Some More Beginner Trading Tips | Podcast Episode #273

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 in today’s episode. We’re gonna talk about some more beginner trading advice. For those that have listened to me for a while now, I do like to focus on some of the beginning traders from time to time, you know, because we can get caught up in some of the more in-depth topics, but sometimes it’s good to circle back around to, and I think I just use a corporate lingo word, circle around, didn’t mean to do that, forgive me.

0:58
But Circle the wagons or whatever you wanna call it, but come back to some basic trading tips. So, today’s podcast is gonna be exactly that. And for today’s episode, we’re gonna give this guy a Florida redneck name of Dylan.

1:17
Dylan, I mean, it’s not quite a Florida redneck name, but it’ll suffice. Dylan writes, Hello, Ryan, my name is Dylan. And I recently found your podcast on swing trading in shareplanner.com. I am currently 2 years into my career as a civil engineer and was very surprised to hear you speak about starting as a part-time swing trader while working full time.

1:38
Yes, that’s a true story. It goes on to write, you have brought up the fact that sometimes engineers and doctors have a difficult time with the stock market because they don’t trade what the market tells them to. As someone who is a complete beginner when it comes to. The stock market, I am looking for advice from someone who has been through it on how to start.

1:55
I’ve looked online for a few beginner courses on swing trading, and I know you also offer courses as well as the splash zone. It’s actually called trading blog now. He says, my knowledge on how to become a trader is so small that I fear these courses may not cover the basics that happen before any trading can even occur.

2:13
Things like what type of an account to open is an account. a business, how much money do you need to start, etc. etc. Like I said, I am a complete beginner. My initial goal is to take time to learn and understand what I’m doing. It would be amazing to cover my monthly expenses by swing trading, and I know that it will take a long time, but I want to learn and understand rather than skim some YouTube videos and think I’m all of a sudden an expert.

2:36
And any advice on how to get started is greatly appreciated. Thanks, Dylan. All right, Dylan. Good email here, and we’re gonna talk about all that stuff. I’ve jotted down a lot of notes for you here. But first, what am I drinking? Well, you might remember in a past podcast episode I did black and then I said, man, it was really, really good.

2:55
I had a friend that bought some for me and my wife and I, we, we really think this stuff is creme de la creme. It’s got a kind of an interesting backstory where they age it to Metallica music so that the base of the Metallica music causes the bourbon to swish all around inside the barrels.

3:11
So really cool backstory. I never bought it originally because I thought it was sort of a hokey story and I didn’t really. Buy into it, but it’s actually a really good one. I think I gave it at 8.3 back in the day. So this one is in collaboration with Total Wine, and it is a blend of straight whiskey finished in black brandy casks.

3:29
So it comes in at 57.36, again, it’s cask strength, limited edition from Total wine, 57.36% alcohol, so pretty high. The proof is 114.73, so they get really down to the 100th decimal spot there. Now, I’ve already tried this one and both my wife and I thought, man, this stuff is way too strong, like it burned your insides pretty good.

3:53
But what I’ve kind of learned to do over the years is not take a bourbon’s value at face value after initially opening it. Usually that’s the worst sip to me. It needs a little bit of air to come in, let it breathe a little bit, and usually it comes back with a much better flavor, more times than not.

4:09
And originally I probably would have given this a sub 5. That’s how much of a difference there is between this one. Now that I’m drinking, that I’ve let it breathe a little bit versus when I originally opened the bottle. To the nose, you get some really nice like dark chocolate flavors, some berries, man, it’s, it’s really pleasing.

4:26
Doesn’t burn the nose like I thought it would. The taste is very pleasant, and that’s completely opposite of what it was like the first time. It’s very pleasant, very smoky. It’s almost got this like nostalgic feeling where you’re sitting by a campfire, you know, making s’mores and burning marshmallows.

4:43
The finish is still very hot, bit of a throat chaser still. You don’t want to take big sips on this one. In fact, I would probably say, take a small sip, almost like chew it a little bit in your mouth for about 30 seconds, swallow, and then come back about 1 minute later and you’ll really enjoy the taste that this bourbon provides you with.

4:59
And that was actually a tip somebody gave me a long time ago on the show. I’m gonna give it a 7.9. I think it’s pretty good. Now, there was actually another one and I’m gonna experiment with this one next week. There was another black and I’m not gonna spend $154 on it, but it was a black and that mixed Will it for you with, I think that’s the green label with Blackened to create a new blend.

5:21
I got both of those here, so I’m just gonna do it myself, half and half. And as for it being an everyday sipper, no, I don’t think this is an everyday sipper. I tend to stray away from everyday sipper status when it’s over 50%. Can it be a weekend sipper? Absolutely. I think it was about $80 so maybe like more of a special occasion status.

