The 30 Minute Rule Of Trading | Podcast Episode #450

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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 shareplanner.com’s Swing Trading the Stock Market.

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And today’s episode we’re going to talk about the 30 minute trading rule here. And this is a personal rule for me.

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I, I’m sure other people do it. I know a lot of people in the trading block do it.

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But for me, this is something that really a huge centerpiece of my trading and it, it’s a pretty simple rule, but it’s also one to help protect myself from myself and emotions and so forth.

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So today’s e-mail comes from a guy he asks to be called Big Tom Callahan because we don’t use people’s real names here.

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We use their stories and their circumstances and their questions, but we don’t use the real names.

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The, the Tommy Boy reference here, I think that’s pretty good. I, I don’t know if we’ve had a Tommy Boy reference before in the past, but I like, I like the fact

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that I’m calling this guy Big Tom Callahan, though. I think it’s Big Tom Callahan Junior, right?

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Chris Farley Collie, what a great actor. Nonetheless.

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Let’s get on with his e-mail here, he writes.

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Hey Ryan, I’ve been listening to your Swing Trading the Stock Market podcast for a good while now

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and it’s been a huge help. Instead of a Florida red nickname, can you just call me Big Tom Callahan?

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My favorite movie is Tommy Boy. That would be awesome.

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I’ve been trading for about 5 years and let me tell you, it hasn’t been easy at all. I started out thinking I might be a day trading hotshot, but reality kicked in pretty quick.

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I lost a good chunk of my savings before I realized I was in over my head. Over that time I found your podcast and started reading more into swing trading.

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It’s been a huge help. Now, I keep hearing you mention this 30 minute rule of yours, but I’ve never caught a full

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explanation of it. I’m mighty curious about what exactly this rule entails and how you apply it to your trading.

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Would you mind breaking it down for us in the upcoming episode? Appreciate all that you do Thanks.

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Big Tom Callahan.

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All right, big Tom Callahan, let’s get into your question.

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First off, let’s look at a little bit of this guy’s journey here. He started off, he doesn’t give me too much background here, but the little bit that he does give me

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talks about how he wanted to be a day trading hotshot. Now everybody starts off wanting to be a day trading hotshot.

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It seems like I shouldn’t say everybody, but most of the time it’s wanting to get into the day trading here.

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And it’s such a bad route to take because more times than not, you’re just going to lose your money. And especially if you’re using it with savings because savings represents something that goes beyond

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your paycheck, something that you’ve been able to hold onto. Afterlife’s expenses gets deducted from your bank account.

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This is what you have, this is what you’ve saved. Sometimes it’s taken years.

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You hear about somebody that loses it all from gambling and in their spouse’s hand. It took us 25 years to save that kind of money, and you blew it all in one hand, right?

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What’s the element that’s attached to that? It’s time.

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If somebody loses $25,000 in the stock market and they can make that $25,000 back the next day just by going and showing up to work, not a big deal.

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But if it takes, you know, 10 years to make that $25,000 in savings and then you blow it all in one, that’s something different.

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Because it’s not so much the $25,000 itself that that hurts. It’s the fact that it took you 10 years to save it and you lost it in one day.

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So day trading with your savings, Oh my gosh, really a bad idea. Because savings is usually something that you accumulate over many many, many many years and then

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you just jump into the stock market and start trading it. And people just don’t start off doing day trading of equities.

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It’d be far better if they did. But no, they get into zero DTE options trading and options trading itself.

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They’re day trading options. I don’t think most people are ready to do long dated options trading, much less let’s do some 0 DTE stuff here or even stuff that expires at the end of the week.

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Absolutely bonkers and crazy, but yet that’s where we’re at.

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There’s a huge chunk and, and probably even some people that are listening to this show, and I say this in all kindness and all sincerity, but you’re probably losing money if you’re day trading right now and there’s there’s a reason for it. You’re not at a place in your training where you should be doing that.

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I don’t really do day trading. Every once in a while I might see something pop up on my screen like we’re probably going to rally right here and I might buy like some TQQQ or or whatever, you know, because it becomes very obvious. That’s like once in a blue moon.

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I do that. I don’t even really look for it.

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It’s just when it becomes like overly obvious to me. But most of the time people are going into day trades looking to trade like multiple times every single day.

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When I talk about when I do it, it’s maybe like once a month or once every six months even.

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Sometimes I just don’t really look for the day trades, but I also know too day trading has a strong element of playing the stock market like it’s a casino.

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And then there’s a further element of that that just completely disregards risk. And that’s where you get people taking day trades and making them long term positions because

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they’re getting just absolutely hosed in it. So that wasn’t even the purpose of this podcast episode.

