Advice for a New Trader | Podcast Episode #204

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.

0:25
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. I’ve got a good episode for you today. It’s not a letter. Usually they are, but not this time. This one comes from my niece who recently sent me a text as of yesterday, actually.

0:45
She was asking me about Visa Stocks and Bullvi. She was saying, hey, got into a little bit of Visa. I’m a little bit worried about it. She was asking me about this death cross that was ongoing and she was concerned that this might Be doom and gloom for her stock. Now, to her credit, she bought Tesla around 700, and we all know what that thing’s doing.

1:02
It’s trading at 1200, so she’s doing a great job. She’s getting into the stock market. She’s in finance as her college major and she’s got bright days ahead of her. But it got me to thinking when she asked me about Visa, I said, you know what, I’ll just go ahead and post a chart for you and detail it out and I’ll put it on Twitter for you.

1:19
And so she was excited about that. She checked it out and she’s doing pretty good on it so far. And then it just came to me that, you know what, instead of maybe just sending her a long-winded text that says things that I would do if I could go back and do things better.

1:35
Things that I wish I would have known when I was in my 20s versus now that I’m in my 40s. What would I tell myself? And I said, you know what, this would be instead of just, you know, being that uncle that tries to explain too much and too short of a period, I thought maybe I’ll do a podcast on it.

1:51
And so this is to my niece. I wanted to make it the 5 things that I would tell her as she starts off on her trading and investing journey. But first, what am I drinking? I’m drinking Old Forester Original batch 1870.

2:08
It’s a straight Kentucky bourbon. And I really like the 1910. I really like the 1920. Those are some of my favorite bourbons. So I said, you know, I need to try this 1870 yet to try it. So 45% alcohol, 190 proof, which is, it’s kind of like in the middle ground.

2:24
I don’t like to go much lower than 45%. Uh, bourbons can’t be lower than 40% anyways, but 45 is that nice average point. Preferably, I like it around 100 proof, 50%, gives it a little bit of extra kick, especially if you’re making like old fashioned with it.

2:40
But I reviewed these bourbons on their own merit. I drank them neat, no ice cubes, nothing at all, and I like to give them a good rating afterwards if they earn it. Now, the color on this, it’s a nice, pretty amber color. The smell of it takes you back to old Grandpa’s wood chipper, I tell you.

2:57
Nice smell, nice color. The flavor is smooth at first, but then it burns thereafter and it has a burning finish too. It lingers like a box of red hots that you just finished. So overall, it’s still pretty good. I like it. I like the burn, I like the smoothness that it starts off with.

3:14
I don’t have anything negative to say that maybe I wish it was like 50% rather than 45%. I’m gonna give it a 7.8. I don’t think it’s necessarily better than the 1920 Old Forester, and I don’t think it’s worse. I don’t think it’s better than 1910 either. I think 1910 is much, much better.

3:29
I like the caramel flavors in the 1910. This one here, I give it a 7.8. I do think it’s an everyday sipper and definitely worth having in your collection. Now, to the five points that I’m going to be telling my niece about trading, I start you first with, and you’ve heard me say this a lot, always plan your trade.

3:47
Know where you’re gonna get in at, know where your target prices are, know where your stop loss is going to be if this trade does not work in your favor. And let’s be honest, she reached out to me about this visa trade. I was like, I’m a little worried about it and I said, well, do you know where you’re gonna get out at?

4:02
It’s like, no. She’s like, well, what would you do? And so that’s fine. I was like, you’re new to trading. I did the same thing when I was new to trading. I wasn’t planning out my trades. But my advice to her if she wants to kind of level up on the learning curve a little bit, is to plan out your trades.

4:19
It’s so important to do because not all trades are gonna go right for you. Not all trades are going to be good for you. And so the very reason that she was having to reach out to me is because she didn’t plan her trade out ahead of time, and that’s important to do. And even if you plan out your trade, it doesn’t necessarily mean that your plan is gonna be right, but at least you have a plan to go by, and even a bad plan is better than no plan.

