is going to be the number of shares traded during a set period of time. And when somebody talks about volume, they're usually going to be referring to the total number of shares traded over an entire day. So if you take the quote of the SOC for Apple down at the bottom left, you can see that right here we have all the bids where the buyers, and down here we have all the assets or the sellers. And below that you can see the total amount of shares traded for Apple on this given day, which happens to be 13 million shares. Now the way that we actually see volume on our charts is by bars that are displayed at the bottom of your chart. So every time a new candles open on the chart, a bar representing the total number of shares traded or the volume. Also going to open on the bottom of the chart and is going to show us what the current volume is for that stock. Now for the most part, this is going to be customizable, so it doesn't always have to be red and green. But generally when the candle of the stock is red, meaning that the price of the stock went down over that specific period of time. The volume bar that goes along with that candle is also going to be red. And the same is true for a green candle that happened go up over that certain period of time. The volume bar for that candle is also going to be green. And now we're going to be talking a lot about just basic volume in the future of this course. And you're going to learn exactly how you can read volume data and actually use it to benefit your trading. Before we get into that, I want to talk a little bit more about other types of volume. And the first of those is what is known as average volume. Now average volume is the total number of shares traded over a defined period of time divided by that length of time. So for example, if a stock has the following volume for each day of the week, Monday we have 2 million shares. Tuesday, 1.5 million shares, wednesday, 4 million shares, Thursday, 2.5 million shares, Friday, 2 million shares, the total in that case would be 12 million shares over that five-day period or that whole trading week. So if you divide that 12 million by five days, that's going to give you an average volume of 2.4 million shares. Now for the most part of the way that you're going to use average volume is going to be to actually help you find the best trade opportunities when you're doing your scanning or your screening in the market. And the reason for that is because ideally you want to see a stock that has a high average volume, in my opinion, of at least 500 thousand shares. This is very important because if the stock is trading, let's say, for example, just 10 thousand shares on average per day. When you're buying or selling that stock, there has to be somebody on the other side to take that trade. So for example, if you're buying a 1000 shares, that means that somebody else has to be on the other side to sell you a 1000 shares. And if a sock is only training 10 thousand shares on average per day, it's going to be very difficult for you to actually buy and sell at the prices that you want to buy and sell out because there's going to be a limited amount of shares on the other side of that trade. So when you're dealing with stocks that have high average volume of a hundred thousand, two hundred thousand, even 500 thousand or more shares. You're not going to run into that problem and you're going to be able to get in and out of your trades without having to worry so much about volume and liquidity. Now another type of volume that can really help you with scanning and screening to find the best trade opportunities is what is known as relative volume. Relative volume tells us how the current volume compares to pass volume data. So for example, if a stock is trading on average just 1 million shares, but it's currently trading at 3 million shares. That means the relative volume is currently at 3. And of course, stocks trading with high relative volume often make the best trading opportunities. And this is because they generally have higher than average volatility in some kind of news that is associated with the increased volume. So if you think about it, all of this increased volume doesn't just come from nowhere. Most of the time it's going to be associated with some kind of news or press release that the company put out. And because that news or press release is bringing new traders and new volume into that stock. That's going to create a lot of volatility. And that volatility is what we like to see as day traders because it makes for great training opportunities and can allow you to make profits in a short period of time. So anyway, regardless of which type of screening or scanning software you may be using. For example, if you're using be thinkorswim platform with TD Ameritrade. They actually have a built-in scanner to their platform. So you could use that to find stocks based on the volume criteria that you're looking for. The same is true with E-Trade pro. The same is true with interactive brokers. And probably a majority of the major trading platforms that are used. They're all going to have a section where you can put in volume data and where you can search for stocks that are meeting your relative in average volume criteria. Just to show you an example of this, I want to go over to thin biz.com and Fitbit is actually a completely free screening software that's going to allow you to search the market for the stocks meeting your specific criteria. So since we are of course focusing on volume and we talked about relative in average volume in this section. If we take thin base here and if you go up to screener at the top of fin biz.com. Again, this is completely free. So if you want to try it out and test out some volume settings on your own, please feel free to do so because it can be very helpful to actually finding the best trade opportunities. But anyway, once you click on screener, thin beds is going to pull up the free screener. Now right off the bat, you're going to notice that there are 7,516 total stocks in this fin based screener. And once we go ahead and put in our criteria for average volume, relative volume, you're going to see that that's going to narrow down the markets. You a much, much smaller list of stocks that are going to meet our criteria and are going to make great trade opportunities. So you can see that you can select many different options for average volume. Like I said, I personally like to look for stocks that have at least 500 thousand shares traded on average. For relative volume, you can see again, there is many different options, but I'm gonna go ahead and select over two. So once I've selected those two things, you can see that the market already narrowed down to just 140 stocks from when it was just over 7,500, just a moment ago. And obviously this is just the basics of screening. You would probably add in much more criteria to narrow this down even further when you are looking for the best trade opportunities. But I wanted to show you that this is how you can actually find stocks meeting your relative volume in average volume criteria. So that way you can make sure that you're only analyzing trading the best stocks to trade based on their volume data. 3. Using VWAP (Volume Weighted Average Price): Alright, so now that we've talked about the basics of volume and we talked about the different types of volume, like relative volume and average volume. And we've also covered how you can add different Volume indicators onto your charts using a platform like thinkorswim with TD Ameritrade. The next step is actually going to be to talk about the indicators themselves. So first and foremost, I want to talk about what is known as the viewer. And the view F stands for volume weighted average price. Now if you think about this in comparison to something like a moving average, for those of you that are familiar with trading using moving averages. Basically what a moving average does is gives you an average price of all the transactions that occur in the market over a set period of time. So when you compare that to the map, in a way you can kind of think about the web as a more accurate moving average, because it's not only giving you the average price of every trade that happens in the market, but it's also factoring in the volume of every single trade that happens in the market. So for that reason, in my opinion, the VW app is going to be a little bit more accurate and a little bit more useful, especially when you're doing intraday trading in the market. Now if you're interested in learning how to actually calculate that the web itself. The way that you could do that is by dividing the total dollar amount traded by the total number of shares traded. And that is again going to give you the view app price. Now you don't need to know that in order to actually use the VW app for your intraday trading. But if you are interested in learning how to calculate it, that's exactly how you can go ahead and do it. So just