Selling Stocks to Buy Stocks | Podcast Episode #156

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, 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, 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 this is going to be a good episode.

0:34
We have have an email from a guy in Montana. He’s actually written me a couple emails. Might try to combine a couple of these in her. I don’t know if I’ll get to all of his questions in this, but I’m going to try to combine most of the questions, he’s thrown a Litany of questions at me here. So again, I try to keep these podcasts fairly concise, you know, 17 to 25 minutes, usually closer to the 17 minute range.

0:55
So that if you’re like driving home on the way from work or going to take your kid to school, you can listen to an entire episode, we’re not one of those people who blow the dates for two hours. I think I’d be horse. I don’t even know how people do that. Honestly, so anyways, we’re going to talk about selling stocks to buy stocks among other questions. That’s also being asked for the name.

1:12
I’m given this guy. I’m going to call them Bunyan as in Paul Bunyan. Now Legend, has it. He was from Maine. Some will say, he’s from Minnesota from Michigan. This guy asked me to give him a Montana name. Heck, I don’t know what state that starts with an m. Paul Bunyan came from, so I’m just going to say Montana, He was so big that he had buttons, made out of wagon.

1:30
Wheels, Legend would have it. So gonna answer bunions, email and it sounds more fun to call them. Bunions. So says hello. Again Ryan. I am just following up to let you know that I decided to start at the beginning of your podcast episodes and now I’m caught up listening to your previous podcast. Help answer all my questions in the previous email.

1:46
So, no need to repeat those. I do have additional questions. First one, why not get out of Trades? At the end of the trading day to avoid aftermarket pre market volatility. Why do you track every single trade you make in a separate spreadsheet? Doesn’t the trading platform already? Do this for you automatically. What are you analyzing in your spreadsheet?

2:01
Other than prices in and out? The next question is, if you’re currently Percent allocated, and come across a stock that was setting up for what you thought was going to be a big move. Would you close out a winning position just to get the capital to put down on this new potential trade? Thanks Ryan. Your podcast has been extremely helpful.

2:18
Sincerely bunion to bunion throws, a number of questions at me so I’m going to get a good bourbon tonight. The record this podcast with this one’s going to be Weller a lot of you guys have probably heard that it’s a highly sought-after. One wasn’t always that way but Weller Special Reserve and it’s hard to find.

2:33
It’s very hard to find down here. You got a lot of people that sit at the ABC liquor stores and the Total Wines and they get them as soon as they come in through that door and it’s not just unique to Florida, it’s all over the place. But anyways, I was able to get my hands on a bottle and it’s pretty good. It’s a good poor. I mean everybody that has it seems to like it but wasn’t so freaking expensive.

2:51
I drink the stuff regularly. It is really good. Now, it’s got a strong kick to it, especially for a 45%, I’d be like that. The kick it has to it, it would be something associated with like 100 Proof, 50% alcohol, but it’s not, it’s got a nice kick to it, but Like simultaneously sweet and got a kick to it.

3:08
It’s weird to explain but I really do like it a lot and I’m really like the warmth that the bourbon has to it. It’s got a little bit of a sweetness like you can taste some vanilla tones to it maybe a little bit even a caramel flavor but it’s the heat that it kind of hits you with that the end. That’s just really nice. I mean, I just really like this stuff on a scale of 0 to 10.

3:25
I’m giving it an eight point nine. It’s just a really, really solid bourbon. What kills me about the stuff that used to be like a cheap cheap bourbon? But now I mean everybody wants this stuff. Now, people are paying triple digits for this freaking bottle of good bourbon, which I think is kind of Overkill, but it does come from the Buffalo Trace Distillery.

3:43
So, a lot of people love that stuff. I like Buffalo Trace to, it’s good. So the first question that bunion asks, he says, why not get out of Trades at the end of the trading session to avoid aftermarket and pre market volatility question, I’m a swing Trader first of all. So in order to be a swing Trader, you have to hold overnight day.

3:59
Trading requires that you buy it after the market open, and you sell the position or you close out the position before the Closes the swing Trader, that’s not the case. The other thing I would say about holding overnight is most of your gains that, of course, to you also have losses that come with it or potential losses, but most of your moves are going to happen after hours.

