A Bad Trade: Datadog DDOG | Podcast Episode #98

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?

0:29
Hey, everybody, this is Ryan Mallory with Swing Trading the Stock Market, getting close to the number 100 podcast. I’m kind of excited about that. I would love to know the statistic of podcasts that actually reach the 100th episode. You always hear about it. On TV shows, you know, they typically do a show once a week. I do a podcast about once a week, so it’s kind of a nice achievement getting to that 100, Mark. I’m excited about it. But any case we talked a couple weeks ago about my worst trait error that was Ellen KD and it was a little bit of a different kind of a bad trade, right? You would think would be something that would have just a disastrous outcome to it, right?

1:05
It was really about the fact that I got stopped out of the trade following the risk management plan that I had only to find out that on Monday morning. I have been bought out by Microsoft for a 60 percent premium, man, I remember that and it was just such a awful feeling in the stomach.

1:21
It really was very upsetting. So I got a lot of good feedback from you guys. You guys like that because we all have our struggles as traitors. Some of us are too emotional, some of us are too conservative, some of us are too risky. We just have different things, sometimes we just have A lot going on in life and it can affect your thinking in your discernment.

1:39
So what I want to do is I wanted to highlight another battery and this is a more recent trade and I’m going to talk a little bit about that. And again, this has a little bit of a Different Twist to it because I didn’t lose money on the trade. I actually made a profit off of it, but I look back on it. I ask myself, did I really manage the trade?

1:56
Well and that’s, that’s what I’ve really struggled with it on and it’s data, dog. Di, di oggi. I got into it on June 8th. Okay, this month’s. Oh, really Just just like less than two weeks ago, I posted a trade in the trading block and I said, hey look, if it gets above 7399, I’m going to get long on it and I’m going to use a stop loss, a 68 19.

2:18
So I like the risk. I like the reward on the trade, I thought it had a lot of potential. And so it quickly triggered got in at 7399, and it went up, really well. It went really nice. I think the day that I got in on it, it was a nice solid break out. It went as high as 77-69.

2:34
So on that particular day, I was Was actually up at one point five percent on the trade also that same day, it pulled back a little bit. I took one third of the profits off the table at 76-42 for a three point, three percent profit, really, really good. Start so far on that trade, I was, I was really happy about it. I held it over night, took a little bit off the table.

2:51
I had traded a couple of times earlier this month and it didn’t really work out that well, so I was looking to. Okay, let’s get on some good footing here. Let’s get this train moving. Let’s capture some profits and we’ll let the rest run. Now, remember the previous day Edge, Close the day out at 76 54 and then it opened up at 76 39.

3:11
So, a little bit below, not much not anything to get worried about, but it went as high as seventy eight Forty Nine. So now I’m looking at a pretty solid trade here really good like 7% up, I’m on it. Okay. And then it proceeded to sell off the market was selling off a little bit too. Now, granted at this point, we’re a little bit over sold in the market, the and Aztecs been on an epic run.

3:30
You’re starting to see a little bit of sell-off. I’m getting a little bit, probably concerned. So when it goes back to the support level, where it broke out at literally, I got out at like, 74, I got in 7399, so I got out at like a point zero one percent profit on the second two-thirds of that position.

3:47
Still made a profit on the trade overall, but I got out at $74. I literally took a penny per share on that second 2/3. Lat. Well, what did it end up? Doing the days that followed? Well, it obviously rocketed higher yesterday, it Clips, the previous day’s high, as it’s like 78 49, it goes all the way up.

4:05
Almost $80 a share. I’m a little bit. Bummed out about it. I said, man, you know, the reason why I got out is because I didn’t want a stock that I was up like 67 percent on the pullback, in all of a sudden go red. Because stocks like dated dog. They’re very, very volatile right there.