to give you an idea of what the app actually looks like, if we take this chart here with AMD, we're looking at the one-day, one-minute chart. So that means that each of these candles on the chart represents one minute of price action. But we're looking over the span of one entire day. And you can see this purple line moving through the middle of the chart is actually the VRef. Now one thing that is very important is that the view I've actually contains three lines. It's going to have an upper band, it's going to have a lower band, and it's going to have the middle band. In my experience, the middle band is the one that is most valuable for day traders and most valuable for actually most trading. And just about every trader that I know using the PUF focuses solely on the middle band. So for that reason, I'm going to focus on the middle band as well throughout this course because I don't want to over-complicate things by adding the upper band and the lower band, which in my opinion, simply make things a little bit more difficult to look at and don't provide a lot of additional value. So anyway, if we break this down a little further, you can see we have a small section over here on the left into larger section over here on the right. Now what you'll notice is that on the left side here, the volume, which is represented by these blue bars at the bottom of the chart, is much stronger than it is throughout the rest of the right side box here. Now because the view up is affected so greatly by volume, because it is again, the volume weighted average price. You can see that's when most of the movement in the web itself is actually occurring. Once the volume starts to flatten out and starts to decline, the VW app itself is not going to move as much because there's not as much volume being traded in the market to actually drag the V2 app either up or down. And if we go to the next slide here, we actually have a screen recording of the few app in real time. So what I'm going to do is actually skim through. Quickly, just so you can see actually how the V Wab moves in real time, along with the price in, along with the volume, again being represented by the blue bars on the bottom of the chart. So if I skim through, you can see as the volumes bikes in, as the stock price spikes to view up is climbing up as well. And as the stock pulls back and as the volume kinda declines, you can see that the web actually flattens out. And we're going to talk about a little further in this section, how you can actually use the view up and how you can use all of these different things going on with the view up. It's actually fine trades, it's actually help you find better entries and exits on your trades. So that way you can of course, use this information to your advantage. Now, as I've already briefly mentioned, the view up is actually mostly just used for intraday trading. It's an intra-day indicator and it's going to reset at the beginning of each trading day. So for that reason, it's going to be most valuable if you're looking at something like the one-minute chart or the five-minute chart, or even the 15-minute chart. However, once you get to the daily chart or the weekly chart or something much longer term view up is not going to be very valuable because it is again, an intra-day indicator. So with that being said, one of the main ways that the view app can be used is to actually determine the current market trend. So a strong push above the Wab means that there's plenty of demand for the stock making it bullish. And when I say demand, all I mean is that there are buyers for the stock. When you think about it, the market comes down to supply and demand. So if there's a lot of supply and not very much demand, meaning that there is a lot of sellers and not very many buyers. All of that selling is going to push the price of the stock down. And the same is true for the opposite. If there happens to be a lot of demand and not very much supply, all of that demand and all of that buying is going to push the stock's price higher. So again, to reiterate, if there's a strong push above of the web, that again is going to be a bullish trend, showing you that there is a lot of upward momentum in the stock. And that can be a quick and easy way to determine which way the market is going, whether the trend is to the upside or the downside. And on the other side of the spectrum, a strong dropped below the view app means that there is more supply than there is demand at the current market prices. And that means that there is probably a bearish trend going on in the stock. So just to help you visualize what I mean by a trend in a bullish move above the VW app. In this case with AMD again on the one-day and one-minute chart, you can see that early on in the morning, the stock breaks and bump the web and throughout pretty much the entire day trends higher and higher above the VW app, showing you that there is a lot of demand for the stock. And you can see that everytime it briefly dips below the view app, it actually comes straight backups. So that tells you again that there's a lot of demand, especially to buy in below the view app, which can be a great sign that this stock is likely to trend higher throughout the rest of the day. And it can be a great indicator for you to actually buy into the stock. And again, on the other side of the spectrum, in this case we have the stock are RC. And you can see right off the bat as the market opened to stock seems to be trending below the V web. And throughout the whole day it's making both lower lows and lower highs, telling you that the stock is in a downtrend and telling you that there is a lot of supply for the stock. So in this case, if you happen to be in the stock, this would most likely be a red flag and would be a great indicator for you to sell in either locking your profits. Cut your losses on the trade. Or you can actually take the other side of the trade by profiting from this downtrend by opening a short position. So anyway, aside from determining the trend of the market, one of the other ways that you can use that the lab is to look for an actual level of support and resistance that forms at that V web level. So when this happens, you can use the web the same way that you would use any other support and resistance level. And what a level of the web support is going to look like. For example, if a stock happens to pull back to and then bounce above the VW app after a bullish move up. Kinda like we saw in this example back here with AMD, we see an initial move up and every time it bounces back off the view app, it continues to go higher afterwards. So that is going to be a bullish sign for this stock. And that tells you that the view up is kind of acting as a level of support. And the way that you can use that is to look for an opportunity to buy at that VW app support, to profit then from the stock bouncing back above it and continuing higher aim because you always want to prepare for the other side as well. You can also use the view web support as a level to cut losses if the stock happens to break below the view app. So that way if that level of the web support fails and the stock starts to show some signs, weaknesses and shows a sign of a lot of supply hitting the market. That way you're going to cut your losses and get out of the trade quickly to reduce your risk and to avoid from holding, threw a big pullback in the market. And again, here's another great example of what this can look like. When we see a level of the web support, we're going to see an initial move up and the stock, the VW app is of course, following along with the stock. We're going to see a pullback in. We ever first bounds here off of the web support. The stock balances higher, pulls back again to the BUF support, bouncing again. And then for a third time later in the day, bouncing off the view up support, if we're running up even higher and actually making a high of day right before the market closed. So again, if you ever see v web support forming like this, you can look for a great opportunity to buy into this via web support. And by doing that, you're going to be able to take advantage of the upward momentum that's occurring in the stalk. And you're also going to have very clear level of risk because you know that you can cut losses quickly if the stock happens to break below that, the web support. Now if you're familiar with support and resistance, you know that resistance is pretty much the exact opposite of what support is. And the same is going to be true for the web support and V Wab resistance. So what a level of the web resistance may look like is a stock that breaks below the slab and then bounces back into it but fails to break again about the VW app and continues to move down lower and lower throughout the rest of the day. And in this case, again, if you're in the stock and you happen to have a long position and you see something like this happening showing that there's a lot of supply, showing that