This Guy Asks A Lot Of Stock Trading Questions | Podcast Episode #146

0:00
Hey, everybody. This is Ryan Mallory with Swing Trading the stock market, and I got an episode for you today from this one gentleman asks a ton of questions. I’m telling you he’s got questions for days on this email. I’m gonna try to get to all of them. And I think a lot of the questions that he has that they are very numerous and very broad.

0:15
I think they do apply to a lot of the traders out there that are listening to this podcast. So we’re gonna get into it all in this episode here, at least I’m gonna try to. Now, the bourbon. That I’m drinking today. And this was a good find. I found it the other day, I was trying to get some cherries for my old fashion, and I came across a bottle of Willet, bourbon whiskey.

0:34
It’s 47% alcohol, 94% proof. Some of the message boards that I’ve read on this, it’s like you either hate it or you love it. For me, I tried it. I had to try it. It was like, like $59 I think, for the bottle. I was really excited because I’ve not been able to find this anymore. I can’t find it at any of the places that I go to.

0:50
I just found it in this little restaurant. So I bought it, trying it here, and to be honest, I wasn’t that impressed with it either. I, I really was wanting to because you know, you find a rare thing, you want it to be a great experience, but it, it wasn’t that great. So on my scale of 0 to 10, give it like a 686, yeah, I’ll give it a 68.

1:07
I was gonna say 69. I don’t even know if it’s worth being on the verge of 7. I, I would not go across town. To get this hard to find bottle. So I, I give it a 68. Not great. I don’t think it’s better than Buffalo Trace. I think Buffalo Trace is much better, but it still has a little bit of that same profile, has a really good smell to it when you put your nose up to it.

1:23
But outside of that, I feel like that’s where it ends. There’s not a lot of depth to the taste. Now for today’s email, we’re gonna call this guy Bear, good solid bear. That, that’s. that I, I went to college with a guy named Bear. I’ve known a couple of people named Bear. They’re all from Florida. We’re calling this guy Bear, OK? Good name.

1:39
So Bear writes, Ryan, I’ve been listening to your podcast for the last week. I think I went as far as back as round number 20 and I’m currently on number 104. It’s like, man, this guy, this guy’s put in an 84 episode. I know some of you guys have listened to all. I think this is number 146. Some of you guys, this will be your 146th episode and I’m just blown away by that.

1:57
He says, I do have to tell you that I’m a Robin Hood bro, and I laugh at that and I take it in stride. That’s cool, man. We all got, we all got to be a Robin Hood bro at some point in our trading. It’s not even so much about the platform, it’s just the mentality of trading at some point, right? But if you’re still on Robin Hood, especially after the last few weeks, you’re definitely a Robin Hood bro still. That’s OK, man.

2:13
I still love you guys. He says, even though I am using Robin Hood, I’m also listening to your advice. Your advice is sound and I have loved every bit of it. So, a history on trading for me, there is none. I have had some co-workers that got me interested in trading and I thought I would dip my toe into the water. Right now, the capital that I have at work is about $130.

2:31
I wanted to start low until I got a better feel for it. And yes, I do have a plan to follow. So real quick about $130. 10 years ago, I would say it’s crazy to try to start trading with $130. And it was. There was no reason to try it because the commissions alone will, will basically destroy your account in just a matter of a few days.

2:49
But granted, Robin Hood has done something really good here. They did open up the markets for everybody to trade. So you got people trading with like a few bucks to, uh, you know, millions of dollars. I don’t think people were with millions of dollars on. Robin Hood per se. I’m sure there’s some, but I don’t think it’s a lot. And it has done a really good job to educate a lot of people a lot more on the financial markets.

3:08
But with that, I don’t know if they’ve been necessarily the most responsible and educating people along the way to the degree that they should. And so I think. There’s a lot of people that have blown out accounts, especially over the last few weeks with GameStop. And, uh, it’s a, it’s a double-edged sword really, because I definitely don’t want Robin Hood restricting trading.

3:25
I mean, people should be allowed to trade whatever they want, but I don’t know if they put people in the best position to succeed in the stock market either by Making trading feel so impulsive per se. But yeah, I mean, $130 if that’s all you got to start to trade, and that’s gonna be something that doesn’t give you anxiety or keep you up at night, by all means, trade the $130.

