Hands-On Part-Time Trader | Podcast Episode #262

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 Trading the stock market in today’s episode. It’s gonna be a good one. We’re gonna talk about some part-time trading for someone who is working that full-time job, wants to be involved in the market, has an interest in it, and needs to figure out how he can balance both a career and A part-time trading gig on the side, so we’re gonna talk about that.

0:51
I actually have a lot of experience in this, believe it or not, because I was once in corporate America too, and I was trading while I was working. Sometimes I was trading when I was supposed to be working, but nonetheless, I was quite the trader when I was working. So the guy that we’re gonna talk about here today, he’s gonna be called Wick.

1:09
That’s the name he wants to be called. I guess that’s off of John Wick, John Wick. Anyways, John Wick writes, Hey, Ryan, love the podcast. This email will be general statements about me and my current plan with questions throughout. If you think you have answered these questions or addressed these topics in previous episodes, I am in the process of listening through each one, so I’ll get to them soon enough.

1:32
This may be a long email, and if the questions sound a bit comical or unexperienced, just know that I am fairly new to trading. Well, you’re in luck, Wick, because We do a lot of talking to new traders in this podcast, so never is it going to be considered comical, or will I care about the fact that you might sound inexperienced because we were all there at one point.

1:54
He goes on the right outside of the hype cryptocurrencies of Bitcoin and Ethereum, which to this day I still don’t really know how you say that currency or if I’m even saying it right, I’ve heard so many people say it in so many different ways. I say Ethereum, but anyways, he said he used to trade those back in college. I really do not have much market experience.

2:11
I recently graduated with a software engineering degree and now I work full time. I used to code projects in my free time as a side gig in college, but now that it is my job, I felt the urge to explore other hobbies which led me to trading. With the new job, I figured swing trading would be a good route to take.

2:30
But I would like to feel more involved in my trades on a day to day basis. I hear it mentioned frequently that swing trading primarily covers multi-day to multi-week time frames. Is there a happy medium between the intraday trading and swing trading? Is it a viable strategy to find entries aftermarket once I get off work that I believe may swing the following day to a price target and close my position at that point?

2:52
I have read that this approach can be pretty volatile. Maybe it’s. The math nerd in me. But I find that chart analysis is enjoyable. I am currently using a blend of indicators, including multiple EMAs, that’s exponential moving averages for those wondering. With MacD’s, that’s moving average convergence divergence, Beta for volatility instead of ATR thanks to your advice.

3:11
And volume. My issue currently is scanning for stocks. It is almost a guessing game on which charts to look at. Alongside this, using the buy after hours and sell the next day strategy, I find myself saying that this might swing up tomorrow a lot.

3:27
I really just look for high volume. End of day charts that are on the verge of crossing those EMA MacD thresholds, but it still feels like a shot in the dark on some trades. Also worth noting, I always set stops around 2 to 4% below my limit, varies depending on where the stock is idling at and its lows over the past few days.

3:46
I have not really been worrying about a price target as much as my stock. If I see it climb the following morning, I will normally pick a selling point and start shedding 1/4 to 1/3 of my shares when or if it crosses that threshold. Other than these points, if there are any tips for someone like me who was fresh out of college and just getting into the market, it would be greatly appreciated.

4:05
And the bourbon that you can use if you have yet to review it is Buffalo Trace. I think I’ve drank that stuff twice on this show, which is really good. It’s a very good bourbon. I like it. Eagle Rare is even better if you can find it. Thanks for all that you do, Wick. So with that being said, what am I actually drinking?

4:21
Well, I picked up this sample bottle of Jim Beam, Devil’s Cut. Now this isn’t something I typically drink a lot of, actually, never. anyways, I’ve always associated with Jim Beam with kind of like the Southern Comfort route, but I noticed it it was kind of like a unique looking sample bottle, at least, I mean, they come in a plastic bottle, so how unique can they really get?

4:41
But Devil’s Cut has a 45% alcohol level, which makes it a 90 proof. So pretty interesting it’s definitely got my attention. Now, to the nose, I pick up a little bit of like a cinnamon lumberyard type smell, and I love that smell of lumberyard. I don’t know why, but I just, I love walking into a wood shop and smelling some lumber being freshly cut.

4:59
So you, you get that little bit of a smell to it. Now on the taste, the taste lacks a distinct flavor to it. This is the kind of bourbon that like, let’s say you were at like a chilly or a super cold with a strong wind cutting across the parking lot of a Philadelphia Eagles game at a tailgate party, and you go to some random strangers and they ask you if you want a drink, you start talking to them a little bit and they hand you some bourbon.

