Scans and Watchlists | Podcast Episode #396

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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.

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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.

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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.

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In today’s episode, I’m going to be talking about scans and watch lists. Done a lot of episodes on scans and watch lists, some just pertaining to watch lists, others focusing mainly on scans.

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But in this particular episode I’m going to be focusing on both of them.

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I have an e-mail from a guy and now remember, we don’t use people’s real identities on this show. So I always give them a Florida Redneck name.

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And for this episode I got the good old Florida redneck name of Hoyt. And Hoyt writes about scans and watch lists.

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He says hi Ryan, I hope you’re doing well as well. Always great podcast and enjoy swing trading the stock market’s subscription service.

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I have a suggestion though for your podcast. Your service is great, but I’m relying on it a lot for stock setups and wondering if you’d do a podcast on how you find stocks and how you make watch lists.

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Do you just sift through endless stocks to find setups or are you using a Screener or another method?

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Thanks again.

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Sincerely Hoyt, Good question. And like all your questions, I always feel like there’s a lot to unpack here and I try to do it in about like a 15 to 20 minute episode because a lot of you guys listen to me on the way home from work or picking up your kid from school.

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So I always think that it’s kind of good to make it digestible and in a quick increments. So there’s a lot of approaches that you can take, and a lot of them are nontraditional to building your watch list, to building your scans. For instance, I like to scan Twitter.

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I like to scan StockTwits. StockTwits has, for instance, a trending tab of stocks that are being most talked about. Often times this might be like your cryptos or stocks that have like explosive earnings that are going way up to the upside or going way down to the downside.

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Those aren’t as usable in terms of and video is gapping 15% today. Let’s go ahead and buy into the that’s not really what I’m looking for.

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I’m looking for stocks that might be showing some strong volume that might be setting up pretty well and for whatever reason it’s catching the attention of some people on StockTwits.

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If I can get into a trade that has a good reward risk ratio, that’s great. And oftentimes when they’re trending on StockTwits or that are popping up on my Twitter feed,

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there’s usually some good volume to it too. Now, the difference between StockTwits and Twitter, it really comes down to the people that you follow.

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And some of the people that you follow will be putting out some good charts out there.

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So yeah, I don’t mind if I find a good trade setup that comes from somebody else that’s posting a chart like, hey, look out for this chart here or look out for this stock.

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If it sets up for me, it fits my criteria for what I like in a trade. Yeah, that’s great.

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It might not have shown up on my scans, but heck, in the end I don’t care if the stock picks come from Timbuktu or from some guy on Twitter that might only have two followers.

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If he’s showing me something or if she’s showing me something that I haven’t seen before or wasn’t on my scans, that’s good.

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So never discount the use of Twitter and StockTwits to be able to find stock. Now you gotta be careful because there’s a lot of pump and dumps out there too.

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People will use those platforms that really try to push an agenda and it’s usually pretty obvious, like if the stock has like 1000 shares being traded a day or something, yeah, that’s probably some

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rogue guy out there trying to pump something. But if it’s like Walmart and you’re in there posting charts and you’re like, oh crud, look at that,

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that’s a pretty good setup there. And I know I do that for a lot of people too.

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I post charts on StockTwits, I post charts on Twitter and it’s usually setups that are not showing up on other people’s scam.

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And so I always take some pride in that, that I’m able to provide people with some different ideas. And the other thing too about Twitter, I love Twitter for this because I think it has the best real

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time news out there. I mean, for free, there is a lot of really good people who are using Bloomberg terminals and

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everything else for their instant news and they’re practically putting it out there instantly. So that’s really good.

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I mean, stuff like the FOMC announcements, it gets released at 2:00 PM. I’m usually seeing that within seconds of the 2:00 PM mark on Twitter.

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So even when it comes to like news, for instance, Twitter is an unbelievable resource and there’s some really good followers out there.

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Two of my favorites is Zero Hedge and Walter Bloomberg. I don’t even know who the heck Walter Bloomberg is, but man he is a great news source.

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But back-to-back to the scans and the watch lists though.

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First off there is a difference between scans and watch lists.

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And that difference is scans are essentially stocks that are meeting a certain criteria for you and what you’re willing to trade.

