Trading with Consistency | Podcast Episode #521

0:02
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. Learn what it means to trade profitably and consistently, managing risk, avoiding the pitfalls of trading, and most importantly, letting those winners run wild.

0:19
You can succeed at the stock market, and I’m ready to show you how. Hey everybody, this is Ryan Mallory with shareplanner.com Swing Trading the Stock Market. In today’s episode, we’re going to talk about trading with consistency. And I think this is one of those topics that gets a lot of traders worked up.

0:36
Because even after you figure out the whole risk management thing and you figure out how to trade within what, what you’re comfortable with or what you’re tolerant with in terms of risk exposure, then it becomes trading consistently. And that can really be problematic for a lot of traders. So in this episode, we got a guy, I’m not going to give his real name out, but we’re I’m going to give him the name of Beaufort Jenkins.

0:57
What is that? That’s a good Florida redneck name. Why? Because I’m from Florida. And two, I live out in the country and consider myself redneck myself. So we’re going with Beaufort Jenkins for this particular person. So Buford writes.

1:13
Hi Ryan, hope things are well. My wife and I are loving the podcast and my wife even started her own trading account. However, I’m hitting a brick wall in my trading journey. My dollar long term value cost averaging approach in the S&P 500 is working well right now. It became more profitable than my attempts at swing trade.

1:31
It’s beginning to frustrate me because I don’t trust my own stock picks to buy more than one share at a time. It seems like I usually buy at the exact wrong time and I am stopped out and end up with a losing trade. Even with my best effort for picking something with high buying volume, I’m struggling to make consistent winning trades.

1:51
I want to become a consistent before I start trading with more money. It’s really frustrating right now but at least my losses are minimal. Do you have any tips to being more consistent with good trades? Sincerely Beaufort Jenkins. OK, Like I said, consistency plagues traders more than anything else outside of risk management.

2:12
And what it sounds like with Buford here is that he is not experiencing necessarily volatile swings in his trading account, and it’s not because of his risk management. Yes, he’s getting stopped out, but that’s part of trading. You’re going to get stopped out. The bigger problem becomes is he’s not experiencing any action to the upside.

2:30
That’s sustainable. He’s not seen his winners run while keeping his losers small. So that becomes a big issue. Now, one of the things that would probably say is that he needs to look at the environment that he’s in.

2:47
Because if you’re getting wrong pics, and that’s what it sounds like here with with Buford, is that the pics are not materializing. Like he’s finding good setups. He’s using risk management, but then it’s not materializing into something better. And so that can come down to not knowing the market that you’re trading in.

3:05
And, and it’s not enough just to play stock picks. There’s a lot of people out there that will just sell stock picks and they’ll tell you, oh, this stock is breaking out of a bull flag. But if you don’t have the big picture, that really doesn’t mean much. And that’s why you see me take that top down trading approach. And Buford listening to the podcast, probably knows a lot about the the top down trading approach to begin with.

3:25
But for those who don’t know, what I do in my trading is, is that it’s not enough just to have a good stock pick. It’s it’s more important that you know the direction of the market and that you’re following the direction of the market means, you know, if you have a great bearish set up that looks like it’s just prime for shorting, but you have a market that’s shooting through the roof, probably not the best time to start jumping in the short positions because even though it might be a good setup, there’s a good chance that you’re going to get squeezed out of it.

3:49
The next thing I will look for is I want my sectors. That’s like your financials, your materials, your communications, your did I say financials? Let’s say industrials, real estate, utilities, technology. I think I said staples.

4:05
I can’t remember, man. I’m anyways, there’s 11 sectors, OK, You get very readily accessible. And then I want to make sure that if I’m trading to the long side, I’m trading the the sectors that matter and that probably is never matter more than it does right now. And then beyond that, I want to make sure that the industries are aligned with the sectors that I’m training.

4:26
So there’s industries that are subsets of sectors in these industries, like for instance, technology, you can have software and semiconductors, right? Or electrical components, information systems, all of those are considered part of technology. But you want to make sure that you’re trading in the right industry.

4:41
Because if you’re not, then all of a sudden you can have the the market direction in the sector’s right. But if you have the industry wrong, there’s a good chance you’re going to lose. And so once you get the industry, the sector in the S&P 500 all going in the right direction, then you want to find the stock picks that are that are moving the industry, that’s helping to move the sector, that’s helping to move the market.

