A History Of Good Trading Decisions | Podcast Episode #129

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, trace 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 MalloryD with swing trading, the stock market.

0:32
I got a good episode for you guys today title of this episode So it’s going to be a history of good. Trading decisions. And what am I talking about? While I’m talking about this new Trader. He’s emailed me today. He’s going by the name cletis. That’s his choice. Not mine though. I probably could have given him something even worse than Cletus.

0:48
But nonetheless, we’re going with Cletus and Cletus, is emails a little bit all over the place. Quite honestly here, but I’m gonna dissect it. I mapped out this entire episode, just to make sure that I was nailing all the points when I’m doing this episode and I got a whiskey that I’ve never heard of before. I’m kind of interested in trying it, so we’ll get into that as well.

1:05
So, His right he says, hey there Ryan I’m currently sitting on my lunch break as a service advisor at a GM dealership, listening to your stop losses. And volatility episode, love the show. He put that all in caps. Actually, I am 21 years old in a very new Trader and yes, I am a Robin Hood, bro. Hey, we all start somewhere not by choice but by lack of knowledge and that’s why I’m emailing you.

1:25
And that’s probably why a little bit of the email is somewhat all over the places. He is a new Trader. I mean, you can tell he’s very green. As I said previously, I love the show, but I find myself not understand. In some of the terminology that you use in the show. And that’s one of the harder things to do for, for new Traders is to talk about what every single term means because a lot of it, it’s just regular vocabulary for somebody who’s been doing this for, I don’t know, I bet guess I’ve been doing it for, like, 30 years now, basically, or 29 years.

1:53
So a lot of it’s just everyday language for me, but I try to be cognizant of that but also too, if you don’t understand something, you got to remember, I’m not really getting into technical analysis and using Fancy terms for most of the parks, most of the time I’m talking about you as a Trader and what you can do to improve yourself, I’m not getting into like bull flags and head and shoulders patterns for the most part.

2:15
If I do it’s usually just like in a passing kind of a way but if you don’t know it I would definitely recommend like Googling it or just try to find a book that might cover a lot of that. One of the books I tell people to read. It’s a boring book. I read it, it was boring but it’s the technical analysis of the financial markets.

2:30
It’s like freaking long. It’s so long. It will put you to sleep many times. Yes, but despite it being very dry, it it covers a lot. Also to, my bourbon of choice today is going to be Battleford Creek. It is 41 and a half percent alcohol, it’s 83 proof, it is a bourbon with a mellow finish.

2:49
I told you about this guy that email before his name is Jack Daniels office. I don’t usually use people’s names but gosh, how do you not use the name Jack Daniels? He says, take a small Small sip in the very beginning it’s called chewing and it’s done to shock your taste buds with a small straight sip that you hold in your mouth for a few seconds before you swallow.

3:08
And then he says in this first sip, you won’t taste as much, but you will get your mouth ready for the second set. There’s also important to wait a bit for the second sip. Some people including Jack, Daniels likes to put a small Ice Cube in before the second set to open it up, just to touch. You should find the Second Step will be much more rewarding because the deeper flavors will be easier to detect know.

3:27
I got to tell you, that sounds pretty bougie, man. Usually, when I’m drinking this stuff, I’m just usually, you know, sipping it as I see fit. But I like this approach, man, Jack Daniels, he’s got to know what he’s talking about here and I like anything that will help me explore the flavors a little bit more with the bourbon.

3:43
All right, so I’m gonna take a small sip not chewed on it. It’s not the most Pleasant way to go about it, but I could see what he’s saying. A man, my mouth is on fire right now. So but we’re going to give it another shot here and I’m just going to go ahead and throw like a one-inch Ice Cube and I’m not even going to full 2 inches. Well, what a difference that makes though it turned out a lot.

4:00
Iran. That second sip, I can taste that mellow finish quite a bit. I mean it really is a very mellow bourbon really Pleasant. It’s very smooth. The harshness isn’t there on the second sip so I’m great in this on a scale of 0 to 10. I’m going to say it’s a 59 I’m going to say it’s a 59, it’s not crazy delicious but I feel like using this technique that Jack Daniels talked about, I mean, I feel like I can actually explore these tastes a little bit more but I would say it’s like a 59, good good bourbon, but let’s get back to the show here.

4:28
So Cletus goes on to say he Says I currently have around 100 dollars in Robin Hood but at one point I had up to $1500. Now he didn’t specifically say how he went from fifteen hundred dollars down $100. I doubt it’s the pay the mortgage or the apartment. If I had to guess I’d probably say it has something more or less to do with bad trading.

