Don’t Be Greedy | Podcast Episode #121

0:00
All right, everybody, this is Ryan Mallory with Swing Trading the Stock Market, man, and I got, I got a good email episode here with you guys today. It’s going to be pretty entertaining. Uh, we got this gentleman, he works for Papa John’s and he, he probably fits the mold of the, the traditional Robin Hood bro. That I’ve been talking about.

0:16
It’s pretty good. He’s open, honest. I, I like, I like this email, but first, but first, I got a whiskey to share tonight. This one, you guys have all heard of Jack Daniel’s before, but this Jack Daniel’s is the Tennessee apple, right? It goes with, and I’ll show you guys, for those who are watching this on Instagram.

0:35
It has a nice little like color to it. It’s not too thin. It’s nice. Again, you could see that I’m using the 2-inch ice cube on it. Very tasty. And uh, yeah, let’s give this sucker a shot. And, and by the way, it’s like 35% alcohol, so that makes it about 70% proof.

0:51
It’s not a bourbon, it’s a whiskey. And you know what else too? I’m not even that big of a fan of Jackie’s. I never use Jack Daniel’s, but what is this? Apple cider, Tennessee apple, right? I don’t think they actually call it apple cider. No. This is like Tennessee green apple, so I’m not even doing it any justice, but I’m sure it’s gonna taste good.

1:07
Do I think it’s gonna be as good as the American honey? No, but I’m, I’m willing to be pleasantly surprised. Yeah, I, I don’t know, hold on, let me try this again. Hmm. I just don’t know what I’m drinking here.

1:23
Apple flavor is really strong. I mean, that, that’s definitely one part that I’m drinking, but I’m trying to find that burn, like that little like, hey, this is whiskey that you’re drinking. I’m not tasting it. It’s like, uh, it’s not syrupy either. I thought it would be syrupy if it didn’t have a burn, it’s not syrupy.

1:39
It’s more like a, it’s very smooth, but it’s almost too smooth. I don’t like it that smooth because it doesn’t taste like I’m drinking a whiskey at all. It’s almost like I’m drinking like a little fufu drink that you get that’s like pink at the, at the, at the restaurant that you go to.

1:55
Like, it’s like, am I ordering a Cosmo or what here? I don’t, uh, just full disclaimer, I don’t do cosmos. I have a man card. I’m not gonna order a Cosmo, but Not assuming that I know what a cosmo tastes like, because, again, full disclaimer, I don’t do cosmos.

2:10
I’m assuming that that’s what a Cosmo would taste like. So on a scale of 0 to 5, I give that a 15. I’m not, I’m not liking this stuff at all. Uh, but if you guys want the des on this, this is, say it’s an original recipe. Gosh, I think they need to throw the original recipe away. It’s got green apple, smooth that it is smooth, but it’s like, if I was to try what a Cosmo is, it’s kind of cosmo smooth, right?

2:32
I’m probably gonna get some emails like Cosmos aren’t smooth. Well, then you know I haven’t ever had one before. Yeah, this is like Tennessee, apple, liqueur. Gosh, man, I gotta pick up my eyes just to see this thing blended with Jack Daniel’s Tennessee whiskey. Man, they got to blend it with something else because that stuff is straight trash.

2:50
Um, I give it a dumpster juice rating there. That’s, that’s a 15, sorry. But I’ll still drink it through this episode. I hope that it doesn’t hinder the episode, but I’m gonna keep drinking it anyways. So like I said in the beginning of this podcast, we’ve got an email from a Papa John’s driver, delivery driver, and once again, a lot of you guys are doing this.

3:12
I’m totally fine with it, but if you don’t give me a name, I’m probably gonna give you a Florida man name. Uh, if he didn’t give me a name, I was probably gonna give him that, that Jethro that I’ve been dying to use. After that, it’s probably gonna be Opie. So some of you are smart, you guys saying, hey, I don’t, I don’t want to get the Florida man treatment and I’m not gonna give it to you if you don’t want it.

3:29
But, uh, funny thing is, is this guy is actually from Florida. So this guy wants to be called Frank, and that happens to also be the name that I, that I call my ex, which is cool, I guess, but that’s more like Frankie after Frankenstein, but we won’t go there. We will not go there tonight. Uh. So Frank says, hey, Ryan, thank you for the podcast you created.