4:17
And I said that in the previous podcast as well, that so much of a stocks movement is based off at things that happen when the markets not even open, that’s why you have gaps higher and lower. Like, for instance, and I don’t recommend holding through earnings. But if you held a stock to earnings, you’re going to get a big move after hours and granted, he understands that.

4:34
And so he’s wondering why Do you even bother with it? Well, there are certain events and you can’t eliminate all of the risks by holding overnight, but you can eliminate a large majority of them by not holding a stock through earnings, not holding a biotech stock through an FDA decision. If there’s some major headline risk or there’s been a lot of negative news, for instance, like Boeing, it’s been a long time since I’ve traded Boeing.

4:54
I feel like every time I trade Boeing something, cataclysmic happens, and I’m stuck in that trade, so I don’t want to be, in fact, for a long time. It was on my do not trade list, then, I still mmm, a little bit iffy about trading the stock because there was so much Headline risk associated with it. I just didn’t want anything to do with it. His next question, he asks, why do you track every trade you make in a separate spreadsheet?

5:13
Doesn’t the trading platform already? Do this for you automatically. What are you analyzing in your spreadsheet? Other than the prices in and out, and that’s truth. So on my website, shareplanner.com, I actually list all my trades that I’ve made. I think you can go all the way back to like 2011 and see trades that I’ve put out there for the trading block, and I put those out there for one so the people can, you know, see what kind of stuff is being traded in the trading block and how those trades are being managed.

5:35
The The thing is that I really don’t care about tracking my trading activity, throughout the course of the year I used to, but I also find too that it’s important to align yourself with what the market cares about the market. Doesn’t care about my returns on the earth. It doesn’t. Now do I? Yeah, of course, I do. But that can also get into the way of making good trades over the course of the trading year because if the NASDAQ starts rallying really harder the S&P, 500 starts robbing really hard and you find yourself trailing the returns of either of those.

6:00
Indices. You might find yourself trying to push trades more harder than you should. Maybe you’re trying to More out of a trade than what you should be doing, or maybe you’re getting into trades, that are more volatile than what you should be getting into. Hoping to close that Gap. Often times if you just do consistent and State Trading, yes, there’s going to be times where the market outperforms you.

6:15
But there’s also going to be times where you outperform the market as well and the and I feel like it works to my favor by not really being caught up in. Okay, yesterday, I was up five percent on the Earth today. I’m up 5.1% Mauro, I check it I’m up five point, three percent know the next day I’m down to four point nine percent on the earth, that kind of like yo-yoing effect and moving around and really get to you just as much as it is when I talk about.

6:35
Dollar watching watching how many dollars are up and down on the day, you start to personalize that. I think the same thing goes for watching your overall Returns on the ear. You have a trade that you lose on and you drop you know from being up, six percent of the year to be in only up five percent on the year and then you get into that next trade. And now you’re only up five and a half percent on here that kind of stuff starts to weigh on you.

6:52
You start to panic a little bit. You get a little bit more. I don’t really care about that kind of stuff. I’ll look at it at the end of the year, but I’m not really looking at it during the course of the year. Because for me, I understand my training methods and I understand why I trade and how I trade. And it’s, The same kind of training, I’ve been doing for years and years. I’ve refined it over the years.

7:08
I’ve found little adjustments and tweaks that I can do to it, but overall, I just want to make good traits where I’m at. At the end of the year. I’ll figure that out at the end of the year. But for now, I just want to be focused on each individual trade making good trade setups, making good entries, making good exits, taking profits with necessary.

7:25
If I start getting caught up in all the extracurricular stuff that the market does not care about. I put myself at risk for starting to inject emotions and feelings and strategies that has nothing to do with what the markets trying to tell me right now. So that answers bunion. Second question.

7:40
Now, he asks, if you were currently 100% allocating, this is the main gist of it. All you are currently allocated 100% in came across. The stock that was setting up for what you thought was going to be a big move. Would you close out of a winning position just to get the capital to put down on this new potential?

7:56
I usually don’t run into that too much. To be honest, very rarely. Am I ever 100% allocated? Now, there has been times when I’m 100% allocated but usually I’m kind of With the Ebbs and flows of the market. And usually, the market doesn’t give me enough opportunity to get 100% long because at some point, if the market keeps going higher, yes, I’ll still be adding new positions but I’m also taking profits along the way where it’s necessary and letting a portion of it just run wild.

