Frustrations With Low Volume, Sideways Price Action In The Stock Market | Podcast Episode #26

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Learn to trade, stocks successfully, learn to profit consistently. I’m Ryan Mallory and on my weekly podcast, I’m going to teach you the in and out of a complex ever-changing stock market, if you will learn to trade better trait, smarter and profit figure.

0:26
Now let’s go trade, Hey everybody. This is Ryan. Mallory doing another podcast. Episode number 25. It started about a year and a half ago. 2017, February, I believe was the first episode and so far. It’s continuing to grow by Leaps and Bounds. I’m really excited about it. So I’m putting a lot of effort to continue to provide you with some really high-quality very informative podcasts and I just want to thank you everyone for listening each month. So we’re about 25 thousand listeners. That’s awesome. I really wasn’t expecting that at the time.

0:59
It Is really sometimes just dabbling in and just seeing how it worked, but it’s really growing each and every month. So I’m excited about that. Today I want to talk to you guys about the trading Market that we’re in right now and what what’s it like and how are we profiting and if you’re not, you know, what can you do to do a little bit better? I’ll say this July was a difficult trading month on paper, it looks like the market just you know, went higher. If you look at the monthly chart it’s a green candle April, May June and July of all been green candle. So You know, we’re going to August. Now we’re off to a seems like be a decent start with tech rocking the house.

1:36
But the thing about the summertime and where it gets a lot of Traders frustrating, it gets me frustrated too, so you’re not you’re not in a boat by yourself. Is that the low volume the, the apathetic disinterested attitude of the stock indices?

1:52
Where on the S&P, sometimes you can get trading ranges. That are like four and five points on the day and volume. That’s incredibly low. Sometimes it’s lower than what you would get in a half day of trading on Christmas Eve. Now, how is that even possible? In fact, we’ve had a couple of month days that were lower than the half day of trading on July 3rd, right? Before independence day. So I don’t even know how that’s possible, but we’re seeing that and it’s really crazy and Traders start to lose their mind. And one of the things that they’ll start doing is they will start over trading their account, and you can Do that.

2:30
It’s really a bad idea to start over trading your account when you’re getting bored or when you’re getting frustrated. Look the last two weeks of July, we’re not easy to trade in the first few days of August. Yeah, I mean, it’s been okay, but it’s not been great. I’ve put on for trade so far and I’m looking at my past performance right now for the month of August August first, I did SPX you.

2:54
I was right on it initially and look like the gap down on on. On August 2nd look like it was going to be a real winner. Maybe we get 20 or 30 points to the downside, and it was like five minutes down and then the rest of the day it just shot right back up. So with SPX you, it’s a 321 M verse right?

3:12
So you can’t keep the stop loss too tight and I tend to want to give it a little bit of wiggle room to try to do its magic. But I basically got right out at the same exact price that I got in at and that was kind of crappy to, you know. So that was a flat trade. Then you have later that day I jumped into the long side on Facebook.

3:29
That look like it, finally put together a base and it was going to break out some, let the about 1.7 percent on that. And then you take Netflix, which I’m like barely up on and then you have hu n, which is another trade that I got into, and I’m slightly down on that. So we’ve had three trading days in the month of August, I’ve made four trades overall.

3:49
And in June, I think there was about 20 or July. I made about 20 trades and the last, I don’t know. I want to say the last seven traits were not the easiest I have One, solid winter with JPMorgan, when the bank started rallying after their earnings, really the rest of them just didn’t do much at all for me, one of the more dependable trades for me.

4:08
This year, has been Netflix and that when, you know, down 3% on me towards the end of the month, and then Target to Target was not a good trade and then it bounced right back up. And that’s what a lot of Traders will start getting really frustrated about, is that they will see in these low volume non-committed markets, they will get stopped out of a trade and then they’ll see the next day.

4:28
It just bounced right back up and like, Oh my gosh, I can’t handle this. And they will lose their mind over. And so then they become undisciplined and you don’t want to become undisciplined, just because of what you see a stock do after you get stopped out of it. You have to stick to your methods of managing the risk and when you’re using a stop loss and you’re you know, you’re putting him in the right spot and you’re not going to be perfect with them every time.

4:48
But when you’re using like support and resistance levels to guide, your decisions of where to put your stop losses because you don’t want to just put them anywhere, you don’t want to say I’ll put it four percent lower than where I got in at know you want to put it. A percent lower at that. Four percent level is right below a key support level where a key price level that will indicate if you’re stopped out stock it’s that price level you want to be out of that trade, if it’s not doing that, then that’s not a good stop low.

5:14
Stop loss to use on a trade and Target. We get stopped out and it was a legitimate stop out, I mean, there was there was reason to get out when it crossed that level but then the next couple of days it just it rallied higher and and the Staples the defense consumer defensive.

5:29
Started doing really well and you can’t really do nothing about that. That’s going to happen in trading because when you get stopped out of the trade, the stock is going to go higher or lower thereafter and you have no control over it and it doesn’t care that you just got stopped out. It’s not going to say and we just stopped out Ryan on this trade.

5:46
Let’s just go lower for about the next four or five weeks just so he feels good about getting stopped out. Now does not care. It’s going to keep on doing what it wants to do, but what the stop loss is there to do is to prevent a small awesome turning into Into a big, big, big loss.