5:02
And then you have a higher chance or a higher probability of finding success in that particular site. Now there’s things that can happen. You can get all those lined up. And then let’s say you’re like, OK, technology is ripping. You got semiconductors up 60%. The market’s up 19% off of the April lows.

5:22
I should be getting into semiconductors. And the caveat to that would be sure that doing the top down trading approach, you would not be wrong, but you also have to be cognizant of how overstretched we are to where it, even if SanDisk, for instance, is forming a bull flag after running, you know, 5000% higher, it may not be the best time to jump into that.

5:42
Because if you do get a substantial pull back, the, the risk management aspect of that trade is going to be very difficult. And you could end up taking a 10 or 15 or 20% loss and it’s in, in, in a matter of a day or two. So you want to be cognizant of that. So in this market right now, I’m not chasing technology from a new trading standpoint, not at all.

6:02
Because trying to jump into tech stocks after the semiconductors have run 60%, that’s problematic. Now, IGV, which is your software industry, that that particular industry has been hit really hard of late. But then you’re starting to see where it’s starting to break out some, especially when semiconductors pulls back, software starts to, to show a little bit more life.

6:22
And then you can boil it down to looking at Microsoft taking out of a bull flag or looking at a take two with a double bottom that’s now confirming to the upside. So you can play those kinds of trades as a result and still be in like the tech sector and so forth.

6:40
But you got to know what’s going on with this market. It’s like there’s a good chance that the frustration that Buford’s dealing with here, Buford Jenkins stems from April 1st of this year, 2026. For those who are listening many years into the future through current, which is May 15th.

7:00
If you don’t have a good handle on what’s going on right now, then the frustrations are going to be huge. When you look at what’s running and what’s not running, you essentially have and there’s in the in the trading block. I always post this one chart and it puts the sectors and quadrants and I even throw a couple of industries in there too, like semiconductors.

7:20
And I also put the NASDAQ and the Russell 2000 on the on the quadrant list, but it shows you in the upper right the ones that are leading, the ones in the bottom left on the quadrant were that are lagging significantly. In the upper right. It’s the ones that are starting to show that are emerging out of lag, lagging the market and starting to show some growth potential.

7:41
And then the bottom right shows the ones that were leaders and they’re starting to, you know, start to fade some. Well, when you look at that, that quadrant, semiconductors are in the like the far right and there’s nothing else. And then behind it you have like technology.

7:56
And then a little bit behind that you have the NASDAQ 100. And all these are compared to the S&P 500. That’s like right in the middle of the four quadrant. So it’s all based off of their relationship to the S&P 500, but it’s all tech, or more specifically all semiconductors, then tech, then NASDAQ 100, and then you have everything else in the bottom left hand Quadra essentially right now.

8:20
Energy showed a little bit of life early on over the past few weeks, but even that’s starting to lag a little bit now too. But everything else is like way down on the bottom there. It’s just not showing life. And so if you’re trying not to chase after and or try to jump into these FOMO plays and you’re smart not to do that, then you’re looking at all these other trades and you’re like, OK, maybe maybe the the financials is going to work out.

8:49
And then it’s like you get into it and you get stopped. I was like, what the heck, It was a good bull flag and everything, but the financials aren’t participating. In fact, really it’s only semiconductor stocks and AI related plays that are leading this market. In fact, when you look at the returns of the S&P 500, about 80% of the gains have come from about 10 stocks.

9:09
And so you’re not talking about a lot of broad market leadership. Instead what you’re seeing is a lot of Yoloing into a very few number of stocks, which creates this like, and you have this huge dispersion among just a few stocks that’s creating these outside gains, that’s pulling up the market higher.

9:25
And then the correlation with all the other stocks where there’s broad market participation just doesn’t exist. You’re looking at some of the market internals right now where the S&P 500 is making new all time highs and 9% of the index is making 52 week lows.

9:42
In fact, that’s never happened before. And so you can see where it would be very difficult, especially Buford here, he’s like, OK, the market’s up 19%, I’m down 5%. Like, how is that even possible when the markets like how, how bad must I suck at trading for that to be happening?

9:58
Well, it’s not that you suck at trading. It’s the fact that the market is a A1. What is that a A1 trick pony? It is. It’s a 1 trick pony. It’s only semiconductors, it’s only AI. And if you’re not in that area, that semiconductor AI trade, nothing else is really moving.