there is plenty of resistance at the V2 app. That is going to be a red flag and should tell you that it's a good time to sell out of your position and either lock in your profits or cut your losses on the trait. However, if you don't have a position open and you see a strong level of the rap resistance, you can use it as an opportunity to short sell, to profit from the stock going down. Now because short positions actually lose money as the stock goes higher, the whether you manage your risk and reduce your risk in a short position is by cutting losses above a level of resistance. The same way that you cut losses on a long position below a level of support. So if we take this example with SSI, you can see that there is a few occasions here where the stock bounces perfectly into the View app and it acts as a level of resistance. So if you happen to have a short position in this case, and you decide to short into this B web resistance to profit from the downward move. You could of course, cover into these lows down here to make a nice profit. However, the way that you would manage our risk again is by looking to cut losses once the stock breaks above this BUF. Because if it does happen to go higher in a short position, you would be losing money as the stock climbs and you would want to, of course, reduce your risk and cutlasses once the demand seems to start taking over the supply. 4. Using OBV (On-Balance Volume): Alright, now the next volume indicator that I wanna talk about is what is known as the on balance volume. Many times just referred to as the OPV. So the on balance volume is going to provide a running total of an assets trading volume and indicates whether the volume is flowing in or out of the asset. And when you think about it like that, it really has a lot to do with the supply and demand of the stock. If based on your analysis of the on balance volume, you see that the volume is mainly flowing into the stock. That's going to tell you that there is more demand than there is supply for the stock. And then it's going to be a bullish indicator and can be a great sign for you to buy into the stock to profit from that demand, pushing the price higher in on the other side of the spectrum, the same is true. If you see that based on your analysis of the on balance volume, a majority of the volume is flowing out of the stock. That's going to represent a lot of supply. And many times that can push the price lower, telling you that now may be a good time to sell out of your position, or even open a short position to profit from the stock coming down. Now like the VE map, you don't necessarily need to know how the on balance volume is calculated. But I didn't want to put this in and in case you're interested in learning how to calculate it yourself. So with that being said, the on balance volume is calculated by adding the current volume to the previous days on balance volume, if the stock is above the previous day's close. However, you would calculate it a little bit differently if it happens to be below the previous day's close by subtracting the current volume from the previous days on balance volume. And again, you don't necessarily need to know that to use this indicator. But I did just want to put that in there in case you're interested in knowing how to do so. So just to visualize what the on balance volume is going to look like on your charts. You can see we have a chart and down here at the bottom we actually have the on balance volume indicator pulled up. And this is typically how you're going to see you're on balance volume. It's going to be below the chart itself, which is of course different from the v Wab which you see on the chart. But it's going to be very similar to indicators like the RSI or the Mac D For those of you that are familiar with those indicators themselves. And as you can see, the on balance volume actually looks pretty similar to a moving average, only below the chart instead of on it. And this line can actually help us a ton with our trading and can give us a lot of information to help us improve our accuracy with our trading in specifically with trading breakouts. And really that's the main way that the on balance volume. And that's actually the main way that many of the traders that I know personally also use the on balance volume with their own trading. So what I mean by that is the on balance volume can actually show us when a breakout above resistance and a break down below support are confirmed by volume. And he can show us when they're not. So if the breakout is not confirmed by volume, it's often a false breakout. And if you were looking to buy the breakout of a stock above a level of resistance because you are looking to take advantage of that upside momentum. And by analyzing the on balance volume, you determined that it's more likely to be a false breakout. That can help you avoid buying into the stock at the top and getting yourself caught in what is known as a false breakout. And what these false breakouts often look like, or what we see here with the example on S NCAA. This is the one-day, one-minute chart, which is something that you would probably be looking at for short-term intraday trading. And you can see as this dog spikes up and forms a high up here with the strong spike in volume that is naturally going to become a level of resistance. And the way that many traders are taught to unfortunately trade breakouts and a stock is to buy immediately when the stock starts to break out and make a new high. And by doing that, you would be buying into this move right here, which happens to end up being a false breakout. So you would buy it to 80 to 90 all the way up to close to $3 per share. When just a minute later it comes all the way back down to 260. And later throughout the day it fades all the way back down to about 220. So by knowing how to properly analyze the on balance volume, you're going to be able to save yourself from buying into these situations and avoid taking these unnecessary losses. And again, to reiterate, the way that you avoid this is by buying and break out of a sock only if it is supported by the on balance volume. And what I mean by supported by the on balance volume is we want to see that the on balance volume is increasing the same way that the price of the stock is increasing. So if it's breaking out above a level of resistance, you also want to see the on balance volume spiking up to new highs as well. And that's exactly what we see here with this example with a man, kay? You can see early on again, this dog spikes up, forms HIV day before pulling back. That high of day is naturally going to become a level of resistance. And as he curls back up, you can see that it ends up breaking out again later on before pulling back in the on balance volume is also making higher highs the same way that the price of the stock is. That's telling us that even as the stock price is climbing, there's still demand and they're still volume flowing into the stock. Which means that this breakout above the recent high of day is confirmed by the on balance volume. Now again on the other side of the spectrum, if you're looking at both the chart in the on balance volume. Here we have a stock spiking up. Again, it forms a high a day before. And going back, that high of DE is going to become a level of resistance. And as the stock spikes, the on balance volume of course spikes as well. However, as the stock then breaks out above that reason ion forms a new high. You can see that the on balance volume is actually slightly lower than it was when the previous high was formed. So that's going to be a breakout that is not confirmed by the on balance volume. And if you're somebody that's looking to bind to the stock, that's going to be a red flag. And a majority of the time when there is not an unbalanced volume confirmation of a breakout. This is exactly what we see happened throughout the rest of the day. The stock ends up making lower lows and lower highs and continues down throughout the day. Which is of course something that we want to avoid buying into. 5. Volume Profile: All right, so moving on to the next volume indicator. This one is known as the volume profile, and this can be used on really any timeframe. So it can be used for any type of trading as well. Whether it be day trading, swing trading or even longer-term investing. And with the boiling profile does, is shows you the amount of volume traded at a specific price level over a specific period of time. So typically when you think about a volume bar, it's going to be vertical at the bottom of your chart. And it's going to show you how much volume which traded and given period of time, whether it be on the one-minute chart, five-minute chart, hourly chart or something longer term like the daily or even weekly chart. However, again, with volume profile, it's going to show you the amount of volume traded over a specific period of time for a specific price level. And because of that, these are going to