A Beginner’s Swing Trading Journey | Podcast Episode #235

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 Trade in the stock market, and I have a good episode for you guys today. We’re going to talk about one trader’s beginning journey into the stock market and trading stocks, maybe even a little crypto, it sounds like.

0:45
So we’re gonna talk about all of that here today. And unlike previous episodes where I will read the email and then give you my thoughts on various points of that email, I’m gonna give you kind of like a running commentary side by side with this email here today. So this person here is in the theatrical business, I guess that’s how you say it, theatrical business, the theater business.

1:06
So we gotta give him a good Hollywood redneck name and I couldn’t think of anything better than Jethroe from the Beverly Hillbillies. Grew up watching that show quite a bit. I don’t think I’ve seen it on TV in ages, but I do remember it quite clearly when I was like 456 years old.

1:23
I watched that stuff regularly with Gomer Pyle. But before I get into the email and this trading journey of a beginning trader, what am I drinking? Well, I’ve got benchmark old number 8 brand by McAfee. Never had it before.

1:39
Kentucky Straight bourbon whiskey, and unlike the last drink that I had on the show, which was like 20% alcohol, 40 proof, this one’s actually 40% alcohol, 80% proof. When I taste it, it comes on pretty strong. There’s a lot of hotness to it. Not a lot of taste, tastes a little bit like pine nuts.

1:58
In fact, I’d equate it to one of those little pine tree car fresheners that you can stick in your car and it’ll make it smell a little bit like a new car smell. It’s kind of like using one of those for personal hygiene or for putting on cologne, like you rub some of that pine tree all over your neck and say, OK, at least I smell better, right?

2:16
It’s kind of like that when I drink this old number 8, it’s not a bad taste per se. It’s just not necessarily what I would call a good whiskey, just like I wouldn’t consider one of those pine tree air fresheners to be a good cologne. Not a huge fan of this one.

2:33
I mean, yeah, you can sip it every day. I mean, it’s probably up there with like a basic Jack Daniel’s or Jim Beam. I’ll give it like a 54. It just doesn’t impress that much. I can get through the entire drink with no problem, but I’m not really yearning to get more of it necessarily.

2:51
Before I get into the email, remember to check out swingtradingthestockmarket.com. That’s gonna give you all my stock market research each and every day so that you can be kept abreast of all the developments of all the happenings in the stock market to my list of daily setups that I’m watching, to the weekly watch list, to Fang updates and updates on all the indices.

3:10
Sending that to you guys throughout the week. It’s definitely a must have in your trading Arsenal. So check that out. swingtradingthestockmarket.com and you’re supporting the podcast as well. Now, about this email from Jethro, he writes, Dear Ryan has a new subscriber here and you always asking for more emails.

3:26
I figured I’d say hi. I don’t think I have any questions for you right now, but we’ll see where this email goes. And trust me, he does go somewhere. It’s probably going to be a longer story, so feel free to skip and know that I really appreciate you for all the content that you provide. I am the rookiest of rookie traders.

3:43
Now, I’ll tell you this much. Knowing that you’re the rookies of rookie traders, that is a good place to start from because you’re not going to have this ego that’s driving you to think that you know more than everybody else or it’s somehow that you know how the market works. So good job on knowing the fact that you’re the rookies of rookie traders.

4:03
He says, I can’t tell you how lucky, blessed, and grateful I feel that I found your podcast on my second day of trading. Looking back, I opened my first account with Public on February 28, 2022. So I’m not real familiar with public at all, but I guess it’s like an online platform for trading.

4:21
He says, yeah, less than 4 weeks ago while I was trading, while I was trying to find some stuff to occupy my mind during some downtime at work. I worked for a theatrical automation company and at that point I was on site running some doors for a TV show, so essentially 14 hours a day of sitting at my laptop, occasionally pressing some buttons.