10:16
In fact, everything’s kind of declining because as this market continues to go to like these bubbling heights, it’s having to pull from the everything else crowd. It’s pulling from utilities and it’s pulling from real estate and it’s pulling from all these other sectors that can’t keep up in a lot of them are like sub industries.

10:34
So if you look at this market, you look at industrials, for instance, Caterpillar and Cummins, they are doing great. But if you look at John Deere, not so great. If you look at the defense stocks like Northrop Grumman and Raytheon, they’re struggling quite a bit, but the ones that are in industrials, even though industrials isn’t really taking a hit right now, it’s been more of like in a consolidation phase near its all time highs.

10:56
The reason why it’s doing that is because the AI related stocks have gone so big within industrials like Caterpillar that you know these three $400 billion companies can keep it afloat, not allow for a pullback, even though most of the sector is pulling back. You go to tech for instance, it’s all semies, very little software.

11:15
In fact, software has been getting hammered by semies. It hasn’t been until lately where it looks like software might be trying to form a little bit of a bottom. But even then, you know, it’s really because of the mega count with Microsoft, which is software company that’s starting to pull it back up. Look, I’m trading in XLP right now and I’m actually up on the trade.

11:34
And it’s been a painful up in the sense that not even painful. It’s been a very boring up. It’s it’s up straight eight straight weeks, but it’s very, very minute compared to what you’re seeing out of tech techs just going like straight through the roof. You look at XLP, it’s just it’s like a little bit, it’s not much.

11:52
And so I’m in that because I’m looking to see, OK, are we going to get a rotation out of the, the tech sector and into staples? Because that would make sense that people won’t necessarily go to cash, but they’ll look to rotate more into defensive stocks. And while that has kind of happened into a sense that, you know, XLP hasn’t really sold off, it’s not necessarily seen of the floodgates open for, for capital rotation into staples.

12:18
Banks, You look at banks, the big investment firms, yeah, they’re, they’re, they’re doing fine. A lot of your regional banks aren’t, they’re struggling, you know, the investment firms are doing great because they’re making money hand over fist, you know, with client money trading NVIDIA and, and all these AI plays. And then, you know, when crap hits the, the, the ceiling or the ceiling fan, everybody wants their bailouts, right?

12:41
Then you got the communications, you know, Verizon and AT&T, they’re not going to necessarily do as well. But you have Google and Meta and their Meta actually until its earnings was doing fine and then earnings came out and it’s just been dog water since then. But Google has done pretty good.

12:57
And then utilities, you know, like next year energy doing good with the AI run, it’s pushing towards 100 at one point. But a lot of your other traditional utilities where they’re not necessarily getting the AI exposure, they’re going to struggle. And, and that’s the, the problem here that it, you know, from April 1st through mid-May, if if you’re looking at the market returns and you’re looking at your portfolio and like, what the heck, But the only way you’re getting those returns is if you’re yellowing and showing no regard for risk.

13:25
I mean, that’s just really a simple matter. If you’re not using like a top down trading strategy, you may find yourself all in tech and that’s, that’s going to put you to, in a lot of high end exposure to a possible nasty draw down. And even if you have stop losses in this kind of a market, don’t be surprised one day when you know, if you see like Intel or AMD or a combination of them or, or whatever, or just, you know, maybe 1, I don’t even mention where they’re down 1015%.

13:54
I mean, that’s the kind of moves that you see. And it’s like that rubber band effect, the more you stretch it, you know, the when you let go of it finally, the more it’s going to sting. And that’s, that’s how it’s going to be with this market too. And we’ve seen it with almost every crazy run over the years, most recently being silver.

14:11
I mean that that one dropped like well over like 15% in a single day. I mean, it was nasty. And I think it even gapped down 15% once it made that huge run and it did it almost without any kind of warning whatsoever. So you, I don’t think traders in general learn their lessons from these these tales.

14:28
I don’t know if I should call them tails because they are true. But I think maybe to the a lot of retail, it feels like tails. And I definitely think to Wall Street, it feels like a tail. And I’m not wrong. What I’m telling you about and what I’m right about telling you about as well as the self-made trader, this is my hands on 14 week course that takes you through my entire trading strategy.

14:51
It’s very rigorous, it’s very long. It’s there’s a lot of material to it. You’re going to go through about 25 hours of video tutorials that I spent about four years putting together. It was a very painful process putting together this whole training course, but it’s actually really good. I think that I’ve, I’ve not had any complaints about it yet.

