One Miserable Trade | Podcast Episode #267

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 at the stock market, and today’s episode is not going to involve an email from one of y’all. Instead, it’s going to be not so much a venting session, but basically me talking about one miserable trade that I had today and I really think that Me talking about these trades, it’s something that a lot of traders don’t do.

0:52
And I think some of your most successful traders are usually the ones that are most willing to talk about their worst trades or what they’re doing wrong with their trading. And I think this is a good opportunity not only for me to get it off my chest, but for me to talk to you guys about it, to let you guys see my thinking and really for me to be human and show you that.

1:10
Hey, bad trades happen. And so this is what we’re going to talk about today, a really bad trade that I made today. It wasn’t one that sunk me or killed me, but it was more of an emotional loss than it was a bad loss in general, just a real miserable trade.

1:27
It just stunk. As they get into it, you’ll see more and more why it was such a crappy trade. But first, what am I drinking here? Well, I picked up this cool bottle. I’ve been wanting to try it for a really long time, but I never wanted to pay the price tag on it. It was always like $90 to $100 depending on where you were looking, but I got this Jefferson Ocean’s aged at Sea blend of straight bourbon whiskey, very small batch, 45% alcohol, 90% proof.

1:53
Now, I don’t think Jefferson’s is a bad bourbon. I’ve never been like what you would say like a. of it. But I mean, this is my second bottle of it. It’s not bad. It’s never disappointed in terms of just being just like a drain pour. But this one is Voyage 24, and what’s cool about it is that they age these things out at sea and then on the bottle itself, they actually tell you all sorts of interesting tidbits about the voyage itself.

2:17
Like, I won’t read the whole thing, but it just says here, the first couple of sentences, it says the driving force behind Ocean Voyage 24 was introduced. A new experiment to the Jefferson’s Ocean franchise. It says that it spent all of its time at sea in the Caribbean where the air temperatures were always hot.

2:32
The containers on board served as heat ovens as the bourbons visited exotic ports of call throughout the Caribbean and Central America throughout the voyage, the humidity was tropical and the average temperature inside the containers was 93.8 °F, reaching a maximum temperature of 124 °F.

2:51
So it talks about the storms and the weather. It’s really cool and and I guess one of the things that they like about these aged bourbons at sea is that Because there’s swells in the ocean and the liquids get tossed about all over the barrels and it causes it to intermingle, I guess, with the barrel more.

3:09
So it’s a cool story. I it’s probably one of the more interesting or unique stories you’ll find behind a bourbon. This one here, I mean, color is a little bit on the light side. It’s not necessarily a bad thing. I always kind of like that dark, dark color, but to the smell, you definitely pick up like some cherries and some good sweet flavors.

3:28
No burn on the smell. The last couple of them that I’ve done have burned. This one doesn’t. Now to the flavor, you definitely pick up some oat flavors and you get this like biscuit taste. Now, I wouldn’t say it’s like, you know, homemade biscuits or sausage biscuits and gravy kind of flavor, but it’s definitely like a Cracker Barrel, Bob Evans kind of, you know, a little bit on the cheaper side, but still good stuff, stuff that’s very edible.

3:51
And I’m getting kind of into the how biscuits are on the smell of this thing, but you definitely pick up a strong biscuit scent, and I’m pretty particular about my biscuits, I guess you could say. Now, on the finish, it comes across as a bit, a little bit nutty, but not harsh at all. It’s not one of those things that just chases you down your throat with a heavy, heavy burn.

4:09
Instead, it just stays there on the palate. It’s pretty good. I don’t think it’s necessarily a great bourbon. I don’t think it’s a bad bourbon. I think it’s an everyday sipper. I don’t think it’s necessarily everyday sipper at $65 and that’s a discount there at at Costco’s.

4:25
I would probably say it’s maybe a weekend sipper at best, but there’s probably better options out there. Like I would say old scouts better, a lot better. Scale of 0 to 10, I’m giving it a 7.4 again, not bad, but I just don’t think it’s great. Now, let’s talk about the crap that I really don’t want to talk about, but I know it’s going to be good.