4:20
Except they have an extreme price range almost every day big time and it’s hard to even get into these traits often times. But I found a good trade setup. I got into it, I took a little bit of profit initially pulled back. Didn’t want a stock that was up about 7 percent to go. All the Sudden – on me.

4:36
So I went ahead and raised my stop-loss up to break, even I said it look not going to have a green to Red on my watch. That’s one of the things I’m very adamant about, however, it never really broke back below the support level that it came back down to and settled at.

4:54
Now, the other question is too is, okay, we had to pull back that day in the stock market. Di di oggi pulls back. I’m up 7% at one point in the day it comes back to where I’m sitting on basically, zero kind of finished – on the day overall, going into the next day.

5:09
There’s a lot of uncertainty at Point you’re like, okay, is this thing going to Rally? The market wasn’t going to wasn’t rally in that day. It actually pulled back again. However, di di oggi it’s kind of one of those covid stocks that people like to flee into because they feel like there’s some safety there.

5:27
So now we’re talking about a stock that closes that at 78 79. But then what happened, this was last Thursday, you had the huge Market sell-off SMP. 500 follows 188 points. Okay, so then what what would I have done? Is a traitor. I probably would have raised my stop-loss knowing who I am.

5:44
I would have probably raise my stop-loss up to the just below the lows of the previous day’s trading range. That way, I’m making sure I’m coming away about two percent profit in that second 2/3. Well, what would that have stopped off spin around? 7532, what a ddod do? Well, it pulled back all the way to 75 18.

6:01
So it’ll take me out there even though relatively speaking DDO. He did kind of good day to dog did fine when them S&P 500, sold off 188 points ddod you would have expected, maybe there would have been like a 10-15 percent. So off considering how much it’s ramped up over the past couple, three, three, four months.

6:19
You’d think that there’d be a huge pull back in it, but no, it didn’t. In fact, it pretty much open at the same price that it closed at, in fact, momentarily, on that 188 point. So, off day, di di oggi was positive for just a little bit in the early morning hours of trading. But then there’s this pesky 5-day moving average and it’s Hold on to it very well.

6:36
So a lot of this of that I’m talking to you about, it’s all in hindsight. I’m looking at it, I’m evaluating my trade because I think that’s important as traders that when we think that okay. Did I did I not do well on that trade. Should I have done something different for us to evaluate it c word? We can do better as Traders and go from there.

6:55
The difference is is I’m making a podcast out of it, so you’re hearing about it real time. But for a lot of you individual Traders, that’s not something that you do. It’s not that it wouldn’t be a bad thing, I would listen to it. I’d learned from it, but I am telling you about it. Help myself also learn from it.

7:12
So, even if some doing this podcast right now, I’m going through the details of this trade and trying to explain it to you. Not only for your good, but for my good as well. So ok, just to recap where we are on ddg, I get onto this trade setup because it’s been consolidating nicely. I tried it a couple times for didn’t quite work out for me, it breaks out, I’m up as much as like, 5% on the trade. On day one, I take a little bit off the table for about 3.3% pulls back to where I got in at, and then breaks out the next day.

7:33
Now, I’m on the sidelines watching. In the stuck, just continue to ramp higher then you have the hundred eighty eight point sell-off last Thursday on the S&P 500, ddg pulls back from a relative standpoint. It was stronger than the market so it held up pretty good. It didn’t just fall apart like the whole Market did.

7:48
This is where it kind of gets a little Annoying. This is where it’s kind of rubbing salt in the wound at this point. Again, got in that 7399 since that hundred eighty-eight Point. Sell-off video G is up five days in a row. In fact, up today, it’s in fact today, it’s at $86 Since up four point three, six percent as of this recording, is it making me a little bit salty?

8:11
Yet it is making me a little bit salty. I’m not overly thrilled about it because at this point I’d be up 20% on those on the second two-thirds of that tree, it be good. However, it was just a couple of things got in the way one because there is a wide range of a stock like that.