4:46
I think one of the biggest things that Traders get themselves in trouble with this thinking that because they have a small account, they need to buy cheap shares. If anything, it should be the exact opposite Granite. You have a fifteen hundred dollar account. You’re not likely to be buying Amazon unless it’s fractional shares but that’s okay though.

5:03
You can also set up an account with a company that probably provide you with the best of both worlds. Fractional shares and free commission’s. I’m sure they’re out there and listen, did the thing is that we can’t get so hung up on how many shares that we own of a stock. So many people get hung up sigh. Well that’s it. Stocks expensive, I can’t afford that.

5:19
It’s a three thousand dollar stock and I only have three thousand dollars in my account. Only be able to buy one share who cares who cares? I’ve never made a dime mouth of the number of shares that I owned. I’ve only made money off of what did the Dokdo after I bought it or what did the stock do after I shorted it?

5:36
But it has nothing to do with, is the shares. They don’t increase the number, unless you get through a stock split and then the stock splits just going to cut the price in half on you guys, shares have nothing to do with it. It’s all about the capital that you’re allocating to the trade. But so many times we get caught up in as I go, I can only buy 10 shares of that. But if I buy this cheaper stock at a dollar, I can buy 100 shares of that tree and it makes literally absolutely no sense at all.

5:57
Why we care about how many shares of a company that we buy. Look at Berkshire, Hathaway class A shares has a good set up, go by fractional shares of it. I don’t know if that’s actually I’ve never attempted to do that but you get my point. By the way, Berkshire, Hathaway class A shares their like trading at three hundred and forty-one thousand dollars a share.

6:15
So I was giving you an extreme example, but you get my gist here, stop buying cheap shares just because they’re cheap. There’s usually more volatility, more risk, more uncertainty. You’re likely to see a company that’s really cheap and shares. Go out of business. Then you are a stock that’s trading with a market cap of 100 billion dollars and trading at 500 dollars a share.

6:38
Oftentimes when stocks are trading that a dollar, a share or $2 a share, there’s a reason for that. They usually suck as a company, but I’ve been preaching this probably for 1314 years, that I’ve been doing share printer and it’s and it’s just amazing to me. Like, even the people have heard me say this time and time again.

6:56
Still don’t get it. Like, oh, that’s expensive. Who cares? It’s not expensive when you’re looking at price-to-earnings ratios and I only do technical analysis. So I don’t even really care if it’s an expensive stock or not. I just care about if There’s a trade setup there but if you’re going to get into the whole fundamental analysis, then, yeah, it’s stupid to look at a share price and say, well that’s expensive.

7:15
Oh but look at this at six dollars a share. I can buy this while the real trade or the real investment that you’re going after should be the one. That’s $200, a share because it’s actually cheaper. There’s less risk less volatility and less headline risk that is associated with the trade.

7:37
No, you take Boeing for instance, right? It’s trading at $200, a share and it’s an absolute clown show, okay? That stock I won’t touch it. There’s way too much risk to it after telling me about losing the $1400 of his fifteen hundred dollar investment. He told me that his question is that what site do you use instead of Robin Hood?

7:57
How do you read a chart? And tell that it’s a good trade and then he goes on to say that, I fear that Robin Hood’s lack of data that hurts me. Well, I’m going to be honest, it’s not, and this is why I called this Having a history of making good trading decisions because it’s not going to be as much as I don’t like the Robin Hood trading platform.

8:15
It’s not the source of your bad decisions you as an individual’s, the source of your bad trading decisions. When I make a bad trade, I don’t blame it on the platform. I don’t blame it on anyone else. I blame it on myself. Now, the reason why I kind of get on to the Robin Hood Bros and everything else is because they flock to the market when the market was, right, for a bounce and bounce to in a historical fashion, and there is about a period of three to four months there where the market Just ripped higher day after day after day, you would see, two, three, four, five percent gains and the broader indices like, it didn’t even matter.

8:44
Like it was just like, normal business operations. And so there is this false sense of understanding of what the stock market is, and how it can turn for months and months at a time. And now they’re starting to see that because I’m getting a lot more emails from the Robin Hood Bros right now because it while they had a lot of success up front. Now, they’re struggling, they’re waking up each day and they’re chasing the high-flying, stocks every day, and then they’re getting just absolutely destroyed.