4:41
On how to manage the risk on your trade because no plan opens you up to unbelievable amounts of risk. So you gotta have a plan. The second one goes hand in hand with #1, and that is to expect to lose. I gotta tell you, I don’t know how many times I have lost in the stock market on individual trades.

4:58
I have lost so many times and I’ve detailed a lot of those losses on this podcast. I’ve had some humiliating losses. I’ve had losses in the beginning that I thought was the end of the world for me. And looking back, they were a stepping stone to becoming a better trader. And the reason why I am the way I am as it pertains to trading today is because of those losses and those lessons that I learned early on.

5:20
And the reason why I have this podcast is because I want you guys to be able to learn from me and to be able to understand. The challenges that goes into trading. And that’s why planning out your trade is so important, and we’re backtracking a little bit here by going back to number one, but it is, it’s so important to plan out your trades, to look at the charts.

5:39
If you’re printing out the chart or if you’re using a, a chart software, do something but always write it out, print it out, type it out, know where you’re gonna get in at, OK? Why are you getting in at that level? Where are you gonna put the stop off? It’s not enough just to put A trailing stop loss out there because we’ve talked about this and there’s tons of podcasts that I’ve done on this.

6:00
It’s not enough to do a trailing stop loss. There needs to be a reason for why the trade goes bad at that particular stop loss and why you need to get out. Where you put your stop loss, that means the trade has gone bad. It’s not worth being in anymore. And then what is the potential for the trade?

6:17
Where does it start to run into some heavy resistance that where it may start to bog down and that’s your target price. What are similar patterns on the chart done in the past and what has been the movement thereafter? What is it project out to? These are some of the questions that you wanna ask yourself.

6:33
Number 2, we already got into it a little bit expecting to lose, but you can’t expect to be right all the time either. In fact, the more you think you’re supposed to be right in the market, the more that you’re going to be wrong. And I see this a lot in the stock market. I mean, social media, they’re not even concerned about making a profit on the trade as much as they are about saying that they were right about the trade.

6:53
They go on the message boards and say this is what it’s going to do and they don’t even give you a reason why it’s just because that’s what they need it to do and when they want it to do something, they need it to do something, they expect the market to acquiesce to their expectations. But the reason why we have #1 as a piece of advice that I would give my niece is because of point number 2, the fact that you’re going to lose, you’re not going to be right all the time.

7:17
I go into every single one of my trades expecting to be wrong. I know in today’s day and age everybody wants participation ribbon and everybody wants to feel good about every decision or every activity that they participate in. But that’s not the stock market. If you’re looking for a participation award or a pat on the back, the stock market’s not going to give it to you.

7:37
It’s very brutal. And you gotta expect to lose. And expecting to lose is what’s going to cause you to plan out your trade. Number 3, expect to doubt yourself, but don’t quit. I see this a lot in the trading block.

7:53
I see it a lot with swingtradingthestockmarket.com. Where people sign up and they have a few losing trades or there are a couple of trades don’t go their way and they’re done. I tried, it didn’t work for me. I quit, which, by the way, swingtradingthestockmarket.com, it’s an unbelievable service.

8:09
You’re gonna get so much of my market research each and every day. I’m sending like 456 posts out a day. You’re getting updates on the S&P 500, the Russell 2000, the NASDAQ 100. You’re getting updates on all the FAC stocks plus Microsoft and Tesla plus my master weekly watch lists, plus my daily watch lists and the most intriguing charts that I come across each and every day.

8:29
So check it out. You’re supporting the podcasting swingtradingthestockmarket.com. Sorry about that plug-in, but hey, we gotta pay the bill somehow. Guys, I go through doubt all the time. There’s times where I’ll have 3 or 4 trades and, and I’m a person that can doubt myself. I’m not what you would call the, the most overly confident person in the world.

