Heavy Reliance On Indicators | Podcast Episode #122

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, everchanging world of finance. Learn what it means to trade profitably and consistently managing risk, avoiding the pitfalls of trading, and most importantly, to let those winners run wild.

0:25
You can succeed at the stock market, and I’m ready to show you how. Hey everybody, this is Ryan Mallory with Swing Trading the Stock Market. And boy, do I have a good one today. This one comes all the way from Norway. You know, I’ve been to Norway. I drove about an hour and a half down the road, got a ticket to Ebcott, visited the country there, was quite amazing.

0:45
They had this thing there called school bread. I don’t know if they actually make that in Norway or if that’s just like a Disney thing. First of all, it’s great because it’s the cheapest thing that you can possibly find at Disney World. And it’s actually pretty filling. So if you’re like on a tight budget at Disney World or at Epcot, go to Norway.

1:02
They got this little like hole in the wall place. Well, nothing’s really a hole in the wall there, but it’s kind of small. You just walk in there and you get the school bread. I got a Carlsberg one time. I was introduced to Carlsberg. I felt like at the time was the best beer that I’ve ever had. Now I know a lot of you guys are going to, like, lose your mind over that because they’re like, man, there’s so much more.

1:18
And I, and I’d agree with you, but Carlsberg is pretty good. At the time, I thought it was the greatest beer that I ever had, which I was probably wrong on that. There’s some Ipa’s that I really like it. There’s a lot of beers. I went there, got the Carlsberg, it was in the middle of the summer, which is a rookie mistake, especially if you’re from Florida.

1:33
To be going to Disney World in the summertime where the crowds are big. I’m not proud of it. But any case, well went there. I got the school bread, I got the Carlsberg was good. School breads words that I don’t know anybody else. It looks like a donut and with like a lot of frosting on it. That’s, that’s how I would describe it. But it was tasty. Had some filling in it.

1:49
Any case, before I get too much off on a tangent about school bread from Norway, I’m excited that this e-mail came from Norway. I learned a lot from from folks overseas. And I really, I really enjoy getting them. I get them all the time. All right, so the whiskey of choice today is kind of classy.

2:06
It’s it’s kind of Snooty. It’s it’s good stuff. It’s not Snooty. If you can afford it, I highly recommend it. I’m not getting it. OK, It’s $250 a bottle there. So what did I do? I found the little Christmas package that they’re already marketing. It comes in a little tiny bottle so you can get it for your loved ones. I think I got three of these things for $24.00, three different ones.

2:23
So I’m going to highlight each of them. Not getting paid, not even getting anything to plug it. But you know, I like doing this stuff. And look at this, man, what’s really cool about it? They put a little cork in these tiny things. That’s high class there. That is super high class. Probably not up to the challenge of drinking this stuff, but it is.

2:41
It is pretty high class. It’s 15 year age. It is Whistle Pig and it is 46% alcohol that that makes it 92 proof. Should be good, man. Let’s I’m going to give it a shot here. All right. So yeah, beautiful color to this this drink. I mean I’m, I’m really excited.

2:57
The smell is unbelievable. I I expect it to be a little bit harsh. I’ve had other Whistle Pigs before it’s it’s usually pretty harsh. It’s going to burn a little bit. But is there a little bit of a smoothness factor? That’s what I really want to know. Oh, how can something be so smooth and so harsh at the same time?

3:14
I gotta tell you, I feel like I’m being romantic with this, this drink. It’s that good. I mean, it is. It’s good. Holy cow. Like I said, man, it’s harsh, but it’s smooth. Oh, smells good too. Oh, I just love how that thing goes down.

3:29
It just in the words of the great Will Ferrell, also known as Frank the Tank from old school. It just feels so good on the lips. Oh my gosh. So what’s my score on this? I’m going to give it a 465. Why do I give it a 465?

3:44
Is because, well, for one, I know that they have a better Whistle Pig out there, technically speaking, because they’re like charging $600.00. It’s got this like fancy cap on it. Again, I I probably won’t know it unless, you know, it magically appears in my mailbox one day or they put it in one of these little tiny bottles because I’m not going to go buy a 500.

4:01
I wouldn’t even be able to sleep at night doing that. But anyways, I this this stuff’s good. 465 and I’m sure that there’s something else out there that’s better than Whistle Pig. So I want to give it some room here. OK. Since we’re early into these ratings, got to give it some room. But yeah, I got the.

