Creating a Watch List | Podcast Episode #131

0:07
Hey, I’m Ryan Mallory, and this is my Swing Trading the Stock Market. I’m here to teach you how to trade in a complex, ever changing world of finance. Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly to let those winners run wild.

0:25
You can succeed at the stock market, and I’m ready to show you how. Hey everybody, this is Ryan Mallory with Swinging Trade in the stock market. I got a good episode for you guys today. Gonna talk about creating a watchlist. I got a good email about that. I also gonna tackle two emails in one because this first one’s just gonna be kind of like a clarification because a lot of you guys are Canadians, a lot of you guys are paying for commissions.

0:48
Wanted to pass along a note. I’m not an expert or anything like that in Canadian trading, so I rely on you guys to give me some information and I thought this was a pretty good email that this one guy sent along. He’s a trader in Canada. He’s found a pretty good alternative to not having to pay as much in commissions because a lot of you guys in Canada pay like $10 in commissions and about a quarter of my audience is from Canada.

1:08
So I want to be respectful to that. He doesn’t give me a name to call him. I’m just gonna call him Boutros Boutros, and he says, I’m from Ontario, Canada. And he says, first off, I want to thank you for making your podcast. I’ve listened to every one and your information has been very valuable to me. On your last episode Afraid to Trade, you asked if there were any no commission or low commission trading platforms in Canada.

1:27
He, and this is what he tells me. He says, I used to trade with RBC, which is Royal Bank of Canada direct investing account, but they charge $9.95 per trade. That’s fine for a passive income meant for a long-term retirement savings, but very expensive for a small-time swing trading. So he says that he opened an account with Interactive Brokers’ trading account.

1:46
They do not offer commission-free trading to Canadians, but they do offer a much lower cost option. The commission is $1 per trade with a minimum total commission of $10 per month. So he said he found that to be a lot better deal. It sounds like it’s gonna be better than paying $10 per trade. And it allows you to also scale out of your trades as well without taking a brutal beat down on the commission costs.

2:08
So check that out. If you’re in Canada, you’re looking for a cheap option, check out Interactive Brokers. I don’t get any kickback or anything like that, but I’m just here to help you guys. If it benefits you and it benefits somebody else, that’s fine. I don’t care. But I just wanted to let you guys know about that. Also, the whiskey I’m drinking today is Jack Daniel’s Single Barrel Barrel Proof.

2:29
This thing is a whopping 65.25% alcohol, man. Let me tell you, I’m almost scared to drink it because it’s so potent. It’s 130.5% proof, but it’s good. It’s really good for sipping. It’s definitely got a harsh taste, but it’s got a good finish to it, so check that one out.

2:44
The main subject though of this podcast, like I said, is creating your own watch lists. And I have a fellow here from Texas. He asked me to give him a Texas name. I’m gonna give him a Texas name of Jed from the Beverly Hillbillies because what did they do? They found some Texas crude.

3:00
They moved out to California, but they’re originally from Texas. I don’t know too much about Texas because I haven’t spent a lot of time there, but I do know Jed is a Texas name just because I grew up watching the Beverly Hillbillies. So we’ll go with that. He says, hey, Ryan. Just wanted to drop you a note and say thanks for what you do in a short time of listening to your podcast.

3:15
I’ve learned a lot. I recently rediscovered trading. That’s awesome. Because I hate to see people who, they go into trading and they have this false illusion of what they think trading should be. They think they’re gonna get rich right out of the gate. They don’t. They take a couple of licks and they never come back to it.

3:32
Man, taking licks is just part of it, OK. I actually took a bad lick the other day over the Thanksgiving holiday weekend, you know, I took a little bit of time off. I was still paying attention to my existing trades. I just wasn’t actively making new trades during the Thanksgiving week, which is kind of like what I do for most of my holiday trading.