8:48
And as a result, there’s gonna be times where I doubt myself, but I’ve been there and I’ve done that. I know what that doubt feels like. I know what triggers it. And I’ve learned to acknowledge the fact that I’m doubting myself, but not necessarily believe it. To know it’s like, look, this is a phase that you’re going through. Yeah, you’ve had 4 or 5 bad trades here.

9:06
It’s gonna work itself out. Just continue to stick to your plan. That’s why I have a plan. That’s why I have a process. That’s why I have a certain method for how I scan for stocks and for how I manage my watch lists and for when I get into a stock and when I get out of the stock because I know it works.

9:23
And when the doubt seeps in, it’s easy to start questioning everything, but because I’ve been there and I’ve done that, I know that the doubt and the frustration is short term. I’ve had doubt this year, guys. I’ve had doubt last year. I have doubt every year and so my niece, I would say you’re gonna doubt yourself, you’re gonna have some losses, you’re gonna have some painful losses.

9:43
You’re gonna have some experiences that teach you a lot about successfully trading in the stock market. And it’s OK if you doubt yourself along the way, but don’t quit. Don’t give up. Keep doing it because it’s the people who don’t give up and always seek to find a way to better themselves whether it’s in trading, whether it’s in business, whether it’s in school, whether it’s some kind of idea that they’ve come up with and they wanna see it turn into a monettizable business venture guys the key so much in life is showing up being present and never quitting.

10:16
And so, when it comes to the trading, don’t quit on yourself, be discouraged at times, recognize that that’s a short-term feeling, that if you stick to your processes and you stick to you know what works, this too will pass. The 4th point, don’t hold on to your opinion.

10:34
There’s lots of opinions out there. Social media is built on opinions. You go onto your Facebook, you go onto Twitter, you go on to anything. Everybody’s putting an opinion out there. I’m putting opinions out there every day. Stockwoods, Twitter, I put opinions out there, SharePlanner Facebook page, I’m putting opinions out there on charts, stocks.

10:52
But I don’t hold to my opinions. Look, stock goes down and I thought it was gonna go up. I’m not holding to that opinion. No way. If the stock sucks and I thought it was gonna be good, I’m not holding onto it. I’m out, man. Peace out, homie. Because the market doesn’t care about my opinion and it doesn’t care about your opinion.

11:10
The market’s gonna care about what it wants to do. The market doesn’t even know what your opinion is, nor does it care to know. And so really what we think about a stock doesn’t matter. What we should only care about is what is the opinion that the market holds for the stock. And if it’s not a good opinion, then let’s not buy that stock.

11:27
And if you’re in the stock and the market sours on your stock, Then maybe it’s time to get out. And that’s obviously where my stop losses come into play because of the stop losses should be at a point to where the market sours on your stock. It doesn’t like it anymore and it’s time to move on.

11:44
Everybody on the platforms like Twitter and Stocks are putting opinions out there each and every day. And they’re putting out these most grandiose beliefs about what they think the stock will do. And when it doesn’t work for them, they complain and they batten down the hatches.

12:00
And then they double down and they add more to their trades. You gotta be disciplined and being disciplined means not holding on to those opinions. It means not holding on to your opinions to where you’re going to go ahead and double down or triple down or YOLO your life savings into a trade because you think that you have to be right on it.

12:18
And then, when the stock does not work in your favor, Guess what happens then? Well, the market must be rigged, and that’s point number 5. Don’t say the market’s rigged. Yes, is there shenanigans that happens on a day to day basis in the market? Yeah, sure. Is there insider trading that happens?

12:34
Yeah, I’m confident about it. But retail traders like you and me, it doesn’t matter to us. Yeah, it stinks when there’s a big sell order that goes in and takes out your stop offs, but guess what? That’s just a bigger buyer. That doesn’t mean the market’s rigged because a person with more money than you and has a ton of money at that.