4:17
I got the little sample package at Total Wine. Total Wine. Paying me for that. No, but you’re welcome. Total wine. Yeah. Should be sponsoring me. But you’re not. But thank you for bringing Christmas cheers in October with this little fine little sample package of Whistle Pig.

4:32
I can’t wait to try out the next two as well. So we got the e-mail. This guy, he made a crucial mistake right out of the get go. He didn’t give me a name to call him by, and he may be OK with me using his name, but the problem is I don’t know that. So he’s gonna get a name from me and he’s gonna get a Florida name.

4:48
He’s getting the Jethbro treatment. This is Jethbro from Norway. And again, I’m not trying to insult anybody. Personally, I have to give a Florida man name to all the people who ride it. A lot of you guys, you guys are wised up to my waist. You’re like, hey, Ryan, don’t don’t be putting any of those crazy red nicknames onto my e-mail.

5:06
And I and I honor it. I honor if you give me a name I’ll use. It’s got to be a good name. Don’t give me like a please call me William. I don’t want that. OK? I need a good eyecatching name. I want it to be strong. I want to be bold. The one that I have in a couple weeks here, it’s going to be from a female.

5:22
She’s already said, hey, use my real name. I don’t want to be called Beatrice. OK, I get it. I think I’ve already used Beatrice, but still, it’s it’s a strong name, but I’m going to use her name. She’s got a great question and everything coming your way. But any case, the bourbon’s good. Jethro asks.

5:38
Hi Ryan, how are you? First off, I want to thank you for your podcast. This is by far the best podcast I’ve ever heard. I’ve never heard one lie about the markets or trading techniques in your podcast. You are spotted on and delivering 100%. I appreciate that, Jethro. It means a lot for you guys to say that cuz I really try to to keep everything real and on the up and up.

5:57
I I don’t try to exaggerate anything. In fact, this bourbon probably tastes a whole lot better today because of the crazy day in the stock market. You know, I mean, I the market was kind of trending higher when I went to bed last night. And then awake, I wake up and the suckers, you know, completely in the, in the sewers.

6:13
I get stopped out of a couple positions. That’s OK. I mean, they were, they’re all profitable positions. I had taken partial profits in each of them. So that was fine. But it still sucks, man. I want to hold on to my long positions as long as I can, as long as it’s making me money. One of them was Apple, the other was Alibaba. The other was Salesforce.

6:29
So all three of those got stopped on it and they actually closed above my stop loss, which that always sucks too. But what are you going to do? That’s the stock market for you. You manage the risk. Sometimes it hurts when you manage the risk, but you got to do it because you’re going to find out in this guy’s e-mail he hasn’t always done that, and it’s cost him a lot of valuable time by tying up his capital to and not making him any money in the long run.

6:48
So Jethro here says I’ve listened to your podcast from Norway over the last month while I’ve been hanging in the ladder, painting the house and trading from my phone. Let me tell you, my dad, he fell off the ladder one time. He had like, shingles for like two or three weeks. I don’t like ladders, quite honestly.

7:05
I mean, I’ll go up on him if I have to, but I really don’t like ladders, basically, because I think I’m gonna fall off like my dad. Like, maybe it runs in my family, or maybe it’s a genetic thing, but he’s hanging in the ladder. I’m not sure what hanging in the ladder is, but he says he’s hanging in the ladder, painting the house and trading from my phone.

7:20
That’s a whole lot of crazy going on on that ladder. And he says he’s too many feet above the ground, which makes it even worse. Man, dude, if you fall from the ladder and die, you can’t closeout your trades. You don’t want that. Don’t do that. At least have a harness or something so that you know if you fall, you can still closeout your trades.

7:36
I’ve been trading for about 12 years now. I’ve fallen all in the pitfalls. I’ve been trading strategies like faith and belief. I’ve been biased by the permit bears. I’ve been locked in the trades for several years before it got back and paid off like a minimal gain. All that stuff sounds bad. Just recently I got my eyes open for risk management.

7:53
Mostly because of your never ending nagging about it. You darn right it’s nagging. And I’m going to keep nagging about it. Thank you so much. And guess what? It pays off for me. I’m still struggling with my emotions, but I’m never ignoring putting out stop losses anymore. You got it, man. You’re the man. I like hearing that. OK, first of all, this guy is being honest to the core, and I love it, man.