3:48
I’m a delivery driver for Papa John’s and I’m a part-time trader of the Robin Hood era. Not ashamed to say it. Good for you, man. Hey, you got to wear the badge. Be, be the best Robin Hood bro you can be. I have listened to every one of your podcast episodes and often go back and replay it from the beginning. That’s awesome. You’re gonna learn a lot.

4:04
If you go back and listen to all my podcast episodes, you’re gonna learn a lot. And, uh, by the way, just before I forget, uh, There was a person that emailed me right before I did this episode, and he says, Hey, you talked about the Bible of technical analysis. I couldn’t find it. And apparently I told you guys the wrong book in the last episode.

4:19
So I’m here to correct the record. It was funny though, because I actually looked up the Bible of technical analysis in Amazon and it came up and it was a technical analysis of the financial markets. I don’t know why I thought, I think because the book actually says it’s like the Bible of technical analysis. I think I paid like $110 for the book.

4:36
It’s like $29 on on Amazon. I don’t get any, uh, kickback for it, so I’m not, I’m not trying to like push a product on you here. This is, uh, a book by John Jay Murphy. It’s really well done. It’s boring. You’re gonna be bored, but you’re gonna learn, so that’s good too. So it’ll get into like the meat and potatoes that I can’t really get into with a podcast because a podcast can’t afford you with any visual.

4:58
So I’m trying to get into more like game strategy and And the way that we think as traders and also provide you with some examples of experiences and so forth. This book can get into the charts themselves and that’s helpful. Like if I try to explain what a head and shoulders pattern is, I can’t do that on a podcast.

5:13
You just can’t. But a book is obviously, it can do that because it can provide you with the visuals. So check that out. If you’re wanting a, uh, really comprehensive guide to technical analysis, it is a lot of pages. I want to say it’s like 500 pages or so. Definitely don’t get it if they have it in Audible or anything like that, you would not benefit from it being on Audible.

5:32
Kendall, I don’t know. I don’t really do anything with Kendall, so maybe that works, but cheapest, cheapest option is gonna be to go with the, uh, hardcover, really is. So the email continues. There just aren’t too many podcasts on the market today that preach risk management like you do, and I’m thankful that you do that.

5:49
I appreciate all of your tips and techniques for risk management. That’s why I’m not opposed to choosing. Your podcast first for my dad’s birthday and getting him the full package that you offer through Patreon. This October, he says, you can call me Frank. I am a Floridian. Cheers.

6:04
All right. Hey, the Patreon thing that he’s talking about, that’s actually where I provide all my market research that I do all week long. It provides you with S&P 500 updates. It provides you with updates on the NASDAQ, the Russell. I’m gonna be sending you multiple updates on my watchlist each week, charts that I find interesting, as well as updates to all the FA stocks, Facebook, Amazon, Apple, Netflix.

6:24
Google, Tesla, and Microsoft. So there’s a whole gamut of things that you can get from it there. You just need to go to swingtradingthestockmarket.com and just choose what you want. It’s a, it’s a really great way to support the podcast. If you find that it’s been a blessing for you, there’s just a lot of good, good information that you’re getting. Always want to make sure that you’re gonna get so much more than anything that you might pay for.

6:43
So, he also continues to say when the stimulus check was issued back in March or April, and this is what a lot of people did. Um, I’m not exactly sure when it was, but I used $1100 of my stimulus check, originally $1200 so I took $100 out of it for my personal spending, and I used the rest to fund my TD Ameritrade account.

7:00
Cool. So he’s not like an authentic Robin Hood bro, but he’s a Robin Hood bro at heart. I looked at the cruise line stocks NCLH, that’s Norwegian Cruise Lines for those wondering on Google, I googled NCLH stock price for the chart, and he, and I saw 3 balances, and I’m gonna get in at the bottom and hope that it goes up from here. 20 days later, I pulled out and added $500 to my account.

7:20
Hey, you almost like doubled your uh stimulus check there. I went through some volatility along the way and noticed that I It was down about $35.01 day and I put all $1100 on NCLH and got lucky like a slot machine. I pulled out my account, now $1700. OK, so that’s where he got his $500 of profits from.