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And that they’re meeting like a specific parameter, like stocks trading above their fifty day moving average or stocks that are trading above their 21 day volume average.

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Or it could be something more complicated like stocks that in the past month have crossed below their 200 day moving average, but in the last couple of days it’s crossed back above their 200 day

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moving average.

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Is there some kind of like back test that says, hey, stocks that you know have that criteria criteria XY and Z or whatever it might be has a good back test that says that they perform

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remarkably well going forward.

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There is an endless amount of scans and possibilities that you can do, especially if you know how to do coding.

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It’s even more amazing Now the watch lists are really the stocks that you’re looking to trade. They’re not scans.

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They’re stocks that have caught your attention, that are worth watching into the trading day and potential plays that you might take on.

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A lot of the stocks that show up on your scans are stocks that you’re never going to trade because it might not have a good stop loss.

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Yeah, it might have meet all the variables that you know in terms of what you want from the chart. But maybe you’re like, if I’m gonna trade this one, I’m gonna have to use a 15% stop loss.

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And that just doesn’t make sense to me. I mean, there’s a lot of stuff that shows up on my scans that I would like to trade, but I can’t trade.

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And that brings me to my next .1 of the things I do try to do.

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And it’s scans aren’t perfect. OK?

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But one of the things I try to do with my scans is I try to exclude a lot of the stocks I have no desire to trade.

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Stocks like that are trading below $10.00 for a share. For the most part.

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I usually don’t ever pay attention to stocks traded below $10 a share. And the reason for that is because they’re often some of the most volatile and headline risk driven

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stocks out there. Cheaper they are, the more concerning they tend to be.

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I mean look at just some of like the EV stocks that are just getting killed this week, right? Your smaller EV stocks, They have some of the most volatile plays to them.

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Solar plays are like that as well. So I get rid of like stocks that are trading underneath $10.

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I also make sure that there’s a certain volume requirement. I don’t want to be considering a stock that only is trading like 500 shares in a single day.

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So I want to see hundreds of thousands of shares being traded on a stock at least every single day. And also too, one of the things that I like to do is when I do get my scans, I also like to see and

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I’ll have a column. I use TC2000 for instance.

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I’ll have a column on there that will tell me when is their next earnings date according to them and if there’s a stock that’s trading within the next one to two weeks because swing trades, you’ve got

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to remember swing trades. Yeah, it can last from a couple of days and you’re out, but it can also be a couple weeks or a

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couple months that you’re in that trade for.

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So for me, I really don’t want to get into a stock that is going to have an earnings date within the next couple days or in the next week or so.

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So especially during earnings season, this is really helpful. I will get my scans and I will sort by next earnings date to where it’s sorting them by the top of the chart or the top of the scheme.

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It’s listening to the ones that are reporting the soonest or at the top of my chart and then I just go down to the date that it OK after a couple weeks.

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These are the stocks that I want to go look at. So I’m looking at the stocks that have earnings reports that are weeks out, nothing within the next one or two weeks.

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And then those are the ones that I’ll start considering in our scans.

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They’re going to change over time. It’s not like once you make a scan in that you’re gonna follow that scan, that’s the only scan that you’re ever gonna use.

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They they have to change over the time because the market changes in in many different ways over time.

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I mean, there’s different seasons in the market too.

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Like right now I pay a lot of attention to the NASDAQ 100. Why?

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Because the NASDAQ 100 has just been smoking hot and continues to climb higher.

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Now, the reason why I pay attention to that, because there’s sometimes, yeah, you might not be able to get into tech stocks, but there’s a lot of stocks that are not even tech related that are in there, like Costco, for instance.

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And so when people are buying into the queues, which is the ETF for the NASDAQ 100, yeah, they’re buying up the queues oftentimes because they’re infatuated with Apple and Microsoft and Amazon and

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NVIDIA and AMD and all those companies. But in the process, when you’re buying shares of QQQ, you’re also exerting, buying power into Costco

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or Comcast or CSX. So when the QQQS are going up, yeah, that’s driving buying power also into those other non tech

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stocks as well. And so they continue to do better in the process.