4:43
So yes, I can see we’re doing that for 14 hours a day. You would have some downtime as long as you’re not expected to open up a door at a certain time that you’re also trying to place a trade, yeah, you could definitely pull that off. It actually gives you a lot of freedom to be able to have a trading system that works to your advantage.

5:01
And that was one of the things for me as a trader when I was working in corporate America a long time ago was that I had so much downtime. I felt like when I was working a 9 hour day I could get my entire job done in 9 hours. I would go to these meetings and these meetings you would call in or had the option to call and I always called in because I was trading too.

5:18
But at these meetings. I kid you not. You were bored out of your mind. There was no reason for you to be in there except for somebody just happened to include you into the meeting invite. In fact, if I had to go to a meeting, check, check this out. When I had to go to the meetings, there would always be, I’ve assumed that this is still prevalent in a lot of companies.

5:39
You have like the main table that a lot of your head honchos sit at or the important key players will sit at, and then you’ll have like chairs that go around the outside of the wall where people can also sit at. I would always try to sit at the corner of the outside wall furthest from the door because I didn’t want somebody come to the door and see that I was working on my laptop and trading stocks.

5:57
That’s how I would work and I would never sit at the main table unless somebody asked me and I was never important enough for somebody to actually ask me or care for me to be at that main table. So I would be in these meetings, sometimes they were 23 hours a day, and I would place trades and I would look at charts and I would blog about the stock market all day long for SharePlanner.

6:15
And yes, I did have some hiccups sometimes. There was times where I’d have trade alerts that would go off right in the middle of the meeting and I try to look at the guy next to me like it was his laptop that went off, because back then there was a lot of people that had smartphones that that were being carried around the work office. Yes, I was working before there was really that many smartphones.

6:32
I think I had a smartphone, the first Apple iPhone that came out, and that was pretty much my last year of being in the corporate work environment. So trading. Even for me many years back was something that helped me get through the workdays, especially when there was a lot of downtime where I could just get through my job so quickly.

6:49
Jethro continues to write. Unfortunately, my motivations for joining the trading business were strictly to make money as fast as possible. Thank you TV shows. And I could, you know, if you’re listening to like Jim Cramer or some of these other clowns on CNBC, yeah, these people are trying to make it look like stock trading super easy.

7:05
Now, you might find it interesting because everybody thinks that if you’re a trader in the stock market, you got CNBC on all day long. I rarely turn on CNBC. I would say 95% of the time my TV never turns it on, except for when there’s an FOMC statement, then I like to see what’s being said about the FOMC statement, what are some of the interpretations, and then the presser that happens about 30 minutes after the FOMC statement release.

7:30
So I’ll tune in for that and usually I’ll just instantly regret it because I’m telling you, the people on CNBC and so many of these other shows. And TV networks, they’re complete blowhards. They’re on there. It seems like they’re on there a lot of times with these hidden agendas where they’re trying to pump up a stock of their own that they’re already in, and they’re trying to bloviate about a previous stock trade that they had and how smart they were to try to get more clients or try to get more customers.

7:56
It turns me off big time. I have no desire to watch. CNBC, I think there’s very little to gain from it. There’s some, I mean, you can get some factual information that you might have a guest on there that’s explaining something in greater detail to what you might be able to get off of a Twitter feed or something else.

8:12
And so that can be helpful at times, but I would say 99% of the stuff that’s on CNBC and these other networks, they’re trash. So Jeff Ro goes on the right. He says, I have a lot of tolerance for risk, but I also like to believe that I’m thorough and at least relatively rational. I took a day and did some brief research online on swing trading, found some pretty blah YouTube videos and a lot of poorly worded strategy guides, and quickly decided that with most things that I do, I learned the best by jumping right into the fray.

8:39
I consider paper trading, but that I had absolutely zero cars or relatability to trading $100,000 of fake money, so I started off with $100 at the idea of trading only 15 to 20% positions. Not knowing anything I looked at, I threw some money at things that sounded interesting and looked like they were trending up, like Arc Innovation, Ark Space, Spy, Netflix, Spotify, Disney, Amazon, and Apple.