3:43
But it’s cool too that you could do fractions of shares because you can’t do Amazon unless you have over $3000 in your account normally. But now that you can do fractions, yeah, you can still trade Amazon. And it’s good too that with this, uh, guy Bearer here that he’s not getting caught up in how many. Shares he’s buying because you’re gonna find here in a second, he’s gonna tell you that he’s trading fractional shares of Moderna.

4:02
He only has 0.4 shares of it. He says, I am only using the funds that are available to me that are outside of our budget. So that’s another good thing, OK? He’s, he’s going outside the budget. This, this is extra money above and beyond what, what they live off of. He says, yes, the wife knows and it’s not even all the funds outside of our budget either.

4:19
He says right now, I am invested in Moderna, Pfizer, and some other stock that Robin Hood. gave me one share. I work in a pharmacy, so I follow the news on them pretty heavily. So I would say this about following the news. A lot of times when we get the news, even when I get the news and I have like real-time news subscriptions and everything else, if I, Twitter is also like a great source to get news, probably faster than some of these real-time news groups can put it out there.

4:41
But Twitter or whatever platform that you’re using, even when you get it real time, it’s hard for you to react to it because usually the reaction is almost Instantaneous, right? You can’t really get in on that initial move. And even if you follow the news and you think you can figure out how it’s gonna go, it’s kind of like earnings. You know how earnings are gonna go, you know it’s gonna be blowout earnings.

4:58
That doesn’t necessarily mean you’re gonna get the direction right. You can have blowout earnings, and we’ve seen that a lot so far this earnings season, great earnings, different reaction than what anybody was expecting. So, don’t rely on the fact that you’re following the news that you’re going to have the right feel or the pulse on the stock itself.

5:14
Because news is almost like after the fact. They’re gonna price that junk in instantaneously. He says, right now I’m about 13% up in Moderna. That’s great, man. Make sure I don’t care if you’re trading with $130 or $10 million. And this is about discipline and about making sure that you put yourself on the right path for when you are trading with more money that you already have in place those levels of discipline that you need in order to succeed in the market.

5:38
So, make sure you’re raising the stop loss. Make sure you’re managing your risk. That’s what you’re doing when you’re raising the stop loss or when you’re taking some profits off the table. If it’s a dollar, you’re still securing some of those profits. Granted my investment is in 0.42 shares, I’m a darn it. Yes, I am managing the risk and I have my stop loss in place.

5:53
Great. I plan on moving it up slightly to track the gains as you have mentioned. I wanted to tell you that I appreciate the advice that you give and I feel like I’m one of the 4 Robin Hood traders that listen to you. Maybe we should be called the Ryan Hood bros. Well, let me tell you, there’s a lot of Robin Hood bros that do listen, and you know what, I, I say this all the time and sometimes I’ll get a little bit of hate mail about this.

6:13
I really have nothing against. Robin Hood bros. I just want you guys to, uh, be on the right track to profitability, to make the right moves for your portfolio because I think a lot of people are, are throwing their money away, and I hate to see that. I want to see them sustain themselves for the long term to be successful long-term traders.

6:29
And that doesn’t mean long-term investing. I’m talking about long-term successful traders that are trading, you know, in the short term. You’re doing a good job, you’re moving up your, your stop us, but make sure when you’re moving up to stop us, that you’re not just moving it up saying, OK. I don’t want to lose more than 3% from where I’m at right now. It needs to be below, at least this is my approach.

6:48
It needs to be below a key support level. I hate moving it up if there’s not a technical basis for moving it up. Now, when things get a little bit out of control where let’s say a stock pops 20 or 30%, but there’s no support unless I put the stop loss below where the initial takeoff took place.

7:04
Well, I’m not gonna do that. I’m not gonna risk 20% of profits. I’m gonna have to arbitrarily place it somewhere to where I’m not gonna lose the majority of my profits on a big intraday run. But those examples are not the norm. Those are the exceptions. So on a standard trade, you know, OK, you get in and it moves up a few percent and maybe there’s an opportunity to tighten that stop loss a little bit, but it’s below a key support level.

7:25
That’s what you want. You don’t want to just say, OK, I’m moved up 3%, I’m gonna put a stop loss of 1.5% below, because there’s a good chance just the intraday price swings of a stock it’s gonna get stopped out and there was no real basis for why it needed to be stopped out. He’s a couple of questions I do have for you. I know you don’t like Robin Hood.