9:07
When the market Gaps them lower the following day and takes him out for some major losses. There’s a lot of fear of missing out fomo because they haven’t experienced enough in the stock market. To realize that what you saw from late March until about June, or July time period where the market just went straight, parabolic is not normal.

9:24
That’s not what you base whether or not you’re going to be a good Trader at. Yes, it’s a moment in the market that was unique and exceptional, but that’s not what the market is going to be year after year. After year, you’re going to have moments where the market has steep. Declines in. That’s going to have massive bounces. Yes. To think that that’s going to be the norm, every day in the stock market.

9:40
Know you look at the NASDAQ over the last two, and a half months. It’s done nothing. But trade sideways. Yes, there’s been rallies. But there’s also been declined and the grand scheme of things. It’s just been a chop Fest. It’s up down, up, down up down, and so they’re getting caught up into this stuff now. They’re getting is like, why is this Market not just blazing higher?

9:57
And that’s probably what Cletus here is dealing with. So it’s not so much the platform. I detest Robin Hood. I don’t like it trading on that platform. Feels more like a casino operation and the sense that That when you hit the buy button and it’s like you’re pulling down a lever. Okay?

10:16
And you’re just like, letting the slot machine like spin its wheels and see if you can get three in a row or get a jackpot, right? That’s not what you want. You don’t want to equate trading with DraftKings. You don’t want to equate trading with a casino like mentality. You don’t want to glamorize trading when we start to glamorize trading, and we think it’s sexy or we think it’s like this great thing where women are going to be coming out in bikinis and you’re going to be driving Lambos everywhere, that’s when you’ve lost your focus and I’m not trying to put this all on Cletus here, clean.

10:37
Is actually doing the right thing, asking me a question. I’m not going to lie to him, I’m not going to sugarcoat anything, but one thing he’s got to do is he’s got to develop a track record of making good trading decisions and when you’re going from 1500 down to a hundred dollars in your trading account, I don’t care if it’s fifteen hundred dollars or a hundred thousand dollars when you’re seeing that kind of a drawdown, you got to stop you got to ask yourself what am I doing wrong?

11:00
And he is to his credit, he is doing that. He’s finally saying he probably should have stopped a little bit earlier because here’s the thing, it’s not Commission’s that are chewing up your account at this point, it’s bad trading. That’s chewing up your account and the past, I would see people that were making good trades on a small account, but they couldn’t break a profit because the commission’s, but that’s not the case anymore here.

11:21
And if you’re not trading commission, free, what are you doing? Like where have you been get going with free trading commission’s? If you live in the United States it’s available everywhere. Everybody’s doing it. And having a history of good. Trading, decisions comes with becoming a student of the game, listening to the podcast.

11:36
That’s great. Watch. YouTube videos. That’s great. But you still have to continue to apply yourself. You need to study the charts. You need to go through hundreds of charts a week, at least so that you’re getting more familiar with how prices react, stay on top of the news, see how stocks react after earnings, see how stocks react around specific moving averages, but become intimate with these charts because once you start doing that price action will start making a little bit more sense.

12:03
And one of the things I try to do is through swingtradingthestockmarket.com, I’ve setup is To provide you with all my market research. And a lot of people have said, hey when you’re posting these charts you’re helping me see what an experienced Trader sees for himself it. What a good quality setup looks like what a shark that we should be watching.

12:19
Should look like and so that that’s what I do. I provide that through swingtradingthestockmarket.com you can go there. It’s a patron account. That provides you with all my market research, everything from charts on the all the Fang, stocks Facebook. Amazon Apple Netflix, Google Microsoft Tesla also give you multiple updates each week on the S&P 500.

12:36
The NASDAQ, the Russell, and I’m providing With my own watch list in the stocks that I’m finding the most intriguing each and every day daily setups on the regular. It’s a great package. If you’re trying to learn how to get your feet wet, this is going to give you a lot of market research study what I’m doing. Look at why I’m drawing the lines that I’m drawing on the chart.

12:53
Look at why? I’m and I provided explanations on everything. So check it out. So here’s the thing to and I’m going to wrap this show up with this final segment here. And that is he asks, how do you tell on a chart if it’s a good trade? Well, I mean, that’s it’s such a broad question, right? I mean, I mean, I could probably do a hundred episodes on that I’m probably not even tip the iceberg.

13:11
The fact of the matter is that, no two charts are the same. They’re all different. There are similarities. But what you want to find in every chart is a solid area to get into the stock early. Before a major part of that move has taken place. Now, a lot of times as Traders, we have this need to see that it’s already going to start running.

