Stay at Home Trader | Podcast Episode #239

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, and I’ve got a good episode for you guys here today. We’re gonna talk about a stay at home trader. I have an email from a person who we will call June Cleaver, or just June for short, if you remember, the Leave It to Beaver show from the 1950s, ran for like 6 seasons.

0:54
I looked that up on Wikipedia actually. June writes, Hello, Ryan. Last year I left my corporate banking job to spend more time having adventures with my toddler. In addition, I have been exploring entrepreneurial options and I’m realizing that trading, in particular swing trading, could be a perfect fit, or at least in addition to running a separate business.

1:16
Up until now, I have been an investor. I have recently discovered your swing trading podcast and I am hooked. Any advice that you could provide, in particular for a stay at home mom. Just entering the world of swing trading would be greatly appreciated. Thank you so much.

1:31
Kind regards, June. All right, June, I appreciate that email, and I’m gonna answer that email in great depth with incredible clarity here, but first, what am I drinking? I am drinking Winchester, Kentucky, ye whiskey.

1:48
Now, if you might remember. I’ve had the Winchester bourbon before. I gave it a 7.1. Wasn’t too bad. It’s definitely one that you can keep on the shelf. This one’s Winchester, Kentucky rye whiskey. They tell you it’s bold, yet smooth.

2:04
I feel like almost every bourbon label will tell you it’s bold, yet smooth. In fact, I think for most bourbon drinkers, we kind of default to, if it’s a good whiskey, we’ll be like, oh, that’s smooth. So, hopefully this one I can say, oh, that’s smooth, yet bold.

2:23
So, it’s got a good smell to it, it’s got a decent color to it, but the smell you pick up on a lot of caramel smells, which is always nice. That’s kind of like one of those pleasant sweet smells that I always like, I always prefer the smell coming from the bourbon when I sniff it. Sounds weird when I say sniff it like that, but anyways, when I smell it.

2:44
I always prefer it to have like more of a sweet flavor, like fruity or chocolatey or or something like that. So caramel’s definitely something that I can like. To the taste though, you pick up on a lot of like spice, like it’s not like spicy, but spice, like spices, good taste to it.

3:00
I would say it’s a very simplistic one. You can taste a little bit of a water down flavor to it, not a ton, but it is a little bit. It’s a simplistic rye whiskey. I would put it like that. I don’t think it’s bad. I don’t think it’s great. I think it can be an everyday sipper. I probably keep a bottle of this on my shelf.

3:16
I have a sample bottle right now, so I’ll probably go back to Total Wine and pick it up. It’s, I think the price point of it’s somewhere around like the $25 range. It’s not bad. I’m gonna give it a 7.0. And the proof is 90 so it’s not bad. 45% alcohol. I always do prefer mine to be at 100, but I mean, I’ll drink, you know, 90 proof or 45% all the time.

3:37
I have no problem with that. So 7.0 for a Winchester Kentucky rye whiskey, decent bottle. Now, about this email from June Cleaver, she wants to know some advice that I have for her, you know, she’s left her corporate banking job to spend more time with her toddler, and so she’s looking for a business.

3:55
Now she can go in two directions here. She can start a business with swing trading on the side, or she’s going to make swing trading her entrepreneurial path along with raising her child. And that is one thing that I really do like about swing trading and trading in general is that you do get to spend a lot more time with family.

4:16
You see them come home from school, you can see them, you know, during the middle of the day if they had the day off, it’s nice in that regard. Now, there’s also drawbacks too, especially for me because I do a lot of extra stuff with content like this podcast, like with YouTube and everything else, and like the trading block is that there’s a lot of content that I’m providing now.

4:34
If I was just trading and doing nothing else, I would have tons of time on my hands. But I’ve come up with about 6 different points that I want to make on this podcast for the stay at home trader and to help June Cleaver out here. And the first thing I would say is don’t rush the process.

4:50
Trading is a journey and a lot of times we jump into it and we want to be profitable right out of the gate. And look, I’m not saying that you should go into it like, hey, let’s see how many trades I can lose that in the beginning here because it’s a journey, you know, and I don’t need to expect to make any money off of trading. No, I’m not saying that.

5:06
I’m just saying that you’re not going to be an expert trader your first year of trading or 2nd or 3rd year of trading. It’s gonna take a lot of time. But it’s a journey worth taking, and it doesn’t mean that you can’t experience success along the way. Sometimes you might have some lucky success, and I like lucky success, man.