4:43
You know, as traders, especially if you’re on social media and you’re following people that you respect on social media or people you think that know something about stock trading, you follow their tweets or their posts on stocks and you think to myself, man, these guys, they nail it.

4:59
Oh, the market’s selling, they’re shorting.

5:15
If the market’s buying, they’re long on the mark. And it’s almost a little bit discouraging because you’re thinking to yourself. Man, I have all these losing trades, but these people, they never have losing trades. And you know what I’m talking about. I think that’s one of the things that I really try to bring to the podcast is the humanistic side of trading in the sense that we struggle.

5:31
There’s a struggle with trading. Trading is not an easy career at all because the trade that I’m gonna outline for you today is, it’s a common thing to have happen. Doesn’t necessarily mean it was a bad trade from a management standpoint, but the trade was just, it went horribly wrong.

5:48
And July, it’s doing really well. It’s the best month of the year so far, but it hasn’t been a good month for me at all. And again, I haven’t traded that much, mainly because I don’t feel like the opportunities have been there. I mean, you take this month, or let’s say, let’s take the last 15 days, for instance.

6:09
Last 15 days, the market has only been up 7 out of the last 15 days. It means it’s been down 8 out of the last 15, a majority of the time, the market has sold off. But during that time, and this is where it gets really interesting. The S&P 500 is up 5% after hours when you consider the Apple and Amazon earnings being factored in 5%.

6:30
Now, I would suspect something like that, you would see 5% up over a 15 day period, you would see the market up either 10 out of 15 or 11 out of 15. Instead, it’s only up 7 out of 15, not even a majority. And so most of the time it’s selling off and so it’s easy not to be able to jump to the long side on this kind of a run.

6:47
Especially when you consider the overall market that we’ve been dealing with, where we’re in a bear market, you have a slew of earnings reports. You have GDP that came out, you had the FOMC statement where there are hiking rates, 75 basis points, and yet somehow we find ourselves dramatically higher this week.

7:03
So a little bit of context on the trade. I got into QID today. If you know what QID is, you already know this trade went awful for me. QID is the inverse ETF of the NASDAQ and it’s a 2 to 1 return.

7:26
So if the NASDAQ goes up 1%, this one’s going down 2%. The NASDAQ goes down 2%, this one’s going down 4%. It’s tied to the NASDAQ 100%. So, I don’t know if you guys are at your computers, you should even pull up this chart because it was just mind-numbing. There was some resistance that The cus have been testing over the last couple of weeks and it hadn’t been able to break through it and we were starting to see a reversal early on.

7:43
Now, you also take what we’ve seen. On almost every one of the FOMC statements this year, I think, except for the one in March, we have seen significant selling the day after the FOMC statement, despite the fact that the FOMC statement saw a significant rally, the following day would result in a significant sell-off.

8:06
So I started seeing that. It’s like the same things playing out again. We’re doing it up against resistance that gives me a clear reward risk ratio. So I get into the QIT or I don’t get into it right away. I actually put it out there. That I’m gonna buy for the trading block. I let people know on the trading block that I’m gonna buy it at 2207, and I’m going to put my stop loss at 2120.

8:21
So decent reward risk ratio, you’re talking about a 4% stop loss on it or just a little bit less than that. And I get in, the market starts to sell off, it hits 2207. What do you think the high price of the day was for that stock? 2207.

8:39
I top tick the trade. I don’t even know the last time I topt a trade. I top pick this one and it was brutal. I’m sure I’ve done it before, but this one, it just, I’m telling you, it’s almost like, and I’m not trying to say the market’s rigged or not or you know, that the market’s rigged to work against me or anything.

8:54
I’ve never subscribed to that belief, but it felt like the market was rigged against me. And again, I don’t think it was. But as soon as I got in, I’m telling you it was a 180 reversal from the moment I got in.