3:48
I don’t get too active during that time. Nonetheless, I mean, I was in Salesforce and what did they do? There was a rumor that came out that day that said that they were going to be acquiring Slack Technologies or WORK. What does that do to my stock? It kills my CRM trade.

4:04
I was actually up on the trade, I get hammered. I think I took like a 5% loss. That’s just part of trading. I could tell that there were some people who are also in that trade. They emailed me or they text me and they said, this sucks, man. I don’t think I’m gonna honor my stop loss. You gotta honor the stops. I didn’t want to honor the stop loss. I never want to honor my stop losses, OK?

4:22
But I do it because that’s how you stay disciplined in the stock market. You’re not gonna honor your stop loss you’re not gonna be long for the stock market. If you make excuses why not to honor a stop loss, you’re gonna mess up. For me, I think it’s crazy not to be putting in your stop losses every day. Don’t use it like, well, it’s not really close to it right now, so I’m not gonna bother.

4:39
No, that’s the very thing that you want to avoid. CRM was not even close to being stopped out on Wednesday, but what happened? It got stopped out. Why? Because some random news story came out about them acquiring a company and most of the time a company. The company that’s acquiring another company is gonna go down in price and the company that’s being acquired is gonna shoot up.

4:59
Slack went way up, like 30%, and CRM took a beating. So I got stopped out for like a 5% loss. It stunk, but it’s part of trading. It doesn’t matter how good you are at trading unless you’re like privy to illegal insider information and that’s illegal, so you can’t do that.

5:15
You’re never going to be able to avoid those kinds of news pieces. That’s why stop losses are necessary to maintain that discipline because if you don’t do it, you’re not gonna stay in trading for very long. But what happens though is people make bad mental errors or they just have a bad moment of luck or whatever in the stock market and they give up on it.

5:32
They just give up before they really get started. So I’m really happy that Jed here rediscovered trading. He says it’ll be a part-time activity as I am a psychologist for my full-time gig. That’s awesome, you know. To be a psychologist and to do part-time trading because I think so much of trading is psychology based.

5:48
I think about 80% of trading is about what goes on between your two ears. It’s about your state of mind. It’s about whether or not you’re going to overreact to the events that happen on a day-to-day basis, whether or not you’re gonna maintain that discipline, whether or not you’re gonna keep yourself from getting hysterical and making a bad trading decision.

6:04
So I’m kind of interested to see how this guy does over time being a psychologist because I think that’s actually a pretty good profession to be in and doing it as a part-time trading activity. And there’s nothing wrong with not having ambitions to become a full-time trader. I think most people probably don’t need to become full-time traders.

6:20
Either they have a really good job or they’re just better off not dealing with the stresses that come with being a full-time trader. So that’s cool that he has already categorized what he wants trading to be for him. And so he says, I also want to thank you for the brilliant idea of buying tester bottles of bourbon instead of buying whole bottles right away.

6:37
That is a good way to go. It lets you find what you’re going to like. I still sometimes buy whole bottles, but that’s definitely a good way to keep the budget intact. He says, I did leave you a five-star review on Apple. Thank you very much. Encourage everybody to do that if you haven’t done so already.

6:52
I mean, unless you don’t think I deserve it, but I mean, hopefully, if you guys have been listening to multiple episodes, you guys feel that way. He says, my question is, do you have any advice for establishing watch lists? I know you offer these as part of SharePlanner, but are there any general tips for publications, data reduction, etc.

7:08
I think it would make a great podcast topic, and that’s exactly why I’m doing this.

7:27
He says, continue your awesome work, and I will continue to follow you. Thank you, bud. Appreciate it, Jed. So there’s a lot to tackle here in one podcast episode. There’s been some podcast episodes already dedicated to it, but I don’t mind regurgitating some of the stuff that I’ve done in previous episodes, and sometimes I’ll cover more stuff that I haven’t tackled in previous ones.

7:43
And it’s also good for reinforcement too. But what I’m gonna try and do here is give you a bit of a cursory overview on developing. Kind of give you like that 30,000 ft view. And so for me, developing a watchlist is a way for me to find my daily trade setups on a much faster basis.

