Episode Overview

In this episode Ryan talks about his preferred methods for entering a stock, getting stopped out of a stock, and for locking in gains. He also speaks to why he doesn’t use good to cancel orders for his swing trading, and the difference in using a 39 minute candlestick chart verses a 30 minute candlestick chart.

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Available on: Apple Podcasts | Spotify | Amazon | YouTube


Episode Highlights & Timestamps

  • [0:07] Introduction
    Ryan kicks off the episode by discussing the value of precision in trade entries and why getting filled at the right price can be critical to a trade’s success.
  • [1:24] Tembo’s Strategy with Limit Orders
    Tembo, a returning listener, shares how using limit orders has transformed his trading approach, allowing for better entries and risk management.
  • [2:41] Order Types Ryan Uses
    Ryan breaks down the types of orders he personally uses, including stop market, stop limit, limit, and market orders, and when each is appropriate.
  • [5:46] The Pros and Cons of Stop Market vs. Stop Limit Orders
    A deep dive into the nuances of these order types and the potential dangers of bid/ask spread manipulation or low liquidity stocks.
  • [10:12] Swing Trade vs. Day Trade Intentions
    Ryan cautions against shifting a trade’s intention mid-trade and explains the importance of sticking to your original plan unless price action justifies a shift.

Key Takeaways from This Episode:

  • Limit Orders Can Improve Discipline: Using limit orders helps refine trade entries and avoid emotionally-driven decisions, especially in fast-moving markets.
  • Know the Risks of Stop Market Orders: These orders can result in slippage, especially in illiquid stocks, leading to worse-than-expected fills.
  • Don’t Confuse Trade Intentions: If you enter a position as a day trade, don’t turn it into a swing trade just because it didn’t pan out in one day.
  • Gaps and Pre-market Orders Are Risky: Avoid placing good-til-cancelled or pre-market orders with market triggers, as unexpected price swings can trigger unintended fills.
  • Cash Is a Powerful Position: Especially in volatile or uncertain markets, cash allows traders to step back, manage risk, and be selective about re-entering.

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Full Episode Transcript

Click here to read the full transcript

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.

0:16
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 shareplanner.com’s Swing Trading the Stock Market and today’s episode we’re going to talk about getting those precise entries that we all desire, those ones that are spot on that you get the exact field, the exact price that you want.

0:45
It’s not always easy, but there’s some things that you can do and some types of orders that you can use in order to do that.

0:50
So for this e-mail, we’re going to call this guy that emailed me and he’s a return emailer to the show that the proper term for that return e-mail or I think it is.

1:02
I think I’ve given him a different redneck name in the past. And the reason why I give people redneck names, I don’t use their real identities because I want that to be secrets so that they can write me openly and honestly, not worry about somebody else knowing, knowing who they are.

1:14
So for this episode, we’re going to call this guy Tembo. I grew up with a Tembo, pretty good redneck name.

1:20
Tembo had a dad named Daryl too. Isn’t all that shocking?

1:24
Any case, Tembo writes. Hey Ryan, lately I’ve incorporated limit orders into my trading plan and I have to say for me it’s a game changer. I mainly trade indices and gold at the moment and mostly day trading, but usually with the hope of it turning into a swing trade.

1:37
My strategy is now breakouts and breakdowns of major support and resistance on the daily chart. I manage my trade entries and trade management on the 30 minute chart. I mark my chart with a blue line for major support and resistance levels and place alerts at the blue lines and a yellow line for where I will place my limit order above or below the breakout level.

1:58
Once in the trade, I move my stop loss once in the profit to the base or top of the form 39 minute candle to continually lock in the profits.

2:07
I’m finding the limit orders are helping me to pick my trades more carefully. It’s helping me to better manage my risk better and to get really good entry points.

2:16
I really don’t have to watch the market constantly and more often than not, it also helps me from getting dragged into unnecessary trades.

2:23
I find that it isn’t good to use it when the market is getting closed as gaps can mess up my strategy.

2:30
My question is, do you use market orders or limit orders or a mix of both? What do you think?