5:24
I would rather be lucky on a trade than have a losing trade any day of the week. But the point here is, don’t rush the process. Don’t think or consider yourself to be such a great trader right out of the gate that you’re ready to trade in the margin and, you know, max out your account with every last dime that you have saved over the last 20 years.

5:45
That’s not something you want to do. You want to slow build that up, build that confidence up and take the time to research and learn. I think there’s a lot of good books out there. And I’ve done some podcast episodes in the past where I talk about the books that I think are really good for traders. My favorite being Reminiscences of a Stock Operator, really, really good book.

6:04
I mean, it’s a fiction book based off of the life of Jesse Livermore. They don’t actually use his name in the book, but that’s who it’s about. I’m telling you, every single page on that book can practically be underlined with some really good trading in.

6:23
There’s just so many good sayings. In fact, I should almost dedicate some podcast episodes just going through that book and talking about some of the highlights in that book. It is really good. I would say it’s good enough to reread once a year. So the first point, don’t rush the process. Take the time to research and learn, read some books, do some study and get familiar with the charts.

6:44
The next thing I would tell you is avoid high volatility stocks. Meaning, just because you see everybody trading DWAC or AMC or GME or Build a Bear, those stocks have incredible volatility and most people will lose trading those.

7:00
But don’t think that you have to jump into those or even worse yet, jump into penny stocks. There’s so many people that start trading and they feel like that they need to start off with the penny stocks because they don’t have enough money. In fact, it’s the exact opposite, especially in a time and place where you can trade with fractional shares, fractional shares.

7:19
So it doesn’t matter how many shares. I’ve always said this, it doesn’t matter how many shares you have of a stock, that doesn’t dictate how much money you’re gonna make off of a trade. It’s dictated by how much capital you commit to the trade, so. You put $100 towards a trade on a $100 stock, you have 1 share, or if you put $100 towards a trade on a $1 stock and you have 100 shares, a 10% move is a 10% move.

7:44
It’s not gonna make a difference. And so the reason why I talk about, you know, try to find stocks with low volatility to them and trade them. I’m not necessarily saying you have to trade like Walmart, you know, I mean, it’s not bad too. I mean, it’s actually broken out this past week, but there’s other stocks out there like Costco, like CMG and stocks like that where you can still make money off of them.

8:04
McDonald’s, for instance, you can still make money or Nike, but they’re not gonna be just like completely wild and bonkers like these Wall Street bet stocks. And it gives you the opportunity to find a little bit more forgiveness in the stock market when you do mess up because these stocks aren’t as likely to drop 40% overnight on you like a penny stock will do.

8:24
Because you wanna build up your knowledge base, you wanna build up your confidence, you want to build upon your knowledge and experiences and not completely destroy your chances at success in the stock market by going into these stocks and you in your life savings on crap. And that’s what’s so crazy about it all is that most people when they get into the stock market, they actually do the exact opposite of what I’m telling you here.

9:03
They get into the most volatile, most difficult stocks to trade. There’s a reason why you don’t see me trade DWAC and GameStop and AMC. It’s because the risk in those trades are very, very, very difficult to manage. And so the more you can learn in a low volatility environment, the better.

9:19
Now June makes a point in this email, hey, I might make this my sole business, you know, in my entrepreneurial pursuit, or I might actually make this like a side gig to another business I might create. OK, that’s fine. Just remember this.

9:37
The more you add to your plate, the more flexible you need to be with your trading, meaning if you’re gonna start a business, raise a kid, it’s gonna be difficult to be a day trader because you’re gonna have to be fixated on the stock market all the time. Even just having a kid will make day trading very difficult because kids and especially toddlers, they’re high maintenance, man.

9:54
They will demand a lot of attention from you. So it can be very difficult to day trade because if you’re feeding the kid or giving the kid a bath and one of your alerts goes off, I mean, you can’t leave the kid in the bathtub, right? I mean, you got to take care of the kid first. So I mean, you can lose some of those opportunities there.

10:13
That’s why, I mean, people who work full time in a corporate environment, you know, and are going to their job Monday through Friday, most of them are passive investors, right? I mean, they’re buying stocks through their company 401k or buying a mutual fund or ETF. But the reason why they’re doing that is because they don’t have a lot of extra time to be able to watch the markets.