be displayed as horizontal bars on the side of the chart. And it's going to look a little bit something like what we see down here with this diagram. Each of these bars over here with the volume profile showing you how much volume was traded at that specific price level. So the volume profile itself is actually broken up into a few main parts. So when you're analyzing the volume profile, these larger volume candles are going to represent points of interests in the stock. These are the prices were most of the volume has been traded and are often referred to as the points of interests or just POC. The POC will automatically be drawn when you using the volume profile indicator on your charts. And again, the way that you add these to your charge is going to be a little bit different depending on the brokerage for the platform that you're using. But to see exactly how to do that, you can go back to this section where we talk about adding different Volume indicators onto your charts. So with that being said, once you haven't pulled up on your charts and you're seeing these high-volume candles on the Boyne profile. These are again going to be considered points of control. And these points have control can often become levels of support and resistance. And it really makes a lot of sense when you think about it because there's a lot of volume treated at these levels. Typically when there is a level of support, for example, that's going to be because of the fact that there is a larger demand at that price than there is at other levels. And that demand is going to push the stock price higher. So when there's all this extra demand coming in, that's generally going to cause an overall increase in the volume. And the same is true for resistance with supply. When there's a key level of resistance formed on the chart, is going to be a larger amount of supply coming into the stock. And all that extra supply is going to add to the overall volume. Which is why these support and resistance levels are often at the same levels of one of the points of control on the volume profile. So to break the volume profile down even further, there's also going to be what are considered high volume notes. And these are prized levels with the highest activity and the highest volume. And these high-volume nodes are often a levels where the stock's price has consolidated. And because a consolidating stock is trading at the same price level for an extended period of time. That's going to generally cause a larger amount of volume at that specific price level, which is going to create a high-volume node and a large spike in the Boeing profile. And what we see often with the volume profile and high volume nodes is that prices often tend to gravitate back to these high-volume nodes after it has either a spike above it or the stock falls significantly below it. And then tends to bounce back up into the high volume note. One thing to keep in mind that I'm going to show you an example of here in just a moment, is that when the price of the stock revisits one of these high volume no levels, it is more likely to consolidate their again rather than simply moving straight through it. And if you take the other side of the spectrum with what are known as low volume nodes. These are pretty much going to be the exact opposite of what a high volume notice. And these are areas where the stock created minimal volume Matt, usually occurring after a large consolidation period and when the stock approaches a low volume node instead of consolidating at it. Again, like we saw with high-volume nodes, it's typically going to have a much easier time going straight through it and will generally not spent a lot of time compared to high volume notes. So to put all of this together, if we take this example here with the stock IN0, we are looking at an intraday charts. So this is what she would be looking at as a day trader or short-term trader. And we have the volume profile put up here on the right side of the chart. And if you take this example and you look at the volume profile, you can see that the largest amount of volume which traded at two main price levels. First we see one right here at about $4.45, and the other one is up here at about $4.60. Now if you compare that information that we see on the volume profile over to the stock itself. You can also see that right here at about $4.60 to stock seems to have a level of resistance that really struggles to break above and to hold above that price level. And the same is pretty much true with this level down here. That is also a high-volume node. In this case though, instead of acting as resistance, we see this level down here and about $4.40 becoming a level of support. And again, that's something that we see very commonly when you're looking at the volume profile. And that's why it's very important to note where there are large spikes in the volume profile because they can act as strong levels of support and resistance. And now if we look at the levels where there is much lower volume, you can see up here at about $4.65, that's where the volume is very minimal. And that is a price level that can be considered a low volume note. And because of that, once the stock price is able to reach that price, it's going to be much more likely to continue straight through it rather than to consolidate at it, or rather than an acting as a level of resistance. And the same is true down here with about $4.25 and lower. Because there's such a minimal volume traded their aim because it can be considered a low volume node, it's going to be much more likely to continue straight down through it until a new level of support is formed. And it is to actually bounced from it and forge forward and support. And if we take another example here with the stock and NVC, you can see that there is a huge spike in the volume profile right here at about the $7 price range. And that would of course be considered a high volume node in this case. And if you compare that to what we see on the chart, you can see that right here in that price area, that's exactly where the stock happens to consolidate for an a pretty extended period of time before it spikes up and moves higher. And again, once we see these consolidation periods, that's going to naturally cause a big spike in the volume profile, causing it to become a point of control and a high-volume node. And because of that, if the stock happens to come all the way back down to that high volume node, it's going to be more likely to act as a level of support. And it's going to also be more likely to once again, consolidate at that same price rather than going straight through it. And that is actually exactly how many traders use the volume profile with their own trading and investing. Because at the end of the day, what the volume profile does is kinda tells you exactly where people are putting their money. And in a way kind of allows you to see behind the scenes and to bind to the stock and the same prices that a majority of other traders are also buying into the stock at. Or on the other side of the spectrum is going to allow you to sell ad or around the same prices that a majority of other traders are selling at. And where there is a large amount of supply hitting the market. And even though we've already talked a little bit about supply and demand throughout this course and the next section we're going to get into more details about supply and demand. And hopefully it will really explain to you the importance of understanding supply and demand when it comes to trading and investing. So anyway, make sure to stay tuned for that and we'll go ahead and get started with this planned demand section right now. 6. Supply & Demand: Alright, now moving on to the topic of supply and demand, which is going to greatly tie into volume and is going to significantly impact the direction of a stock moving in the future. So at the end of the day, supply and demand is really the sole reason for price fluctuations in the market. And that may seem a little bit confusing to you because many people think that, you know something along the lines of a chart pattern, or even news being released by the company. Or social media influence is really the driving factor of the stock going up and down. And those things do of course tie into whether or not a stock is going to go up or down. But at the end of the day, what they do is influence the supply and the demand of the stock. And that supply and demand is then the driving factor, whether the stock goes up or down. And really it is a fairly simple and straightforward concept. If there's more demand, meaning that there are more buyers lined up than there is supply or sellers. The price of the stock is then going to go up. If there happens to be more supply or selling than there is demand or buying, all of that supply is going to outweigh the demand. And it's going to push this stock's price lower. And that is really the main way that supply and demand is thought out when it