2:36
Cheers, Tembo. OK, Tembo, good question. We’re going to address all of these here. So what what type of orders do I use for my trading?

2:47
I use both. I use stop limits, I use stock markets, I use just plain old limit orders and plain old market orders and it all depends on the situation.

2:54
So one of the things that always concerns me is is that what what if, OK, I get into a stock at $100 and I have a stop loss at $95. Well, what kind of order am I going to use on that?

3:09
Typically I’ll use a stop, stop market order and there’s benefits to that and there’s problems to that.

3:18
One of the problems could be especially now for one, now I want to say I do not keep my orders in overnight.

3:26
I do not use good to cancel orders, never have. Well, I can’t say I’ve never have, but I never will going forward.

3:31
I have used them in the past when I first started trading, but I don’t use them now. And the reason why is there’s these like split seconds that you don’t even really see with the naked eye that takes place in the beginning of trading sessions right at times where they can really do some screwy things with the bid and ask.

3:46
And I don’t even totally understand it. But they they manipulate them to be able to trigger orders even if the price doesn’t even trade down to that level. But because bid and ask got below that level, they will trigger an order as long as that bid and ask got below that stop loss order.

3:57
So I don’t do it right at the gate. I usually have my orders all in within the first couple minutes of trading. So with a stop loss that uses a market function, a stop market function essentially the price gets down below my stop loss, it automatically sells it as a market order.

4:11
Now if the bid in ask on the stock that just triggered my stop loss at $95, let’s say that the the bid is like $93 and the ask is $96 and you had something that hit the $95. OK, now my stop loss is getting triggered.

4:33
Well, there’s a good chance that I’m going to get a fill around that $93.00 possibly because I’m essentially putting in a market order as soon as that stop loss gets triggered.

4:41
That’s one of the downsides. So that’s why you often times will see me trading mostly large cap stocks.

4:47
I don’t get into a lot of the stocks that have widespread. Why? Because I don’t want to be taking an extra percentage loss because my stop loss was triggered. So that’s important to me.

4:56
You got a stock like Apple that’s very liquid. You don’t really have to worry about that happening, but if you get into a stock that’s trading at $1.00 and it has, you know, a bid ask price of like $0.97 and a dollar O 3, that stop loss getting triggered could be quite problematic.

5:15
Now, the good part about it is that I’m getting out of the trade. You don’t want a stop loss that doesn’t actually trigger.

5:21
And that’s one of the problems that a stop limit will do for you because you’re setting a range. You’re saying, OK, if it gets me stomped out at $95, I’m willing to sell it at a limit order above 9490.

5:33
And most of the times it’ll probably, especially if it’s a large cap liquid stock, you won’t have any problem getting filled there.

5:39
You know, you’ll probably get filled close to the $95 level.

5:43
But let’s say that you don’t. Let’s say that you get stopped out.

5:46
Let’s say there’s a nasty news event that takes place and every once in a while you’ll see these crazy news events that will actually get prices down on an intraday basis.

5:55
It’s not often, but you can see them like pop up on the ticks where all of a sudden it’s just instantly the bid ask changed, you know, And so by the time they, or it could be this too, that there’s such a heavy rush of sell orders that yours doesn’t get filled right away.

6:06
And then as a result, you’re having to, there’s no buyers to buy it at, at your range between 9490 and $95 and then the stocks trading all of a sudden at $92.00.

6:17
And you’re like, why do I still have this position? It, that’s happened to me before and you’re like, why, Why do I still have this position? I had a stop limit order.

6:30
It went right through it. There was orders that were placed in that range, but there wasn’t enough buyers to fill it in that range.

6:35
And so as a result, you’re bag holding it. And so that’s the one of the problems with the stop limit order.

6:38
Now, 99% of the time that’s not going to happen, but there’s freakish things that can happen.

6:47
So those are the pros and cons. Now, the pros of the stop limits, especially for the stocks that are very liquid, like Apple, you could do a stop limit order.

6:55
Let’s say. Again, I know that Apple’s not trading at $100, but it’s just so much easier to use examples when you’re just saying $100.