10:31
So they’re long-term investors. If you don’t really have any responsibilities at all, you can do day trading. Now I have thoughts about day trading. I don’t think it’s the best pursuit for people to start off in, and I really don’t think day trading for most people is suitable anyways because most of your gains in general from the stock market comes from overnight moves.

10:54
Out of a 24 hour period, the stock market’s only open 6.5 hours, so there’s a lot that goes on after hours that can influence the price of a stock the next day that it opens higher or lower. And I also think that’s why swing trading is such a good option because it does give you the opportunity to hold positions overnight, but you’re not having to sit in front of a computer nonstop focused on scalping stocks or day trading companies.

11:10
It gives you the opportunity to be able to raise a kid or to have a side gig for a business. And before I get to point number 4, I want to remind you guys, check out swingtradingthestockmarket.com. Guys, this is amazing stuff. It’s going to give you all of my stock market research each and every day.

11:28
Hundreds of you guys have already signed up. I’d encourage everyone else to sign up as well. You’re gonna support this podcast in the process and get my watchlists, stocks that I’m watching each and every day for trading, plus the charts that I find the most interesting and eye-catching. You’re gonna get all that plus updates on all the fang stocks and the indices.

11:45
So check that out, swingtradingthestockmarket.com. Now, number 4, and you’re gonna find this interesting because it goes contrary to what society tells you. And some of you guys may even disagree with me on this, but I’m gonna say this: avoid setting financial goals for your trading. Why is that?

12:04
It’s because what we want from the market isn’t always what the market’s willing to give us. Now if you’re a long time listener to this podcast, you’ve heard me say that before, but it’s very true. The market doesn’t care about our personal goals, our financial goals, whether we wanna pay off a car loan, a credit card loan, a mortgage, trade full time.

12:23
The market doesn’t care jack squat about our goals. And when we create these financial goals, and I know so many people they’ll create spreadsheets. I did it when I first started off trading too, and they were crazy spreadsheets, you know, thinking that I was going to be this like billionaire by the time I was 28 if I kept doing the same thing over and over and over and over again.

12:41
Of course, the reality of the stock market taught me otherwise, but when you start to create these financial goals of I gotta make 2% a month or 5% a month or 10% a month, I’ve seen people out there saying that it’s so easy to make money in the stock market. All you got to make is 3% a day. Does anybody realize how hard 3% a day every single day is?

12:57
In fact, it’s impossible. I would reckon nobody has ever done it before, because when you start setting these goals and you’re not meeting them and let’s say for the month of April, you wanted to make 5% in the stock market and it gets closer towards the end of April and you’ve only made 2% in the stock market.

13:18
What are you gonna do? A lot of times as traders, we’re gonna start forcing trades because we want to get back to that level. We’re gonna say, I gotta get to this 5%. So you start forcing trades and making bad trades instead of finishing the month up 2 or 3%, you find yourself down 5% because you made bad trades.

13:34
And I’m not saying that there’s never a reason to get back into a stock after you get stopped out. I’ve done it plenty of times, but it’s not because I’m revenge trading, it’s because it’s the best trade setup for me to take at that point in time. But for most people it’s gonna be revenge trading.

13:52
So when we’re setting these financial goals, we’re adding another element of emotion into the market that’s not healthy. Instead, take what the market’s willing to give you, don’t have expectations for the market, but try to follow the direction and the trend that it provides you with, and that leads me to my next point.

14:13
Go into it with no money expectations. Very similar to the last point, but the reason why I say that it’s slightly different is because when we start caring about how much money we’ve made on a particular trade setup, we’re going to start personalizing that money. We’re gonna start equating it with paying off this month’s mortgage.

14:30
Maybe 5 days into the month, you’re like, man, I’ve already made enough to pay off my mortgage, my credit card debt, and this month’s car payment. You can pay all your bills after 5 days of trading in a given month, and that may happen. And what do you do? You cash out and you go ahead and pay for it all because you don’t want to have to deal with it.

14:51
And then you’re watching the market the rest of the month and realize you just missed out on an incredible rally that you could have been a part of. Had you not gone ahead and cashed out your gains, you could have been part of a major rally, but now and exceeded all of your expectations and profits for that month, but you closed it out.