9:04
After my first day, I ended up being up about 15%, bolstering my confidence and making me add about $500 to my account to mess around with. I won some and I lost some, ultimately ending up down about 10%, but still feeling confident that I would eventually learn more and once I started seeing overall gains, I’d throw more money in the ring.

9:23
I ditched the public trading platform almost immediately and have been trading on Weeble with only about $400 until I have a better grasp on the market. So this is a pretty interesting paragraph that he writes to me about because he really gets into the details of how he came about trading here.

9:38
We’ve talked about how boring job, working 14 hours a day. Now he’s put about $100 into the market because trading with fake money of $100,000 he just couldn’t relate to it. And without him realizing it, he said something very brilliant there, and it’s something that I talk about a lot on these podcast episodes is that fake money, these.

9:58
Paper accounts, it’s very difficult to understand the risk when you’re trading with fake money because it’s not real. If you’re wrong, OK, you go to sleep, you don’t worry about it, you can reset your account to $100,000 again. When it’s your real money, whether it’s $100 you’re trading or $100,000 you’re trading, there’s no reset button.

10:15
You lose that money and it can be a real shock when you go from paper trading to real money that all of a sudden, oh, this is a lot different. My emotions are really messing around with me. I remember when I first started with just $1000 of trading, my emotions were a complete train wreck.

10:31
I had $1000 it cleared my account and guess what I had to do right away. I had to get 100% vested, man, I found things right away. I almost feel like when I’m reading Brandon’s story here, it has so many parallels to my own story where I wasn’t really doing that sound of technical analysis.

10:47
I was just looking at charts that looked like they were going up and I got in there, didn’t even know that two of the stocks have earnings that were being reported later that day. Woke up and two of my stocks were down 20% the next day. I think the first one was ARRS and the second one was SMSI. I just got completely steamrolled on those.

11:06
I also like to that even though it’s just $100 that Jethro is trading with. He’s still trying to find the right position sizes for himself. Now he’s gonna find that as he, let’s say he goes and adds $10,000.01 day to his account, he’s going to find that the 20% positions with a $10,000 account is going to feel much different than a 20% position with a $100 account.

11:29
It’s the difference between trading with $20 versus $2000 on a position, just as much that trading with a $100,000 account is going to be much different than trading with a $10,000 account. And that the higher you go up with the capital, the more pressed you’re going to be to reduce your position sizes.

11:45
You get up to a couple of million dollars, you might find yourself only willing to put maybe 2 or 3% on a position. And having started on February 28th of 2022, Jethro has missed a lot of the fireworks that took place in the stock market. Yes, there was still some more downside to the market, but on February 24th, it essentially hit the bottom from where it’s at right now.

12:05
This podcast is recorded on March 31st. Well off of the bottom of those February 24th lows. So Jethro, believe it or not, so new to the stock market, hasn’t really seen a significant bear market just yet, hasn’t seen a lot of selling, and I would say that even people who have been trading just in the last year alone haven’t really seen how bad a bear market can get.

12:26
Heck, I’ll go even as far as say people who haven’t traded in the last 10 years. Now, let’s go 12 years. You haven’t traded in the last 12 or 13 years. You haven’t seen what a real bear market can look like, because, OK, you can say that 2018 was pretty bad there in the quarter four.

12:43
You can also say that 2020 was really bad when you had the COVID shutdown, but those sell-offs did not last very long. In fact, the 2018 selloff was a little bit steeper than the one that we’ve experienced so far this year, and it was a little bit longer too. Now, we haven’t gone back up to new all-time highs yet, so we don’t even really know.

12:59
If we’re out of this so-called bear market that started in the beginning of 2022. Personally, I do think that we have more downside to go in this market. I don’t think we’re out of the woods yet. I mean, we’ve seen like what, one rate hike of a 25%. We don’t even know if there’s going to be some emergency rate hikes.