7:03
You’re saying that, you know, Apple’s trading at $100, You have a stop loss at 95 and you say, OK, you know what, I’m putting my stop limit in at 9499 and 95 and I want to make sure that I’m getting right out at that 95.

7:16
Good chance that you’ll get out at that level.

7:19
There’s a good chance, you know, I’m not saying it for sure every time, but there’s, you know, often times you’ll get get it, fill it.

7:25
But now that’s about as tight as you can get. And I’m not saying that you should do that, but you have to think about that when you’re setting your stop limit orders because you’re essentially giving it a range from what it can sell it at with a limit order.

7:36
So, you know, if you go from like a dollar to to $95 at you’ll get filled every time. But I don’t think I want to really even risk that.

7:44
I mean, you always see those weird tales that can sometimes pop up on a chart, often times wonder if that’s just some crazy, weird stop limit that got filled.

7:52
I don’t know, I’m just pondering or speculating there. But every once while, you’ll see some crazy tail on a stock on or on a candle.

7:59
You’ll see the huge long shadow like who the heck sold way down there? And you see it often times at the very beginning.

8:05
So the whole point of that is that I don’t want to be the person that causes one of those big, you know, lower shadows on his chart.

8:13
Now, one thing you should think about is swingtradingthestockmarket.com.

8:21
Now when you go to swingtradingthestockmarket.com, it’s going to take you to my SharePlanner site and SharePlanner will list you all the different plans. But what one that I want to really highlight is the one that goes alongside with this podcast, and that’s where you get all of my stock market research each and every day.

8:33
That’s going to include my daily watchlist stocks that I’m watching each day for potential trades. I updated each night. Send it out to you guys. I’m letting you know which ones I’ve taken off the list.

8:43
Also, I’m doing watch list reviews each day on the watch list to let you know how, how did they turn out? What was my thoughts on each one of them?

8:51
Plus, I’m doing big tech updates throughout the week along with stock market updates throughout the week as well.

8:56
So check that out. Plus, at the beginning of each week, you’re getting my bullish and bearish master watch list where I’m showing you all the stocks that I’m going to be keeping a close eye on and that I’m going to be pulling my setups from.

9:07
So check that out. swingtradingthestockmarket.com.

9:10
Now there’s a couple of other things I always like to read a little bit more into the emails than probably what they intended me to do.

9:15
But he says this here. He says I mainly trade in the season gold at the moment and mostly day trading, but usually with the hope of it turning into a swing trade. Problem with that is that it changes the thesis on the trade.

9:27
Now, I’m not saying that you don’t ever have a reason to go from a day trade to swing trade. Often times, and I just had this happened the other day, where we start to test a major trend line.

9:36
And so I buy into it and I’m saying, OK, you know, we’re starting to bounce here. I’m going to buy into it. If the stock can cooperate and continue to to rise, I’ll stay in it because it’s holding that trend line.

9:48
But if it can’t hold that trend line today and it starts to break back below it, I’m going to go ahead and sell out of it. That becomes a day trade at that point. But my goal going into it was for it to be a swing trade.

9:58
But if it doesn’t cooperate, I’m not going to give it a second chance for another day to trade. I’m going to go go ahead and hop out and hop back into it the next day if it wants to start to cooperate again.

10:06
So that’s about as far as I get towards day trades turning into swing trades.

10:12
Now, often times the reasonings for getting into a day trade can be very much different. Most of the time your day trades, they’re running on news, they’re running on heavy, heavy volume, they’re running on a lot of hype, whether it’s off of a a Reddit message board, Wall Street bets, they’re running along those kinds of lines.

10:29
They’re running off of earnings news, a downgrade, an upgrade, but those are the ones that give those day trades their momentum.

10:36
Rarely are you getting people to trade Goldman Sachs on no news during the day. If it is, it’s probably like a scalp. They’re seeing some kind of technicality that says, OK, I can buy at $100 flat and sell at $100.10. Or, you know, they’re scalping for pennies.

10:48
OK, fine. But what I’m talking about is day trade.

