Don’t Trade Like A Serial Killer | Podcast Episode #151

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, hey, everybody, this is Ryan Mallory with Swing Trading the Stock Market podcast.

0:35
This is gonna be a good episode. First of all, we’re going to talk about a guy that’s actually just afraid to trade. He’s starting off. He has a small account, you just a little bit nervous and tentative about getting his feet wet. And then I’m going to segue into why you shouldn’t treat like a serial killer, which is the title of this podcast.

0:53
So, might sound a little bit weird as I’m trying to explain it right now. But as we get further along into this podcast today, it’ll make a little bit more sense. So today’s email comes from beginning traitor, I’m going to call Bobbi Ray. He’s from the Deep South, he’s in Mississippi and he actually likes his redneck names.

1:10
He also likes Maker’s Mark for his bourbon but for me today. Picked up this new bourbon that I’ve been seeing on some other message. Boards out there. He picked it up at a local restaurant and it’s called Redwood Empire, pipe dream bourbon whiskey. I guess pipe dream is a tree out there in California.

1:28
It’s like the 14th tallest tree and the world and so that’s what they named it after, after the pipe dream, but it’s 45 percent alcohol. 90 Proof made up in Northern California. Some of you listeners are from up there so maybe you’ve been to the Distillery. That’d be pretty cool and when I when I drink it it’s got this like nice smooth, vanilla flavor at first, right?

1:48
Then it kind of transitions into a little bit more spice, a little bit more hotness. I can taste like the oak flavor in it and it has like this meant, like finish. I don’t know. I can’t get anybody else to say that they can taste that same mint flavor, but it seems very prominent to me. And I don’t know why it is that I taste it, but it’s The really good flavor.

2:06
I think I got this for like 36, 37 dollars, this Bourbon and it’s an amazing bourbon for the price scale of 0 to 10. I give it a 7 point 7 just a really solid solid bourbon very distinct flavors. You can smell the honey when when you put it up to your nose, just really good.

2:22
Now Bobby Ray here, he emails. Me says Ryan, I joined share planner two weeks ago and really enjoyed watching you guys trait. I have studied for some time now. And maybe are you or two in total? I have not been able to pull the trigger on a trade yet for a couple reasons. Reasons. First I have a small account, 2500 dollars and I don’t want to get in on a trade that makes that even seem smaller.

2:41
When I see a setup, I just can’t help, but think I’m not ready for this. Or is that just fomo second. I’m wondering if I should wait on the market to become more opportune for this bubble to pop. Any advice would be appreciated sincerely Bobby Ray. Now trading with a small count, yes, I get that.

2:57
If you’re profitable on a trade, you’re not going to be making a ton of money, and if you’re trading a small account, there’s a tendency to let some of your losses be a Bit bigger than what you should probably let it be because you’re thinking to yourself, okay, I lost 100 bucks. I’ll be able to recover I’ll live, right.

3:14
But you shouldn’t view it that way. In fact you really a my opinion as a traitor and this is how I approach it. And that’s what I really try to do with this podcast X give you real life, examples of a traitor who’s had to make it himself in this world and taught himself how to trade, never had like a mentor or anything else, really?

3:29
And I’ve had to learn these examples for myself and I started off with a very small account to. But in today’s day and age, You’re not being riddled with commission costs that are five and ten dollars a pop and you get totally destroyed but just commission costs alone on your trading. I mean, I actually had to deal with commission costs that were like 1999 when I was starting out and I was trading a small account and I’ll get to that in a second to.

3:51
But today, you have free commissions. So whether you’re trading a million dollars, you’re trading $2500 your approach to trading should really be the same and even better is that there’s fractional shares. I tell you guys all the time. Don’t get caught up in how many shares you can buy of a stock just don’t and you can buy fresh.

4:07
Channel shares of Amazon now, which is really cool. So you can really be unbiased towards whether it’s a three thousand dollar stock or whether it’s a ten dollar stock and you can just say, hey, is this thing setting up pretty good. And if so if it’s an Amazon stock and I want it, I have 2500 dollars in my account and I’m going to put 10% on each tray.

4:28
Maybe it’s $250 and it’s a very small fraction of Amazon, but it’s nonetheless, your you’re putting $250 to work. Just like, if you were buying 25 shares of a ten dollar stock for a total of 250 dollars, whether whether that ten dollar stock goes up 10% or whether Amazon as a fractional share goes up, 10%, you’re still making the same amount and every one of my positions of my portfolio right now, I can’t tell you how many shares of any of my stocks that I own.