15:13
So go into it with no expectations as it pertains to money. And the final point that I’m gonna make is that trading takes time. We talked about the first point how don’t rush the process. In the same sense, get better at seeing the charts, get better at seeing patterns. I can almost look at any chart there is out there now, and instantly within about 5 seconds, I can see most of the patterns in that chart.

15:32
Is it because I’m some kind of like genius? No, I’m far from that. I’ve just, I’ve seen probably a million charts in my lifetime. And so it’s very easy to start pointing out the patterns that exist in a chart before I even start marking it up, but that takes time and it takes repetition.

15:53
When I say trading takes time, it also means becoming comfortable in very difficult markets like right now, from January until now, a very difficult market. You take February, March, and so far here in April it’s been very choppy. Yes, we’ve seen a lot of sell offs, but for the most part it’s been very, very choppy and so a lot of people are gonna lose money in these kinds of markets.

16:11
Coupled with trading lower volatility stocks, not getting into penny stocks or these meme stocks from Wall Street Bets, all of these steps that I’m talking about will help you get more and more comfortable in difficult markets because not all markets are just going to trend higher for you. There’s gonna be very difficult times.

16:27
We talk about all the time some of the previous episodes where the market was very difficult. 2015, the entire year was difficult because it was just a sideways market. You had 2018, you had 2020 when the COVID shutdown sent the market spiraling out of control downward for three weeks.

16:45
You had 2008 and 2000. You’re going to go through difficult times if you stick with this trading. And when you’re unsure about a market, when you’re not sure what’s going on, trade less. There’s been plenty of times over the past couple of months where I’ve been very unsure about where this market’s going, and the best thing that I could do and I have done is I’ve traded less.

17:06
Trading less is more. Not trying to perfectly time every little reversal in the stock market. Sometimes you might have to go as long as your stop losses don’t get triggered, you might have to sit through a nasty sell-off that goes against your positions. But if your stop doesn’t trigger, then you’re simply following your trading plan and give yourself time to learn.

17:22
Man, we have these crazy expectations for ourselves when we get into the stock market and I gotta be really good. I’ve given this thing 8 months and I’m not good yet. I’ve given it 5 years and I’m not good yet. Guys. Trading is a very, very hard skill to develop. It taxes your mind, it taxes your emotions, it taxes your heart.

17:42
It creates self-doubt. There’s no other profession like it. So you got to expect that you’re going to have to put a lot of time and a lot of effort, and there’s gonna be a lot of times where you experience failure and it’s gonna break your heart and you’re gonna wonder, am I good enough for it? But those are the times, man, you gotta step up to the plate and say, no, I’m going to learn this.

17:59
I’m going to get better through experience, through studying, through time. I’m gonna get better and you will. So to wrap this up one, don’t rush the process. Research, learn, study. 2, avoid the high volatility stocks when you’re starting off.

18:22
You don’t have to get into the crazy penny stock stuff, OK? I’ve talked about that at quite a bit of length because most people will do the exact opposite. Number 3, the more you add to your plate, the more flexible you have to be with your trading schedule. So, if you’re going to, in the case of June here, she’s going to raise a kid and start a business and be a trader, day trading might not be for her.

18:42
In most cases, it’s not for everybody, but she might have to be a lower frequency trader, and that’s where swing trading comes into play. Number 4, avoid goals, at least financial goals, OK? The financial goals when it comes to trading the market don’t care about it and most times it’ll be used against you to create higher amounts of emotion, bad trades, and undiscipline.

19:01
Number 5, go into it with no expectations for money. You’re trying to get better at a craft, OK? So number 6 will tell you trading takes time. Learn to see the charts, become more comfortable in difficult markets, but trade less when you don’t know what’s actually going on or you’re just simply unsure, and give yourself time to learn.

19:17
If you enjoy this podcast, I’d encourage you to leave me a 5 star review. Those things really do go a long way to helping me grow this audience, whether you’re listening to it on Spotify, Apple, Google, or some other platform. Leave me a review, leave me a 5 star review, that would be great.

19:33
And make sure to keep sending me your questions like this one here from June, ryan@shareplanner.com. I do read them all, I promise you I do, as well as sign up for swingtradingthestockmarket.com. Thank you guys, and God bless. Thanks for listening to my podcast, Swing Trading the stock market.

19:52
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, and WhatsApp. So go ahead, sign up by going to shareplanner.com/tradingblock.

20:08
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. All the best to you and I look forward to trading with you soon.