7:59
I usually keep anywhere between like 40 to 80 stocks in my bullish watch list and then my bearish watch lists. And I think it’s important to keep those segregated because if you don’t, then you can easily get those things mixed up with each other. It’s like, oh, did I think this was bullish or did I think it was bearish? And if you’re thinking that, they probably shouldn’t be on either list.

8:16
It should be obvious if it’s bullish or bearish. But keep a minimum of a bullish and a bearish watch list. I also have other ones too. I have a must watch watch list. That’s a hard thing to actually say, believe it or not. And what that is is that’s like the stocks that I always want to be keeping tabs on regardless of the market.

8:33
What I want to be doing is following these stocks each and every day. I go through them every day. And again, remind you that I am a full-time trader, so I do have that luxury of doing that. If you’re not a full-time trader, I’d probably say at least go through them a few times a week at night and just see if there’s any trading opportunities out there.

8:49
Some of the names on the list are obviously like your FANG stocks, like Facebook, Amazon, Apple, Netflix, Google. And then I also have Tesla, I have Microsoft, I have DataDog, I have DraftKings, I have Nio on there. I have like Home Depot, I keep Caterpillar on there, I keep Baidu, I keep Alibaba.

9:06
I mean, there’s just a ton of them. There’s about 65 stocks in total that I have on my must watch watch list. Sometimes I take some off, but most of the time I’m adding new ones on there. So I wouldn’t be surprised if in the next year or two, if that list expands to like 100, 115 stocks that I’m watching on a daily basis.

9:22
And so when I’m updating my watchlist, and I do that multiple times each week, and when I’m looking at the must watch watch list and those that are qualifying for being either bullish or bearish, then I’m adding those names to my bullish or bearish watch list.

9:38
Now, I also use a scanner too, and a lot of people think that there’s a lot of voodoo that goes into scanning for stocks, and it’s not really necessarily that. I always tell people just starting off getting into scanning for their watch list is to essentially scan for stocks that you don’t want to trade.

9:55
Eliminate the stocks that you don’t want to trade. That means the parameters of like stocks trading under $10 if you don’t want to trade stocks under $10, or some cases you may not want to trade biotech stocks or you don’t want to trade a whole host of other stocks. Use those in your parameters for weeding out the stocks that you don’t want, and then take the list that comes out of that and then just start going through them one by one.

10:12
I don’t think necessarily you’ve got to whittle your scanners all the way down to like 1 or 2 stocks. I oftentimes have like 400 stocks that show up in my scanner, and that’s OK. I have the time to be able to do it, but if you don’t have the time, then maybe you put in a little bit more stricter parameters, and that way you can weed it down to maybe 50 or 60 stocks. Again, a lot of it, there’s no right answer to it.

10:29
It’s really about trying to make it work for you. So we talked about having a must watch watch list and how you look at those regularly, sometimes a couple of times a week, sometimes every day depending on your schedule, and then you use those to populate your bullish and your bearish watch lists.

10:45
Then you also have a master scanner and you wanna at the very least, you want to use that to also populate your bullish and your bearish watch list. But you wanna make sure that you’re weeding out the stocks that you don’t want to trade at a very minimum. And so what your watchlist is ultimately going to do is feed your daily setups.

11:02
So if I have like 70 or 80 stocks for my bullish watchlist, then when I go through that bullish watch list for stocks that I want to get long on that day, then I might be reducing it down to like 8 or 9 stocks that I’m gonna be watching. So it’s really like a trickle-down process. You have this big, large, broad stock market, right?

11:19
And out of that huge, ginormous stock market, you have a must watch watch list, right? And then you also have a list of parameters of stocks that you don’t want to trade. And then you’re going to get a handful of stocks that you can scan through, go through the charts, and the more you go through charts, the faster you’ll be able to go through them.