13:15
I do think we’ll see some of those in the future because inflation’s out of control. You’ve got to have some aggressive rate hikes to get the demand for pretty much everything down. And until you do that, inflation is just gonna continue to run rampant, especially with oil over $100 a barrel.

13:32
Also, Jethro had a moment where after the first day of trading, being up 15%, decided to add another $500 to the account. Now, I can’t speak to Jethro’s personal finances or anything, but I would say for most people who’re getting into the stock market, you go from $100 to $500.

13:50
Well, you know what I mean, it would suck to lose that money, but for most people it’s pretty recoverable. I mean, many of us upgraded our iPhones every year and that’s like what, like 1200 or $1300. So I think, you know, you’re still not at that place where you’re trading with money that’s going to really cause a lot of emotional distress if you go through a large drawdown, but still.

14:10
I think it’s better than not to when you’re first starting off trading, keep the dollar amounts that you’re trading small and to treat it like it’s a million dollars but to keep it small. So then we’re getting closer to the end of this email where Jethro writes, that’s where you come in after about a week of trial and error and trying to learn from a bunch of random websites.

14:28
I finally had a day off and was driving upstate a few hours to see my best friend, so I looked up swing trading on Spotify, on Spotify and added several random episodes predominantly geared towards low budget and beginning traders. Literally, the first episode I listened to was your podcast about swing trading with $500. That’s awesome.

14:47
I listened to a couple of other random ones, but they weren’t nearly as engaging and interesting, or as helpful as your podcast. Now you just make me sound like I’m trying to pump up my own podcast here, but that was on May 8th, and since discovering your podcast, I’ve been listening to you daily.

15:09
I joined your Patreon and even subscribed to SharePlanner. I honestly feel like I’ve gained months if not years of experience from you. When I was first messing around, I definitely fell prey to just about everything you warned against large positions, up to 100% position sizes, no stops, bag holding, watching live one minute bitcoin charts and patiently taking stupid trades just to be in it and so much more, but I am slowly creating a system that I can understand and make educated decisions from.

15:26
I find that I do want to have larger positions than $100 10% of my current trading account, but I’m restricting myself to that 10%. I think one of the biggest struggles is my desire to simply be in trades and to make money. I’ve gotten about $300,000 in student loans left.

15:47
So I’m always trying to find ways to take a few more chips away from it. Thanks to you, I can remind myself that trading is a slow game, but I’m excited that I’ll be able to start making some serious headway in the next 10 to 15 years and lop these loans off early. Anyway. All this is literally just to say thank you from the bottom of my heart. PS my mom and sister live down in Space Coast, Melbourne Cocoa area, and it’s always fun to see the blastoff area code. Maybe I’ll change my number one of these days to represent the 321.

16:04
And for a little background on that, Brevard County where I live. They actually do have the area code as 321 to honor the space program because before they launch, obviously they say 321, blast off. So the area code for Brevard County, and I didn’t know this for like 10 years after living here that the area code 321 was actually after the space shuttle program.

16:21
Pretty cool tidbit there to know about. OK, so let’s wrap a lot of this up here because there’s still a little bit more to talk about. Jethro has $300,000 in student loans left. One of the big things that we have to make sure that as traders that we don’t do is start taking some of our personal goals because Jethro says it right there in the email.

16:39
He wants to chip away at it through making profits and trading and that’s great if he can, but you can’t make that your objective in trading because what happens is when you start getting spreadsheets about what you want to get out of the stock market, like OK, if I make 1% on average on every one of my trades.

16:54
For the next 15 years, I’ll be able to have all my student loans paid off early. OK, sounds great in principle, but the market doesn’t adhere to your spreadsheets and it doesn’t adhere to your goals. And I know that sounds so awful saying like don’t have goals, right? I’m not necessarily saying that, yes, you should want to pay off your student loans or any debt for that matter, but your trading can’t be reflected by what you need from the stock market in order to achieve those personal goals.

