Get Rich Quick Trading | Podcast Episode #228

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, everchanging 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 and I got a good episode for you guys. Today we’re going to talk about getting rich quick. Now, it’s not a question that’s coming from one of y’all.

0:42
As most of y’all know, the large majority of my podcast episodes come from y’all you guys write me the emails, y’all are the guests on the show. But today I wanted to take the opportunity to talk about the whole get rich quick mentality in the stock market and how it just simply isn’t so.

0:59
This is the reason why most people will get into the stock market is because they feel like that they can find this like life hack by starting to trade stocks in the stock market, whether it’s swing trading day trading, crypto NF, T’s people are looking for that way to make money in a very quick fashion.

1:17
So we’re going to talk about all of that today. Is it possible? What should your mindset be when it comes to trading in the stock market and more? But first, what am I drinking? Well, I’m drinking Whistle Pig 12 Year Old World Rye. This is a given to me by a friend who brought me this bottle of Whistle Pig at last year’s Christmas party and I haven’t had a chance to do a review on it yet.

1:41
It’s a selection of different barrels, so it’s not really something that you’re going to find at the stores. It’s more of a hand selected Whistle Pig bottle of whiskey. Now when I smell it, I pick up on some like berries. So it’s kind of nice to the nose.

1:57
And now when I taste it, it’s not a strong flavor. It comes in more like licorice, which you would think would kind of be a strong flavor, but it’s not. And then the finish, the finish is what really throws me off on it. Now remember I gave The Whistle Pig 12 year that you can get at the store. I gave it a nine two, which that was like a year and a half ago.

2:14
I’m kind of questioning my judgment on that particular rating. But nonetheless, the finish on this one tastes like Grandpa’s cigarette ashtray. It’s like you’re going past all the slot machines, That Caesars Casino in Las Vegas. It’s that smell.

2:30
It’s that taste. It’s like running your tongue across that ashtray. That’s the best way I can explain it. It has a very unpleasant finish. I’m going to give it a 6.9 now. You would think, man, that’s whistle pay. Aren’t you being kind of rough? I’m telling you, the finish just is not pleasant.

2:46
It’s not pleasant at all. And yes, I’m running the risk here of my friend actually listening to this podcast episode. No offense if he is, but it’s just not as good as I hope for. Yeah, I have a high standard when it comes to Whistle Pig. I’ve had good Whistle Pig the 12 years. It’s pretty good. If I were to rate it a game, which I probably should, I don’t know if I would give it a nine two.

3:04
I mean, I’ve done over like 150 bourbons since then. So I’m not sure how good the Whistle Pig 12 is considering all the different opportunities that I’ve had to try different bourbons, both good and bad. But yeah, I’m gonna have to give this like a six, nine.

3:20
I can drink it, but it’s just isn’t that good. I would never go out and asking for another one of these bottles. I’d say, hey, can you find a different one? But nonetheless, I mean, I’m appreciative that he brought it, but it just it didn’t come across that good. Now back to the get rich quick scheme. Now if you remember too, before I get too far into it, the last couple episodes I’ve been experimenting with video podcasts.

3:42
I think I’m going to go ahead and stay away from doing that. I feel like I lose the intimacy that a podcast provides when I try to do it on the YouTube. So whether it’s a good opportunity for me to expand into video or not when it comes to this podcast, I’m gonna withhold from that.

3:58
I just couldn’t get comfortable enough doing a podcast with a camera staring at me in the face and a whole bunch of lights shining down on me. So going back to the audio and that’s all you’re gonna hear from me on the podcast is just the audio version. Now get rich quick and stocks and ETFs and crypto and NFTS and options.

4:19
A lot of people wanna try to play options. In fact, what’s crazy is how many people go straight to options and bypass equities altogether. That blows my mind. But a lot of people are doing that. You’re almost guaranteed to lose if you do that. I’m just going to be honest with you, if you don’t have the experience of trading equities, you should not be getting into options.

4:36
So what’s one of the main reasons that traders get into stocks in the 1st place? They get into it because they want a better life for themselves. They want to make more money, they want to create more income. Maybe they’re in a profession that’s not paying them enough. Maybe they’re struggling month after month to make ends meet with their mortgages, with their kids, education, Who knows?

4:55
I mean, there’s so many demands that’s put on us today that you start to look for okay, Where can I make ends meet? What can I do to make some money on the side? A lot of people choose the stock market because it feels like there’s a very little barrier to entry. You know, it’s not like you’re having to start up a restaurant and and buy a building and get the permits and everything else that you need to be able to run a restaurant.

5:20
This is just a matter of setting up a brokerage account and transferring some money into it and then you can start trading right away. I mean in some cases it only takes like 5 or 10 minutes to do that. So most traders will use that as an opportunity for a better outlook on life in terms of their financial standing.

5:36
And in doing so, they hold this false belief that it can be learned quick. I had a friend that recently asked me, said, Ryan, can I sit down with you a week and then just pick your brain about the stock market and figure out how to do this. I think I could get a good general overview of how to make it work for me in the stock market and I don’t wanna say I was insulted by it.

