Destructive Goal Setting | Podcast Episode #293

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, 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.

0:33
In today’s episode, we’re going to be doing a follow up on a guy from podcast, episode number 270. Now, if you remember in previous episodes, I actually mentioned that I like getting some follow-ups on some of these episodes because, you know, I like they Dole out some helpful tips and tricks of the trade and making these podcasts and such a way that helps you to become a better Trader, but it’s also really cool to get feedback about how it actually did make you a better Trader.

1:00
So when I do your episode, when you guys provide me with some feedback on how its It’s changed your approach to trading. Maybe it’s a couple months down the road, maybe it’s a couple years down the road. Either way I like to hear from you guys and in this case it’s a couple months down the road. We referred to this guy as Liam and episode 270 and it was entitled when to quit trading.

1:20
It was kind of sad because he had said in that particular email, I felt that I had a real passion for trading, but these last few terrible weeks of training has made me ask myself a lot of hard questions apart from losing all your money. At what point should someone just give up and realize it’s not for them.

1:36
I know this is a difficult question would be very different from many different people. It is a lot of losing part of learning. Could you speak about your biggest ever, winning trade and maybe your worst loser or longest losing streak was a sad email, was a sad podcast episode. I remember it pretty well.

1:52
But the cool thing is, is he followed up with me. Me and Liam rights. Hello Ryan. I hope you are keeping well and August. I emailed you and you did a podcast on my question. I was at a real low point then and had a real bad run. Well, good news is, is following your advice. I really turned a corner.

2:08
And since then, I’ve gone, my account from 25,000 dollars to twenty seven thousand dollars. So that’s a two thousand dollar gained, almost a 10% move. That’s really good. One of the main ways I achieved, this was I started back trading with 10 pounds on the risk side of every trade.

2:24
In group my confidence and gradually, increase the risk to 100 pounds. That’s where I am at now, I still make quite a few mistakes along the way, but not as costly to my account. And another thing I am doing is printing out all my trades and writing notes on them and randomly selecting a few before I trade, as a beginner observing my trades.

2:43
Sometimes I can’t even believe. I took some of them then he puts a smile Emoji right after it. Anyways, that’s the quick update and a big. Thank you for everything. You send us monitoring your thoughts and charts as Been invaluable on my trading Journey, he’s talking about swingtradingthestockmarket.com, and the trading block is, which is two different Services, swingtradingthestockmarket.com that just gives you all my research trading block, is you all that in addition to all my actual trades and access to my trading room?

3:10
Now, my quick question is, should I be setting goals? Do you set goals? IE profit targets account size monthly Target. Thanks for everything. Liam now I love the follow-up. I love the fact that he asks another question there. And I have some strong opinions. Is about goal settings, and we’re going to get to that.

3:27
But first, what am I drinking? I’m drinking some wild turkey Rare Breed Barrel proof Rye, not bourbon Rye. I’ve done it before on the bourbon but I’ve never done it on the rear Bree dry. So kind of interesting this one I got it because I heard that it’s really good with old Fashions, but for this episode, I’m not doing old-fashioned.

3:46
I’m just drinking it neat. My Glenn clear glass color on. This one’s nice medium dark. No, pretty color. The smell. I definitely can pick up the wheat flavors. I can smell some lemon, very zesty and oh, I almost forgot his 56.1% alcohol, which makes it a hundred and twelve point to proof now to The Taste, it’s very strong bright flavor.

4:08
A lot of zesty. Lemon flavored pops up as well again in the taste just like with the smell and then you get the Strong finish but it’s not like an ethanol finished so that’s a good thing. I hate that ethanol flavor that pops up in a lot of your cheaper. Bourbons, I got this one, a So I think for like, 49 bucks or something, but it is a very dry finish, but it’s a finish that doesn’t like overwhelming, it doesn’t knock you out overall.

4:30
I mean, from the nose flavor, down to the Finish, you kind of feel like with those lemon flavors and then some of those Rye flavors that you’re almost like a day like a Grain Mill of some sort, you know? You pick up those smells. It’s really cool. So what I consider this an everyday super absolutely. It’s good, it’s solid.