8:11
I want you guys to be honest to the core with me because I’m being honest with you guys too. Told you about today. I thought it sucked. I mean, I’m glad the market recovered before the close, but it still sucked. But one of the things that he says, I’ve been biased by the permit bears and I think I could do an entire podcast on this. Maybe I’m gonna write it down because I think that being biased by the perm bears gets you in a lot of trouble, man.

8:30
If you go on to like Twitter, if you follow certain people on Twitter, if you follow certain people on StockTwits, there’s going to be some huge biases. Some of these people are making their money by being very biased. All I just try to do is be honest with you guys. If if that turns you off or it, you know, I’m not going to sell you a story that’s not there.

8:47
I feel like my story is good enough and I’m going to share it with you guys because it’s what’s worked for me. But there’s these people out there that you go to and they’re super biased and it’s happened to me over the years where if I read some of these blogs, like if you go to zerohedge.com, I like the the website.

9:02
But I have to take it with a grain of salt. I have to know what I’m dealing with here because you’ll think that the market is going to get hit by a meteorite tomorrow. If you keep reading that stuff and believing it to to your very core every single day. There’s a lot of good information out there. I followed them on Twitter, but I also followed them with a grain of salt, knowing that the world’s not ending tomorrow.

9:21
There’s a lot of other people too that are saying the markets going to crash, the markets going to crash, the markets going to crash. And then when you get to become a permit bear, what do you do? You start listening to these people because they’re there’s a confirmation bias there and you want that confirmation that you’re in a losing trade, but it’s going to crash and you’re going to be OK don’t do that.

9:36
The best thing you can do is not really care. What if the market goes up or down? You’ll just adjust, just adjust. I was telling myself that I was coming out of the gym today. You know, try not to get fat. And one of the things that I was thinking about is like trading is so much easier if you don’t care about if the market goes up or down.

9:53
Yes, when you’re along and the market goes against you, that’s gonna suck. It sucked for me today. But I also know, too, that I have the flexibility to scale out of my positions. I’ve been taking profits along the way because I just really don’t care if it goes up or down. I just want to make sure that I’m consistently making profits all all the time. Doesn’t always happen that way, but that’s that’s the goal.

10:10
But I feel like so much of it burns us in the stock market when we let our bias get in the way. And this guy here, he’s, he’s been in the pit, he’s trading with faith and belief. And if you’re a permit bearer, there’s a lot of faith and belief that the markets going to crash any day. And yes, at some points it does crash. It crashed this year back in February, but what did it do?

10:27
It went on a rally that nobody thought was ever going to happen and it did. It was crazy crazy. One of the craziest things I’ve ever seen in the history of my trading in the stock market. And so he’s also been locked into Trace for several years. I don’t know if it’s because he was a Perma bear or if he was just long on a stock that got killed and went lower and then you were just hoping that it was gonna come back for a minimal gain.

10:48
First of all, you should be thankful that you came away with a minimal gain because a lot of times these stocks that get crushed, like you look at some of these traditional retailers, they don’t always come back. Man, JC Penney’s isn’t coming back, so he comes back out of it for a minimal game. But it’s still not good because what happened is, is that all this time that capital was tied up into a trade that wasn’t going anywhere.

11:08
I bet you anything it didn’t keep up with the rate of inflation or or it just a general interest rate. So you want to be in your losing trades for as little time as possible, but you want to be in your winning trades as long as possible. That’s one of the reasons why I didn’t like getting knocked out of my Apple trades because I was up like like at one point I was up like 1314% on the trade.

11:27
I took some of my profits there, but I wanted to keep going cuz I want to stay in this trade as long as possible. I know it has earnings coming up, so I would have had to have gone out before then, cuz I don’t hold any stock through earnings. But but that’s that’s that’s the key there. But he says he’s still, you know, still struggling. The emotions, everybody’s going to struggle with their emotions, man.

11:44
Don’t don’t be too hard on yourself about that. It’s just important for you acknowledge your emotions. I get angry. I was a little bit annoyed earlier this week. Let’s let’s show a perfect example of something that annoyed me when when Trump and I’m not trying to get political here at all. OK, but he had a tweet that if you were long it burned you.