9:13
I’m talking like seconds after I got in. Never saw 2207 again. In fact, it was like a few hours later, and look, I’m a swing trader. That means I’m holding my trades for a few days to a few weeks. But not this one. This one was a freaking day trade because I was out like 2 or 3 hours later at 2120.

9:31
I mean, it was brutal and it was humiliating. And here’s the crazy thing too. I don’t feel like I’ve done a good job trading this month, but the research has been fire. I’ve had some really good research. You know, if I would have acted better on some of my research, I think the returns would have been much better, but it just wasn’t the case here.

9:53
There was a disconnect here. In the month of July between the research that I did and the trading, I mean, I was tilted bearish, but there was also long opportunities that I was pointing out I was like, hey, if this market can stabilize and, and take off, trades like Amazon or Genpack, which is G or W, these ones are setting up for a good rally to the upside or Nexstera Energy and EE.

10:10
These were all ones that I’ve been looking at, but I didn’t get beyond the fact that we’re not breaking through. Key levels of resistance in order for me to get along on those trades, and so I never took them. So that’s where the research was really good, but implementing it into my trading, there was a disconnect there.

10:26
And speaking of my research, if you want to get my research, and this is kind of a shameless plug, right? Because I’m telling you how bad my trade was today and yet I’m pushing my research to you guys. Go to swingtradingthestockmarket.com. I’ve actually made a lot of changes recently, so if you guys are once looking at it before.

10:45
Before I used to just do nothing but charts and graphs, you know, using like pictures, right? Now I’m doing videos. Now I’m doing videos. They are only things that you can see if you’re a member of swingtradingthestockmarket.com. And these videos, I mean, they’re really good and they provide a lot more detail on the different setups, on updates on the overall market and just really good.

11:02
I’ve gotten a lot of good feedback off of the video, so I’m excited about rolling these out more on a regular basis for you guys multiple times a day. So check that out, swingtradingthestockmarket.com and in the process you’re supporting this podcast and getting an incredible service and return. OK.

11:27
Now let’s pivot from talking about the research back to this crappy trade. And again, I’m doing this because I want you guys to understand the downside of trading because it’s easy for me to tweet out a whole bunch of different things throughout the week and say, hey, watch this stock, or hey, watch that stock, or, you know, this stock is setting up well, and then Cherry picked the ones that I want to follow up on on and say, hey, see, if you would have bought this stock, you could have been up 10%.

11:43
And that’s what most people will do that are offering a service or research or whatever. They will cherry pick their research and say, hey, see here, you should have done it like I did, and they probably never bought it. I don’t do that. I post too much information and do too much research for me to remember all the good ones versus all the bad ones.

12:03
I just put it out there and I, I trust that you guys remember, you know, the quality of the research that I put out there. But what I’m trying to get to is that there’s so many people that try to Act like that they’re perfect at the stock market, that they don’t suffer losses, that they don’t have drawdowns in their account, that it can almost be very discouraging to you to think that there’s no chance that you can make it in this market, and you can.

12:21
That’s the thing, you can, but you’re gonna have to do it at the expense of taking on some losses along the way because as traders, we’re not gonna be perfect. We’re going to have crappy trades like this one here in QID where I literally top ticked the trade. Nobody got in higher than what I got in at.

12:43
I got in at 2207. That was the high mark of the day for that stock. In fact, I somewhat expected when I was stomped out to be stomped out at the low end of the day, it’s like, watch it reverse exactly where I got stopped out at. That would have sucked too. And I’ve had that happen before, but we can’t expect to be perfect at our trading, and we can’t expect to be perfect every month at trading or every week at trading.

12:59
And sometimes there’s gonna be years that you struggle more. At trading than you do other years. In fact, I remember like 2015, for instance, that was such an annoying year of trading for me. I just remember it was so difficult to get any kind of consistency out of the market because it was such a turn all year long.