comes to trading or investing in the market. However, the way that I want to talk about it in a little bit more detail here in this course, is aside from the buying and selling. Another way that the supply and demand affects the stock market is by the number of shares available to be traded by the public. The volume. Now that number that is available to be traded by the public, meaning that people like you and I that are retail traders are able to buy and sell these shares and they're not held closely by insiders. That is what is known as the float. And the float of the stock can actually have a huge impact on how that stock traits. In my opinion, the flow data is something that you should look at before every single tree that you get into. Because it can give you a great idea of how much volatility you can expect in the market. And that's going to help you manage your risk and your position. And the way that you find the float Data is by going to a website such as Yahoo Finance. And if we go ahead and pull this up, I'll go ahead and give an example here. We'll go. Then go ahead and click on statistics. And if you scroll down a bit on the right side, you're going to see under share statistics, next to float, Apple has 4.27 billion shares and they're float. So again, what that means is there are 4.27 billion shares available to people like you and I to trade or invest in. If we go to something that has a much smaller float. For example, let's take a small cap stock like SRS, which happened to be a big mover recently. Again go to statistics. And in this case underflow we have 177.33 million shares. This float for SRA, which is of course much smaller than the 4 billion that Apple has an airflow. Now the way that we use this information when it comes to our trading and investing is fairly simple. You can think of the supply for a stock as the float. Because again, that is how many shares that are available and the demand for that stock being the volume. If there happens to be a large demand, meaning a ton of volume coming into a stock. And it has a very low float, meaning that there is a limited amount of shares to be bought or to be treated in this stock. And you can expect that low floats talked to have much more volatility and a much greater potential for a huge run than a stock that has a much larger supply, meaning a larger float and a smaller amount of demand. So at the end of the day, there is no set number for what is considered a small float and what is considered a large flow. Well, when it comes to day trading stocks, many times you're going to see very, very small floats and relation to higher-priced stock such as Apple. And with that being said, what I like to consider a microphone is something with 5 million shares or less as the float. Now again, because of micro floats to have such a limited supply, if there happens to be a large demand coming into such a small float, you should probably expect and plan for increased volatility in that stock. A low float, in my opinion, would be anything from the five to 10 million share arrange. A medium flow could be anything from ten to 50 million shares. And then a larger flow that is probably going to have a little bit less volatility than a micro or low float or even medium float is anything with 50 million or more shares in that float. And again, to reiterate, these low flowed stocks are going to have limited supply. So when there's a large amount of volume, in other words, a large amount of demand coming into these low float stocks, you should expect increased volatility. And that's going to go hand in hand with your risk management. And how much you decide to buy into this stock. Because increased volatility means more risk and more potential reward as well. And with that being said, most of them major stock spikes that we see happen to be in stocks with a low float in strong relative volume. And if for whatever reason you don't believe me, feel free to look into some of the major stocks bikes that have happened over the past couple of days. Look at your top percent gainers, and then head over to Yahoo Finance to look into their float data. And you're going to see that most likely it's a relatively small float. And along with that large spike in the stock, there was probably a large spike in volume or in other words, a large spike in demand as well. So if we take this example here with DRY s, This is a very well-known big spike that happened a few years ago. And the reason that it had such a massive Ron from at the time being about $5 per share to a few days later being over $100 per share is because there was such a small the stock. And in fact the float of Dries at the time happened to be under 1 million shares. So when this stock did start to spike and all of this extra demand and all of this extra buying and volume came into the sock with such a low float and a limited supply, it did end up causing a massive run in the stock. So by knowing this information and knowing that DRY S was a low float at the time, you could have very confidently bought into the stock and had a lot more patients while holding the position to really take advantage of this momentum into then profit from the spike. However, another thing that is very helpful when it comes to analyzing Float Data is the ability to avoid short selling stocks that have a very low float in that the potential to have a big spike like we see here with Dries. So for those of you that know about short selling, short selling is going to allow you to actually profited from a stock coming down. And with that being said, when a stock is rising while you do have a short position open, that's actually going to cause a loss in this case. So by seeing that dries was such a low float and had the potential to have a big spike. That would be a red flag for opening a short position. And that information has the potential to save you on countless losses when it comes to short selling. And unfortunately many traders, so huge losses on their short positions when DRY S was by game because they didn't necessarily know that it was such a low float stock. And they didn't compare that data to the demand that was coming into the stock. So there would have never expected for DRY S to run from about $5 per share all the way up to well over a $100 per share just a few days later. Okay, now with that being said one thing that is very important to keep in mind is that low float stocks have increased volatility in both directions. So just because a stock is a low float, doesn't mean that it's going to just immediately start spiking up and have a huge run like we saw with DR. YS. That volatility again, is going to work in both directions. So you do have to be cautious buying into these low flowed stocks if they already had a significant spike up. Because the volatility can then hit to the other side. And they still do have the potential to come back down just as quickly as they went up. And because of that, in my opinion, when trading low-flow stocks, it's always a good idea to take a smaller position and you typically would to account for the increase volatility. So that way if the stock is having a lot of volatility and it's pulling back and spiking very quickly. You're at least going to be minimizing your risk by taking a smaller position. And that way you can safely hold through the pullbacks without taking a much larger loss. And you would like to take. 7. Stock Breakouts & Volume: Stock breakouts and volume. So this section of the course is going to be dedicated to safely trading breakouts in the stock market and is going to help you use volume analysis to avoid buying into false breakouts, which many times cause inexperienced traders to buy into a stock all the way at the top before a bearish reversal to the downside. So first and foremost, what a breakout is in the market is a move above a defined level of resistance, or even a move below a defined level of support. And in either case, they can be used to buy into his stock. If it happens to be a breakout of bubble level of resistance or even short sell or just cut losses on a long position if the stock happens to be breaking down below a level of support. So with that being said, because you use these support and resistance levels to either bind to the stock or sell out of the stock. Many times what happens is there is what is known as a false breakout. And we talked about this a little bit in the on balance volume section of this course. So if you want to go back to recap that, I highly recommend you do so. But would have Fosbury gout is, is a short-term temporary breakout, often causing inexperience traders to panic by at the top of a move. Or Japan excel at the bottom of a move. And obviously these are two things that we want to avoid doing as traders. And by using volume analysis, you're going to be able to avoid buying into these false breakouts and selling into these false breakdowns below support. So if we take this example here, as NCAA, you can see that