12:00
OK, he had a tweet that said hey I am stopping all stimulus talks with the Democrats until after the election where the stock market do if violently reacted. We were all up on the day it came crashing down. That sucked. OK, I was annoyed. I was very annoyed.

12:15
The whole thing really irritated me because it wasn’t something that I could really control. I didn’t know he was going to pull out his phone and tweet that out, and then the market would have a big reaction to it. No, not at all. But the good thing is, is that in order to counter those emotions, he’s using the stomp losses now, and that’s really good.

12:31
He says he has a current winning strategy, trading mostly in Norwegian blue chips. I would love to know if there’s a USETF for Norwegian blue chips or just Norwegian stocks as a whole. Preferably blue chips though. That’s cool. I mean guys, how many of you guys listen thing on this podcast knows anything about Norwegian blue chips guarantee this guy knows more than I do about it.

12:49
I don’t know. I couldn’t even name a Norwegian company. I think Carlsberg beer that I was talking about earlier I don’t even think it’s from. I think they’re like something in Europe probably. Well, I guess that’s never mind. They’re another European country. I don’t even know where your Carlos Berg is, but they serve it at Norway, at Epcot, and that’s that’s what I know.

13:09
He’s trading with different time frames like the one hour chart in the daily chart. Those time frames fit me perfect while I have 100% job as a police officer on duty 24/7. Wow, that’s that’s some serious hours as a police officer. I don’t know how how the whole job as a police officer works in Norway, but man, that’s that’s a lot of work right there, so that’s cool.

13:29
So he’s using the hourly and he’s using the daily, he says. I mostly do price analysis, technical patterns like double tops, bottoms, head and shoulders patterns in the RSI. The RSI has become a problem for me because I feel so bound to it being either oversold or overbought before I make the trade. I feel like I missed out on so many trades because the patterns or breakouts are there, but the RSI doesn’t always give me the edge that I need to make the trade.

13:50
How can I break out of this individual trading pattern for one? It may be that the settings that you’re using on the RSI are too much more of a long term setting that you’re using. Maybe try to play with the settings on the RSI to maybe get the confirmations a little bit tighter or a little bit quicker than what you’re getting right now.

14:08
That could be one. The other thing is that the RSI is a lagging indicator. So all your indicators are basically a function of price and volume. What I do as a trader is I have stochastics on my chart. I don’t have RSI. Sometimes I’ll reference RSI because it does smooth out the price action a little bit for you.

14:24
But what I use is just price and volume. That’s I would say 99% of my trading decisions comes from that. Sometimes I’ll back off of a trade if it’s been sitting at 99 for like the past three or four weeks. I mean that’s a kind of an extreme reading which you know it can’t sustain it like if it’s up 7 or 8 days in a row, it’s got a Stochastics at 99.9, OK, that’s that’s going to be kind of hard to pull because you it’s kind of like Tony right there.

14:47
You might be getting in at a shortterm top before I eventually pulls back or consolidates. So I try to hold off on those kinds of trades, but I would say 99% of my trading decisions is based off a price and volume. So the more comfortable you get with price and volume, the less tenancy that you will have on relying on the RSI indicator.

15:04
So that was that would be the things that I would probably say to you right off the bat of hey first try to try to adjust the RSI indicator to give you quicker shortterm confirmations, right. The 2nd is is get better with the price and volume. And that goes for any of you guys that find yourselves highly reliant on indicators.

15:22
You don’t want to be reliant on indicators for the most part. I know a lot of people feel some kind of like sense of security. The ones that I see the most are the Mac D and the RSI and they’re good indicators, but there’s going to be a little bit of a lagginess to him because in the end they’re interpreting the price and volume.

15:37
So if you get good at price and volume in particular with just price like volume is good because it lets you see how much emotions behind the moves like in the market selling off really heavily. You want to see is there a lot of volume that’s accompanying this big sell off in the stock market? Because if it does have that, then you know that there’s a lot of emotion.

15:55
There’s some panic that’s coming in with the sell off, like for instance back in February and March when the market was selling off really hard volume level, those were through the roof. Now when we had major sell offs over the last couple months, they weren’t that strong. They weren’t nowhere near strong as what we saw back in February.