7:41
Correct. I don’t like the Robin Hood platform, but I do like Robin Hood, bros. You guys, you guys are my jam. Even though I don’t trade like you guys, I love the enthusiasm that you guys bring. He says, and I’m not a millennial geek either. Well, let me tell you, that’s, that’s not, let’s not go hard on the millennials here. I may be one.

7:57
I don’t know. My, my niece Jessica, she, she claims that I’m a millennial. I don’t think I am. I was born in 1980. From what I’ve read, it’s like 1981 1982 is the cutoff. So I think I might be a Gen Xer, definitely not a boomer. I’ve been called a boomer before, definitely not a boomer, but I don’t think I’m a millennial either.

8:12
He says, I am actually 38. And not much younger than you. Is there another platform that you would recommend trading on? I have wanted to trade for a long time, but it has always been when I was younger that you have had to have a lot of money to start trading with. That’s why Robin Hood appealed to me. If I want to trade $1 I can’t. So this is a good question, like what, and I get this a lot.

8:29
What, what platforms to trade on? There’s, there’s a ton of platforms out there. I mean, uh, everybody should be trading free right now, at least in the United States. I know in Canada that’s not the case in some countries. Overseas, that’s definitely not the case either. But in the United States, you definitely should be trading free right now. And I’m hoping that it, the same could be said for the other countries in the near future.

8:46
I like TD Ameritrade. I think TD Ameritrade’s a, a, a decent platform. I don’t know if there’s any perfect platform out there. I mean, we’ve seen plenty of times over the past year where a lot of brokerages are down when you’re needing to trade the most. Robin Hood has been down quite a bit in my opinion. And that’s never a good thing, but I’ve not really seen any platform that’s perfect at that per se.

9:07
I also would say that the ease of entering an order is pretty important. I believe that Robin Hood has a pretty decent ease of entry. I think it allows for a lot of impulsive trading, so that’s not good, but you don’t want to have to be, you know, going through a lot of steps to place an order. So, my favorite one is stink or swim.

9:22
I also like Fidelity. I think Fidelity is pretty good too, um. They also have their flaws as well. But outside of that, TD Ameritrade’s owned by Charles Schwab now. Charles Schwab, I think is fine. ETrade’s fine. Some of the bigger ones you can’t really go wrong with. Yes, I don’t like some of these things that big brokerages have done, like restricting the ability to trade, uh, certain stocks like GameStop, even though I would never trade it, but I still don’t think they should be restricting that on the retail traders.

9:47
He says my games will be small, but it. Be in my control. And again, he’s trading with $130. He says my goal is to take my profit and reinvest 50% back into the market. 50% will go back to me, so I am keeping a profit but also growing my capital to trade. It’s not a bad thing. I know some people that they always trade the same amount. They don’t even, uh, keep any of the profits in their brokerage account.

10:06
They trade like with $100,000 any money that they make over the course of the year, they put it into their personal account and just continue to. that $100,000. I still like the idea of growing the account, but people need to be aware of the effects of compounding. Yes, compounding can be really good to the upside, especially when you have years and years and years of successful trading.

10:24
But even if you have years of successful trading, you start getting very sloppy with how you manage the risk. It takes one trade that can wipe out years’ worth of profits, especially as the, the account continues to grow or as you add more money into it. You got to recognize the fact that if you’re losing 10% on a $50,000 trade, that’s gonna be a whole lot more than 10% on a $130 trade.

10:47
And so that can set you back quite a bit. It can set you back a year or two. So you have to manage the risk. That’s why I like to keep my risk tight and uh I want the nearest support level possible to define my reward to risk ratio. Because I like the idea of selling 13 at a time. This makes sense so that you keep some profits if it goes.

11:04
South and, and it does help. It helped me with RUN this past week. I was in it at like $73 or $74 a share. It went up to $77 plus change. I got out of 13. Guess what it did? The rest of the day it sold off. It sold off, didn’t give me a good candle at all. I didn’t like the candle going into the next day.

11:21
So I sold at the end of the day on the last 2/3 of that trade, I took like a 0.6% loss, but because I took profits early on in the very beginning. That 1st 3rd that I took off the table was worth like 4.2%. So overall, I actually made profit on the trade, even though the majority of the trade was for a loss.