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So I’m also going through as part of my scan the NASDAQ 100 and it doesn’t take much time especially the more you get proficient at going through scans and watch lists, you should be able to start

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being able to do those within two to three seconds. So let’s say I go through each chart spending about on average like 2 seconds on each of them,

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right. And then we’re talking about the NASDAQ 100.

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So that’s 200 seconds. So you’re talking a little bit over 3 minutes to go through the whole thing.

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And yes, when you, when you find one that’s catches your eye, then you’ll probably spend a little bit more time.

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You might spend like 20 or 30 seconds on that chart. But the point is, is that two months from now on might not even be paying attention to the NASDAQ

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100 specifically. I might be, you know, spending less time just looking at that index in general because maybe the

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market’s pulling back or maybe that, you know, the index itself is chopping sideways.

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So there isn’t those opportunities there.

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A lot of people like to see what stocks are moving the most ahead of the market, open what stocks are up 2030%, ’cause that’s the one that I’m going to avoid.

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But I also say that’s probably the highest risk scan that there is out there because you’re jumping into these stocks that are moving 2030%.

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And yes, it seems like, yeah, you get into them, they’re just going to keep going higher. And we saw that this past week with NVIDIA earnings.

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I mean, it just continued to skyrocket, but there’s a lot of those that it’ll gap way up and you’ll think, my gosh, this thing’s gonna run like crazy today.

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This is the stock I’ve been waiting to see get some action. And as soon as it does, people are so tired of having held it for so long that when you get this big

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news piece, they start getting out of it and in droves. And all of a sudden you start seeing that moves fade very quickly and very fast.

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I had a trade not too long ago in Wayfair, and it wasn’t that fun of a trade for me. I was down on it most of the time, but then there was some news that came out.

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They were cutting some jobs and it spiked at like 1314% in the pre market. I got out of that thing as fast as I could.

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Shoot, I got out of it, some of it in the pre market. Actually I got out of it.

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Most of it in the pre market. I was left with like 1/3 of a position.

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I think within the 1st 5 minutes of trading I was out of it. Why I was is, is because of that very scenario that I was telling you about.

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I was like the stock was struggling. I got kind of a gift out of the stock by a gap in up 13 per plus percent and I’m like peace out, I’m

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out of here. And it did fade.

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I mean, the stock isn’t anywhere near where it was at. Since that news came out, it faded the rest of the day.

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And so sometimes you’ll get a stock that’s up 20% and it’ll fade all the way back to red. So what happens, especially if you’re not disciplined in your trading, you’re like, OK, I’m gonna

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get into this stock. It’s up 20%.

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Let’s just say it’s up 10%. And then it starts to fade.

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The rest of the day people are selling it and you’re like, oh crap, how’s this happening? You didn’t go into the trade with a plan and all of a sudden you’re taking like A10 plus percent

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loss on your trade. So the percentage change scan that a lot of people rely on, yeah, there’s some winners in it, but

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usually you’re taking on a lot more risk and sometimes you don’t even realize it.

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One thing I do hope that you realize is how much of A value swingtradenthestockmarket.com is go

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there. It’s really awesome.

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You’re going to get access to all of my stock market research each and every day. That’s going to include my daily watch list, the bullish and bearish watch list that I put together

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each week of stocks that I’m looking to create trades from. Plus, you’re going to get updates on the big tech stocks and you’re going to get stock market

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updates throughout the week. So it’s really a cool feature that goes alongside of this podcast and you’re supporting this podcast

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in the process.

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There’s also a cool thing on TC2000 and you can get that in the description notes of this podcast if you’d like.

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But one of the things that I do like for measuring volume is this thing that they have called the volume buzz.

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And it helps me to see like what stocks are trending with some strong volume relative to other periods in time with that particular stock or that ETF.

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And sometimes it can be hard to determine that early on in trading because you just really don’t know how the rest of the day of trading is.

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So you wanna kind of say, OK, so far today, how is this stock comparing when in terms of volume compared to previous days of trading?

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Or you know, maybe from this time last year or this time last week and it gives you a volume buzz.

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And I think that that is also helpful in my trading.