7:37
After this, of course, I feel like, hey, I’m the best. I know what I’m doing. I know how to trade. I’m a trader, I’m good at this. Wow, the confidence just really got me rolling. I traded for a while, loss after loss after loss, all the way down to $920 from the $1100 that I originally started from.

7:54
And this was just 2 weeks ago. I just recently made a trade on a penny stock, of course, because that’s what’s affordable for 100 shares. I caught CBAT. I got CBAT, which is CBAC Energy Technology for those following along at home, on its most recent run up and even added another 100 shares the night before closing it out, I had $1500 in my account the next day.

8:15
So, OK, so he pushed this thing back to from $920 to $1500. This guy’s got some volatility in this portfolio. Um, I definitely can’t trade that way. It’s a little bonkers. But, um, anyways, he probably got in somewhere around the $2 range, maybe, maybe down into the, the mid $1 range and it went as high as $5 back in, uh, early October, and then it’s been pulling back 4 out of the last 5 days back into the threes.

8:38
All right. Next paragraph on this guy. He says the same thing happened next, lose, win, lose, lose. I’m now at $1,277.55. So he’s pretty much had like a drawdow. of like 25%. That’s a lot, guys. That’s a lot. I can’t recall having a 25% drawdown.

8:55
Um, and it, and that’s because I manage the risk. That’s what you gotta do. You gotta manage the risk because if you get a 25% drawdown, you basically got to make 33% to make it back up on your portfolio because to go, if you go from 100 down to 75%, that’s a 25% drawdown to go back 75% up to 100%, that’s a 33% gain.

9:12
Takes a lot to get back to break even, guys. That’s that’s why I keep the risk tight. I recently had to watch a YouTube video called Greed in the Stock Market after being up $400 on the day and letting my profits sink to $100 all in just 3 to 4 hours. I saw a head and shoulders pattern and I didn’t believe it would tank, but it did.

9:28
I am greedy. That is my issue. I use hard stops for my swing trades, but sometimes when I day trade, I have no day trades left, so I don’t worry about a stop loss, then it turns into a losing swing trade. Well, I I do think there’s a huge greed problem here. Um, the reason why is that, yes, in theory, you can make 3 trades a week, basically, day trading before you get flagged as a pattern day trader, but basically, they don’t want you being a day trader if you have less than $25,000 in your account.

9:56
And I don’t like that rule. I don’t think it’s a good rule, but that’s the rule. I think you should be allowed to do whatever it is that you want with your money. But that’s a big problem though. I mean, if you’re, if you’re making that next trade that’s going to make you a pattern day trader, then you don’t want to be making that trade as a day trade. That’s crazy to do because all of a sudden, if the stock goes against you, you can’t get out of it.

10:14
And it sounds like he’s trading a lot of volatile stuff here. Now, he’s new to trading since November. I’m going to, you know, give him a pass here because he’s still learning. He’s, he’s Still trying to come to grips with what the stock market is and what it isn’t. Here’s the thing though, it’s not a get rich quick scheme, and you can’t try to force the market to give you profits faster than what it’s willing to give it to you.

10:33
The way you make profits and the way you make increased gains year after year after year after year is by managing the risk and being patient. You don’t have to trade every day and you. I personally would not be day trading with $1000 in my account. I, I don’t even see the need to be day trading now.

10:49
I know that there’s moves, there’s select moves that you can make money off of on a day to day basis and that it’s like worth taking like WKHS. I was watching that one, but it broke out a little bit too fast. But had I got into it, it went up like 12% in one day. I probably would have gone ahead if I got in on that same day. I probably would have taken at least half off the table and see where the rest wanted to run.

11:08
So half of that position would have been a day trade. But you, you don’t want to be trying to rush your development. A lot of people want to rush their development. They want to keep trading as much as as possible. And what happens when you start doing that, the quality of your trades diminishes greatly because you’re starting to get to a point where you’re willing to trade almost anything.

11:27
You trust yourself too much. And, and look, I have to do that all the time as a trader. I have to second guess my judgment all the time. Not because I’m not confident in what I’m trading, but I have to make sure it’s like, OK, is this a trade setup that I just want to get into that I’m just really excited about getting into?

11:44
Or is this a trade setup that I could care less about whether or not I want to get into it, but it’s because of the risk parameters, because of the profit opportunity, it makes sense. And that’s really what you want to be aiming for is the latter is like, does this trade make sense? Not because I need to trade or have to trade.