15:07
Honestly, it’s, it’s from beginning to end. You’re getting inundated with everything that I know about trading over 3030 plus years. I’m going to take you from the very basics of understanding how I approach the stock market, you know, the psychology behind it, setting up my strategy to creating scans for it watch list and then morphing that into the finding the stocks, executing those trades, the entry prices, placing the stop losses, the management of the trade, taking profits along the way and then closing them out for either a profit or a loss depending on how the trade works out.

15:41
But what what this course is designed to do is to teach you from the very beginnings to my more advanced strategies, and it’s just a really awesome course that I would encourage everybody to check out in the process. You’re supporting the website in this podcast too, while getting a wealth of knowledge in the process. But going back to this market and, and just dealing with some of these frustrations and for, for a lot of traders, take a look at the, the 40 day moving average in the percentage of stocks that are, are trading above or below it.

16:12
What I like to use for that is on TC2000 they have this thing called T-21 OA. It’s and you can duplicate it probably through a lot of different services, but it’s, that’s where I use it from. I think you can probably find it on Trading view as well or variation of it. But I look at the percentage of stocks trading above their 40 day moving average and it’s like 40% right now.

16:31
Actually it’s might be even 39. A very small amount of stocks are participating in this rally. 40 day moving average is a relatively short term moving average. And so in the short term moving average, you’re telling me that almost 60% of stocks are trading below the short term moving average.

16:52
That means 6% of the stocks are not participating. You think NVIDIA is trading below its 40 day moving average? Absolutely not. It’s not trading below any moving average for that matter. But that’s, that’s the kind of market that we’re in where these stocks, they’re, they’re not, they’re not participating.

17:11
And what’s probably historically one of the greatest rallies that we’ve ever seen, especially over a one month time span. And then you look at the T21O7, which measures the percentage of stocks trading above their 200 day moving average.

17:27
And you take, OK, that’s like a long term moving average, you know, taking most of the price action from the past year. No way that it’s not trading above that. Most stocks aren’t trading above that moving average. Now, I would say about 42% are trading above that moving average.

17:42
That means 58% of stocks long term are trading below the 200 day moving average. That is a horrible, horrible reading. So knowing your market, I think is going to go a long ways and understand the frustrations and that’s really what’s caused me to not be trading that much right now because I can’t FOMO after tech.

18:03
It’s just not possible you’re you’re taking, you may be right in that if you do FOMO after it, maybe there is another two weeks to the leg higher and you can make some decent gains. But from a reward risk standpoint, if it goes against you, you, you run some major risks of just taking some massive losses.

18:21
And so I’m not FOMO ING after the semiconductors or any of those because from a risk management standpoint, it just doesn’t make much sense. So I’m having a look on the like the peripherals, you know, like trying to see if we can’t get something coming out of XLP when it had like a nice double bottom forming. And so far it confirmed the double bottom, but it’s not giving you like a lot of trajectory to the upside.

18:41
You know, you have some bull flags and railroad stocks that could play out, but in general, there’s just not a lot of trade opportunities out there. So I was even looking at this past week, NOC and Raytheon as potential defense plays that that might spike, especially if you you start seeing tensions in in the Middle East start to rise again and you couldn’t even get any kind of a pop out of them.

19:07
I played energy before made of made a few percentage points on that. But you’re really having to like look on the fringe or on the outskirts of trying to find where there may be some some opportunities there that if there is a major pull back to the downside, won’t get hit as hard. In fact, it might even succeed. But yeah, I get it, Buford, this this is a difficult market.

19:25
And and so if you’re trying to force matters, let’s say you’re trying to over trade in this environment, but you’re trying to stay out of semis. And let’s say you’re like, OK, I’m getting into the banks, I’ve got some real estate, I’ve got some all sorts of players that represent most of the sectors. You’re probably losing on 9 out of 11 of those trades if you have every sector represented.

19:43
And the, the reason why I say that is just because most of the markets not participating. So you can have this incredible market. You can, you could be playing stocks in every one of the sectors, but the truth of the matter is you’re probably losing on over 80% of those trades as a result of that. So that then the trading consistent becomes OK with the markets up, but I’m not.

