One Technical Indicator | Podcast Episode #401

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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 #401, we’re going to get back to the emails and I’m going to read the e-mail for you guys.

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This one comes from a person that of course I’m not going to reveal his real name because I just don’t do that on the show.

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But I do give them a good Florida Redneck name. And in this case, I’m going to give this person the name Sadie for a good Florida Redneck name.

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I grew up around a couple of sadies, honestly, and not as sad as they seem. Dad joke there.

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But any case, Sadie writes. Hey Ryan, just a note, keep up the podcast.

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They are really good. The topics you pick are always timely.

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It’s funny that you say things that I thought I only thought about. Like when you said that after you sell something, sometimes you ignore it for a while so not to feel

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bad if it goes back up. I sometimes do that too.

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Stocks are such a mental game. I tell people all the time.

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Listen, it’s not for everybody. Especially trading.

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Buying stocks and holding and then ignoring them is different than swing trading, Swing trading. You have to have the right mindset, plan and execution.

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And preferably you are not a gambler. I, for example, am not a fan of sports betting or casinos.

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I see so many people addicted to those things. People that panic at the loss of $20.

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I tell them trading stocks is not for you until you can learn to control that aspect, among other things.

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I guess since I have your attention, I’ll ask you a question for your podcast. If you could only have one technical trading chart or indicator, what would it be and why?

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Sincerely, Sadie. OK, good question.

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So we’re down to this idea of if you could only trade with one technical indicator, what would it be and why?

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First off, as I like to always do, I go back and I pick up on some clues that come up in the e-mail itself.

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I love it when you guys tell me about your stories, when you tell me about the things that are troubling you or bothering you.

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In this case, he’s just talking about how he doesn’t like to gamble, but he loves swing trading. Now some people think that trading stocks and and not investing in stocks is another form of gambling.

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And in some ways it’s true.

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You go back to 2020 for instance, when all the sports gambling was shut down, you had guys like Dave Portnoy who who’s a big gambler.

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They started getting into trading stocks and Dave Portnoy to to his credit, he made it very popular for a lot of people to transition from sports betting to company betting essentially.

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And a lot of people got into it. A lot of people needed something, especially when you’re sitting at home for long periods of time,

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there was nothing to go out and do. There wasn’t a restaurant to go out to at night.

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People got into stock trading because the stock market was still open. So then people kind of treated it like a casino and still to the day there’s there’s tons of people.

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Even before COVID, there was tons of people that treated the stock market like a casino.

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People are hoping to strike it rich, especially when it comes to penny stocks and low dollar stocks and options trading.

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That’s a huge form of gambling for a lot of people, so they hope to hit it big. But they’re not really looking to manage risk.

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They almost treat it like a craft table. Either I make it big or I lose it all, and that’s not how you sustain yourself in the stock market

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long term. It was funny that Saudi talks about not being a fan of gambling in a casino or doing sports bets.

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I’m in fantasy football. I have one league that I’m a part of and honestly, I don’t enjoy the fantasy football part all that

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much. What I do enjoy is the camaraderie with these guys that I went to college with back in 2000, and

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we’re still in touch today. We’re in different parts of the country, some in Texas, some in Orlando, but we all get together at

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least once a year and we have the fantasy football draft. So I like that part.

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As for like trying to predict what players are going to have the best weekend, whether it’s Stefan Diggs or Mike Evans, I gotta be honest, I’ll usually pick the wrong person.

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It’s it can be really frustrating and I don’t really have any say in it. I don’t have any clue into how they’re really gonna actually perform.

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Who knows, maybe one of them got in a fight with their wife the morning of the game and they’re off on their gap.

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I don’t know that. So I don’t really enjoy the actual aspect of fantasy football.

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I enjoy the camaraderie and the fact that if it wasn’t for the fantasy Football League, probably wouldn’t have much of A connection with these guys anymore.

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So that’s the cool aspect of fantasy football. I go on cruises a lot because we have a huge port right near where I live, Huge port.

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So I’ll do some, like, weekend cruises and my wife and I will go downstairs and we’ll watch the betters.

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Now you would think, oh man, Ryan, he trades stocks for a living. He probably goes down there and plays at the crafts table or at the roulette or or something like

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that. No.

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And all the cruises I’ve ever been on, I’ve yet to make a single bet.

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I’m not hating on anybody if they choose to do that.

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Because ultimately, and I tell the people this all the time, you know how to know when people are not winning at gambling and it’s like, oh why, why, why now?

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Tell them I was like, when the casinos are still open. If the casinos were consistently losing money more than what they were bringing in, they wouldn’t be

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open. So the odds are stacked against you from the very start that you’re not going to win.

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You played enough, you’re not likely to win. I always thought to myself, if I were to play in a casino game and and it’s not anything morally

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repugnant to me, I think it it’s morally repugnant if it becomes addictive and you are not making good decisions with your money.

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But if I was to go into a casino and I would say, OK, I got $100 that I’m going to gamble with here, would I do it just like in dollars or pennies or quarters or nickels?