early on the stock spiked up and it formed a high Up Day, which is naturally going to become a level of resistance, especially because of the large spike in volume that happened when the stock did reverse from that high of deck. Later on you can see that the stock was able to briefly break out above that resistance level, but it came straight back down and ended up going pretty significantly lower throughout the rest of the day. And unfortunately, a lot of new traders are taught to buy into Sachs immediately once they break out above a level of resistance. So that will cause traders to bind to the stock all the way up here in the two eighties and even to nineties before just a few minutes later it was all the way back down into two sixties and later on in the day gone all the way back down about 220. So after going through this section, you're going to know exactly what to look for. And we're gonna go back to this example to show you why this was actually a bad stock to buy into when it comes to breakout trading. So with that in mind, that volume can actually tell us a lot about a stock's breakout. If volume happens to be increasing as the sock is breaking out, it shows strength and it shows that there's demand in that breakout, which is going to of course, push the price of the stock higher and is going to be a good breakout actually buy into on the other side of the spectrum if the volume happens to be weaker, when the stock is breaking out above that resistance level, that breakout is much more likely to be a false breakout and is not going to be a confirmed breakout. So again, going back to the on balance volume section, this is really the same concept that we talked about when a stock was breaking out over resistance. But the on balance volume was lower than it was when that resistance level was formed. So in this case, we're going to be looking at the actual volume bars. And we want to see that as stock is bringing out above resistance or breaking down below support, that the volume candles are going to be larger than when that breakout level was formed. So if we go back to this example here with SNCC, yea, you can see as this resistance level was formed, there was a huge spike in the volume over these two candles. Later on, once the stock breaks out above that resistance level, you can actually see that the volume was only about half of what it was when that resistance level was formed. So because of that, that tells you that the demand is not that great up here at these levels. And because of that, it's more likely to end up being a false Breakout, which is exactly what happens in this case. So that would be a red flag if he were looking to buy into the stock. And if you already had a position in the stock, that will most likely tell you that now is a good time to lock in your profits, because this is likely a reversal point. And there's a good chance that the stock is going to come back down, reverse trend to the downside. And over on this slide we have the same example with S NCAA. But now you can really see the divergence and the volume going down while the price of a stock is going up. And again, if you are somebody looking to buy the breakout of the stock, that's obviously not what you want to see, and that is going to be a red flag. Now if we compare that to something like what we see here with an NVC, early on again, the stock spikes up and it has a big volume spike as it meets this HIV day up here. So from there does have a little bit of a reversal to the downside. Later on throughout the day. It's able to make its way back up to the high of day. And right here, this is where volume picks up significantly. And as it's breaking out above that past resistance level, the volume is spiking up as well, and the volume actually starts to comment much stronger than it was earlier on when that resistance level was formed. So because of that, this is going to be a breakout that is actually confirmed by volume. And this is one that is going to be much more likely to continue up training after it breaks out above that resistance level. So Azure watching stocks like this in real time, which are going to want to see as the stock is breaking out above these resistance levels, is that these volume bars are starting to spike. And if you're looking at other tools such as the time in sales, you want to see a ton of volume, of course, flowing in on the time and sales as well. Telling you that there is a lot of volume and a lot of demand coming into the stock as it is breaking out above resistance. 8. Volume Exhaustion: Alright, so to finish off the course, I want to talk about one more topic, which is volume exhaustion. Or you exhaustion is often compared to somebody running. If you think about it, somebody can jog at a steady pace for awhile. But once they start to sprint, inevitably they're going to become and exhausted and they're going to need a break. And if you compare that to the stock market, you can think of a stock that is in a nice steady up trend as a person jogging. However, once the stock starts to spike up very significantly and very quickly, that's really the equivalent of the person's starting to sprint. And inevitably it's going to need a bridge. Which when it comes to the stock market, outbreak is going to be in the form of a pullback in the stock or even a complete bearish reversal to the downside. And when it comes to volume exhaustion, there are really two sides of the spectrum. There's going to be buyer exhaustion and there's going to be sellers auction. So with buyer exhaustion, this is when a stock moves up too much, too quickly, eventually that amount of demand, It's going to become unsustainable and that's going to cause the stock to pull back or even sometimes reverse completely to the downside. And if we take the diagram example down at the bottom, you can see again, this is when the stock is in a nice slow and steady up trend, which is compared to the person jogging. Once it starts to spike up very quickly, going pretty much parabolic at a certain point. And the volume goes straight up as well. This morning candle that is significantly larger than all the other ones throughout the rest of the day, is going to be your level of buyer exhaustion. And that's often a reversal point in the market, which can be a great scientist cell out of your position. Or to even look to you open a short position to profit from that bearish reversal. So to show you a real life example of this, if we take the stock AGT, see here, this is an intra-day chart. We're looking at the one-day, one-minute chart. So this is probably what you would be looking at if you were doing some short-term day trading. And again, just like the diagram, just like I explained in the previous slides, early on, there's pretty much a nice slow and steady up trend. And then we get to solid green candles in a row. After that, we get a huge spike in the volume as the stock breaks out to a new high. And from there that ends up being a reversal point, showing that this is a level of buyer exhaustion. And again, the volume over this candle a significantly larger than it was throughout every single other candle, the entire rest of the morning. Now one thing on its own can often be a great indicator to sell our stock and can tell you that there is a reversal coming. Remember to benefit the most from volume exhaustion candles. I do recommend trying to pair these levels with candlestick patterns. Because if you do see a level of buyer exhaustion at the same price that you see a bearish candlestick pattern. That's going to be two great signs that there is a bearish reversal coming, which is going to of course helped make these volume exhaustion levels even more accurate and even more useful with your own trading. And of course they take the other side of the spectrum. You're going to have sellers option as well. And this is going to be when a stock moves down too much, too quickly. And that amount of supply in And eventually it's going to become unsustainable and it's going to cause the stock to bounce back up. So this is really going to look exactly like buyer exhaustion. Only completely flipped over on the other side. And in this case we see a nice slow and steady downtrend. But eventually we see a huge sell-off in the stock. In along with that sell off, we're going to see a big spike up in the boardroom representing that level of cellular exhaustion. Eventually that supply is going to become unsustainable. The demand for the stock is going to take over and push the stock backup, causing the price of the stock to bounce back up a little bit. And that could be used, of course, to look to buy into the stock, to catch the bottom of a downtrend internet profit from the stock bouncing back up. So again, to show you some real life example of seller exhaustion in this case, we can see that there is a huge spike in the volume at the same time that the stock meets its flow today. Again, we want to, of course, try to pair this with as many