13:20
But when I go back and I look at this individual trade here on QID was my trade set up in the resulting loss, a reflection of poor management? No. Was it a result of greed or fear? No, I really didn’t even want to get into the trade, but I saw the trade set up there and if I’m going to follow my trading plan and the way that the market was shaping up, it did present itself as a quality reward risk ratio.

13:36
But even the best reward to risk ratios on a trade set can result in the risk being realized instead of the reward. And so just because you have a good reward risk ratio going into a trade doesn’t mean that it’s going to favor the reward at the end. Sometimes you get stopped out and you get knocked out of that trade.

14:03
In fact, it’s going to happen a lot and for some people more times than not. But even if it happens more times than not, doesn’t mean that you can’t be a profitable trader. It comes down to cutting your losers short, losing fast, and winning slow. Today, I lost extremely fast, extraordinarily fast, faster than I would have personally liked to have lost, but at least I’m not holding onto it going into the next day, where I could easily take on additional losses.

14:21
I followed my trading plan. It didn’t work out the way I wanted. It failed spectacularly. I don’t even know if I can say that word correctly, but it did fail. It failed miserably, but in the end, I didn’t sink my ship. I’m still in the trading game, and I have to learn from it and move on.

14:46
I think one of the biggest things is to shrug it off better. I did not shrug this one off very well. It annoyed me to no end. All day long it bothered me, just because of how it made me feel. And I think if I was doing this in isolation where nobody even knew the trade that I was making, maybe I would have shrugged it off a little bit easier, but I think there was an embarrassment level to it too, because, yeah, I think I’m pretty good at what I do for a living.

15:02
But even being good at what you do for a living doesn’t mean that you won’t have setbacks. I mean, look at Patrick Mahomes, or the greatest quarterback of all time, Dan Marino. They throw interceptions all the time. They throw pick sixes at the opponent’s goal lines, sometimes to win the game. I mean, Russell Wilson, great quarterback.

15:20
Remember the Super Bowl where he threw The interception at the goal line. You talk about humiliating what I did today pales in comparison to what happened to Russell Wilson in front of the entire world. I would have needed a lot of counseling after doing that in a Super Bowl, and Russell Wilson’s an amazing quarterback and a good quarterback.

15:38
And guess what? He’s still quarterbacking today. He’s still Signing million dollar contracts, and he’s still revered as quite possibly one of the best quarterbacks of this generation. But yet as traders and as athletes, and I’m not trying to say traders are athletes because then I wouldn’t probably fit into that category at 42 years of age.

16:00
But what I’m trying to say is, is that we all have setbacks and some of them can be embarrassing, some of them can be humiliating. I felt definitely a little humiliation today. I felt a little bit of embarrassment, mainly because everybody saw that trade. And maybe that’s the reason why I’m doing the podcast on it because it helps me at least talk about it, helps people to understand that.

16:23
As traders, yes, we need to own up to our bad trades just like I’m trying to do here, but we also can’t let it define us either. I can’t let this trade define me into the next trade, and I can’t let a month of trading in July that hasn’t been that great for me, not great at all, define August and define September because so far this year has been a marvelous year.

16:41
How many people can say they’re up on the year? Not many, but I definitely can, and I’m proud of that, but. Even in the midst of a really good trading year, there’s gonna be some bad traits, and that’s what happened today. So guys, don’t let the losses get you down. If you’re managing your risk, if you’re following your trading plan, move on to the next trait.

17:01
Don’t let it weigh you down and let it do that a little bit to me today, one, because I’m human. And another reason why is because I feel the losses just like anybody else does as a trader. So, If you enjoyed this podcast, make sure to leave a 5 star review. Also make sure to check out swingtradingthestockmarket.com and make sure to send me your questions right at ryan@shareplanner.com.

17:22
Next week I’ll be getting back to those emails that you guys sent me. I love reading those and I love answering them, so keep sending them my way. 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.

17:44
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. 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.

17:44
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.