20:02
You’ve got to know your market environment. You got to know what you’re dealing with there because it is not a fun place right now for people who want to manage risk. Because like right now, the market’s going to reward leverage. It’s going to reward those who don’t use risk management and it’s going to honor those who are hyper FOMO ING into the trades, But that’s only for a time.

20:22
It may work for now, but it goes back to that that old podcast that I did that resonated with a lot of people is that you’re trading like a serial killer at that point. And then, you know, like all serial killers, you keep doing it until you get caught. And it’s like that with traders is that you’re going to keep hyper trading into these positions until you get caught.

20:40
And then when you get caught, you lose those gains. And more than that, if what I was saying wasn’t true, you wouldn’t had so many accounts that blew up duringthe.com bubble, which is like probably the the best comparable to what we’re dealing with rightnow.com bubble. People wiped out accounts because they were so over leveraged.

20:56
I mean, you look at this, the, the trades right now, 60% of your stock trades or your there, there’s no volume on SPY, for instance, but the options markets through the roof and people are going all into options are going all into leverage and in a lot of them are doing 0 DTE. In fact, the large majority of them is 60%, which is a record in and of itself.

21:14
And when that market blows up on them, they’re, they’re all the games that they’ve spent time in in creating for themselves is just going to go up in flames. And they will be like a lot of the people that I, I remember when I came out of college, the.com bubble, so many people told me about like, oh man, you should have seen how much money I had in some Microsystems.

21:32
And this is like 2000 to early 2000s. And a lot of people are like, yeah, I had like four $5,000,000, you know, which probably is like $10 million compared to today. Like, yeah, I had like four $5,000,000 in Sun Microsystems. And then like overnight it just disappear like went worthless.

21:49
I know AI know a guy, an old pastor friend of mine, he, he said that he had all sorts of options contracts in Qualcomm, which ironically, Qualcomm is running again, 4 million and within like minutes just disappeared. And so a lot of these people, they’re they’re filthy rich right now off of this market because they’re showing no risk management.

22:09
But then you know, when that when that bubble does burst, it’s going to wipe out a lot of accounts. And you’re not probably going to see a lot of people on podcasting right now talking about this issue like I am. But I’m, I’m trying to make it as relevant to the retail trader as possible because you want to be aware of this stuff.

22:27
I wrote an article too on shareplanner.com that you can go to and it’s, it’s free to everybody just talking about the AI bubble. Are we in a stock market AI bubble? And I think that would be a good thing to check out. But remember, risk management in this market, it, it’s not going to let you capture all the gains that you’re seeing, you know, from the S&P 500 and the NASDAQ.

22:46
It’s just not, I mean, if you’re using risk management, you’re going to get stomped out on some trades and, or you’re going to have to not get out of you’ll, you’ll not get into some of the trades that would have otherwise proven to be very, very profitable had you done that. But it will keep you in the game for a greater and for, for a much longer time and for much greater gains long term.

23:08
And so these are frustrating periods for a lot of traders who, who feel like they’re on the outside looking in. Trust me, I’ve, I’ve seen so many of these bubbles, right? And I’ve, I go on my way not to FOMO into these bubbles. And they, they get annoying.

23:25
They, they really do. Because it’s like, OK, how, how in the world does semiconductors heat going up like this day after day? But the fact is, is that the markets got a history of bubbles and it’s the people who chase after and they usually get destroyed by them. If you enjoyed this podcast episode, and I hope that you did, make sure to like and subscribe.

23:41
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23:59
Click on trading Academy. You can find out all about it and then make sure to send me your questions, send me your stories. I like, I like long stories that you tell me your backgrounds and the things that you’re struggling with. I want to hear about those. And then finally, I’d be remiss if I don’t give you a word of encouragement here.

24:15
And that comes from Romans 10/9. And that says, because if you confess with your mouth that Jesus Christ is Lord and believe in your heart that God raised him from the dead, you will be saved. Thank you, God bless. Thanks for listening to Swing Trade in the Stock market. If you’d like to trade alongside me each day, I invite you to join the SharePlanner trading block where I navigate the markets in real time with traders from around the world.

24:38
Your membership includes A7 day trial and full access to my Discord trading room. You can Sign up today by visiting shareplanner.com/trading Block. Be sure to follow SharePlanner on YouTube and X and across all major social platforms where I share unique market insights every day.

24:53
And if you have any questions, feel free to reach out to me directly at Ryan at shareplanner.com All the best and I look forward to trading with you soon.