16:10
And some days you would have above average volume, but it wasn’t, wasn’t nowhere near the kind of panic that you were seeing back in February. So anytime you see a lot of panic in the market, it’s going to be accompanied by some heavy, heavy volume. Anytime the price action is really dropping hard, you want to see what kind of volumes flowing into the market at that time.

16:28
Man, I really love this whiskey. I don’t even think it’s a bourbon. I if I called it a bourbon earlier in this, I apologize for that. It is not a bourbon, It’s just a straight rye whiskey. And I don’t usually go for the straight rye whiskeys. I like straight rye whiskeys, but I always tend to enjoy the bourbon flavor a little bit more. But this this is as good as any kind of bourbon you’ll ever have.

16:46
And unlike that side cider crap that I drank from Jack Daniels earlier this week, I’m savoring this. I just wanted to get the cider thing out of the way. I wanted to drink it. I have a hard time just like throwing booze down the the sink. I feel like I’m I’m doing something really wrong in life when I do that.

17:02
So I’ll still drink it, but I didn’t enjoy it. But this I enjoy. So he also concludes, he says I’ve been talking to one of my training buddies to ask for some Facetoface mentoring in the US when the pandemic is over. Is it possible to get get that going with you in one or two weeks in your area?

17:17
Yeah, yeah, for sure. And that’s one of the things I don’t think a lot of people realize. I actually do coach a number of people. I have somebody in Australia. I have a number of people in the United States. And yeah, so that’s that’s no, that’s no problem here. And and I I usually try to accommodate anybody’s schedule and I don’t I don’t take on a ton of students.

17:36
I really don’t reason why I do. It is just because of the same reason why I benefit so much from these podcasts and and dissecting people’s problems. It helps me out a lot too. And it helps me stay up on on my own trading and my own education because as a trader, I want to keep getting better. I don’t want to just, you know, rest on my orals and say, hey, I don’t need to improve it all because the market’s always changing.

17:56
So you know, whether it’s in the trading block or whether it’s through my research or whether it’s through something else, I’m always learning from you guys and that’s so important. And before I forget to make sure to check out swingtradingthestockmarket.com. Right there you’ll get all of my market research. Man.

18:13
I put a ton of market research out there every single week, Go to swingtradingthestockmarket.com, take you to a patron account, and there you can actually sign up for whatever level of research you want.

18:22
Basically I’m publishing all my research every week. It’s all of my analysis on the S&P 500, the NASDAQ, that Russell couple times each week. I’m also putting out their analysis on some of the most popular stocks. That includes all the Fang stocks. Facebook, Apple, Amazon, Netflix, and Google as well as Microsoft and Tesla.

18:40
So I’m updating those each week. And then there’s also a option to be able to get all of my personal watch lists that I update each week, as well as some of the most exciting and intriguing setups that I find out there Each and every day I’m publishing them. I’m putting them out there so you guys can be able to benefit from my research that I’m doing every day as well.

18:58
So any case, make sure to check that out if you enjoy the podcast. Please, please, please please be sure to review the podcast if most of you guys listen to it on Apple Podcasts. I know that because I get the the overarching you know where people listening to you from. 53% of you guys are on Apple podcast.

19:15
So I asked the 53% of you guys make sure to leave a review means the world to me. For everybody else whatever it takes to to show that you’re interested in the show. I’d appreciate if you did that too whether that’s leaving a review whether that subscribe and just do something. So I appreciate that. Thank you guys.

19:30
If you have any questions make sure you’re sending me your emails man because I literally have a folder of all your emails. I’m always trying to answer each and every one of them, and if I have to, I’ll go to three podcasts a week. It’s kind of getting close to that okay, but I don’t mind doing. I really don’t. I enjoy doing these podcasts with you guys all the time, so make sure to keep sending them to me.

19:48
You can go to ryan@shareplanner.com, just send them to that e-mail address and I will get them. Like they will hit my eyeballs and I will put them in the folder for me to use them on a future episode. All right, Thank you and God bless. Thanks for listening to my podcast Swing Trading the Stock Market.

20:05
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20:23
That’s www.shareplanner.com/trading-block. And follow me on SharePlanner’s, Twitter, Instagram and Facebook where I provide unique market and trading information every day. If you have any questions, please feel free to e-mail me at ryan@shareplanner.com.

20:40
All the best to you and I look forward to trading with you soon.