Trading World Markets | Podcast Episode #210

0:07
Hey, I’m Ryan Mallory, and this is my swing trading, the stock market podcast. 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 swing trade in the stock market, and today’s episodes from the other side of the pond coming from England. This person who I’m gonna call Rupert Papawell.

0:42
Sounds like a good British name, right? Rupert Poppawell writes, Hey, Ryan. It’s Rupert Papawell. It’s great being a part of the trading block and tapping into your experience and trading skills. I found your trading site after following the usual route new traders get into, i.e. chasing trending stocks, and ultimately losing, particularly when my position in OCGN dropped 40% pre-market after an FDA kickback.

1:09
I now understand without risk management, my trading career will be very short. I’ve got a question for you or maybe a future podcast. Apologies if you’ve addressed this in the past, but I live in England where we have a number of trading platforms available to us on our platform. We have access to 17 different markets around the world.

1:27
My question is, with all your talk of Fed tampering, huge underlying weakness in the USA markets and the amount of cash Biden keeps printing. What stops you from branching out into healthier markets abroad? I have a number of theories why you don’t, but I would like to know your reasons. Does analysis of the charts apply to the London Stock Exchange, Spanish Stock Exchange, Hong Kong Stock Exchange, etc.

1:48
This does make it into the podcast. I’d love to get a traditional British name being from. England rather than a Florida name. It’s always hilarious to hear Americans on British stereotypes. Thank you so much for all your educational work. Quitting work to trade full time is the dream, and I feel with your help, it’s becoming increasingly likely, sincerely.

2:05
Rupert, Poppawell. Well, Rupert, good question. Definitely not something I’ve addressed in the past. Maybe I’ve addressed it in passing, I’m not sure, but we’ll definitely dedicate an episode to it today. What am I drinking? I’m drinking Clyde Mays, original Alabama style whiskey.

2:23
If you remember, I just had some Clyde Mays straight rye whiskey, just recently, it was pretty good. 7.8. This stuff here, never tried it before? Very dark, like almost like muddy, muddy brown. Kind of cloudy too.

2:39
It’s 42.5% alcohol, 85% proof to the nose. It’s like a peppermint smell. It’s really not what I expected. It’s like got this mellow taste to it. And it falls flat like a uncarbonated Doctor Pepper can that’s been sitting in the sun for maybe a couple of hours too long.

2:57
And I find myself after I drink this stuff, like I’m licking the roof of my mouth like a dog eating peanut butter. I don’t know this, Clyde Mays, I mean, they make a number of different bourbons and whiskeys. It’s all over the place. I mean, I got crappy ones. I’ve got a decent one that’s a 7.8. This one’s gonna be a 4.8, I guess, kind of like in the middle there.

3:17
Clyde Mays has got to figure out what their signature recipe is gonna be. I think the straight rye whiskey is good. But this stuff is awful. This is, again, the original Alabama style whiskey, not really good at all. Definitely not an everyday sipper. If I had to choose between this and a nice cold glass of sweet tea or in Rupert Papawell’s case, some afternoon tea, unsweetened, of course.

3:41
I would choose the latter. So talking about these world markets, why do I not trade other world markets like the Toronto Stock Exchange or the Spanish Stock Exchange or Hong Kong Stock Exchange, London Stock Exchange?

3:56
What keeps me from doing it? For one, I do too many markets, it’ll burn me out, and I think it’ll stretch any trader a little too thin if they start trading too much and not only that, it’s different times. I mean, I could see where. If the markets in London and the markets in the US, if they were trading at the same time or as well as the Chinese markets, they’re all trading at the same time, where I could probably do that, but They don’t.

4:21
I mean, I would start trading the Chinese markets, what is that like 89 o’clock, and then you would get into the overnight trading with the London Stock Exchange around 2 a.m., 3 a.m. when they all start opening, depending on which European market we’re talking about. So there’s not a lot of time for sleep if I’m doing that.

4:38
US markets too is one of those that I’ve been doing for a long time, so I understand it. I majored in political science, so. I understand the political side of it too, and then I also studied economics, so I understand a lot of the economic aspects of the US markets.

4:56
The other thing too is, I mean, there’s a lot of things that hit the markets on a daily basis. I mean, for instance, you have the Federal Reserve that issues their FOMC statement once every 6 weeks on a Wednesday at 2 p.m. followed by a 2:30 presser. Now, I’m not as familiar with all of the European markets and I’m not as familiar with like the Chinese markets.

5:15
So, you know, when are they reporting GDP or when are they reporting their decision on interest rates? I don’t always know that usually that’s something that I kind of find out when it’s becomes important, but I’m not tracking it on a regular basis. Why? Because my focus is on the United States and its markets.

5:34
So that’s really one of the main points there is that there’s a certain comfort level of trading what you know. And that kind of goes back to like Peter Lynch’s philosophy on investing, investing in the stocks that you know and that you understand, kind of a buffet approach to investing as well.

5:49
And just because the market has underlying weakness, I actually welcome that. I think that’s a good thing for the market. And then even with like the Fed tampering, if it leads to major sell-offs in the market, one, I can short the stocks. 2, I can just be patient. And wait for those stocks to come down. There’s so much to be said about patience that trading successfully doesn’t just come down to what are you trading, what stocks are you in?

6:11
It’s also at times like, how exposed are you? Do you have too many long positions? Do you have too many short positions? Today, for example, the market got higher and it ran higher over 1%, and then it gave up all those gains and went finished well into the red. I didn’t make any new long trades today.