10:52
You still want to make multiple percentage points on your day trades. You know, buy a stock at 100 and hopefully that it, you know, it might have closed the previous day at $95. It opens at 100 today.

11:03
And then you’re hoping to get in, you know, around that $100 market and run it up to 105 off some technical pattern that you find advantageous to, to trade off of.

11:10
But what I don’t want to do is use that mentality to go ahead and hold it overnight because that might just be a one day thing and it might not even be a good pattern beyond a day trade.

11:20
So I don’t like the idea of trying to take swing day trades and, and make them into swing trades. I just don’t think that works very well.

11:26
Now you see why he talked about a 39 minute candle. Why does he use a 39 minute candle?

11:31
It’s pretty simple. There’s 390 minutes in a trading session and you divide that by 390. You get 10 candles in a trading session. Now you can’t use an hourly candle and get an hour out of each one of the candles because a typical trading session is 6 1/2 hours long. So the last candle or the first candle, depending on how people draw it on your software, they’re going to make one of those candles, 1/2 hour candle. So I that’s why one of the reasons why I stick to the 30 minute charts so much.

11:57
Now, I don’t think there’s anything wrong with a 39 minute candle. It condenses the the chart action in a way that the hourly can’t do it and the 30 minute can’t do it. It just makes it a little bit smaller, but it still makes it an equal increments.

12:09
There’s a reason why people use 21 day moving averages instead of a 20 day moving average is because there’s 21 days on average in a trading month that you can trade. So they’d rather have that monthly moving average based off of 21 days. Again, I, I don’t use a 39 minute chart, but I don’t fault anybody from it because in the end what you’re going to see off of the 30 in the 39 minute chart is going to be very, very, very similar.

12:26
So I don’t get too worked up about it. Essentially it’s taking 3 candles off and condensing it into the other 10 candles by adding 9 minutes of additional trading into each candle.

12:41
But I, I also kind of like just knowing when the candle ends. If I’m using 39 minute candles, I’m going to be like, all right, when does this one end?

12:48
It’s always going to end on a weird, weird #2. So personally, I like the 30 minute candles, but don’t fault anybody for using 39.

12:58
Now for getting in the stocks. What’s the best kind of thing?

13:01
If you’re looking at a base breakout, you’re really dealing with the same issues that you’re dealing with on a stop loss.

13:07
If you use the stock market order, you may not get the best fill. You may be trying to get in at 100 and instead you get filled at $100.15.

13:18
So you’ve got a little like .15% slippage. And if you’re trading in a liquid stock, you’ll heck, you could get in at $102.00 this year.

13:26
So that’s one of the reasons why you want to focus on liquid stock. Now on the stop limit order, you could say, OK, I want to buy stop limit order where you know, I’ll get in between 100 and 100 and dollars and $0.10.

13:35
And so you don’t have to worry about too much slippage. Or you can put $100.03 for all that matters and hopefully you’ll get in. But if you don’t get in and it keeps on running and never comes back, you missed out on that trade because you know of a few pennies.

13:49
So there’s pros and cons to it.

13:54
Now, often times with like breakouts, if it’s already broken out and you know you want to be in it, you don’t have to wait. You can just use the market order, but just make sure you understand the bid and ask price that you’re not going to, you know, create like a two or three percent slippage for yourself because that would really stink.

14:05
And then when it comes to target prices, I think the limit orders work the best.

14:11
SO to Timbo’s point here, you know, if I’m looking to get a third out at a certain price, I can get in, I’m getting in at $100 and you know, my first target price to take a third off of my trade is $105.00.

14:23
Then I’m going to put a limit order at $105.00. That way I’m getting out exactly at that price and I don’t have to keep watching the target price the whole time either because one of the frustrating things would be is to have a target price that hits it.

14:35
And then you didn’t even realize it because you were off making yourself a Sammy.

14:40
And like Timbo said, you want to be careful with with any order when there’s a big gap in play. You don’t want to just if you’re holding your orders overnight, you’re doing good to cancel orders and you got a big gap on the trade. You want to be thinking about how that gap is going to impact your trade.