12:00
I didn’t trade Friday at all, and that’s OK. I almost didn’t trade today. Because the stock market breadth wasn’t that good, I used a top-down trading strategy, which I think is immensely important. I, I have all sorts of information on my website about it. You can go there, check it out. Not feeling the pressure to trade every single day is important.

12:18
Just because the market’s rolling does not mean you need to add new trades to your portfolio. And you don’t Have to be in a rush. I mean, the markets open up every day, guys. You don’t have to be in a rush. You don’t have to time bottoms either. I mean, think about it. Would you have done good in this market if you got in late March when the market bottom versus late April?

12:34
Yeah, you would have done fine. Market kept on rallying. There’s, there’s time. You don’t have to force it. You don’t have to go all in. And so one of the things that I’m worried about Frankie here is that he is being a little bit too aggressive, and he doesn’t have a lot to lose here. And that’s OK. He doesn’t have to be trading with a million dollar account at all, but with $1200 or whatever it is that he’s trading at this moment, he’s got to protect that capital as if it was a million dollars.

12:59
And the other thing, and I talk about this a lot on my podcasts too, is don’t dollar chase. You don’t want to be a dollar chaser. When you start dollar chasing, you start ignoring all the Other important stuff and just focus on how much are you up on a trade, and you don’t want to do that because when you start thinking about how much am I up on the trade, you start personalizing what that dollar amount means to you.

13:16
It’s like, hey, I can go buy the new PS5 that’s coming out. Or hey, I, I just saw that Sam’s has a discounted TV that I can get for the money that I just made off of that particular stock. I’m cashing out. I’m going there, but that’s, that’s not, that’s not good trading. That’s horrible trading. I don’t care if you made 100% on the trade.

13:32
That’s horrible trading because Not basing it off of what the stock market’s doing, what the chart’s doing. You’re basing it off of your feelings and what that money means to you. That’s why it’s important too to to study at night and to determine what you’re going to be trading the next day, because when, when the market’s not open and when you’re not feeling the pressure to make a trade or not to make a trade, when, when that is not happening, that is the best time to really be studying the charts and to be trying to figure out what, what kind of opportunities are out there, what are your risk parameters, what are your entry prices and everything.

14:00
Else, how are you going to manage the trade? Because once the stock market opens up, people have a tendency to start chasing and turn into Jojoe, the idiot boy that goes into like hyper mode saying, oh, that stock’s up 15%. I’m just gonna buy and see if I can write it up to 20%, and then all of a sudden they’re the stock as a whole is down 10%.

14:15
They’re a long-term bag holder. Oh, man, I’m throwing a lot at you, man. Maybe this thing just makes me hyper to this drink. I don’t know. I don’t feel anything from it. It, it actually gets worse. Oh, gosh. It gets worse as it gets diluted, more diluted, and uh sometimes drinks get a little bit more pleasant when it gets a little bit more diluted, like sometimes they’re the harshest when you just pour it.

14:38
This stuff is nasty. If I, if I was to base it off of delusion alone, it’s like a 0.023, 9. OK, he admits that he’s over trading and yes, he is over trading. Uh, he also says though too that I find myself in some big winners along the way, but the loss is overtaking them.

14:57
That means that you’re, you’re validating what I always say on this podcast, that manage the risk and the profits will take care of themselves. You’re not managing the risk, but if you were managing the risk on those losing trades, those big winners that you have along the way would not be overtaken by the losses. He says being up $177 in 6 months is not bad, statistically speaking, but yes, you can do yourself a world of favor by minimizing those losses.

15:20
Keep them small, man. You want to find out if you’re gonna lose fast or win slow. You want to win slow, lose fast because the faster you can get out of a losing trade and realize, OK, this stock isn’t going anywhere, the quicker that you can put it towards a winning trade. Mind blowing, huh? I study 6 to 7 days a week and think that maybe I’m overwhelmed by the wealth of information I have learned in such a little amount of time.

15:39
Yeah, that could be the case too. I don’t, I don’t think that you have to necessarily study 6 to 7 days a week. That’s good that you have the passion for it, but learn how to just do a couple of really good trade setups and just focus on those. You can make a career off of one trade setup. You really can’t. And so learn how to do like 2 or 3 trade setups and just work on those.