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We’re talking about the 30 minute rule, but I wanted to get that off my chest. I want people to focus more on equities than day trading or, or getting into zero DTE stuff because

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I would say there’s probably a 99.9% chance you’ll blow up your account. Just saying.

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And if you’re doing it with savings, the reason why I was talking about the savings because there’s a huge emotional element to that time factor.

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So you’re trying to day trade, you’re new to trading, you’re trading with savings, and you’re trading with a lot of emotions because those savings associated with a long period of time that it

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took you to save that money. Yeah, you’re more than likely going to blow out that account because one, you’re trading emotionally

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off of your savings until you don’t know what you’re doing and there’s such a uncertainty. Like intraday charts, they can be good, they can be helpful, but they’re very unreliable.

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They’re just not nearly as reliable as daily charts or weekly charts or monthly charts, especially if you’re using like a one minute chart.

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There’s there’s no reason to use the one minute chart that I’ve been able to find. I’m not saying that people haven’t made trading systems off the one minute chart and been successful

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with it or that even people have been successful day trading. I just wouldn’t go into it thinking that you’re going to be the exception any case.

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Gosh, kind of mean on this podcast here so far today, I haven’t not giving you guys much of A pick me up there so far, but nonetheless, I’m not here to sell you as Tommy Callahan would do it a

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guarantee that you’re going to be successful. What what’s the saying?

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If you want to guarantee you can look up a forget about that. I’m not going to say that I’m a little bit prudish, I guess, but yeah, I’m not going to say it.

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All right, so explaining the 30 minute rule, essentially it’s this. I don’t make any trades in the 1st 30 minutes of trading.

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Now, that doesn’t mean that I won’t sell partial profits and we’ll get to that in a second, but I don’t make any new trades.

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I won’t establish a new long position or a new short position in the 1st 30 minutes of trading. I wait from 9:30 AM until 10:00 AM for that to pass.

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And the reason for it is that is the most emotional period of trading. And what’s interesting about that is I actually see more ads from people.

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They’re always popping up in my social media feeds. You know, all these people selling services and everything and they’ll like trade the 1st 30 minutes

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a day and be done the rest of the day. Man, I can guarantee you that service is going to RIP you a new one because that is the most

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emotional, volatile period of trading in a day. It’s the most unpredictable.

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You really can’t predict the 1st 30 minutes of trading. It’s kind of like the FOMC statement, but on a much smaller scale in terms of we’re not going to

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necessarily move 100 points or, or one or 2% as a result of the opening. I mean, we could, we’ve seen that happen before.

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But in terms of its reliability, there’s going to be a lot of back and forth. Just there’s a lot of conflicting interest in that first 30 minutes.

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There’s a lot of emotions. You’ll often times see a stock that’s gapping up at the open, it’ll attract a lot of buyers at the

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open and then all of a sudden spend the rest of the day pulling back. Like why did I get into that?

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But you did and you’re paying for it. So for me, I do not trade the 1st 30 minutes of trading, simple as that.

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And I sound like a a broken record. When I talked about it, particularly in the trading block, I talked about it all the time.

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I talked about on swing trading the stock market as well and I talked about it in the videos that I make.

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I just don’t trade that first 30 minutes because it is such a disaster in the making to to put on new long positions.

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Is there times where a stock will break out in the 1st 30 minutes and keep running the rest of the day?

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And it’s like, because I had that 30 minute rule in place, it’s just, it’s long gone. If I would have bought at the open, I would have been OK.

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But then by the end of the day I’m like, ah crap, why did I not just buy at the open yet? But then I’m becoming undisciplined and I know that more times than not, I’m thankful that that 30

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minute rule is in place. Remember, when it comes to trading, there’s nothing that’s foolproof.

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Trend lines aren’t foolproof. Support resistance.

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It’s made to be broken. That’s where you get breakouts from. 30 minute rules.

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Will it save you every time? No.

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Sometimes at 10 O1 it will break out and then it will fade at 10 O2. But by and large, the 30 minute rule has saved me countless dollars by not Fomoing after positions

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at the open.

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Now, did I create this rule? No, I don’t think I did. I think I probably learned it from somebody else.

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I don’t know who. I mean, I’ve been doing it probably.

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Gosh, I don’t know, at least 15 years that I’ve been using the 30 minute rule, maybe even longer. I mean, yeah, I, I really don’t think it’s me.

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And if I, if I did kind of create the, the version that I follow here, it was probably inspired by somebody else who is far smarter than me or much more better at his craft.