4:47
I just don’t know. I don’t pay attention to it. I also don’t care how much money I am up, or down on a trade, because all I’m trying to do is manage the risk from a percentage standpoint from using technical analysis. The dollar amount is irrelevant to me. And so, really, if you’re trying to get good at trading, you got to get past the whole dollar amount thing if you’re good at Being ever, you become good at trading. The dollars will follow but you don’t have to pay attention to that. You really need to be focused on making good quality setups. And so Bobbi Ray here, instead of worrying about, you know, the 2500 dollars going down or going up and it’s good to have a sense of concern about losing the money. It is.

5:22
But you can do paper trading and you have a lot of people who are successful paper Traders. But then when they start putting their money to work in real time they suck. And why is that is because the emotions aren’t involved in paper trading. There’s no emotions and paper. Tree. It’s easy. If you’re wrong. Who cares? Just add a few more zeros to account if you’re wrong. Look, if I was learning how to trade on paper tray, I’ll probably just have fun with it and trade GameStop and AMC the whole time. Yes there’s there’s things that you can learn just from like a mechanical standpoint of how trading works and everything through paper trading.

5:53
But the emotions is a whole other game once you start trading with your own money. So if you’re a successful paper Trader, I would not Bank on yourself, being a successful Trader and real life, because once you start putting your money, Work. It’s a totally different game, and I don’t want to discourage you. Everybody’s got to start somewhere, but you got to get your feet wet at some point and maybe it’s not the right time for Bobbi Ray, I don’t know. But, I can tell you, it’s not fomo because if it was fomo, the fear of missing out you’d be jumping in and you put be losing a lot of money because you don’t know when to stop trading, not when to start trading, but you can get these fractional shares, I think Schwab Charles Schwab has them interactive. Brokers has them and Robin Hood. Even though I don’t like Robin Hood at all.

6:30
They have them too. And I remember when I was training with a small County, I started investing when I was Eleven years old and I built an account up during the 90s.com bubble very similar to like what we have right now and I built it up from like five thousand dollars up to like 40 thousand dollars and then it came crashing down and I learned what a market bubble was like, I mean, that was an incredible example and then I went off to college and I kind of got distracted. I still had money in the market, everything, but it’s very passive about it and then afterwards I got back into it when I, you know, used a lot of that money that I made when I was in high school as a down payment on a house and other things. But after that, I got back into the market and I remember standing Ring off of like a few hundred dollars with twenty dollar commission costs.

7:09
Right. I mean you really needed big big games but I also remember to take it a thousand dollars and putting it into my account and by like 45 stocks and I remember that night I felt like I was just completely irresponsible and hindsight a thousand dollars is not going to make or break you in life. It’s a lot of money. I don’t want to lose a thousand dollars on a trade or for any reason on life, right? But it’s not going to make or break you in the long run. You can come back from that. But in my mind, I was like Like, losing sleep, that night is like, man. Am I gonna lose this thousand? I just didn’t know what to do. I remember the next day and I don’t remember why, but the stock market was plummeting, and all those positions were were red, and they were bleeding.

7:45
And I just didn’t really know how to handle this. I think I was down, like, 10% of my account. Yeah. There were, there were pretty volatile trades at the time. And I just panics old man. I sold every one of those stocks. I said, I can’t handle this. I can’t a lot of Traders still do that today. That’s not unique to my time trading. I mean, everybody Panic cells at one point at a time, in their life and some some of them never can stop. Excelling. I think that’s what Wall Street bets call this paper hands. You gotta hand it to Wall Street. Best they come up with some fascinating terms paper, hands aren’t good and Diamond hands aren’t good. You want something more in the middle there? Nonetheless, I sold out.

8:16
I would say two three weeks later. All those positions were up 15, 20 percent but I let the emotions actually had good stock picks but I let the emotions get to the trade. I didn’t go into the trade with a plan. I didn’t come to the tray with okay. If it goes against me, this is where I’m going to get out so I get I get the emotions of trading small dollars. It’s real to you at that time that okay. If I lose twenty five hundred dollars were my case. If I Lose a thousand dollars back when I first started, actively trading again. Yeah, it’s going to wreak havoc on your mind and you can Panic sell so, so I get that. But I also have created and I encourage people to do this because it’s very cheap. Swing, trading the stock market dot comments, a patron account that runs along side by side with this podcast and it’s going to give you all of my market research on a daily basis.