8:19
So I’m always taking profits along the way. For instance, if I have three positions in my portfolio and they all go up and I take a third off of each one of them. Now, each one of them have 2/3 of a position left but I now just created enough capital for a full position by taking a third and three positions you not Keeping up with the math of it, don’t worry.

8:36
Basically, I just sold enough stock between three positions to create a whole new position. So then I can do that. If that stock goes up, then, maybe I’m taking, you know, half off the table. And then I’ve got enough Capital to add a half a trade if I really wanted to. I don’t usually do that fact, I can’t remember the last time I did it but in many ways you are freeing up Capital if you wanted to trade.

8:56
And by the way, let me tell you about swingtradingthestockmarket.com. Guys, got to check this out because so much of those trays that I talk to you guys about. They all come from the Each list that I have on swingtradingthestockmarket.com. I provide my master watch list twice a week so for the bullish and bearish stocks that I’m following and then I provide daily setups off of the watch list that are showing you the eight to nine stocks that I’m looking at possibly trading each and every day on top of that, you’re going to get the most interesting charge to the day and you’re going to get updates on all the Fang, stocks Facebook, Apple, Amazon Netflix, Google, Microsoft Tesla, and the S&P 500 updates multiple times each week, along with the NASDAQ 100, and the Russell 2000.

9:33
So check that out. swingtradingthestockmarket.com now back to what Bunyan has to say about selling a stock in order to buy a stock, if I was to do that because I was 100% allocated and there was no reason for me to sell any of the stocks, I would have to ask myself. What’s the stock that I have the least amount of confidence and going forward?

9:50
What chart is the least favorable going forward. Once I’ve identified that in my portfolio then I have to ask myself is this chart better than the trade setup that I’m looking to get into? If it’s not that I’m not going to sell it if it’s better than it then yeah, why wouldn’t you? But I Should tell bunion here.

10:07
Don’t get caught up in the big move. I will say this, the stocks that have big moves for me. I usually don’t expect it. I had a recent one of late Bank of America. It just kept going higher and higher and higher. I wasn’t really expecting that big of a move out of Bank of America, but I got it and it was kind of cool, but that wasn’t really one that I was expecting a big move out of and oftentimes the ones that you get the big move out of.

10:26
That’s not the ones that you’re expecting. It from in the ones that you want this big move, or you think that you’re getting into a really big play. Those usually are the ones that disappoint. So I wouldn’t go into A stock that can do this is going to be a big move because I think that’s more focusing on the profit potential of a stock rather than focus on managing the risk of it.

10:42
And I may be splitting hairs here. You may be setting it up with a stop loss and everything and that’s great. But I’m also wanting you to think about stocks from a different mindset to not to look at it from how much money can I make on the trade, but what do I need to do to protect myself on the trade?

11:00
Because I always say this, and this is why I bring up this point manage the risk, keep the loss of small. And if you do those two things, the prophets will take care of themselves. Making profits in the stock market or picking, Good stock. That’s not the magic formula. The magic formula is managing the risk, and keeping the loss of small.

11:16
Because when you do have those winning trades, you’ll be able to enjoy the Lion’s, Share of those gains, by managing the risk on your losing trades. Most people let the losing trades wipe out their profits and that’s what I’m always trying to keep you guys from doing and by talking about that and every episode and mentioning that I talked about it in every episode, it’s going to resonate with you and you’re going to start thinking about that solely.

11:35
So maybe I’m being a little bit. Picky to bunion hear about a big move, but nonetheless, those kinds of words. Signal to me, that people are still getting into the trades for what they think they can make off of the trade, instead of focusing primarily on the risk at hand.

11:52
So that’s going to do it for this podcast episode. If you have any questions, feel free to send them to me. ryan@shareplanner.com. Courage, you to check out swingtradingthestockmarket.com at supports this podcast.

12:09
And what also supports this podcast is giving me a five star review on your platform of choice or at least subscribing to it. Okay. If you subscribe, leave a five star review, all those things are, like, podcast, go to my world. Okay, stand, it helps me. Continue to And the reach and provide you with excellent content. Again guys, keep sending me your questions.

12:24
Thank you. God bless. Thanks for listening to my podcast. Swing trading the stock market. I 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 with your membership.

12:41
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12:59
And Facebook where I provide unique market and trading information. Every day you have any questions, please feel free to email me at ryan@shareplanner.com all the best to you and I look forward to trading with you soon.