bullish indicators as we possibly can to make sure that this seller exhaustion level is actually going to become a potential reversal point. And in this case, if you're familiar with candlestick trading and candlestick analysis, you can see that as the stock comes down here at the low and it has this big spike in volume. There's also some pretty significant lower wigs on these candles, which represents that the demand is starting to take over. And the buyers are starting to push the stock price up once the stock gets down to these levels. So again, by pairing this together with these volume exhaustion candles, you can use this information to look, to buy into the dip or buy into the pool backup a stock before it bounces back up. And in this case we do see a great example of the stock bouncing backup. And this cellular exhaustion level would have actually been a great area to buy into the stock. In. Just to finish off this section, I do actually have a screen recording here. And what I'm going to do is actually just skim through this because it is a very long screen importing about 51 minutes. So I'm going to skim through it really quickly. And all I want you to do is keep an eye on the volume bars down here at the bottom of the chart, and keep an eye out for any levels of volume exhaustion. Hopefully this is a pretty obvious level of boiling so option. And the reality of it is that many times it is going to be very obvious because the whole point of volume exhaustion is that the volume is so much significantly larger than it was throughout the rest of the day. So in this case, we see that this is of course the level of buyer exhaustion, this case, because the stock was spiking up, the demand eventually becomes unsustainable. And that buyer exhaustion level is then going to become a level of resistance where the supply takes over in the stock price starts to reverse. And that's exactly what we see here as the stock spikes briefly up to about a $1.40, it's immediately pushed back down and it consolidates for awhile before completely reverses to the downside. So if this doc happened to break out up to 140 on this candle with a huge spike in volume. It would be a complete different story of the next candle also had just as much volume and was also going to the upside because that would tell you that this is a breakout and the stock, and that there's still demand pushing the price higher as it's starting to break out to the upside. Because the stock spiked up with such a significant spike in the volume and immediately came back down. That shows us that that is a level of buyer exhaustion, which is of course going to become a reversal level for the stock. 9. Examples & Analysis: All right, so to finish off the course, I'm over here in my trading platform. And this is the interactive Broker platform up here with my scanners and different top percent gainers and talk percent losers, as well as the level two and time at sales here. And down here. This is the thinkorswim platform with TD Ameritrade. And I use this for most of my charting and technical analysis. And really all I wanted to do here for the last section is just go through some of these top percent gainers and top percent losers for today. And we're going to look at some of the intraday charts and just try to find some examples here of when the volume analysis worked and when it didn't work very well. So that way we can hopefully use all of the information that we talked about throughout the rest of the course to the best of our ability, once we start using it with our own trading. So first and foremost, what I'm gonna do is just jump around through some of these examples here. Right now we have upped the stock, PSP, which was the second talk percent gain, or today closed up about 74%. And we have some charts here put up. This is the one-minute chart. This is also the one-minute chart. And over here with the volume profile, this is going to be the five-minute chart. So the first thing that I actually notice here in this example is that as the stock breaks out early on in the morning, you can see that the on balance volume is of course spiking up pretty significantly later on encloses pretty low in relation to the higher-up day. But in after hours and ends up and actually breaks out briefly above that previous HIV day. Now again, going back to the on balance volume section of the course, I mentioned that when a stock is breaking out over a level of resistance, which a high of days naturally going to become a level of resistance. You want the on balance volume to also be making a new high in order for that breakout to be confirmed. So if we take this example, you can see that as it breaks out in after hours for exalted above that high. But the on balance volume is not even close to where it was when the stock was breaking out early on in the day. And again, that would be a red flag and tell you that this is probably not going to be a good breakout to buy into. And then it's going to be more likely to become a false breakout because of that. And also hopefully you noticed that the volume on the breakout and after hours is also going to be significantly lower than it was when this dog broke out early on in the morning. And that may just be because the fact that there is often less volume traded in both pre-market in an after hours than there is intraday. But also that doesn't help the case of this breaking out with a much lower on balance volume. So in my opinion, because of those two things really, this is a great example of a false breakout. In one that you would not want to buy into. If we just go through some of these other ones here. The next one is Dx LG. And if we zoom in a bit on the charts, one thing that I do notice is if I go ahead and pull up the five-minute chart instead of this one-minute chart. Just so we can see it a little bit more clearly. You can see there's a few breakout levels here. Initially, the Salk forums high up here with a pretty strong spike in the volume. So if we go ahead and draw that as a resistance line later on in the day, you see that it does briefly break out above that resistance line before it has a pretty significant pullback. And if we compare that break out than to the volume that's underlying, You can see that the volume on this candle when that high of Day was formed is pretty high. And then when it breaks out later on in the day, it is significantly lower. And that shows us. Exactly what we talked about and the stock breakouts in volume section. And because of that, this stock is more likely to be a false breakout. And that's exactly what happens initially, but later on in the day it does end up breaking out and continuing higher or regardless, if you were to try and buy this breakout above the initial five day, you would probably end up taking a loss and getting stopped out on this pool back before it ends up reversing to the upside. So that's a good example really of using the volume and looking for these false breakouts based on your volume analysis. Also, if we look over here on the one-minute chart, you can see that as the stock is breaking out, the on balance volume is pretty much exactly where it was as high a day up here. So they're pretty much identical. And then later on as the stock actually is able to break out and continue higher. You can see that the on balance volume spike significantly above where it was when this resistance line was formed. So that tells you that this breakout is actually confirmed by the on balance volume. And this is the one that you would want to buy into for a quick profit rather than this one down here. And now if we move on to the next OK, This one is Vb IV, and this one close up about 36% for the day. And in my opinion, this is a pretty good example of some buyer exhaustion and the stock. If we zoom in here on the one-minute chart, you can see that there is one candle that has significantly higher volume than all the other candles throughout the day. So naturally that's going to become a level of resistance and is likely going to be a buyer exhaustion level where the stock ends up reversing from. And that's pretty much exactly what we see in this case. The reversal doesn't happen to be immediate like it is in some cases, it does trade sideways for a little bit and then briefly breaks out above that high from the volume exhaustion candle. But from there at about $5 does reverse all the way back down to a low of about $4.15 later in the day. So that's a great example of volume exhaustion, and more specifically buyer exhaustion. And that tells you exactly why you should be looking out for any major outliers when it comes to the volume bars at the bottom of your chart. And also if you look over on the five-minute chart on the left, and we take a look at the volume profile. You can see that right here at about $4.25, there's definitely a point of control and there's definitely a large spike in the volume profile. And going back to what we talked about in that section of