12:50
Let’s say it’s Warren Buffett, or let’s say it’s Elon Musk or who knows, there’s countless billionaires out there these days and millionaires and people who can move the market. And if they choose to sell their positions, it doesn’t make the market rigged, just means there was a big sell order that ended up hurting your position on a particular stock.

13:06
But that doesn’t make it rigged. I think it’s the biggest cop out to call the market rigged because when we call it rigged, we’re trying to blame somebody or something for it. We’re not wanting to take responsibility for a bad trade. It goes back to why I always say that when I have a bad trade, it’s my fault, and when I have a good trade, I got lucky.

13:23
Why? Because I expect the trades not to work and if I get lucky enough to have a good trade, well, that’s great. I’m thrilled about it each and every time it happens a lot, and I’m thankful for it every time it does happen. But when it doesn’t happen, I’m not surprised.

13:39
When it doesn’t work, I’m not surprised. And I definitely don’t say that the market’s rigged. Banks are going to play stocks, institutions are gonna play them, ETFs, mutual funds, hedge funds, they’re all going to have a piece of the pie. And when they make a move that runs contrary to your position, It doesn’t make the market rigged, it just means that it’s capitalism at work.

14:01
So let’s sum this up. The 5 points here, plan out your trade, know where you’re gonna get in at, know where you’re gonna get out at if the trade goes against you. And look at the chart and figure out where do you look at achieving your target price.

14:17
And it doesn’t mean that you have to get out at your target price. You’re just finding a target price for the true potential of a trade. I rarely get out at my target price. I’m in stock right now called Unity. It’s way beyond the target price. Target price is at 140, it’s trading at 150 plus. I didn’t sell it there because that was where I felt like the potential was.

14:32
Well, the stock went beyond the potential of the trade. Remember what I said? It’s like, don’t hold on to your opinions. As being a matter of fact, well, if I did that, I would have given up about $10 of additional profits per share. Number 2, expect to lose. Lose every time is what you should expect.

14:48
When you’re profitable, you got lucky. It keeps you humble, it makes you not think that you’re better than you are. And what it allows you to do is to plan out your trade and expect the worst and how are you going to respond if it doesn’t work the way you expect it to. Number 3, expect to doubt yourself, but don’t quit.

15:07
Like I said, I’ve doubted myself plenty of times in the past. I’ve done it this year. I do it every year, OK? I, I hit a, a bad patch of trades. I’m like, man, what am I doing here? What’s wrong with me? But I don’t quit. I just keep pushing forward. If there’s areas where I can adjust to my trading, I do it.

15:27
Number 4, and we kind of already talked about this one here in the summary, but don’t hold on to your opinions. Our opinions just don’t matter, guys, they don’t. They’re important in a lot of different areas and a well-developed opinion can take you places, but in trading, nah, leave them at home. If you’re wrong, you’re wrong. If you’re right, you’re right, but it doesn’t matter. Just learn to manage the trade.

15:43
And number 5, don’t call the market rigged. Yes, there’s Sine against, yes, the FOMC continues to provide a lot of liquidity for the markets that allows it to continue to keep going higher, but the moment you start calling it rigged, you’re taking the blame that you should be putting on yourself for a bad trade and putting it on someone else. That’s not good.

15:59
And in closing, I really do hope that my niece finds her niche in the market. She finds as much enjoyment that I’ve been able to find over the years in it and be able to meet as many people and great listeners as I have been able to achieve here with this podcast and with the people that’s come through shareplanner.com and swingtradingthestockmarket.com.

16:18
You guys are the best. Thank you guys, and God bless. Thanks for listening to my podcast, Swing Trading the stock market. I’d 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, you will get a seven-day trial and access to my trading room, including alerts via text, email.

16:38
And WhatsApp. So go ahead, sign up by going to shareplanner.com/tradingblock. 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 every day.

16:55
If 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.