11:35
I probably look at a chart for one second and I can tell you the whole story. That’s probably because in my lifetime, I don’t know, I don’t want to say I’ve been looking at a million charts, but I wouldn’t be surprised if I looked at a million charts. I don’t know what that comes out to per day, but my goodness, I’m probably looking at 500 to 1000 charts a day.

11:51
And so all of that gets funneled down into a bullish and a bearish watch list. Now, there’s other watchlists that you can include too. I mean, if you want to create a watchlist for stocks that you want to do certain options plays for, that would be a possibility, or if you wanted to do something that’s stocks that are just trading sideways, maybe there’s a trade option for you on that or trending stocks or triangle patterns or bull flags.

12:08
I mean, you can really get down into some finer details, and that’s fine too. Maybe you want a whole watch list of just bull flags, go for it. But all of these watch lists, they eventually feed into these daily setups, but you don’t want to be looking at 100 stocks while the market is open.

12:24
What does that do? That makes it to where you’re just a little bit on the overwhelmed side, where you have a little bit too much going on there. I see these people all the time. They have monitors galore. I mean, I’ve seen people with as many as 15 to 20 monitors, right? First of all, I don’t want to know what their electric bill is. Two, can’t imagine what the AC has to be running at to keep that system cool.

12:41
But, dude, you only have 2 eyeballs. Like, how many monitors can you possibly look at at one time? For me, I have 3 monitors. I have a big monitor on top and I have 2 monitors on the bottom, and it’s just perfect for me. I have a TV that sometimes is playing. I don’t know, like Laverne and Shirley or Price Is Right, or lately I’ve been watching Good Morning Football on the NFL Network.

12:58
Pretty good show. I like football, so I don’t mind it. Nonetheless, you don’t need a ton of stocks. You don’t need a ton of monitors that are tracking all these different stocks in order to make good trades. I mean, it just adds more noise to the chaos that’s already the stock market. But all of these watch lists should be feeding into just a handful of stocks.

13:15
And I actually provide my own stocks each and every day. You can go to swingtradingthestockmarket.com. That’s the name of this podcast. It’s also the website that supports this podcast, allows me to continue to do this every day with the membership to my Patreon account.

13:32
You’re going to get analysis on the S&P 500, the NASDAQ, the Russell multiple times a week. You’re also gonna get updates on all the FANG stocks like Facebook, Apple, Amazon, Netflix, Google. Also gonna get it on Microsoft, also gonna get it on Tesla. On top of that, you’re also gonna have access to my daily trade setups, most interesting charts of the day, and you’re going to get multiple updates to my watch list each and every week.

13:57
So check that out, swingtradingthestockmarket.comm. Now, without going too far off the beaten path, we talked about how our watch lists ultimately feed into the stocks that we’re gonna be tracking every day. And it’s important to keep these to a minimum. This should be the best of the best.

14:14
Now, it can change from one day to the next, but what your watch list is, is like basically a bank of stocks that you’re currently watching that you have bullish prospects on. Sometimes it may not even be a bullish chart, but you’re saying, OK, next few days, if this thing pulls back to the trend line, it could be a very bullish trade setup.

14:30
So I’m gonna add it to my bullish watch list. But it has to be what works for you. And then your daily setups are gonna be those that you’re gonna say, OK, today, these are legitimate potential trades that I could be making today. And that’s what the difference is between your daily setups and your watch list.

14:47
Now, one thing I always think is very interesting, and it can help you to stay on top of the market from a trending aspect, is what sectors or industries are trending the most because you’ll start to find patterns of stocks that are showing up on your bullish watch lists and stocks that are showing up on your bearish watch lists.

15:03
For instance, for most of this year, oil and energy-related stocks have been on my bearish watch lists. They’ve never really made it off of it. I’ve usually had a disproportionate amount of bearish stocks that were oil and energy. Now, of late, that started to change a little bit.