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And I was just able to benefit from it. But nonetheless, this is, this is a rule that I employ, that I use, that I really take the heart and

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that is I do not trade in the 1st 30 minutes of trading. Now, on the flip side, I love taking profits in the 1st 30 minutes of trading.

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When I’m in a position, I often times will take partial profits almost every time. And often times those profits are taken in the 1st 30 minutes of trading.

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Why? Because there’s an emotional aspect to that first 30 minutes that can propel a stock much higher,

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that might lift it up to one of my target areas to take partial profits. And I can capitalize on other people’s emotions.

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It’s much better to capitalize on other people’s emotions than being part of the emotion itself. To me, what I want to say is like, oh, you want to run this stock up to $180 this morning?

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Sure. I will sell you a third of my position and I will lock in some profits at that.

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Thank you. Oh, you want to spike NVIDIA up 5% this morning?

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Cool. I will sell you some of my position there or I will close it out.

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And often times it fades there after. And I’m thinking to myself, Oh my gosh, what a difference that made selling some of my position in

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the 1st 30 minutes of trading because people got way too emotionally excited about a particular stock.

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Remember at the end, whether it’s Apple, whether it’s Google, whether it’s Sofa, holy cow, people are obsessed with that stock.

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By the way, whether it is DJT, which a lot of people get into because of the political ramifications of it, or whether it is, I don’t know, Neo or Tesla, look at it as as a three or four letter symbol.

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In the case of Google, A5 letter symbol.

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Don’t look it as anything more than that because when you do, you start to get married to a stock, you start getting emotional about the stock and you don’t want to do that.

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And I get it. It’s like you see a bull flag in Broadcom or Qualcomm versus a bull flag in NVIDIA.

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You’re going to be like NVIDIA. Let’s take the bull flag in NVIDIA because there’s a little bit more of a glitter, more of a sparkle to that kind of stock.

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I understand that, but you don’t want your basis for trading or the reason why you stay in a stock longer than you should is because you’re emotional about that company or you’re you’re you’re too much of a believer in that company.

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I see that with Sofa in particular, people are passionate about that company for reasons I have no idea.

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But any case, the market tends to fill gaps. Now when it comes to the 1st 30 minutes of training, let’s say the S&P 500 opens 20 points higher,

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there’s a good chance it’s going to fill that gap. And so people who are buying right at the open when it was at 20 points higher and maybe even

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scooted up to like 25 points higher on the day and then it starts to fade. They’re holding the bag like, oh crap, I shouldn’t have got into it.

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I’m going to go ahead and get out. And then it fills the gap and it bounces right back up.

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One of the reasons why I don’t trade the 1st 30 minutes of trading because I like to give it the the most opportunity to be able to fill that gap in the early going.

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And sometimes it’s, if it’s very volatile out there, I’ll even wait a full hour before I start trading.

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And so the next element of the 30 minute rule is that if let’s say for instance, I want to get into stock ABC at $100.

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And I’m just giving you like a boilerplate example here. I want to get in the stock ABC at $100 and it gaps up to $101.00 and I have a stop loss that I want

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to use at $97.00. OK, let’s see what it does the first 3 minutes of training. I’m not going to do anything with it, but I wanted to get in at $100.00, so it’s a little bit above

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my reward risk ratio. And then it goes up to like one O 250 and then it starts to pull back. At the end of the first 30 minutes, it’s trading at $100.50.

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Do I buy in because it’s sitting at $100.50? Absolutely not.

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What I wait for it to do is for it to break the highs of that first 30 minutes. So when it gets back over the highs of the day, then I will get in one penny above it.

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That’s how I trade it. It’s real really simple.

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It’s simple as that. And do I wish I could have gone in at 100?

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Yes, but because the stock gapped above that level, I wanted to make sure that if it was going to run, it was going to run beyond just the first 30 minutes of trading.

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Now, let me tell you about swingtradingthestockmarket.com. That is my subscription service that goes alongside of this podcast.

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You’ll get all of my stock market research each and every day. Going to swingtradingthestockmarket.com will take you to my SharePlanner page where you can see

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all the different plans laid out for you there. But Swing Trading the Stock Market will give you access to my stock market updates that I do

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multiple times a week via video also via video. I do mega cap updates.

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That’s going to be like your Tesla, your NVIDIA, your Microsoft, Apple, Meta, Google, Eli Lilly. Did I say NVIDIA?

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Probably did, but it’s all those guys. They’re the the real big guys Amazon.

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I don’t think I said Amazon, but anyways, it’s about 8 of them in all. And I, I provide multiple updates on those each week.

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Plus I send out a daily watchlist everyday of stocks that I’m looking to potentially get into from a setup standpoint.

