What Should You Trade | Podcast Episode #54

0:00
Everybody, this is Ryan Mallory doing another episode with you on Swing Trading the Stock Market, and today’s podcast, I want to talk about what should you trade. There’s a lot of different things that you can trade out there, but how do you know which one that you should be trading, and are you trading the vehicle, the trading mechanism that is right for you?

0:17
So there’s a lot out there. You have futures, you have crypto, you have stocks, you have options, you have Forex, you have bonds. So let’s use this time to go through about each of these, the pros, the cons, and how it might work for you as a trader. First, futures. What are futures?

0:34
OK, these are things that trade all throughout the night, all throughout the day, and they are leveraged. They can be anything really. They can be cattle, they can be oranges. They can be oil, they can be the S&P 500, they can be the NASDAQ.

0:50
They, there’s just a whole host of them. I mean, you think about any kind of farm animal or commodity, you can trade it gold, silver, you name it, it’s out there. Futures, they, they have different closing prices for each commodity. For instance, oil closes at 2 o’clock each day, but it keeps on trading right afterwards, and they each futures contract has a different like opening and closing time.

1:12
There’ll be, there’ll be different breaks in between the S&P futures, the eMan futures trading for the S&P 500. They trade 24 hours a day, 5 days a week. They, they start trading at 6 p.m. Eastern Sunday night, and they trade through ah.

1:28
In of Friday at 4:15 p.m. So you have breaks between 4:15 p.m. and 4:30 p.m. Eastern Monday through Friday. But one of the big things about Futures is the leverage. So you trade one contract, you only have to put a little bit upfront to trade a very large contract.

1:46
So, it sounds great because if you’re right on a trade, you can make a lot more than what you put up front. However, you can also lose that money extremely quick if you are not managing risk appropriately. So those are futures. 24/7, you got, or 24/5, but you gotta kind of stay on top of your game there. Then you have crypto.

2:02
I’ve never actually traded crypto before. Um, this is another one. It trades 24/7 and it’s got a lot of volatility to it. You buy one Bitcoin, you control one Bitcoin. So right now Bitcoin’s at $11,000. You buy one Bitcoin, you’re controlling $11,000 worth there.

2:18
So there’s no leverage per se. However, you really have to be on top of this one. But I actually like crypto from a technical standpoint. It does tend to follow technical patterns pretty well. Um. But then again, there’s a lot of volatility into it because it can take 10 to 15 percent price wings in a given day.

2:36
So if you’re going to trade those, you need to be moving up your stop losses as you get the gains pretty rapidly. And of course, you got what I do. You have the stocks, the equities, and these things are open from 9:30 to 4 p.m. Eastern every day. I like it because it’s kind of during working hours when I want to be working, which is what I do for a living.

2:54
I trade stocks, but I don’t want to be trading stocks all throughout the night and into the morning. I’d rather for it to be a set times, but there’s a lot of things that can happen overnight that can create gap ups and gap downs on stocks, so you have a little bit of risk there at the opening bell each day. Then of course you have options which are derivatives of the stocks.

3:12
So you might be buying calls on Apple for maybe like $10 and you’re controlling 100 shares at $200 and you’re expecting it to go up to $220 but the only way that they can Actually make you money is as if the price goes up to $220 before the expiration date.

3:31
So, and when I say you’re buying Apple at $10 you’re not just buying $10 to control 100 shares, you’re buying $10 using $10 or whatever. It could be $20 depending on the, the, the option in the contract and the strike price and the expiration date, but you’re doing 10 times $100 so it’d be like $1000.

3:50
To trade that that many shares. Now the downside to options is that there’s a lot of risk to those too, because whatever you put in there, it’s very easy to lose all of it right away. Um it’s, it’s kind of an all or nothing ordeal. I mean, I’ve traded options before. I don’t always lose everything when I when I trade options and.

4:07
You can still use stock losses and in the sense that you can get out at a given price. However, you can wake up the next morning and if you’re trading Apple stock and the stocks down 10 percent, your, your, your options are probably going to be worthless if it’s in the, if it doesn’t have much time left on the contract.

4:23
So that’s something you always want to keep in mind. Then you have Forex. Forex, I mean, you have, you know, the US dollar, you have the peso, you have the euro, you have the yen, the yuan, all these things that they’re pairs, right? They come in pairs, so it’s the US dollar versus the yuan or the yen, and And so the values can dramatically increase because there’s a little bit of a futures element in that you, you do have leverage in that regard.

4:49
So if you like the futures, but you feel like you have a better propensity towards currencies and and world events, then that might be the one to go for you. And then of course you have bonds. Those are fixed investments. Yes, the bonds values can increase and decrease, and people will trade off of those, but I don’t have a lot to say about bonds because I’m not really a bond trader and not really done it too much.

5:08
So the ones I do know, I kind of Talk to you a little bit more about today. This is a pretty basic podcast, but it’s going off of one of my previous podcasts where I’m talking about finding your trading edge, and the first one was what should you be trading? And so in the coming weeks, I’m gonna be going through each of those um steps to finding your trading edge in a little bit more detail.

5:28
So for this week, it was what you should be trading, and I wanted to go through just a list of a, a number of known. Vehicles for trading. Of course, there’s a lot of other ones out there and I probably missed some of them, but I mean, heck, you have, you have poker, right? I mean, you could be doing that or fine wines or or art, but in terms of cash transactions and stock market and Wall Street, these are the main ones.

5:52
If you have any questions, feel free to email me ryan@shareplanner.com. Until then, thank you. God bless.