11:38
So his next question. What is considered a short term, midterm and long-term trade. So short term trade, uh, I would, I would usually consider that anything from like a few days to like a few weeks. That would be my short term, midterm starts to when it gets like 1 to 2 months long. Uh, you could probably even consider swing trade that’s a month or so, a short-term trade.

11:58
But once it starts to get like 2 to 3 months because of midterm, I don’t have a lot of mid-term trades that, that take place. I’ve had a couple that last about 2 months, but They don’t usually get too far beyond that. And I don’t ever have any that go beyond 3 months because there’s earning season 4 times a year. That means that you can’t really hold a stock if you’re not going to hold anything through earnings season.

12:17
You can’t hold anything beyond 3 months. Long term is going to be anything over a year. So your midterm is gonna be like a couple of months to a year, long term is gonna be like a year and onward. He says, does it differ to each person? Yeah, I, I, I, I guess so. I don’t think long term differs, long term capital gains, doesn’t it? Differ to the tax man, um, that’s usually like long term capital gains is beyond one year.

12:37
He says, I know you have said that you’re comfortable with selling 3 to 4% profit margin when you start selling. I feel like I am slightly higher one because I’m not using a ton of capital and two, if I lose it, it’ll suck, but I won’t lose my house. What is a good percentage profit for a new trader? Well, I mean.

12:54
That’s gonna really depend on the technical analysis of the trade too. So I took 2% this past week on Bank of America. Why? Because I was down 3% the week before and it made about 6% move off of the lows of that trade, but and I almost got stopped out of the darn thing. But it was a good week in the market. It recovered pretty nicely. When it got up to about 2%. OK, I, I don’t want it to go up 2% and, uh, have a reversal and go back down.

13:13
I was like, man, sucker was. Back up 2%, I could have sold a little bit of it right there and, uh, at least come away with some profit on a portion of the trade. But no, I didn’t let that happen. So I took a little bit off the table. I was like, look, I hope it keeps going higher for my sake because I still have 2/3 of my position on there, but it hasn’t been a perfect trade. It hasn’t been a very solid trade in terms of it broke out, it did exactly what it was supposed to do.

13:33
No, it had a pretty, pretty significant pull back there in respects to where the stop loss was placed. Got pretty close to. The stop loss, made a nice little reversal, went profitable. So I took a little bit off the table. I’m letting the rest run. It’s like up 6% at this point. Now, there’s sometimes where I take my first at like 7%. A lot of times too, that will depend on what kind of volatility is associated with the trade.

13:53
It’s a lot easier for the 1st 3rd of a trade to be taken out at like 7 or 8% when you’re trading something like SPCE or Shopify or Trade Desk. But to get like 7 or 8% on your 1st 3rd with Amazon or with Microsoft or with Walmart, takes a little bit more effort there, right?

14:11
So a lot of that’s gonna go based off of the trade. I don’t think you should base it off of, OK, whether or not I’m a new trader or an experienced trader, if I’m trading with a lot or trading with a little. I really think that it needs to be based off of the price action of the stock, your confidence in it going forward, has the trade really played out as well as it should have.

14:27
And I provide a lot of information like. This was swingtradingthestockmarket.com. Each and every week I’m providing you guys with my analysis on the S&P 500, the NASDAQ, the Russell 2000. On top of that, I’m providing you with all my analysis on the FA stocks. That’s gonna include Facebook, Amazon, Apple, Netflix, Google, Microsoft, and Tesla.

14:45
So when you’re looking at like a stock like Tesla, maybe it’s starting to hit some resistance here. You got a full position where you said, you know what, it’s hitting some resistance, it’s struggling. Let’s take a third of my position off right here. That’s where that. Kind of analysis is going to help you out. Also, I’m gonna provide you with my master watch list twice each week, updated watch lists that I’m following for both bullish stocks and bear stocks.

15:04
And every day I’m gonna give you the daily trade setups that I’m following for that particular day, as well as some of the most intriguing charts of the day. So check that out, swingtradingthestockmarket.com and check out a cheap plan that works for you. He says, I know I have to manage the risk. You say that at least 10 times each podcast. Yeah, I know, I know. I, I know I kind of brand.

15:20
Myself about managing the risk in the sense that everything I pretty much say comes back to managing the risk, but the profits take care of themselves. He says, I love that. He says, last question is about the 1/3 you sell. Do you reinvest that once the stock has fallen to a set point, or do you move it on to another stock? Ryan, I love your podcast and I hope to get caught up on to the current episode soon.