17:19
So, if it’s a mortgage, if it’s a student loan that you want to chip away at, you can’t make your trading decisions based off of those things because it has no relevance to the stock market. One of the things that I do to help me control my emotions and my trading is that on the Think or Swim platform I can start out and hide all of the profits that I’m making on a trade.

17:40
I don’t want to see the dollar amount associated with the trade that I’m up or down on. It’s not that I’m gonna be overly emotional if I do see it because I’ve been doing it for so long, but it’s one less thing to worry about. It has no relevance. I’m up X amount of dollars or down X amount of dollars, it has no relevance to the trade at hand.

17:56
I’ve already planned out the trade. I already know where I’m gonna get out before I ever get in if the trade goes against me. I’m going to move my stop losses up along the way on the profitable trades and take some of those profits off the table along the way as well. So there’s really no significance for me to look at, OK, how much is my account up today?

18:12
How much am I making in the stock market today? Or how many dollars am I up on this trade? Because when I start doing that, I start personalizing those trades, and that’s what most of us are going to do in general. You’re going to start saying, hey, I can pay off two months’ worth of my student loans and cut down on the interest payments overall on the total student loan.

18:30
So you start to personalize it at that point and you don’t want to do that because the market doesn’t care about that. It’ll take it away almost as soon as you start to do that. At least that’s what I found in my experience. When I first started trading, I used to have these fancy spreads. I remember, I think one of them was, OK, I can make 5% on every trade on average.

18:46
OK, yeah, I’ll probably have like 1 or 2 losing trades here and there, which that is definitely not true. You have a lot more losing trades than just one or two, but I had myself becoming a millionaire by the time, you know, 2 years was up. And I really believed it. And then all of a sudden the market just completely threw cold water on that idea.

19:01
So ditch the trading spreadsheets that say, OK, if I make this amount of money every day or this amount of money every week or month. Guys, just take the profits and the opportunities that the stock market gives you. Sometimes it’s gonna be plentiful, sometimes it’s gonna be difficult. Sometimes you’re not gonna get as much as you’d like out of the stock market.

19:18
And that’s just the reality of the stock market. I also like too that Jethro realizes that you don’t watch one minute charts for the most part, especially as a swing trader, there’s very little value in looking at a one minute chart. Why? Because it’s such a small data point in the grand scheme of a swing trade.

19:33
Swing trades you tend to hold for a couple of days to a few months. With a one minute chart, you’re really almost trying to take a swing trade and make it a scalp or a day trade. And those one minute charts because there’s so much more volatility because the charts are a smaller range and the candles are gonna be a lot bigger on them, it creates for some reason a lot more emotion.

19:53
There’s gonna be a lot more up and down and indecision on those one minute charts versus what you see on a daily chart or a weekly chart. The further you go out on a chart, the better grasp that you can have for how a chart is trending over the long term. And then finally, even if you’re trading with a small amount, you’re wanting to create good habits discipline when it comes to the stock market.

20:14
If you’re trading with $100 or $500 or some small amount, just because it’s a small amount doesn’t mean that you shouldn’t be worried about position sizes about stop losses, because if you want to be a master of a lot, you got to show that you can be a master of a little too. With that being said, I hope you guys enjoyed this podcast episode.

20:31
Make sure to leave me a 5 star review. Those things really help me out. Also, check out swingtradingthestockmarket.com, where you can get all my stock market research each and every day and send me your emails, ryan@shareplanner.com. I do read them and just like Jethro here found out, I read his email and I put it on the airwaves.

20:48
So 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 SharePlanner Trading Block where I navigate the stock market each day with traders from around the world. With your membership, you will get a 7-day trial and access to my trading room, including alerts via text, and WhatsApp.

21:08
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. If you have any questions, please feel free to email me at ryan@shareplanner.com.

21:28
All the best to you and I look forward to trading with you soon.