14:53
Where’s the bid and ask price at? And I definitely think that trying to trade in the pre market with orders can be extremely, extremely dangerous, especially with market orders or stop market orders because you’re going to get some of the wildest fills unless it’s just extremely liquid because earnings just came out or something else.

15:09
But you don’t even hardly ever catch me trading before the market opens unless it’s just, you know, painfully obvious that I need to go ahead and get out of a stock.

15:16
With that being said, I’m going to wrap this one up with a old fashioned review here.

15:22
So for those not familiar with this, every few episodes I’ll do a old fashioned review. I just, I used to just do bourbon reviews, just drinking at neat and giving my ratings, but I’ve I’ve pretty much exhausted the list of bourbons out there.

15:33
So now I have just tons of bourbon and I need to figure out a way to to use it all because I don’t drink it every day or anything by that by any means.

15:40
So this one for today, though, that I have is Kalamet farm.

15:47
This is a 14 year old Kentucky straight bourbon whiskey. I’ve had this one for a long time.

15:51
I think I got it for a little shindig me and my brother were going on and I was like man, I’m going to get us a good one here.

15:56
So this was barreled back in 2006 and it’s a 48.1% alcohol making it 96.2 proof.

16:09
Now you guys have been listening to me for a while. You know, I like my old fashioned to be bottled and bond. I got a, you know, 100 proof.

16:13
I think there’s a there’s a diminished quality when you go below the the 100 proof. I think there’s a little bit too much heat when you go over the 100 proof.

16:21
Now that doesn’t mean that there is an exceptions along the way and I’ve documented those as well. But the Evan Williams has always been my my torch bearer.

16:29
Now on this Kalamet Farm, I always say that Evan Williams is like a 75. It’s a really good bourbon for making old fashions with.

16:37
It’s not really a good bourbon by itself and I give it a 75, but with this Kalamet Farms, because it has a lower proof, it’s kind of sweetens it out too much.

16:45
It brings more of the simple syrup that I use and I only use like 3/8 of an ounce of simple syrup in my old fashioned, but it pulls in too much of that flavor and makes it way too sweet.

16:54
Not much heat really no heat at all on this one. So I still I I don’t mind a little bit of sweetness, but I don’t want it to smother the heat that comes from a good choice of bourbon with the old fashioned.

17:03
So on this one here, I’m giving it a a 6.4.

17:14
I just look, if I was on a if I was on a cruise ship or if I was at a restaurant and they brought it out to me, I would say, OK, this is fine.

17:23
You know, like I don’t have high expectations. But for my own self, this one here I can’t give more than A6 four.

17:28
So 6.4 for Calumet Farm 14 year old straight bourbon whiskey. And if you enjoyed this podcast episode, I would encourage you to leave me a 5 star review on whatever platform it is that you listen to me on.

17:40
I appreciate those reviews. I appreciate the feedback. They do mean the world to me because you know, I want to see see traders become better traders. I want to see them do you know, things that are in the best interests of their capital. So when you guys give me that feedback, it does mean the world.

17:56
And also send me your questions. I don’t get enough questions from you guys. I really don’t. Thanks to Tembo here, man.

18:01
I had a had a question for this podcast. I think I have a couple more in the queue, but but keep sending them to me man, and you won’t have to wait in line long for this ryan@shareplanner.com send them to me. Thank you guys.

18:11
Check out swingtradingthestockmarket.com and God bless. Thanks for listening to my podcast, Swing Trading the Stock Market.

18:18
I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the stock market each day with traders from around the world.

18:26
With your membership, you will get a seven day trial and access to my trading room including alerts via text, e-mail and WhatsApp.

18:32
So go ahead, sign up by going to shareplanner.com/trading Block. That’s www.shareplanner.com/trading Block and follow me on SharePlanners Twitter, Instagram and Facebook where I provide unique market and trading information every day.

18:43
If you have any questions, please feel free to e-mail me at ryan@shareplanner.com.

18:53
All the best to you and I look forward to trading with you soon.


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