5:55
I’ve been doing it for 30 years and I’m still learning on a regular basis. And so a lot of people will look at the stock market and say hey okay, if you can just show me like a BC&D and I’ll apply that to all my trades and then I’ll just constantly make money out of the stock market.

6:11
What indicator do I need to use or what? What does the chart need to do to give me a guaranteed win every time? What most people don’t understand is that the success in the stock market comes not from picking the right stocks, it comes from managing the losing stocks. Now let’s say I’m the trade. I’m 41 years old right now.

6:27
Let’s say I trade another 30 years up until I’m 71. I hope I’m trading. Then. I don’t have any need to retire. I enjoy what I do. I want to keep on doing it. Let’s say I trade for another 30 years before I give it up and kick back a little bit. I will have not just hundreds of losing trades.

6:43
I’ll have thousands of losing trades between now and then. Does that make me a bad trader? Absolutely not. The losing trade is not what makes you a bad trader. Picking the wrong stock to trade does not make you a bad trader. Has no bearing on whether or not you are a good trader or not. What determines whether you are a good trader or not is how you manage those losses.

7:03
You just sit there and say, hey, you know what? Not taking the loss back at the beginning of this year, 2022, in January, my first trade of the year was PayPal. You want to know where I got into PayPal at $194.00 a share. You know where I got out of it at $186.15?

7:21
Why did I know to get out $186.15 and not bag hold all the way down to where it’s at today, which is like $100 a share? The reason why I was able to get out $186.15 a share was because I expect in every one of the trades I take for it to go against me in a dramatic fashion for me to be a big loser on every trade.

7:42
Therefore, I must manage the risk, I must manage it actively. And if I don’t, I set myself up to hold PayPal all the way down to $100.94 dollars, $95 wherever the lows were set on that stock. But when you look back on this year and right now, I’m doing really good on the year, I’m not going to say, oh, I was up on the year because I was shorting the market when the market was going down.

8:04
No, I’m going to look back on the year and say I was up on the year because PayPal was a stock that I did not hold all the way down into the hundreds and upper 90s. I took the losses early. I avoided a 50% loss because how many trades would it have taken for me to make back those losses?

8:21
Let me tell you, that was the first trade of the year I lost on it. If I would have been holding it to the day, I would still be making up for that loss many, many times over despite the fact that I’ve been right over 80% on the year. I would still be trying to make up for those losses and that’s where the losing trades will do you completely in.

8:42
So when we think about getting rich in the stock market, we think about it being because of stock picks are having this certain methodology of picking these big winners that are going to set us up for life and it’s completely wrong. It has nothing to do with it. What it has to do with is consistently managing the trades, the risk from one trade to the next.

9:03
I’m not losing enthusiasm in between when you rack up four or five losing trades in a row. I’ve had four or five losing trades in a row plenty of times and I bounce right back. Is it fun when I’m going through it? No. Do I question myself? I sure do. But I stick with the plan. I follow the discipline of managing the risk.

9:19
I also find it interesting that somebody thinks that they can just learn it very quick. The reason why is if I go to the golf course and I find the best person on the driving range and I say, hey, can you take like an hour or two to show me how to play? Like, you? This guy’s probably been golfing since he was 11 years old or 12 years old.

9:34
Or he probably had private lessons when he was a kid and he’s slugging at 300 yards down the middle of the fairway. And I’m going to come up to him and say, hey, you mind spending a few minutes with me to show me a little general overview of how to be a good golfer? No, They’re gonna be like, what are you thinking? But a lot of people go into trading thinking that, though, that, oh, I’m a smart guy, I can do that.

9:53
The market penalizes you for being smart because it’s the smart people that think, well, I know I’m right on this trade. I’m a smart guy. I got into it because of XY&Z. These factors are going to hold up. It’s going to come right back up. I’m holding. I’m now a long term investor in the stock, even though I got into it as a day trader, a swing trade.

10:11
But it’s their smarts that usually do them in. I would probably say some of the worst traders I’ve ever come across are doctors and lawyers. Doctors and lawyers make some of the worst traders I’ve ever seen. And it’s not because they’re stupid. They’re obviously not. They’re pretty smart guys and gals, but it’s their smarts that get in the way.

10:27
They think they can outsmart the market. You can’t outsmart the market. And another thing that I find pretty interesting is that get rich quick mindset often results in people taking very large position sizes because large position sizes equals large returns, large profits.

10:44
But they’re not. Also thinking about the fact that I’m going into this trade with zero risk management. I have no idea what a stop loss is, but I just know I’m going to be right, so I’m not going to worry about it. So these large positions that they get into thinking that they’re going to result in large profits, they’re stunned when they result in large losses.

11:00
And then not to be outdone, when those large losses start coming on, they start Googling or they start looking up like, oh, what should I do? It’s like, well, you know what? I’m not going to let this big loss turn me. I’m not selling fact, I’m doubling down. And what do they do? They double down, maybe triple down, quadruple down.