5:23
This is like what you would hope that they would at least give you some of, right? I mean, you’re hoping that they don’t. Give you like freaking Southern Comfort or Ravens lace, which is the absolute worst whiskey I’ve ever reviewed. Actually, both of them are pretty much the worst whiskey I’ve ever reviewed. You hope they’re not giving you anything like that, but if they give you something like Jim Beam’s devil cut, OK, not bad, not bad for a tailgate party.

5:43
This is kind of like a tailgate bourbon. This is something that would taste good at a tailgate or if you meet some rando strangers at a tailgate party. I don’t know how I got onto the topic of rando strangers at a. Philadelphia Eagles game. I’m not even a Philadelphia Eagles fan. I’m a Miami Dolphins fan. But the finish, it comes in hot.

5:59
It’s very hot actually, but it’s not like overwhelmingly hot. It doesn’t burn you when you swallow. I’d say it’s more like sandpaper on the tongue. Now, it sounds like I’m kind of being negative on it, but I’m really not. It’s not a bad bourbon at all. I would give it and, and when I did my first taste, I said this is a 6-3.

6:14
I would probably stick with that. I think it’s a 6-3 bourbon, is it everyday sipper? No. Is it a weak. sipper, yes. I think you can get away with sipping this on the weekdays, not necessarily one that I want to start drinking into the weekends, but, you know, if I’ve had a rough day, you know, on the markets, this is maybe a bottle that wouldn’t be bad to open up.

6:30
In fact, next time I’m at Total Wine, I’ll probably look for it and go ahead and just grab a bottle of it. I don’t know what the price point is on it, but I’m imagining it, it’s probably gonna be a little bit on the cheaper side. So, Jim Beam, Devil’s cut 45%. I give it a 6.3%. Now, back to Wick.

6:46
There’s a lot to talk about here with Wick. He’s definitely on the inexperienced side. He’s trying to balance the life of a full-time employee, which, by the way, you shouldn’t let your trading ever get in the way of your full-time job because at the end of the day, your job takes precedent. For people who are trading on the side of their full-time job, your full-time job is what’s funding your part-time trading.

7:06
So if you don’t have your job, you don’t have a side gig of trading. I know this because that’s what I was doing when I was in the workforce. I was trading on the side, but I always kept my eye on the ball, knowing that I had to do well at my job because the last thing I wanted to do is be so distracted by my trading that I started sucking up my job because then you don’t have a job.

7:28
Now this guy Wick, he’s a software engineer. He sounds like he’s got his life together or at least he’s off to a good start in life. But the one thing he probably made a huge mistake in his starting off with the cryptocurrency trading. Because, and let me just say this, a lot of people started off trading cryptocurrencies.

7:45
I couldn’t imagine starting my trading career doing cryptocurrencies. I think it’s such a bad taste of what true authentic swing trading is about. Yes, I know people have made some money on it. I know some people have made some ridiculous money on it. But by and large, on the whole, it’s a very difficult financial vehicle to profit from long term.

8:04
I mean, you’re seeing that so far here in just in 2022 where it’s gone from like $69,000. It’s all-time highs from last year, all the way down to like 18 $17,000. It’s an absolute clown show at times. And so it’s a great way to lose money and everybody wants to preach.

8:21
You got to hold these things long term because it’s going to $100,000 or it’s going to a million dollars a coin and people buy into that. So they will bag hold from 69, down to $17,000 and lose a lot of money in the process and then they’ll put their faith into it by putting outsized positions into this stuff.

8:39
Now, I don’t think Crypto is a good area to start off with as trading. I think the best place to start off with is stocks, large cap stocks that have a tight spread between the bid and the ask. That’s not gonna be the most exciting route, but it’s gonna teach you so many fundamental understandings of trading.

8:56
In fact, to this day, the majority of my stocks that I trade are large cap stocks, because that’s the best area for me to be able to contain the risk and as traders, our first priority is to manage the risk. So he wants to be more involved in the day to day trades, and it sounds like almost from the tone of his email that he’s not sure that he can do that with swing training.

9:15
Well, the cool thing is, is that unlike day trading or investing, which kind of pigeonholes you into a certain time frame, for instance, day trading is essentially you’re opening and closing in the same trading day. Investing by its nature, if you’re going to be a long-term investor, you’re holding for at least a year, right?

9:31
Because of the tax implications. Swing trading is everything in between. Swing trading is essentially what you make it. It has so much flexibility and so many avenues that you can take. I mean, there’s times when I’m swing trading and a swing trade turns into a day trade because it was either such a bad trade or it was such a good trade, such a bad trade in the case that, OK, I get in and I had a 4.5% stop loss and I get stomped out the same day.

9:52
OK, well, that turned into a day trade. But it’s still part of my overall swing trading plan because swing trading really is what you want it to be. You can keep. it to your lifestyle, whereas day training is very difficult if you’re a full-time employee working somewhere. I have a bunch of friends that work at Northrop Grumman, for instance, and they work on these top secret programs and oftentimes they’re in vaults.