8:56
That’s going to include my master, watch lists, both, bullish and bearish. So if you’re willing to short the market you’re always going to have a watch list of stocks that I’m watching from the short side also. You’re bullish. There’s going to be stocks that you can look at from the from the more bullish side. Also, I’m giving you my daily setups that I’m looking at possibly trading each and every day as well as some of the most intriguing charts that I come across on top of that all the updates on the Fang, stocks Facebook, Amazon Apple Netflix, Google Microsoft and Tesla as well as multiple updates each week on the S&P 500 and NASDAQ 100 in the Russell 2000.

9:27
So, check that out. swingtradingthestockmarket.com, you’ll learn a lot from it, and that brings me to going from Trading with a small account and Being afraid to trade to not trading, like a serial killer. So I had this discussion with my dad the other day and was a, it was a pretty cool discussion. I was telling about a friend that was trading his trading big.

9:45
And he was saying, man, I just, I really don’t enjoy the trading right now. I’m having to watch like every tick because one I’m trading probably way too big and he also said that these are some very volatile plays there, like in the Solar plays and he was just, it was causing the stomach to turn a lot.

10:00
So I was I was telling my dad a little bit about it. I was like, man, he’s just like a lot of people do this. Like, it’s not that they can’t make profits in the market, it’s a very hard thing to keep those profits. I think that’s what more people run into than anything else. Everybody has a story about a big winner that they made, but what they, oftentimes, don’t tell you is how they squandered, all of those profits from that.

10:22
Big winning trade on the very next trade that they took and it’s kind of like, a serial killer. I’ve always wondered this about serial killers and I’m not like a Person who watches murder mysteries on Netflix or anything else, but I have watched a few of them, okay? And you take like the Ted Bundy’s. And some of these other guys that are just real crazy.

10:39
What was the one thing that they did? Well, they kept going until they got caught very rarely. Do you ever hear of a serial killer that? Never got caught. I like a string of murders that you never found out. Who did them all instead? What you get is like these serial killers is, they keep killing. And eventually they’re going to slip up and what’s going to happen, they’re going to go away for life are going to get killed.

10:58
They’re going to go jail. But something’s going to happen to him. That’s going to put into it all. And I think I know it’s kind of a morbid comparison, okay. But I think it’s very similar to that and trading with the mindset is that we keep going big and we all of a sudden, like, convince ourselves that we can keep trading.

11:14
Big keep trading. These very volatile stocks and stay very profitable at the same time, just like a serial killer things. I could keep just getting away with murder all the time and move on to the next murder and get away with that too. That’s what so many Traders do. They just keep trading big until they get caught and when they get Cut, they lose it all.

11:31
Like I said, making profits aren’t the issue. It’s keeping them, it’s not getting caught as a traitor. To the downside getting into that one trade, that all of a sudden just goes belly up on you, you lose 80 90 percent on it, it doesn’t matter what you did on the 10 or 15 previous trades that made you massive gains.

11:47
You just kept adding those profits to the next trade and you’ve got slammed always ask myself. Why don’t serial killers are stopped while they’re ahead and in the kit sense of a swing Trader or a day trader, that keeps going for the big home runs each. And every time I don’t, They just stopped when they’re ahead. And that’s why with this podcast on almost every episode, I do, I highlight the risk of trading, I highlight the risk because I know that if you manage the risk, that is the only way that you can sustain a career, or a lifetime in the stock market trading, because when you trade big and you’re not showing regard for the risk, some of these big trades, they’re very, very difficult to manage the risk on whether it’s AMC or GameStop hurts and Kodak these things, that all of a sudden, out of nowhere will go up a thousand percent or buying Bitcoins over 55,000 after it just made this.

12:29
Move over the last one, and a half months. And now all of a sudden, it’s a good time to get in your swinging. Big, you’re putting all your money into Bitcoin. Hoping that it will go from 55 up to 200,000 or to a million. I don’t know and maybe you will get it right. But then when you move on from that trade, then there’s gonna be another trade that you swing big on.