6:02
And if you’re a person who has held and I know there’s a lot of you guys out there that have held Facebook over the course of earnings or Twitter or earnings or trip. Or I mean, there’s a bunch of them, a bmd. You know what I’m talking about about, letting a small loss turn into a big loss and then how much harder it is to come back from those kinds of losses?

6:26
Now, some of you guys might be riding a wave of confidence because Is you got you got into Tesla before earnings? You’re like, yeah, we’re going to squeeze the shorts and you did and it goes up like 15 or 16 percent after earnings, and you’re feeling pretty good about life. But all that’s going to do is emboldened you to play earnings again, and that’s what’s really bad, because then you’re probably going to be playing with more money, because you’re playing with the money that you have, plus, whatever you made off of the Tesla earnings and you going to apply it to another one in, you’re going to take even a bigger loss, and it’s going to be a very destructive force.

6:55
So I can’t say it enough. How important it is to To manage the risk and continue to use stop losses. Even when you feel like you’re just getting turned out of some trades. Now, what I’ve been doing and this is, this is why I’m able to remain profitable, is that, yeah, I’ll go on a good tear with a good number of trade, Make Some solid profits, but what I’m not doing is, I’m not over trading my account, and I alluded to that a little bit earlier in this podcast already.

7:24
But what you don’t want to do is, is to get into a trade And get stopped out or it’s not giving you enough action. And then decide I got to admit another position in another position, another position because I need to get something out of the market. And when you’re soon as you’re starting to say, I need to get something out of the market, that’s when you’re going to get your head handed to you, so don’t do that.

7:44
So be willing to trade a fewer positions at the markets. Not giving you much, don’t think that you need to put on a lot of positions, okay. If you want to put on one or something like that, that’s fine. But like right now most days I’m only having like two or three positions of my portfolio. If I’m lucky maybe I have four but right.

7:59
Now, I have three positions and the portfolio and there’s a good chance on Monday. If we don’t see any solid action out of the market, I’m not going to add anything else. I’ll probably go into Tuesday with three positions or less depending on whether or not. I stay in the current positions that I have. Here’s the thing. Don’t over trade, your account in these markets, it’s frustrating.

8:18
And if you’re going through a losing streak, and I don’t necessarily say, I’m going through a losing streak, but it’s not as ideal for profit generating right now. Over the last couple weeks, I think it can change on a moment’s notice and I expect it to change everything, you know, and to do well every day.

8:33
But the thing is, is that while that’s not happening, I’m not going to keep adding more and more positions to the portfolio thinking that something’s going to change because I’m adding more positions to We’re fully instead. I’m going to let the conditions of the market dictate. How aggressive that I am to die, either the long side or to the short side, and I’m going to go from there.

8:52
Let’s face it. So what was an August 1st the market started selling off? You know, it was right after the Apple earnings and we had opened up way, way higher. And then we started dropping lower there for the rest of the day and I got short and I thought I might have a good short position on, but what I didn’t do is I didn’t stockpile the short positions I didn’t say to myself.

9:12
Oh man, I think I’m going to be right on this one. Let’s really pile onto the short plays here and just get really short. And then the next morning it gaps down and I’m thinking I’m going to be doing really good and then it just shoots right back up. Now if I had about seven or eight positions or 80% of my Capital put to work on that kind of a move man, I would have been hammered instead.

9:34
I kept it light, I kept it Nimble and I was able to respond to the to the changes in the market because I wasn’t expecting to go back up on Wednesday. I mean, that that wasn’t really what was in the plan. Did and so I have to change my strategy. I have to change my Outlook when the charts changed their Outlook.

9:50
I have to adjust my trading strategy to what the charts are telling me. So that’s so important, and if you’re going to be stubborn, if you’re going to be, have an ego that says, I can’t take a loss, or I have to just keep on pushing through or holding or ignoring the stop losses.

10:06
You’re going to lose in the stock market, I promise. So don’t do it, man. Don’t do it at all. All right, I’m going to wrap it up here. I think it was a pretty good talk with. We had, hopefully, if you’re frustrated with this Market environment that, that you’re going to be able to find some Solace or find some reassurances.

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And what I’ve told you here today, and just remember the harder that it gets the smaller that you should be trading. If it’s just not a Cooperative Market, if your trust strategy isn’t performing as well as you’d like, then trade smaller trade, fewer positions, and wait for the market conditions, to confirm that and for your trades to confirm and a smaller sample size that you’re doing the right thing.

10:44
And then you can start adding more. Thanks for listening to this week’s podcast of Swing trading with Ryan Mallory. I’d like to encourage you to join me in the SharePlanner Trading Block where I navigate the financial markets every day with Traders from around the world. With your membership you’ll get a 7 day trial access to my trading room and text and email alerts.

11:06
So go ahead and sign up by going to shareplanner.com backslash Trading Block. That’s www.shareplanner.com/trading-block. And follow me at SharePlanner on Twitter, and on SharePlanner’s, Facebook page, where I provide unique market, and trading ideas every day.

11:25
If you have any questions, please feel free to email me ryan@shareplanner.com all the best to you and God bless.