6:27
Had I done that? I would have been burned more than likely. But because I had the patience not to get into the stock market today, and I’m not trying to toot my own horn. I just happened not to get in the stock market today. It didn’t look good to me and I paid off in that manner. But had I gone in and just become impatient when I saw the market rallying 1%, higher and feeling left out.

6:49
Then I would have been paying for it at the end of the day, but I saw that the underlying conditions weren’t good, and there’s so much to be said about not trading and how that can actually help your gains out so much by knowing when not to trade it just as much as by knowing what to trade and when to trade. Patience to not trade.

7:06
Again, I’m gonna say this, it’s so vitally important because we always feel like if we have money in cash, we gotta put it in something. And it’s OK to be 100% cash in your swing trading account like I am right now. If the market goes back up tomorrow or it decides to rally again, sure, maybe I can put some of that capital to work, but I’m not compelled to.

7:27
The market needs to show that despite the underlying conditions, it can still rally higher and right now, it’s a handful of stocks. That are keeping that market propped up, so I’m willing to kind of stand back a second here and while I’ll continue to do all my research on swingtradingthestockmarket.com, where you can get all my daily watchlists, my weekly master watch lists, my updates on all the fang stocks and all the indices, and the most intriguing charts of the day.

7:53
Well I’ll continue to provide those things for me personally. I may say, hey, despite some good trade setups out there, despite some really enticing trade setups out there. I’m gonna show the patience and the wherewithal. To hold back a little bit and not trade just because I want to trade and because there might be a good stock set up out there.

8:15
For instance, KBH came in today looking at that chart. KB Holmes is what KBH stands for. This stock has a nice double bottom and it was setting up nice for the break higher. It was trading higher, but then it gave back all the gains on the day.

8:30
Now, I was tempted to get long on it, but the market conditions weren’t. Making that the right time for me to get long on it, was it a good trade setup? Yes, from an individual stock standpoint, yes, it was a good trade setup. But when you take all of the other factors into the market, the fact that the S&P 500 has horrible bread over the past week, the fact that the majority of stocks are trading below the 40 day moving average and their 200 day moving average, I decided not to get into it.

9:00
But all those reasons for why I didn’t get into a stock doesn’t necessarily mean that I need to go where the action might be over into London’s stock exchanges or to The German stock exchanges or to Australia’s or Canada’s. None. Instead, sometimes you just gotta be patient, of course too.

9:19
I’m not saying that nobody should trade outside of the country that they live in. No, I mean, I know a lot of people that trade a lot of different markets. I’m just saying from a personal standpoint, I can’t do it. I’ll get burned out. I mean, I do a lot of other stuff with the stock market from research and providing content on YouTube and even on this podcast, it would make it hard.

9:40
I definitely don’t think I would be doing 2 episodes a week on the podcast if I was trading multiple markets. And there’s also a lot of benefits to trading in the United States and its markets. I mean, some of the biggest companies in the world are in the US market. There’s a lot more volume, there’s a lot more capital flowing into it.

9:56
The other thing too is I don’t understand all the tax implications of trading in other foreign markets. I don’t know if there’s favorable tax implications or not. I’m very content trading in the US market and I think that’s why a lot of people from overseas also trades in the US markets because it’s it’s a really good market.

10:13
I mean, I know that it’s incredibly bubbly of late and that at some point there’s going to be a correction, there’s gonna be some interest rate hikes, but those can be opportunities as well. What you don’t want is to get stuck in a sideways trading pattern like the Russell 2000 was stuck in for much of this year, because that goes on for 89 months.

10:32
There’s not a lot of opportunity there. Thankfully, there was opportunity in some of the other tech names and big large cap stocks. There’s a big propensity with a lot of new traders to trade as much stuff as they can. I mean, I know people out there right now, they jump into the markets and forget equities, man, they’re jumping into options, they’re jumping into futures or leverage to the gills.

10:51
They got crypto, they got NFTs, they’re trading in the European markets in the early hours of the morning, and they’ve got more positions and they know what they do with them. They can’t even handle it. And so you don’t want to get stretched out too thin. Really, the approach to trading, and I always find this best, get good at just a couple of trade setups in one market.

11:12
In one time frame, get good at a a very distinct trading strategy and expand from it. Maybe your strategy would be continuation patterns like bull flag patterns or continuation triangle patterns or bullish wedge patterns. Focus on those kinds of chart patterns and then maybe you can start getting into basing patterns and pull backs to trend lines, but try to start small and expand outward.

11:36
When you’re good at something, get really good, make that your base, make that your cash cow. And then yeah, you can start playing around in some different markets and everything, but avoid the temptation of feeling like you got to trade everything all at once. If you enjoyed this podcast episode, encourage you to leave a 5 star review.

11:53
That really helps me out quite a bit. Also, be sure to check out my other platforms like YouTube, Constantly putting a lot of good stuff out there, including some live streams, and make sure to keep sending me your good questions, man. These are some phenomenal questions that I would never have thought of on my own. So I rely on. Your questions to provide me with such great content.

12:11
And if you have a question, send it at ryan@shareplanner.com. Don’t forget those 5-star reviews. Don’t forget swingtradingthestockmarket.com, and God bless you all. Thanks for listening to my podcast, Swing Trading the stock market. I’d like to encourage you to join me in the Share planner trading block where I navigate the stock market each day with traders from around the world.

12:33
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12:55
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.