12:46
So the key becomes not so much making the profits but sustaining those profits but keeping them and that’s why it’s so much better to take a much more moderate approach to trading, where you’re planning out your trait, you’re always assuming that you’re going to go wrong on your trade. You’re always going to Assume that you lose. And so if you’re going to lose where you going to get out at where you going to know that you’ve lost that because every trade that I make, I assume that I’m going to lose on it.

13:06
And I always know where I’m going to get out before I ever get in because in the end, it’s not about just continuing to hit big until you get caught. Because at that point, you lose it all. It’s about systematically making trays and managing stocks the same way, with every trade where the risk is far, less than the prophets that are possible from that trade.

13:25
Now, that doesn’t mean you go after GameStop and say, well, I’m going to put a 75% stop. Us on this thing and hopes that I make two hundred and twenty five percent off of it know that if you’re wrong on a 75% trade, you just dug yourself into a huge hole, there’s like a fine line. Like, for me, I’m trying to like not take losses more than like four to eight percent on my trades.

13:45
Sometimes, when the markets providing incredible opportunities, that incredible oversold levels, maybe I’ll, I’ll push that out to like 10%, but for the most part is somewhere like that four to eight percent usually more. So in the four percent side, I want tight risk, especially in this market here where there’s a lot of Sucks. Losing their momentum. I’m not going to let it go. Run against me eight to nine percent. Before I finally realize that maybe I should get out it’s going to be more towards like the three to four percent because if I can make 12% or 16 percent and only be risking three or four percent on the trade that is incredible you’re going to make good profits in the long run by just simply.

14:17
And let me tell you 16 percent or 15 percent or even 10 percent is so much more attainable and so much more realistic on a trade and trying to go for these Wall. Street bets two hundred percent Returns on your trade because How many more people are going to lose trying to attain that level then what who will actually achieve it?

14:35
I guarantee you there’s more people who lost on GameStop than made money on GameStop and there’s a lot of people holding onto losing positions that they’ll never get out of because they probably bought it at like 300 dollars. A share is like a little comeback. I mean there’s articles all over the place I saw it on Wall Street Journal. I’ve seen it all over dudes that took 20,000 dollar loans out and now they’re stuck at like over and they’re paying interest on the loans on top of the fact that they have a stock trade that they’re down like 75 80 percent on all but it will come.

14:59
I’m back. I like the stock I believe in the stock now man, if you would have just planned out the trade actually, if you would just avoid a GameStop all together that would help. But also if you would have just plain out the trade. But when you try to plan out the trade, how do you plan on to trade? That has these wild 50% swings. You can’t that’s why you can’t trade those though.

15:15
In the end, just to summarize all this. If you trade like a serial killer, you’re going to get caught. Like a serial killer. When you get caught like a serial killer, you’re going to lose everything that you had. So one don’t trade too big to don’t trade, these incredibly volatile impossible. Manage trades like game stock and all these other ones that are out there right now, especially with like the spax, there’s a ton of people in CC IV right now.

15:37
Maybe some of you guys have made money off of it. There’s there’s gonna be more losers in the in and CC IV then there is Winners. And what you definitely don’t want to do is trade big on very difficult and unmanageable trades. That’s the recipe for disaster for sure. The other two instances that I just gave you their disasters as well, but you almost want to Surefire way to get into the impossible to manage trades with massive position.

15:59
Alright guys, that’s going to do it for today. If you have any questions that you would like me to go over on this podcast, send me an e-mail ryan@shareplanner.com. I am getting to, as many of these things that I can, you guys send a lot of them in, but I’m going to get to all of them. I really do believe that I will. I have every one of them. I’ve read them all, and I hope to put every one of them on air.

16:18
So keep sending them my way ryan@shareplanner.com. And if you could do me the pleasure of going on to Apple podcast app or whatever app that you’re listening to this podcast, Donna. Just leave a review, subscribe follow. It means the world to me that’s like gold in the podcast world and it really helps me to continue to build the audience in my reach that you guys mean the world to me for doing that.

16:40
So many of you have already done it already, this asking if you haven’t done it yet, maybe maybe consider doing it. Thank you guys. God bless. Thanks for listening to my podcast. Swing trading the stock market. I like to encourage you to join me in the SharePlanner Trading Block, where I navigate the stock market, each day with Traders from around the world with your membership.

16:59
If you will get a 7-Day trial and access to my trading room including alerts via text email and WhatsApp. 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.

17:19
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.