the course, these points of control are often going to become levels of support and resistance. And because the stock pulls all the way back down to this price, that's exactly what we see in this case, the $4.25 area becomes a pretty strong level of support that holds from about 12 o'clock, noon all the way throughout the rest of the day until the market close at 04:00 PM. So you definitely do want to keep an eye on the volume profile, especially when it comes to looking for key levels of support and resistance. Because it can really help you visualize where there's a ton of demand and a ton of supply for that given stock. Which can many times help you get on to the right side of the trait. But regardless, I hope going through some of these, the symbols here with the top percent gainers helps you to see how important it is to look at all these different Volume indicators. Every one of them definitely plays a role in my personal treating. And every single one of them can really help you with your own trading as well. And with that being said, this is going to be the final section of this course other than the next few bonus sections. So if you do want to learn to set up your thinkorswim platform with TD Ameritrade. And you want to learn how you can actually practice trading completely risk-free without risking any of your money. And then stay tuned for the next sections in the bonus section of this course. But anyway, thanks for watching. I hope you enjoyed the course and good luck with your trading and investing. 10. Risk-Free Trading Practice: Alright, now at this point you should have a good understanding of the trading or invest in style and strategy that you plan on using When you start trading or investing with your real money, any a real live account. But before putting your hard-earned money at risk, most people would of course, want to practice in some way, shape, or form. And a very common way to do that with the stock market is by doing what is known as paper trading. Paper trading is essentially just trading with fake or virtual money in order to practice and test different strategies without of course, putting any of your own money at risk yet. So I just wanted to briefly make this video to show you how you can start paper trading for 100% free. And the way to do that is by going onto thinkorswim, which is the platform that comes with your brokerage account with TD Ameritrade. And it's actually a 100% free to use. And once you open an account with them, you don't even need to fund your account yet in order to use the platform in order to actually start paper trading. So once you click on the application, which is going to look like this down here, this is the box that's going to pop up. And in order to log in to actually start trading live with real money, you would want to have this selected on the left side here for live trading. And then simply put in your username and password and go ahead and login. But for this example, I just wanted to show you how you can briefly start paper trading. So you wanna make sure that this is selected over on the right side for paper money. And then from there again, you're just going to want to log into the account and it's going to pull up the platform to start paper trading. Alright, so once you're logged in, the application is going to pull up your workspace. And if it's your first time going onto the application, here's me look a little bit different than mine does at the moment. And the reason for that is because mine is already set up in I've already used this platform on multiple different occasions. So if it's your first time, I recommend going back to the section of the class that is titled setting up your trading platform. And it's going to show you how to set up and use all the different tools and features within the thinkorswim platform itself. But if we go ahead and look at the top up here, you can actually see what our buying power, and that's the amount of money that they give you, which is of course fake money to actually start practicing your trading are the best thing. So if we wanted to go over and look at stock CTRL, you can see right here we have deep five-day, five-minute chart. And then down here I'm gonna go ahead and select you one day, one minute, just for a shorter timeframe. In order to trade this, we're going to use the active trader over here. And we would simply treat this the same way that we would if there was with real money. And that's actually a very important aspect of paper trading. Because when you're trading with fake money or virtual money, you're not going to be nearly as emotionally involved as you would be when you're trading with real live money. So in order to get the most out of your paper trading, It's very important that you think of the paper money as real money and treat it the same way that you would if you were trading with a live account. Okay. But in order to buy this, what we would do is we could of course just buy at the market and that's gonna get us into the stock immediately at the current market prices. However, if we wanted to use a limit order, we would simply make sure we have the amount of shares that we wanted to buy selected. Let's say we wanted to change this to 5,700. And then all you do is simply go down here to the act of Trader box and hover over the price that you want to buy out. And then once you find it, you would just click on it and go ahead and click on the confirmation box. So if we were looking at this. And we see that there is kind of a level of support that's forming in the 295 to $3 level. And let's say we wanted to use that as our opportunity to buy into the stock. We could go ahead and place an order to buy, maybe at $3.02. We would just hover over Rio to click on that. Here's the order confirmation that's going to pop up. And from there, all you do is click send. The order looks to be exactly how you want to be. And then once that order is sent, it's going to treat it exactly as it would if it was a real position. You're going to be able to buy into the sock. And then once you have your position filled, you can then sell out of the stock or place your order to sell the right side of the active trader. And let's say we wanted to sell. If you're at 310, you would just click on 310, send that order and wait for your position to get filled so you could walk in your profits. Alright, so on the other side of the spectrum then, as we know, you can of course, short-sell also, which is a way to profit from the stock going down into short cell, you have to of course, sell shares first before even owning them. And the way that we do that is by borrowing shares from our broker. So if we place that order to sell first before we even have a physician, we can then later on buy back those shares, ideally at a lower price and profit. The difference between where we sold short and where we bought the cover multiplied by the amount of shares that we traded. So if we were looking at this chart and we see that right here in the 325 to 330 area, there is a little bit of resistance forming. We could use that as an opportunity to short sell if the stock did spike up into that resistance. So let's say we wanted to sell at $3.24. We would just click there on the right side, of course. And then go ahead and again, quick sand once the order confirmation pops up. And as you can see in this example, this talk is actually not available to be sold short. And that does happen every once in a while with penny stocks, especially because you do have to borrow them from your broker. And they're not always going to be available to be sold short. However, one thing I do want to point out though, is regardless of if you're buying or selling, if you're somebody who wants to get in and out immediately and you're trying to trade very quickly. Then you may want to have this box select here, and this is the auto sandbox. So if we have that selected once we place an order to buy, sell, short sell, or even cover, it's going to immediately place that order rather than having that confirmation box pop up. So right now you can see we still have our order set for 5 thousand shares to be sold at $3.10. And now would close out our position that we bought earlier in this example. And if we went ahead and click the exon that to cancel that order. And using the auto send option, if we clicked back on 310, you can see that that order immediately pops back up without the confirmation box popping up as well. Okay, so I hope this helped you to understand how you can actually practice your trading or investing before putting any money at risk. It's definitely something that I recommend doing for a little while before you dive into the market. And if you're somebody that's brand new to trading or investing, it can be a great way to get a feel for the market and how stocks fluctuate. And of course, using the thinkorswim platform here with TD Ameritrade is again a 100% free, so I do recommend using them to actually start doing so.