10:13
They can’t even take a cell phone with them in their vaults. They have to put it away in a locker and they go and they work in a vault. Well, that’s kind of hard to be a day trader when you’re working in a vault because they don’t even have access in many cases in those situations. But swing trading, yeah, swing trading can still give you that opportunity if you’re working in a vault, if you’re a truck driver, if you’re a teacher, or if you’re a software engineer.

10:36
There was a time when one of my systems of trading involved more like. Swing trades that would last anywhere from like 3 to 6 months and it would take advantage of oversold conditions and the market and certain price patterns that would emerge. And I would run the scan every night, see what stocks popped up out of the S&P 500 that met those conditions.

10:56
And then I would trade them at the open the next morning and I would be very systematic about it. I had like a 10% trailing stop loss on it, and it was just something that I would do in it over the years, it actually had a pretty good success right now. I’m not saying like go say do exactly what I just told you because I didn’t give you all the elements of that trading system, nor do I even.

11:13
Remember it offhand, but what the point I’m trying to say is is that he’s trying to figure out a way that he can determine entry prices from the night before and be able to get into them the next day. And he wants to be able to place profit targets at a certain price level and get out of them the next day. Well, the thing with swing trading.

11:31
And I’m a huge proponent of this is that I want to lose quickly and I want to win slowly. I want to stay in a winning trade as long as I possibly can, as long as it’ll keep winning for me. I want to stay in it. So I don’t think it’s a good idea to say, hey, I want to get out of this trade at the next day at a specific price point.

11:46
The reason why I say that is because what if there’s much more opportunity down the road? Let’s say you got lucky or fortunate, I guess is probably the better word, and. You made 10% off of the trade the next day. Do you necessarily need to get out of it just because of that? No. Should you take some profits off the table? Probably.

12:02
But should you completely get out of the trade? No. I mean, if you have a stock that’s ripping higher, closes at the highs of the day, yeah, let’s take some profits off the table, but for me at least, when it comes to trading, I’m going to take some profits off the table, and yes, it may pull back on the next day, but there’s also the potential for it to continue to rally higher, especially if everything that you saw on the day that it rallied 10% is all pointing higher.

12:25
Let’s give it the opportunity to continue that trend. And so maybe it runs for 5 or 6 days higher and instead of just walking away with 10%, you’re walking away with 20 or 30%. I’m a firm believer that if you’re gonna find success in the market that you have to build it around your lifestyle. And in the case of somebody that’s a software engineer working a full-time job, day trading is obviously gonna be out the window in most cases, unless his boss is like totally cool with it.

12:47
But even then, is day trading really the best route for new traders? No, I don’t think it is. I don’t think options trading is either. I think the more leverage that new traders take on, the more likely they’re going to fail. And if you’re a new trader, do you really wanna fail right out of the gate? No, you want to take as many problematic variables out of the equation.

13:04
That’s gonna be your options trading. That’s gonna be like crypto trading. That’s gonna be meme stock trading. These are very high risk avenues of trading that. May not be right for a new investor or trader. He also uses exponential moving averages, which again, you got to make this system work for you.

13:22
I use simple moving averages for instance. Why is that? Because I feel like those carry more importance to a majority. Of traders so that there’s significance behind those levels. Whereas less people use the exponential moving averages and and I’m not saying that exponential moving averages aren’t necessarily effective. I’m just saying for my style of trading, I like to take advantage of where key support levels might be for.

13:44
Mass amounts of traders and resistance levels as well. And so I think the simple moving averages oftentimes like the 200 day moving average, for instance, there’s usually, especially on the indices like SPY, there can be a strong psychological effect. We saw throughout 2021, every time it pulled back down to the 50 day simple moving average, it tended to bounce.

14:03
That was because there’s a psychological level. There’s a lot of people that use it and it almost becomes a self-fulfilling prophecy when we continue to hit those levels and then bounce off of them because everybody’s watching those levels. He says he’s almost performing a guessing game on which charts to look at each day. And then he also talks about going after the high volume stocks.

14:21
I know a lot of people do that, but oftentimes if you’re going after these stocks that have like, you know, a 10,000% increase in volume from the previous day or even like a 500% increase. Oftentimes it’s news driven, it can oftentimes as well be associated with a low dollar stock that’s gone from like $1 to $10.

14:39
And do you really want to be chasing something that just went up 1000% over the last day, I’m not saying that that’s an everyday occurrence, but I have seen it before. Do you necessarily want to be chasing after that? Not really. So you want to see like over many days with a legitimate stock, like, let’s say it’s Adobe, and you see like tons of volume pouring in over the course of a week.

14:57
That’s a good sign that there’s a lot of accumulation at that particular. Level and you’re seeing like a base pattern form, then you want to play that breakout. But I also like to have a must watch watch lists. These are stocks that I want to look at every single day, every single night, or however, you know, you want to fit that into your lifestyle when it comes to trading.