8:26
It’s hard for me personally to be up 7 to 10% on a trade and watch that thing, pulled back and go red, it’s just not in my DNA to allow it to do that. So one of the things that I’ll do oftentimes is that if I start seeing the stock start to sell off, really hard, I’m not going to be taken down with it.

8:42
I’m going to go ahead and get out of it. And then re-evaluate from their problem is, is it gapped up the following day? And it just never really came back down to where I wanted to get in at that breakout level. The other thing was, is that the nearest stop loss on that day? That it pulled back? The second day that I was in the trade, the nearest stop loss is that 7008?

8:59
So now I’m looking at a stock that had gone into the 78s for me and I’m going to have my stop loss at 7008. Get Out there well into the red and that’s actually where my stop loss was going into the day was 70. Actually was 7006, 70. .06. So I have my stop loss there, but once I start Salt pulling back, it was dipping a little bit below support there.

9:19
I said, look, I’m gonna walk away with a profit on this trade, I’m not going to get not going to get wiped out. And so that was, that was my, my standpoint. I don’t think it’s good psychologically, as a traitor, to be way up on a trade, only to see it. Come way back down DDO.

9:35
Oh, gee didn’t provide me a really a good stop loss on that particular trait. So when it kept coming back down, down, down down, I moved my stop loss up to 74 dollars and it hit taken out of the tree my bummed about it. Yeah, anytime that okay you see what it does thereafter.

9:51
And it’s like, okay if I could have stayed in to that trade that day, I could have been up 20% but then the bigger question is, what I have been able to stay in the trade during that 188 point sell-off on the S&P 500 and no, I wouldn’t have because I know where I would have put my stuff. Was that day, I would meet making sure that I’m coming away with some profits on ddg.

10:10
I’m going to raise it up to the tightest stop loss that I can, which would have been the previous day’s loads and it broke below that by about 17 cents or so. So I would have been stopped out of that. Probably would have been even more frustrating because on the next day it started a five-day rally. So training is a lot like golf.

10:26
It’s not something that you’re ever going to perfect. I guess, the day that your perfect golf is when you can shoot an 18, right, where you can go a hole in one on all 18 holes, which is pretty much impossible, nobody’s, ever going to do that. And it’s the same thing with trait.

10:41
You’re never going to be a perfect Trader. You can be a disciplined Trader and so that’s what I try to do. And I incorporate discipline sometimes to my chagrin, sometimes to me, missing out on bigger moves. And why is that? Because managing the risk is more important than seeking after the prophets.

10:58
Because I do know. And I again, I know I say this and every podcast, and I also know that I say that, I know that I say this in every podcast. But nonetheless, I know that by being disciplined, that DDO Gee, that particular trade is not what’s going to Define me this year, or my career as a traitor, but a poorly, managed trade can Define me.

11:18
And that’s something that I do not ever want to happen. That’s why I do manage the risk. That’s why I manage the risk aggressively. That’s why I preach about it so much because I know what it looks like. When you don’t manage the risk. Things Fall Apart, emotions, run high. And you always make the worst possible decision for yourself, when you’re not disciplined, and a lot of that, discipline comes from designing your trade up front.

11:40
Hunt. Where are you going to move up the stops to? What are you willing to not? Allow happen. And I said earlier, I’m not a person that’s going to let a stock where I’m up 78 percent, go deep into the Red Army and take me out for a 45 percent loss psychologically. That’s not good for traitors. So when we talk about, di di oggi, you’ll be able to think about me and the Mist trading opportunity that I had, but I also know that to that, not all trades, are perfect.

12:02
So that’s gonna do it for today’s podcast episode. If you have any questions, feel free to reach out to me ryan@shareplanner.com. I love to see you in the Rating block. Where many other Traders join me each and every day to fight the stock market, right? The craziness and to find some profits along the way by managing the risk.

12:21
Thank you. God bless.

12:23
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12:40
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12:55
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 chatting with you soon.