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And beyond that, I do a watchlist review every single day and I go through it and I say, OK, this is what worked.

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This is what didn’t work. This is what I’m looking for in this particular setup right now based off of what we’ve seen so far

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today. And at the beginning of each week, I send you a list of my bullish and bearish stocks that on my

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master watchlist that I’m looking to curate setups from. So check that out.

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Swing trade in the-stockmarket.com. The 30 minute rule, guys, it aims to keep you out of positions that you wish you did not get into.

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If you want to get a big loss, one of the best ways to accelerate that is to get in during the first 30 minutes of trading because often times you’ll see stocks, they’ll get 5% higher and they end up

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the day 2% lower. Had you just avoided trading in the 1st 30 minutes of trading, you could have avoided that 7% loss

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altogether. There’s a lot of turmoil that comes with trading in that first 30 minutes of trading.

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It’s also done to protect yourself from yourself because every time a stock gaps above my ideal trigger price, I’m like, Oh no, I was really hoping I would be able to get into the stock.

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Oh no, I really want to get into this thing. Hey, better now than ever.

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Even though it’s in the 1st 30 minutes, a part of me wants to get into that trade. But because I have that parameter in place, I follow it.

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Even when I don’t feel like it’s in my best interests, I still follow it. Even when I see that oh crap, if I would have just ignored it that time, I could have had a big

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winner on my hand. Yes, there’s going to be times where the 30 minute rule keeps you out of a good trade.

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It’s guaranteed to happen. But on the flip side, there’s going to be many trades that it keeps you out of.

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It’s hard to do it at first, especially if you’ve made most of your trades during the first 30 minutes of trading.

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If you’re a swing trader that’s struggling, look at how often you’re trading in the 1st 30 minutes and then take those trades out of the equation and see how you would have done if you did not trade

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in the 1st 30 minutes of trading and you might have a clearer picture on how good of a trader you can actually become.

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Now for the fun part. I know I don’t do these as much as I used to do, but every once in a while I like to throw one of

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these in and this is an old fashioned review. I try to find the best bourbon for my old fashioned recipe.

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I have a really good old fashioned recipe. For those who don’t know what it is, it’s six dashes of those Angostura bitters.

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I never say that right, so forgive me if I said it wrong. 2 dashes of the orange bitters, 3/8 of an ounce of simple syrup and I use Evan Williams bottled and Bond 100 proof bourbon.

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Also, I use, you know, a good like dirty cherry and I use the orange peel. You got to get that expression out of that orange peel.

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I consider the Evan Williams just from a basis of grading all other bourbons, A-75. If it’s a good bourbon, it’ll be above 75.

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If it’s a bad bourbon, it’ll be below 75. So I love using Evan Williams.

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That’s the one that I recommend. I don’t get paid for saying that.

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They don’t even know that. I say that for this one.

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I had somebody in the trading block ask me about, hey, can you make a old fashioned with small batch select from 4 Roses?

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I said I got that. I will try it.

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It’s 104 proof, which makes it 52% alcohol content. It’s really good by itself.

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I almost hate even putting this in an old fashion, but for the sake of the people, I put it in an old fashion and let me tell you, it did not disappoint.

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It’s a strong sweet taste, which I don’t mind the sweet taste, but I need to follow up with a little bit of harshness, a little bit of heat, and it actually does that.

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I think the sweetness is a little bit maybe on the too much side, but it quickly offsets that with a little bit of heat right afterwards, which is what I want in my old fashioned.

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I want sweetness, then heat. That’s the perfect combination because it doesn’t feel like a sugary drink or anything like that or

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something that you get at Chili’s. It gives you a little bit of that sweetness and then it comes in with some heat to let you know,

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hey, the bourbon’s still there. And in this case, it does a pretty good job.

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I would say this is this is a good solid 81 on a scale of zero to 10, obviously, SO81 for this particular bourbon here, 4 roses small batch select.

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I like it a lot. And if you enjoy this podcast, I would encourage you to leave me a five star review on whatever

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podcast platform that you listen to me on. It might be Spotify, iHeartRadio, Apple, whatever it might be, leave me a five star review.

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I would greatly appreciate it. And check out Swing Trade in the-stockmarket.com.

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And before I forget, send me your emails. Not enough of you guys do this and I know you guys have questions, so send me your questions.

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I don’t care if you were even a repeat listener to the show. You got a good question, I want to answer it.

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Send that to me.ryan@shareplanner.com. I’m the only person that reads these emails.

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Thank you guys, and God bless.

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Thanks for listening to my podcast, Swing Trading the Stock Market.

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

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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

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Facebook where I provide unique market and trading information every day. 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.