5:39
But I really like this one. It was a lot better than the first time I tried it. Not bad at all. That’s the black and cast drink limited edition with Total wine. All right, now back to Dylan’s email here. In the first part of it, he talked about how engineers and doctors have a difficult time with the stock market because they don’t trade with the market tells them to.

5:56
That’s actually very true. I would throw lawyers probably in there too, and no offense if you guys are any of these professions, you guys tend to be really, really smart people and, and sometimes the market knocks people who are overly smart. Because these people are so smart, they oftentimes think that they can outsmart the market and it tends to backfire on them, honestly, because the market doesn’t care how smart you are, you just have to be on the right side of the market or you’re just gonna pay for it.

6:19
And I’ve done that plenty of times, so I know that firsthand, not to say that I’m smart or anything. I just, I’ve been on the wrong side of the market. So a couple of things that he asked, he talks about the type of accounts to open. I think that people should start off with an IRA account for sure. I mean, Roth IRA, especially if you’re young, because then you don’t pay taxes on that money because you pay taxes upfront, but you don’t have to pay taxes in the end.

6:40
Traditional IRA you don’t pay taxes upfront, but you do pay them at the end. Also, if you’re working for a company, They offer a 401k and they’re matching you on it, definitely. I mean, that’s just free money, so I would max out whatever they’re matching for sure. And then for me as a trader, I just opened up a margin account.

6:55
You don’t have to have a margin account, but the margin account makes it to where you don’t have to wait for your trades to settle and gives you the ability to short to if you want to. But remember, shorting has a lot of risks to it, so you want to keep that in mind when you’re jumping into the market and trying to short some stocks.

7:12
Now, I get this question all the time. How much money do you need to trade? Well, 56 years ago when you were still being charged a commission, I would have said at least $10,000 maybe even $20,000. I would have said 20 years ago, probably 2500 to $30,000 just because those commissions really ate into your profits. They were like $9 anywhere from $9 up to like $20 for a commission just to get in, to get out was the same price.

7:32
So round trip was quite pricey. So if you were starting off with a $1000 account, you couldn’t make money because you just needed such massive gains just to be able to cover the commissions. But now with us trading in a zero commission trading environment, I think you can start with $1000. I don’t think you necessarily put $1000 on every one of your trades.

7:49
I’m always telling you guys, no matter what size of account that you have, you want to treat position sizing no different than if you were trading like 1010. $1000 account or a $1000 account. You want to not focus so much on the profits and why people so oftentimes if they’re trading a small account, they go all in on their trades is because they’re focused on the dollars that they can make from a trade and not so much the percentages because when you’re trading with a smaller account, you’re just really trying to become a good trader so that when you do trade with a larger amount, you’re able to do so in a responsible way.

8:21
But if you’re throwing it all in on $1000 there’s a good chance that you’re gonna be reckless when you’re trading with $100,000 if Uncle Ned dies and you inherit that money and you throw it in the stock market, yeah, you’re probably not gonna be the most responsible person with that cash. So don’t base your position size off of your account size.

8:38
Really, try to treat it as if you’re trading a hedge fund or trading a large dollar amount. You want to be focused on consistent profits, not so much on the dollar amount, consistent profits. The profits will come, but what you’re trying to do in the early going as a trader is to be good stewards and managers of risk.

8:56
And that goes into the really the next point to where we want trading to cover expenses, we want it to cover a lifestyle, and those represent needs and those represent goals. And when you have goals, that’s usually conveyed to the market in a very bad way because those goals also represent our needs, our wants, desires, market doesn’t care about that.

9:15
It usually penalizes you. That’s why I say don’t create a spreadsheet of where you want to be each and every month or where you hope to be when you’re 30 or 40 years old. Just take what the market is willing to give you on a day. day basis and trade according to the risk that’s in your portfolio and according to the trade setups, not according to what your hopes and dreams are, because when you start doing that, the market is known for being a dream crusher and it will take you out.

9:37
There’s a lot of people that are chasing these meme stocks right now like Bed Bath and Beyond and GameStop and AMC. Why are they doing that? Because they’re Excited to manage risk? No, they are ignoring risk and they’re just chasing after profits because they have a desire, they have a dream, they have a need, and they want the market to fulfill it for themselves because they think they’ve seen it happen for other people, so they think it should happen to them.

9:58
But all they’re left with is a massive, massive loss and usually margin calls because they’re over leveraging themselves in the process. So if you start trying to convey your wishes, your desires to become a full, it’s OK to want to be a full-time trader. What I’m trying to say is don’t try to convey that onto the market.

10:14
Don’t try to say, well, in order for me to stay on the path to become a self-sufficient trader, I need to make another $1000 this week and then try to trade as if you need to make another $1000. Just trade according to what the charts are telling you, what the setups are showing you, and just manage the risk.