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No, I would go to the roulette table and I would just put it all on either red or black. And if I win, good, I come away doubling my money.

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If I don’t win, I lose it all. But if I kept playing the roulette over and over and over again, almost certain that I’m going to

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lose all my money, I think my best chance is just going all in on. And that goes really contrary to trading.

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And that’s probably why I don’t do any gambling in the casinos. It doesn’t seem enjoyable to me.

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I do find it enjoyable. Like I said, I find it very enjoyable watching everybody else lose their money because that is money

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that I am not losing. That money is still in my pocket.

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It’s still in my account. But for everybody else, I kind of like it.

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I cheer for the house. Honestly.

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I don’t cheer for the other people. I kind of cheer for the house.

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I like watching the emotions. You’re not going to get emotions out of the house, but I really like watching the fear and the greed

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play out and a casino. So my wife and I will go get some old fashions on the cruise and we will watch people lose their

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money and I don’t feel sorry for them. And I know some of you guys enjoy gambling and there’s nothing wrong with that.

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But I’m not going to feel sorry for somebody if they choose to go gamble cause more than likely you’re going to lose your money.

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I mean yes, there’s people who come away and have a good night or whatever, but by and large the trend is against you to be successful long term.

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So I do think that there is an element of trading that the less you enjoy gambling in the traditional sense, whether it’s betting on sports teams or betting on, you know, red or black or or

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going into like a slot machine and putting a whole bunch of money down on that. I think there’s like an inverse correlation between that and swing trading.

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I think you’ll be a better trader if that kind of stuff doesn’t appeal to you.

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Now I do get and I think there is a lot of similarities between playing like Texas Holdem or playing poker. Yeah, there’s a lot of that that can crossover into it and how you manage your your chips and how you manage your hands and the the odds and the probabilities there.

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But you’re playing against other people when you’re starting to play the house.

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That’s where it gets kind of difficult to succeed, at least at least in my opinion.

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OK, Everything I say on this podcast is not going to be something that everyone’s going to agree with.

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And not everything that I say on this podcast is necessarily going to be something that’s completely accurate. But I’m going to give you my opinion on it and hopefully if you don’t agree with what I have to say,

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that you can be an agreeable disagreer, I guess.

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So not going too far down that rabbit hole. I just thought that was kind of a interesting aspect of relating trading and gambling in an inverse kind of way.

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But As for my technical indicators, the technical indicator, if I had one technical and I’ll give you some others too.

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But if I had one technical indicator that I would use over all the other ones, it’s probably gonna be the volume buzz.

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That is probably the one indicator that I use more than any other indicators. Now there’s others, I mean I like to look at the average volume over the last 21 days, which comes

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out to like about a month of trading action. I also put moving averages on my charts, which I don’t necessarily consider those an indicator.

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Those are more like overlays fast acastics. I do like looking at that just to give some perspective on it is particularly with weekly and

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monthly stochastic readings. But overall, one indicator that I really do like is the volume buzz.

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And you’re gonna ask yourself what is the volume buzz? Volume buzz is a proprietary indicator that TC 2000 offers and it essentially measures the trading

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volume of stocks relative to their average volume over a specific period of time. Now some people will say it’s like 90 days, it’s because it’s proprietary.

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You don’t have a complete insight into it, but it’s believed to be about the past 90 days or it’s also used with a mixture of different time frames.

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This is an indicator that expresses the percentage of how volume is performing today relative to other periods in time.

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It could be intraday from the day before or from 90 days ago. This indicator is expressed as a percentage and helps traders to identify unusual volume activity in

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real time. So if a stock has like massive amounts of volume, for instance, like NVIDIA a few weeks ago it

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gapped up 20% higher, you might have been living under a rock and didn’t know that they were reporting earnings.

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And you’re seeing that they have a volume buzz probably like around 200%. You’re like, holy cow, what the heck is driving this thing up?

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Well, it was a news event, you know. And so sometimes it’s news events.

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Sometimes it’s a breakout where people are getting really interested in the stock because it’s finally broken through a technical resistance level and you can get a huge volume reading.

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What it helps to understand is that when you’re buying into a stock and it’s breaking out, it helps you to see whether or not in real time the volume is backing up the breakout.

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And that’s important in your trading. And so volume buzz does play a critical role, and that would be my #1 technical indicator that I

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would use above all others. Essentially what matters more than anything is price and volume.

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Price is about 70% of the game, 30% is about volume. So the more comfortable that you become with price action, the more you can read the charts just

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based off of price alone, the less in need you will be of having to have like a Stochastics or a Volume Buzz or RSI or a MACD.

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I’m not even huge fans of MACD and RSI. If I had to choose between MACD or RSI it would be the RSI, just because I think it’s a little bit

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simpler and a little bit easier belt out. But RSI is good for measuring extremes in the market.

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But overall, my number one thing’s gonna be volume buzz. Now, I mentioned a few others like moving averages, right?

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Talk about that being more of an overlay. What I do like about moving averages is not that every moving average is important on a chart.

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So a lot of people get hung up on, oh, it’s testing the 50 day moving average or it’s testing the 200 day moving average.