13:29
It’s like bandwagon fans and sports, right? I remember growing up in the 80s and it was all about the San Francisco 49ers. Everybody was a San Francisco 49er. I was a Dolphin fan, Miami Dolphins. It’s starting to get less painful this year being in Miami Dolphins fan, but in the 80s it was all about Joe Montana.

13:45
Jerry Rice. Ronnie Lott. John Taylor, Roger Craig, those guys, I’m from Florida and everybody’s a San Francisco 49ers fan. Why because they were winning. And so we look at trades and we look at charts from the standpoint as it started to win yet. I want to see it going up already.

14:02
I want to see it well underway in a trend line and then I’ll start to get in. Well the problem with that is that you’re missing out already Eddie on a big move you want to get in where the smart money is getting in is right where it’s starting to break out, right? Where it’s coming out of like a consolidation period and that maybe terminology that some of you don’t understand.

14:19
But if you look at my charts that, I’ve always posting, whether it’s on Twitter, whether it’s on swingtradingthestockmarket.com, or SharePlanner on my YouTube videos. I’m always showing you what consolidation looks like and you want to get in on that break out, but you don’t want to wait for the stock that’s already run, 15, 20, % and say, oh now it’s a good trade or hold, man, I’m missing out on a really good trail.

14:36
I’m better late. Never know. Sometimes it never is better than late. And Cletus, wants to be a full-time Trader. One day and that’s great, but just being a good stock picker is not going to do it. I’ve picked a lot of stocks in my time that are good. Have I always have been successful on every one of those good stock bikes know.

14:52
Sometimes I get stopped out, and then they keep going higher. Was it a good stock pick? Yeah, it’s just, maybe I didn’t use the right parameters for a stop loss or maybe I let fear get a hold of me and I got out of the trade. But nonetheless being a good stock picker is not where it’s at being.

15:16
A good risk manager is, and it’s not a perfect practice, you’re not going to be perfect at it, you’re going to have times where you’re struggling, where you’re going to have self-doubt, and it’s going to affect how you manage the risk on a trade.

15:32
But overall, before, you can start thinking about being a full-time Trader, you got to put the work into it up front. You have to have a good history of making good trading decisions. A good track record of as a part-time Trader is an absolute necessity and becoming a full-time Trader.

15:48
If you’re not doing it right in the part-time, you’re not going to do it good in the full time and I’ve done a whole series. On the part-time Trader. I’d highly recommend going back and listening to, those is like a three part series about the part-time Trader. And there’s one part about transitioning into a full-time Trader. Go back and listen to those because it’s really good really helpful.

16:04
But again, guys, just to wrap it up, if you’re struggling, you’re trading. It’s not because you are robbing Hood, bro, on the Robin Hood trading platform, okay? The much, as I don’t like that platform, if you’re struggling as a Trader is all going to point to back to you, you have to have a good history of making good trading decisions.

16:19
Now is some platforms better than others. Absolute. But you also have to put in a lot of work. A lot of research, it’s just not going to come. You can’t go to the bar at night, come back home and you’re half drunk and say, oh, look at a couple of charts here. Tesla looks good, I’ll go by that in the morning.

16:36
You put in a market order before you go to bed. You sleep in till 10:30 Eastern, you wake up and you got filled on Tesla at that market open and it’s been fading ever since you don’t want that kind of mentality. It’s such a bad approach to Trading. You got to put the work in it. And that’s what’s goes into having a history of good, trading decisions.

16:52
So, get it done in the part time before you even consider doing it in full time. I’m glad that you like it but you got to get it right in the part-time trading before you can even consider a full-time trading career. Do you guys like the show? Make sure to subscribe to it and make sure if anything else, please leave a positive review.

17:11
I would love that more than anything for you to go. If you’re listening on the Apple platform or Spotify or any of the other platforms out there, go leave a positive review. Let me know what the show has meant to you. It means a lot to me than courage is me to keep on going. I’m going to continue to turn these episodes out because I know it helps you guys, so make sure to go there.

17:31
Leave a review. Thank you guys. And God bless. Thanks for listening to my podcast. Swing trading the stock market. I like to encourage you to join me in this SharePlanner trading block, where I navigate the stock market. Each day with Traders from around the world with your membership, you will get a 7-Day trial and access to my trading room including alerts via text email.

17:46
And what’s app? So go ahead sign up by going to shareplanner.com trading block, 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.

18:04
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.