10:34
And remember too, in trading, you’re not gonna be consistent in the form of, I will make $1000 every month. I’ll make $10,000 every month. There’s gonna be some months where you don’t make any money because there’s gonna be times where you do go through a drawdown. How you manage the drawdown, how shallow you keep that drawdown is really going to determine your success in the months that follow, because if you just bury yourself into a hole because you’re trying to get back to break even so you can get back on track according to your spreadsheet that you created 6 months ago, you’re usually gonna make things even worse.

10:57
So don’t expect the expenses to be the same month to month. Sometimes there will be feasts, some months there’ll be famine. Like last month, I took a loss. And let me tell you, I traded a lot less frequent than I usually do, and I couldn’t get on the right side of the market to save my life. And that’s gonna happen.

11:12
But in future months, I expect to be profitable and for it to far outweigh the loss that I took in the previous months. And if you’re interested in helping yourself out with trading, make sure to check out swingtradingthestockmarket.com. This is my market research that I provide members with each and every day. That includes updates on my watchlists, the different stocks that I’m watching each and every day, a number of different trading ideas, plus you’re going to get.

11:36
Updates on all the big tech stocks, the markets, really cool. I’m using a lot of videos these days, so it’s not just picture files that I’m uploading. I’m actually doing videos and talking to you like I am right now, except I’m talking to charts, really cool feature that I would tell you guys that’s worth checking out and in the process, you’re supporting this podcast.

11:53
Next point I would say too, focus on becoming a better trader. We tend to think that. We need to trade in such a way that’ll set us up to be a full-time trader that may not always happen. Life happens, things change, desires change. But one thing that you can do regardless if you’re working for the man or whether you’re trading for yourself is to focus on being a disciplined trader.

12:14
Focus on following your strategy, focus on continuous learning, keep trying to learn, keep trying to fine tune your strategy. Make sure you’re remaining disciplined. If you do those things, then there’s a good chance that yes, you will become a full-time trader, but you gotta make sure that you’re capitalizing on your good experiences and on your bad experiences, on your losing trades, on your winning trades.

12:36
What are the takeaways? What am I doing wrong? How am I not being disciplined on this trade? How could I be more disciplined on the trade? And you got to implement that in the future trades. Do you see trends in your trading? Like, hey, when I trade this particular stock and this kind of price action happens, I tend to get a little bit panicky and I sell out way sooner than I should.

12:53
Look for those things. Look for why you’re getting out of trades, how you were feeling when you were getting out of those trades. And there’s a lot of information out there, and I get that. Dylan made the comment that there’s trading courses galore out there, and even I have trading courses. Not sure which ones to go after. And I’ll tell you, I’m actually working on an all-encompassing trading course that I think will really knock it out of the park with you guys.

13:14
So keep your eye out for that. I expect it out this year, really going to be a cool course, very immersive, essentially just pouring out 30 years of knowledge and trading advice from the very beginning all the way to where I’m at now. So it applies to beginning traders as well. But You want to stay away from people who are trying to sensationalize the market, people who are trying to make a soap opera out of the market, the people who are trying to sell you on a pipe dream.

13:38
If there’s Lambo’s and girls wearing bikinis in their videos, or they’re trying to tell you how they can make you $100,000 in 3 days with $1000 or any dollar amount for that matter, just stay away. I’d stay away from crypto too. A lot of people are getting sucked into crypto. That is a very, very difficult market right now.

13:54
And a lot of people are blowing up accounts in it. So I would probably stay away from that as well. So to summarize, make sure that you are opening up at least a Roth IRA at this point. If you’re, especially if you’re young, traditional, if you’re a little bit older, doesn’t hurt to have both of them opened up. Again, I’m not a financial advisor, so don’t take this as financial advice or anything else.

14:13
This is just what’s benefited me in the past. If you’re getting employer benefits, make sure you’re matching them on the 401k side. Your trading can’t be a business unless you make it a business per se. You can’t like add it to like, dry cleaning business, but if there is a purpose, you know, I would think that you could probably make it a business.

14:29
But a lot of like the services and subscriptions and trading courses, those are usually tax deductible, but again, check one of the accountants on that. Don’t try to put your needs, don’t try to put your goals. Don’t try to put your wishes upon the market. Just focus on being a good consistent trader who stays disciplined, follows the strategy, fine tunes it, continuously learns both from Winning trades, losing trades, and just the overall trends and behavior when it comes to the trading strategy.

14:54
You do all that, I think you’ll be off to a pretty good start in your trading career. So if you have any questions, make sure to keep sending them to me, ryan@shareplanner.com. I enjoy hearing from all of you guys. Make sure to leave a 5 star review too, because I do read those as well, and they do mean the world to me and check out swingtradingthestockmarket.com.

15:09
Guys, tons of good research there each and every day that I’m sending out to you guys. So, with that being said, 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.

15:28
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.

15:49
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.