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Who cares? Who cares unless there’s a history of price testing those moving averages.

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If there’s not a history of it, then it doesn’t really matter because it hasn’t paid attention to it in the past.

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Why should I care about it? Testing it now in the present.

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So moving averages are only important to me if there’s a history of where it’s testing a similar one.

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Like for instance, like the QQQ right now say it’s so weird, but the QS QQQ that has a moving average right now where it’s tested now twice the 20 day moving average.

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I want to see based off of what I’ve seen, you know, a few weeks ago when it tested the 20 day moving average and then here in just the most recent training session, it tested the 20 day moving

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average. I’m starting to notice there’s a little bit of a trend there.

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There’s some support at the 20 day moving average. But if you look at the five and the 10, is there any support there?

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No, there’s no support there. So I don’t really care about the five or ten day moving average, but I have noticed it with the 20

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day. So that becomes more important to me and something that I’m willing to watch going forward.

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And likewise, whether it’s the QS or SPY or the in an individual stock or ETF that you’re trading, don’t get hung up on a popular moving average just because that’s what everybody talks about.

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Get hung up on it if the market gets hung up on it, if the market cares about the moving average, then you care about the moving average.

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Ultimately though, I will say this indicators can be supplemental to your trading, but they’re not essential to your trading.

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If I could have a great indicator or I could be a good interpreter of price action every time, I would rather be a good interpreter of price action.

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Another thing that I would say is check out swingtradingthestockmarket.com. Yes, I’m plugging in a service here because that’s part of this podcast.

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I have a subscription service that goes alongside of it that’s really cheap and affordable. swingtradingthestockmarket.com will give you all of my stock market research each and every day

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through my Discord. And it’s really cool because with it you’re going to get broad market analysis through videos as

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well as videos on the big tech stocks, mega cap stocks and you’re going to get my daily watch list plus my weekly bullish and bearish master lists.

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So check that out swingtradingthestockmarket.com. And the other thing about the stock market that I would encourage people to do, and I don’t think a

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lot of people do that in general, and that is to be aware of the bigger picture. We can come up with really good breakout scenarios.

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I mean, we can come up with charts that look just amazing from a breakout standpoint. But if you don’t have the big picture confirming that move, more than likely you’re throwing your

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capital away. When you’re getting into a trade, you got to look at it as an edge that you’re looking for and

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you’re trying to pile on these edges to, to provide a bigger edge for your potential to succeed in the stock market.

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So where’s the edge? If you get into a stock that’s breaking out early on in the day, it had a really good start to the

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day. It’s surging higher at around 10:15 AM Eastern Time.

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OK, we’re about 45 minutes into the trading session. But you’re also seeing on that same day where the S&P 500’s falling apart.

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You’re seeing the sector that it’s trading in, let’s say it’s materials. And then let’s say the industry that it’s in is steel and steel is falling apart, but the steel

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trade set up in this or in this steel company is breaking out. Now you got the broad market, you’ve got the sector and you got the industry all working against

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you. Is there the potential that this steel stock could keep going higher?

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Yes. But is that necessarily an edge just because it could?

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No, it’s not an edge. So you want the edge, You want the edge with the market, you want the edge with the sector, you want

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the edge with the industry. And then you want a technical pattern that you can manage the risk on with the individual chart or

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ETF or whatever it is that you’re trading. So that when you get into the stock that you know you can minimize the potential risk on the trade

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but you’re piling on those risks. But far too often we’ll have a down day and it like markets, down the sector, the industry, but we

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have this potential trade set up where it’s test a stock. This is probably where you see more.

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So during sell offs you’ll see a stock testing a trend line. You’re thinking to yourself, well it’s testing the trend line, I gotta buy it right now but it’s not

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worth buying. If nothing else is bouncing, that one may bounce it temporarily and it might just be a response to

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the technical pattern. But then if it starts falling apart because the the pressure and the sectors and industry and

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broader markets falling apart, that’s not going to do you any good. So indicators are good, chart patterns are great, being in a good interpreter of price is really

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good, but you also have to keep the bigger picture in mind. And so often times that’s one thing that’s really overlooked that I’ve noticed a lot.

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And traders, they get too hung up on the individual trade setups and they don’t think about the broader market.

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And if you enjoyed this podcast episode, I would encourage you. So leave me a five star review on whatever platform you’re listening on.

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Those things do mean the world to me. Please send your emails to me as well. ryan@shareplanner.com I do read them all.

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They come right to me. There’s no like filtering.

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Nobody else is reading them first. I get them, so send them to me. ryan@shareplanner.com.

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I want to hear about your stories. I want to hear about your problems.

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I want to hear about your background. Tell it to me, even make it a long e-mail.

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I don’t care. Send them to ryan@shareplanner.com and make sure to check out Swing Trading the-stockmarket.com.

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Thank you guys and God bless. Thanks for listening to my podcast Swing Trading the Stock Market.

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and trading information every day. If you have any questions, please feel free to e-mail me at ryan@shareplanner.com.

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