TD Ameritrade Holding Corporation (AMTD) Earnings Report


I'm often asked how my trading firm traded 500 millions shares per month profitably.

Most assume we had some fancy NYC quants working for us. But the truth is each trade was built on a very simple argument. From day one we wanted our traders to answer three simple questions.

  1. Who is in charge? (buyers or sellers)
  2. How long have they been in charge?
  3. Are they holding the bid? (Or offer)

The amount of money traders give away to the stock market because they can't answer these simple questions is staggering. More money is lost because of impulsive, poor ideas than any other reason.

On my trading desk we called the above 3 questions "building an argument." The stronger your argument the stronger your reasons to accept risk. The last factor in the plan was profit potential.

"Is there enough profit potential to justify the risk?"

Who is in charge?

Too many traders make this business complicated for no reason. "Shiny objects" in the form of automation make you believe in miracles, but they typically cloud your vision.

But here's the thing, you can't hide real commitments. When the smart money has an interest in a stock, they back their ideas with real money, and create higher highs or lower lows. I call this well-bid. See image. (Reverse for a selling bias).

The smartest way to know who's in charge is start looking for well-bid or well offered patterns. That's step #1.

How long have they been in charge?

Since we mostly lived in the day trading arena, we looked for pattern #1 on the daily candlestick charts. BUT we wanted a stronger argument, so we moved up a time frame to the weekly charts.

Smart money build positions over time. We looked for continued commitments. Generally speaking 4-5 weeks was an entire play for us. The more weekly candlesticks showing the same picture, the more real dollars were invested in that idea. 

This allows us to piggy back a large order by smart money.

Are they holding the bid? (Or offer)

The final piece tells us if today's price action is in sync with longer term pictures. This patterns stops us from buying a strong stock going lower. We look at the change from the open. If we see bullish commitments, (well-bid) is the current candlestick green? 

This last piece prevents huge losses and tells you when it's ok to hold longer-term trades. An example is a trade we initiated in NFLX last week after earnings. We found the exact bottom and the stock rallied for a $10 bounce, but closed well below the open. So we did not hold the trade.

If you're going to swing trade, you need criteria. The lower close did not confirm the earnings pop.

This strategy is only a small piece of the Order Flow strategy I teach. See if you can spot some good trade ideas from today's bullish scan.

The chart of GS Goldman Sachs shows some very clean examples of well-bid and well-offered opportunities.

If you would like to learn more, schedule a strategy session with me. Let's see if we are a good fit to work together.

Have a great day.


Goldman Sachs Chart 10-20-19

Goldman Sachs Chart 10-20-19

Stocks will likely hit new records in the week ahead if earnings keep topping expectations

The all-time highs could be tested as about 120 S&P 500 companies, or around 24%, are scheduled to release their quarterly results in the week ahead.

Some of those companies include Caterpillar and Boeing, both of which are expected to report Wednesday before the bell. Amazon, Intel, McDonald’s and Chipotle Mexican Grill are also on deck for the week.

What's in the Cards for TD Ameritrade (AMTD) in Q4 Earnings?

TD Ameritrade Holding Corporation (AMTD) is scheduled to report fourth quarter and fiscal 2019 results, after market close on Oct 21. The company’s revenues and earnings are expected to have grown year over year.

It witnessed net interest margin expansion in third-quarter fiscal 2019, which led to higher revenues. Also, average client trades per day increased, indicating improvement in trading activity. However, elevated expenses posed a concern.

Coca-Cola Stock Near All-Time High After Solid Quarter

Dow component The Coca-Cola Company (KO) rallied to a six-week high in Friday's pre-market session after meeting third quarter expectations and reiterating full-year guidance. Revenues rose a healthy 8.3% year over year, while operating margin fell from 29.8% to 26.3%.

The stock is trading close to an all-time high after mounting multi-year resistance near $50 in the second quarter of 2019.

Pete Renzulli

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