15:14
For me, I have about 100 stocks that I look at each and every day, multiple times a day usually. And then there’s also my scans that I run that I’m looking at for stocks that I may not even come across sometimes, but every once a quarter or once every couple of months. But there’s a number of stocks on that scan, and I’m just trying to look at the ones that are popping out to me.

15:32
But I also think too that finding the right stock can be a lot of hard work. So if you’re going to find an individual stock to trade, sometimes you might have to go through a couple 100 stocks to find that right one. Finally, he asks, hey, what are some things that you can help a new trader coming right out of college to find success in the stock market?

15:48
One of the things I would say, and I think it’s very easy to do this, is to create spreadsheets with your goals in mind. Let’s say you just start off trading and you have A good couple of months trading. You made 5% this month and you made 10% the following month, and you can say, all right, I’ve made about 20 trades and over the last two months and I made 5% the first month, 10% the second month, so we’re gonna average that out to like 7.5% a month.

16:11
And then you create a spreadsheet if I can do that every single month, then I’ll be a millionaire by the time I’m 25 years old or whatever. But people extrapolate those gains over many months and over many years and they’ll say, OK, I could be a billionaire by the time I’m 40. And it doesn’t have to be 7.5%. It could be sometimes the bigger percentage the worse because more unrealistic becomes.

16:30
But try to avoid spreadsheets, try to avoid goals. Try to seek to be profitable, but make your goal to be to follow the market’s lead, to follow the direction the market gives you. When you start trying to say, hey, I had a goal this month to make 10% and you try to put that goal upon the market to give you that 10% market doesn’t care about that goal.

16:51
Market’s not gonna give it to you. It may not even have the conditions presently to give you that goal. If I did that, the past couple of weeks would be frustrating because I haven’t been able to make a trade. I got within 1 cent of my entry price on a stock today. I can’t begin to tell you how frustrating that was to not get triggered on that, but then on the same.

17:10
I didn’t lose any money either and it finished lower than where the entry price was at. So, you know, it wasn’t really a bad decision not to get into it. But if I was trying to get 10% out of the market every month and I was that close, I might have just gone ahead and pulled the trigger on it and not been disciplined. And so you want to make sure that you’re not forcing your goals or your expectations or your needs or your wants upon the market because the market doesn’t care about you.

17:32
It doesn’t care anything about you, doesn’t even feel sorry for you when you lose. It will go about its day. When you get out of a stock, it continues to trade. When you get into a stock, it doesn’t care either. It’s going to ruin you if it takes the notion to do so. That’s why we got to protect ourselves against the market.

17:48
And against ourselves too by using stop. Don’t fantasize, don’t fantasize about being rich. Trading is one of the hardest endeavors. It’s one of the most worthwhile endeavors though too, but it is extremely hard because you’re gonna learn a lot of stuff about yourself, some stuff you don’t even want to know about, particularly as it pertains to money and how emotional you can be about it.

18:07
So don’t fantasize about what the stock market might be able to do for you in the years to come. There’s people out there that thrive off of people who are fantasizing about their trading gains in the future. And the lifestyle it might provide them with. And as long as you’re new to trading, don’t think that you’re good at trading. That’s kind of mean, but I’ve been doing it for 30 years now, and I refuse to admit that I’m a good trader, even though on paper, if I’ve been doing it for this long, I must be doing something right along the way.

18:34
However, I want to live in the struggle. I want to live in the day to day fight with the market, trying to find the right reward to risk ratio setups. The moment I think that I’m good, I set myself up for a disaster. So, try to avoid thinking that you’re good at trading or that you’re some kind of prodigy when it comes to the market.

18:52
Realize that you’re learning from it each and every day. If you enjoyed this podcast episode, I would encourage you to check out swingtradingthestockmarket.com. That is my patron website that supports this podcast. With it, you’re gonna get all my stock market research each and every day. It’s really, really good stuff. So I’d encourage you to check that out.

19:08
Also, be sure to leave a 5-star review on whatever platform it is that you’re listening to. It could be Apple, it could be Spotify. It could be Google, Amazon. There’s tons of them out there. Leave me a good review. I do read them and I do appreciate them quite a bit. And keep sending me your questions, ryan@shareplanner.com.

19:24
I’ve been loving some of these questions that I’ve been getting today. And Wick here, he had a good question, and I was glad I was able to give him some of my thoughts and just give it to the general audience really felt my thoughts as it pertains to being a new trader in the stock market. So thank you guys and God bless. Thanks for listening to my podcast, Swing Trading the stock market.

19:42
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20:01
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. If you have any questions, please feel free to email me at ryan@shareplanner.com.

20:17
All the best to you and I look forward to trading with you soon.