15:56
And then learn all the intricacies behind it. Start studying price action and what that means. He says, my dad just got into the stock market. He’s holding a symbol such as KODK. Oh, that’s Kodak, folks. I’m trying to like keep, keep my emotions about Kodak out of the picture here. Um, there’s a lot of people that have bought Kodak, and that’s people lost a lot of money.

16:15
I mean, this thing went up as high as like $60 back in late July. It was just the nuttiest thing. I mean, it basically came out of the grave. It was like a penny stock practically. And now it’s trading at $9 and it went up 14% just recently. Now it’s selling off again. Look, I don’t know where he got in at. Like, I can’t, I can’t talk specifically to his dad’s situation, but generally speaking, don’t go after these high flyer stocks.

16:35
Don’t go after stocks that are on the verge of dying. You know, people are doing that with Hertz right now. There’s just no need for that. You got to manage the risk and stuff like KODK and stocks that are going up 234, 100% of the day, they’re really impossible to manage the risk. It’s a slot machine. If you’re looking for that action, you just got to go to Vegas.

16:52
But yeah, um, his, his dad’s birthday is coming up and he wants to, uh, show him he got somebody on a podcast to analyze the stock market, uh, from an intelligent standpoint, which hopefully, hopefully I’m helping everybody out with this podcast episode here. He says PS constructive criticism is highly accepted.

17:07
Hammer it down for me. So I try not to be too hard on you, Frankie, but yeah, you guys are gonna find as you get more and more into trading and you get more and more of that. Experience that you got to stay out of these stocks that are just high flying and, and the FOMO crowd is at its height because the FOMO will get you every time and you’re going to lose a lot of money and it’s just not worth it.

17:26
So manage the risk, guys. Stay out of these FOMO stocks like Kodak, like Hersch, just because everybody else is getting into it doesn’t mean you have to get into it. That’s, that’s just the fact of the matter. You know, you’ve got a stock that’s going up 20 or 30%, you know, over the course of 4. 5 days and everybody’s excited about it, but there’s a ton of other stocks that are probably gonna be going up at that same time too.

17:44
I can’t tell you offhand which ones they’re going to be, but it’s just like any stock. You have to buy into it in order to, uh, experience whether or not it’s gonna go up 10%, 20, 30%. But again, try to focus on one strategy. You don’t have to be a swing trader, day trader, futures trader, options trader. You don’t need all that stuff. Focus, focus on being a good trader if you’re new to trading, guys.

18:02
Work on just a couple of setup. take it slow because I’m telling you, the slow and steady, it’s like the tortoise and the hair. We got a lot of hairs right now in the stock market and very few tortoises. And when you’re not trading like a tortoise in the sense that you’re being more methodical, logical, and fact-based, and you’re not just chasing it because everybody else is chasing it.

18:20
Look, if, if, if you’re buying a stock today that you never heard of yesterday, that’s probably a FOMO move. Just saying. By the way, I hope you guys like this podcast. Make sure that you are leaving reviews. I, it really just means the world when you do that. I’m doing 2 of these a week, really flirting with the idea of going to 3.

18:36
It’s much easier for me to do 3 podcast episodes than 3 YouTube videos, which I don’t see that happening anytime soon. I flirted with the idea as well with YouTube going to 3 videos a week, but it’s just impossible. I’m gonna keep. that too. But the podcast, I think, you know, as long as you guys keep sending me emails and, I’ll keep, I’ll keep doing these episodes and everything.

18:55
Um, but yeah, keep sending them to me, keep sending me your questions. I like them. I like them. I mean, it’s, it’s such good content for new traders, experienced traders, and everything in between to really be hearing because we’re getting to learn from each other’s situation. And you know what? It’s not just what I have to say.

19:11
Say some of you guys out there are listening and you’re getting ideas off of what these people are saying in their emails and maybe I’m sparking a little bit of that creativity as well and that’s a good thing. So make sure to leave some reviews whether you’re watching it on Apple, which the majority of you guys do, or whether you’re watching on some other platform, make sure to subscribe, leave a 5 star review if you can.

19:28
That means the world to me. And um God bless you guys all, man, and keep sending those emails in. Thanks.