11:17
And before you know what, they got everything they have in this stock and it doesn’t come back up. There are many stocks out there right now here in the first two months of the trading year that will never see all time highs again. Just a fact of the matter, you got stocks that are down 50, sixty 70% and if they do see all time highs it might be 10 or 15 years down the road.

11:38
And these people tend to have massive amounts of overconfidence. I don’t know if they had never been insulted in life or told that they can’t do something. I could probably say a little bit of that for myself when I first started trading, thinking that, oh, I can make 10% on every one of these trades. And if I do that over the next five years, I’m going to be a multimillionaire.

11:57
I did that when I was in my early 20s. I thought I could be an instant millionaire before I was 25 years old simply by getting 20% on every one of my trades. True story. And boy did that bite me in the butt. But now the difference between me now and me then.

12:13
Then I was always thinking about, okay, how much money can I make on this trade? Now it’s like, how much money can I lose on this trade? I expect to lose every single trade that I take. I expect to be a loser on. It doesn’t quite have the American Dream ring to it, but it’s true. I expect to lose on every one of my trades, and I have to manage those positions against the fact that I’m expecting to lose on that trade.

12:35
The other thing that gets really problematic for people is that they see everybody else making money in the stock market, and if they see everybody else making money, they feel like they’re missing out. And so they have to get into it. And again, it goes back to the large position sizes, the lack of risk management. You end up blowing up your accounts and that is why I’m everybody’s second choice.

12:54
A lot of people come to the trading block. Not everybody, but a lot of people come to the trading block because I get the stories. I read the emails as their second choice. The first choice was is that I jumped into the Wall Street Bets crowd. I got onto the Robin Hood app. I signed up for this pump and dump scheme on the Internet from some guy who was selling his get rich quick scheme with Lambos and beautiful women that flock to you like the salmon of Capistrano.

13:19
Which, if you’re a dumb and Dumber fan from the 90s, you’ll know that reference. Because I don’t want to sell that dream. I don’t. I sold the fact that trading is hard work. And yes, you can be successful at it, but it’s going to take a lot of work. It’s going to take a lot of time. It’s going to take experience. And so, like the purpose of this podcast, for instance, is to help accelerate that learning, Help accelerate the learning so that you’re not making some of these unnecessary and avoidable mistakes.

13:45
And Speaking of learning, make sure you check out swingtradingthestockmarket.com. That’s my patron account that’s associated with this podcast. You’re going to get all my stock market research each and every day. It’s awesome. It’s worth checking out again. I provide you with my research each and every day so that it can better assist you to make better choices in the stock market, manage the risk better, and to be abreast of all the market developments that are happening each and every day.

14:09
In the end, the people who want to just get rich quick, they stand less than a 5050 chance at success in the market, far less than 5050%. So you’re probably better off taking whatever money that you were going to do this with and going out to Vegas instead and putting your money on either red or black.

14:27
Now, I say that facetiously because I don’t want somebody to actually do that and then blame me for it. But yes, hopefully you see my sarcasm bleeding through on that comment because your odds are better of winning that way, which is a full hearted way to try to get rich, than it is by trying to get rich quick in the stock market.

14:46
Now look, the market wants you to think that you can get rich quick. It wants you to put your capital to work in a very ill advised way because the smart money is just going to take it at the end. And when the smart money takes it, you walk away thinking, hey, the market’s rigged. It sucks, man.

15:01
It sucks. I tried. I knew what I was doing. But man, it was the market makers or it was the algos. Or is the hedge fund. They took my money, man. It’s so rigged, it’s so corrupt. When you find yourself blaming the stock market for being corrupt or rigged, you’ve already lost, and it’s shifting the blame on the boogeyman instead of on yourself for getting into it with false expectations and not an understanding of what risk management actually means.

15:28
So the take away here is it’s okay to want to better your life through the stock market, but to focus on the profits, to focus on trying to just make money in the stock market, and to think that you’re going to do it quick, or that you can pick it up over the weekend or with a few hours worth of work.

15:44
It just doesn’t happen that way. In fact, it’s crazy to think that way because if you do and you start trading on those beliefs that after a few hours worth of work you’ve got it all figured out, you’re going to quickly find out that the market had a different idea for you. You enjoyed this episode. I encourage you to leave me a 5 star review.

16:01
Those mean the world to me. They really do help me continue to build the audience for this podcast. Also, keep sending me your emails. ryan@shareplanner.com I do read them all and unless it’s just a terrible e-mail, I put most of them on the air. So make sure to send them to me ryan@shareplanner.com.

16:17
Thank you guys. God bless. Thanks for listening to my podcast Swing Trading the Stock Market. I’d like to encourage you to join me in the Share Planner Trading Block where I navigate the stock market each today 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, e-mail and WhatsApp.

16:37
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 every day. Do you have any questions?

16:54
Please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.