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Like if I wanna go look at SPY and see which stocks are trending really hard on the day on SPY or what’s making SPY go up so much, I can see the ones that are showing the most volume, that are

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supporting the move and that can also provide some really good trade setups as well.

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And so it’s important that when you’re running the scans, whatever they may be, and I don’t give specific scans out because everybody’s different, you really have to spend the time on building your own scans.

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I like to give concepts and things to think about when you’re building your scans.

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But if I say, yeah, stocks trading above or below the 50 day moving hours, yeah, that’s great. That’s not really going to help you understand how to build your own scans.

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You have to understand why your scans are the way they are.

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Now one of the things as a swing trader that I do is I use my scans most often during after hours trading my own personal scans.

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I’ll go through them in the after hours.

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Yes, I’ll also go through them, you know, from time to time during the regular trading hours. But my main effort, my main amount of time, the most amount of time that I spend on scans is during

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after hours trading or before the market opens and then my watch list gets the most use during regular trading hours.

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I’m building those watch lists through my scans because I’m taking the stocks that I like the most from my scans and adding them to my watch list for the trading session.

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And then during their trading session, I’m looking at the watch list for opportunities now that might be different for day trading and it really is because day traders, they’re really looking to

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capitalize on intraday movements.

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And another thing I’d like to throw out there too is when it comes to watch lists like, well, let me back up a little bit, I talk a lot about the top down trading strategy.

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This is what I use in my trading.

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I want when I make a trade, I want the market, I want the sectors, I want the industries all to be in alignment with the stock that I’m trading.

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And sometimes that can be difficult to find those opportunities. But when you find a sector, for instance, that’s meeting your criteria and it supports the direction

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of the overall market and you’re like, OK, I need to find something from the sector that really works well, One of the best ways to do it.

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And again, I’ve referenced TC2000 a lot because that’s the charting software that I have used, probably said jeez, since like 2006, two thousand.

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I mean, it’s a long time that I’ve used. I mean I used it before they were TC 2000.

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I think they had like a thing called stock Finder back in the day. I mean that’s how long I have used it and I like it a lot.

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I’m very familiar with it.

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But one of the things that I like that I can do in my own trading, I can type in for instance, XL, Y and it’ll display for me all the stocks that are in XL, Y, XL, Y is a discretionary sector ETF.

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It’s the most popular discretionary ETF and right now when I type in XL Y, TC2000 will give me an immediate watch list that they create for me on XL, Y and all the stocks that it has listed being in

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it.

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Right now it shows 52 stocks. As I’m looking at this real time while I’m recording this podcast and for instance at the top it’s like Amazon and Tesla.

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And I sorted by market cap too. Amazon, Tesla, Home Depot, McDonald’s, Nike, Booking, Lowe’s, TJX, Starbucks, Airbnb, Marriott, O’Reilly, Chipotle, Hilton, Ross stores for.

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So I can go right through these things say OK, like what’s what’s moving this? I can also sort it by the volume buzz that I was just talking about.

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It’s really cool. That’s one way that, you know, using the top down trading strategy.

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I’ll start sorting by, OK, what’s moving in these sectors here because I’m looking at those ETFs all day long to be able to gauge real quickly which sectors are moving in the stock market.

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Because often times you may have a market that’s running 1% higher, but six of 11 sectors are trading higher with it.

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So you really don’t wanna be trading in the sectors that aren’t moving with the overall market because that could be a recipe for disaster, right?

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You could be getting into the market, but the stock that you’re trading in is not moving with it. So it helps to do that.

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It helps to know what that, you know, the different ETFs that represent the sectors.

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So in any case, I don’t wanna ramble on too long here, so I’ll go ahead and wrap up this podcast episode with scans and watchlists.

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Hopefully you were able to get some tidbits from me on how I approach scans and how I approach watchlists.

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If you enjoyed this episode, feel free to leave me a good review.

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I would love to see that out there. Five star review.

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Those really do mean the world to me. Also check out swingtradingthestockmarket.com to support this podcast.

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And I want to hear your stories. Send me an e-mail, tell me your story.

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Tell me your trading background. Tell me the problems that you face as a trader and what your questions are.

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I would love to hear from you guys. It’s ryan@shareplanner.com.

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