15:20
They started disappearing off of my bearish watch list because they weren’t bearish anymore, and they, what did they do? They started appearing on my bullish watch lists. And once they started doing that, I started realizing, hey, people are starting to buy these things. You’re starting to see oil rise again, and it brought it to my attention that, hey, I don’t even like trading oil stocks.

15:37
I honestly hate trading oil stocks. They oftentimes are so unpredictable, but the trade setups are popping up all over the place. I took a position in HAL and I made, you know, double digits on the trade. It was a really good trade. But the reason why I needed to get into that is because I was seeing all these oil stocks starting to set up, starting to make big moves.

15:54
And so I said, OK, Halliburton has a nice bull flag. I’m gonna play the breakout of it. I did, and it was like 20% later, it made for a fine trade. I closed it out today. So keep an eye on your watch list of the different sectors that are popping up. I’ve oftentimes nailed breakouts in semiconductors just because I start seeing like Nvidia, and Advanced Micro Devices, and Micron, and KLAC or LRCX.

16:19
They all start popping up on my watch lists all at the same time, or Intel or Texas Instruments, and they just are like screaming to me, hey, people are buying semiconductors here. And so I’ll notice that, and that’s an industry, not even a sector, but it also works for industries as well. Industries are like a component of the overall sector.

16:35
So like in technology, you’ll have software stocks, electronic components, you’ll have semiconductors. Those are all industries within the sector. So keep an eye on what’s trending because it can help you make sure you’re staying where the money is flowing into based off of what you’re seeing predominantly showing up in your watch lists.

16:52
So to summarize all of this, we’re developing watchlists here. How do we develop them? Well, we have a must watch watch list. These are the stocks that you want to keep tabs on on a regular basis. No must watch watch list is the same. It’s different and unique to each individual of what they’re trading, how they’re trading, why they’re trading.

17:09
But these are the stocks that you want to be kept abreast of regardless if they’re bullish or bearish or none of the above. You should be going through these regularly. They funnel into your bullish and your bearish watch lists at a minimum. You also have a master scanner of stocks that filter out all the stocks that you have no desire to trade, and hopefully you can get that down to like 500 or 600 stocks at the very least.

17:26
You don’t really want to be spending more time than that going through all of them. Again, the more that you go through charts, the faster you’ll be able to go through them. And it’s also important for a platform, and you can get this in the description of the podcast, the one that I use, which is TC2000. Your charting platform should go through charts very, very fast.

17:43
You should be able to just go bam, bam, bam, bam, bam, right down the list. I hit a space bar, new chart instantly comes up. There’s no waiting, no lag. And so once you get all of these stocks compiled into your bullish and your bearish watch lists, or whatever additional ones that you want, then that’s where you’re gonna get your daily setups from, and that’s where you’re gonna find what is trending, where is the money flowing into.

18:03
You’ll start seeing patterns emerge. People are buying semis, people are buying energy, people are buying industrials. You’ll start to notice these things and that’s where you’ll want to go. If you enjoyed this podcast, I’d encourage you to go to your platform. Most of you guys are listening on Apple iTunes, so if you’re on iTunes, please go to the platform.

18:20
Leave a review. I love those 5-star reviews. Those mean the world to me. And so if you can do that, I would be much appreciative of that. It helps me continue to grow the podcast outreach and to be able to educate you on matters pertaining to the stock market.

18:37
If you guys have any questions that you want me to cover in the show, send it to ryan@shareplanner.com. I do get all your emails. I read them all. Again, thank you guys for listening and God bless.

18:54
Thanks for listening to my podcast Swing Trading the Stock Market. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock market each day with traders from around the world. With your membership, you will get a 7-day trial and access to my trading room, including alerts via text, email, and WhatsApp.

19:17
So go ahead, sign up by going to SharePlanner.com/tradingblock. That’s www.shareplanner.com/trading-block. And follow me on SharePlanner’s Twitter, Instagram, and Facebook where I provide unique market and trading information every day.

19:38
If you have any questions, please feel free to email me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.