15:38
Thank you for your advice. It’s perfect. I hope I don’t fit the stereotype Robin Hood, bro. I want to be a Ryan Hood bro. Thanks. Sincerely, bear. All right, so Bear, a lot of questions. Like I said, he had, he gave me a lot of material to work with here. That was fun. Now, when I sell a third of my position, sometimes I sell a half a position.

15:58
Look, if this stock has been acting crazy and I’m just not getting a good feel, but there’s an opportunity to take some of my profit off the table, where maybe the market has just really turned south in terms of its outlook. I’ll take a 50% off the table. I have no problem doing it, so it’s not set based solely on 1/3 of a position.

16:13
Sometimes it’s a 1/2 a position. Sometimes it’s more. Sometimes I’ll just go ahead and get out of the whole stock altogether. But now, if I get out, let’s say a half a position, I get in at 100, it goes up to 105, I get out that half a position and it comes back down to 100. Am I gonna go ahead and take that half position that I got out at 105 and put it back in at 100?

16:30
No, I’m not. Because really what I’m trying to do is I’m just trying to manage that first trade. I can make it. More complicated and add more back to it. But then there’s also like a psychological aspect of that too. Let’s say I get my whole position in at 100, it goes up to 105. I get half out of that position.

16:46
It comes back down to 100. I add that half position that I got out at 105 back in at 100. I’m excited. OK, maybe it’ll go back to 105, maybe it’ll go back to 110 with that full position now that I, I have once again. But instead, it goes down to $95 and I get stopped out. I didn’t make anything on the trade.

17:01
In fact, I lost money on the trade. And so that’s, that can be a very discouraging aspect of trading that I really don’t want to deal with because like you guys and like anybody else, it’s like we’re, we’re emotional, we’re humans, we have emotions. And so I don’t want to subject myself to like the psychological damage that that can. as a trader of like, hey, I just had a good trade on my hand and I blew it, man.

17:20
I, I try not to blow trade, you know, and I think that’s a good way to blow it is when it comes back down. If it comes back down to $100 and I have my, my stop off set at like $98 or $97 a share, and that triggers, then I’m on the overall trade, I’m probably getting out flat. But at least I’m not taking, taking a loss on the trade.

17:38
So I’m not a big fan of that. What I want to do, and it’s not as exciting. Because for the majority of people who get into the stock market, it’s about making money. It’s about making gains. And it’s that for me too. Ultimately, that’s what I want to do. I want to build my portfolio higher and higher and higher each and every year. But I also know too that the way to do that is having a history of good trading decisions and making good trades.

18:00
So if I get into a stock ABC at 100 and I manage it, I get a little bit out at 105, and then I raise my stock loss to 101 and, and the rest gets stopped out at 101. I know I made a profit on the trade. It might not have been like a mind blowing profit, but it’s still, it’s increasing the profits to my portfolio and I managed the trade based off of what the chart said, not based off of my emotions or.

18:19
The desire to make more money. You got to almost get rid of the desire to make money in the stock market in order to make money. You have to just be concerned about, I’m making good trades. I’m executing my trades. I’m doing it right. And you don’t get caught up in the GameStops and AMCs and the blue blueberries and blackberries and, and everything else in between that they’re just going crazy and you avoid that FOMO.

18:39
That FOMO will get you so messed up. It, it’s a great way to blow capital. So you don’t want to be doing that kind of stuff. So overall, Good email. It was kind of like all over the place in terms of questions, but most of the time it’s about taking profits and, uh, just managing the risk. And I, and I like those emails.

18:54
I like any of your emails, so keep sending them to me. Don’t get discouraged if I haven’t got to your email yet. I will definitely try to get to each and every one of you guys. And if you have any questions, be sure to send them ryan@shareplanner.com. I love getting your emails. I want to hear about them and I want to know what troubles you guys. Make sure to guys, to subscribe if you’re on the Apple platform or any platform for that matter that gives you a subscribe button, click that subscribe button and be sure to leave me a review.

19:17
That, that really helps me to continue to promote this channel, continues to motivate me to provide you guys with this excellent content, and it just really means the world to me too. So 5 stars if you feel that it’s worthy for that and thank you for all that you guys do, and God bless.