4:45
What I consider this like a premier bourbon. No, I would give it like a 79, I think it’s pretty good every day. Supper saw Bourbon now, back to Liam. Here he mentions about how bad of a run that he had how he was at his low point. And I’ll tell you when you’re trading, especially if you’re doing it as a career, or you’re doing it part-time even, you’re going to have some low points.

5:03
I have low points on my months, I have low points on my weeks, it’s just gonna happen. There’s going to be a lot of low points in your trading and sometimes it comes just down to how bad do you want it? You are you going to push through? Are you going to force yourself to become disciplined in your trading approach? He grew his account from 2500 all the way back up to 27,000 and that’s huge now As some people might say that’s only two thousand dollars, no.

5:24
It’s about the fact that he’s consistently managing the risk that he was willing to take smaller traits. Be able to better control the emotions. He mentions how on some of his stories, he was only risking 10 pounds of risk, which is I guess. In today’s terms about ten dollars in US dollars, right? I’ll just refer to as US Dollars just because it’s hard for me to say, 10 pounds of risk, $10 of risk for the purposes of this episode.

5:46
Why is he doing that? Why is that important? Your things yourself but he’s only making smaller profits as a result. Yes. He is but in the end of the day, he’s up to thousand dollars on his account. Whereas he could trade a lot bigger introduced, a lot of emotions and then lose a lot of money. He could be down. 5,000 maybe even ten thousand dollars if he was trading with too much risk.

6:05
Too much position size. Instead he focused more on doing good trades along the way and yes as a beginner you’re going to have bad traits and he realizes that just looking back at some of his traits. But because he was trading with smaller amounts, he was able to learn from those Aids with less exposure to the downside and, as Traders starting out, even if you have the money, is it really necessary to trade big?

6:29
Isn’t it better to learn your craft a little bit to get better at it before? You just like, start throwing the money at it. We are so quick with trading to want to say that we’re good at it that we’ve got it figured out and it’s a huge mistake that a lot of Traders make they view themselves and their abilities to be far greater than what they should the markets the great humbler.

6:48
And if you think that you’re better than the market that you have, it figured out that you can trade off. Intuition or your gut feels, it’s going to punish you for that and because Liam here, trade it with smaller risk, he was able to experience some of those mistakes that he made along the way without it being costly. And here’s the thing to, he’s always going to be mistakes.

7:05
We all make mistakes trading. I make plenty of mistakes in early on, you’re going to make a whole lot of mistakes. There’s just going to be things that you learn from the first time that you never even knew you’re going to find yourself in a very illiquid stock one day, and you’re going to be like, man, I can’t get out of this trade and it’s going to teach you about liquidity but there’s gonna Be a lot of less ones and that’s just one example, but there’s a lot of things that you learn along the way that you won’t even learn from this podcast, you’ll just learn from experience because we’re all going to make mistakes.

7:30
Whether you’re experienced or just starting off. I have this incredible ability at using limit orders instead of stop orders and sometimes I can result in me getting into a stock. When I don’t want to, then I have to close it back out, and wait for the right entry price. Because by putting in the right order type, just in the trading block this week, we had one guy.

7:47
He accidentally added an extra zero to his shares. What’d he do? He had a whole lot. More exposure to a particular stock, think was meta, actually than what he wanted. Now it turned out. Good for him, he actually made a profit of an outsized profit as a result of that. But that’s one of the things that you’re going to do is a traitor.

8:03
Even Beyond bad decisions you’ll make mistakes as traders to one of the things that I do in my own trading, I use thinkorswim. I actually just put the dollar amount that I want to trade, thinkorswim doesn’t do fractional shares or anything. So it’s not like right to the penny when they fill the order but usually, I’ll be pretty close to the actual dollar amount that I want to trade, sometimes it might be like 15 or 20 dollars.

8:21
Off of the total amount that I want to invest in this the in the particular stock. But overall, it’s pretty much right there with where I want to be position size wise. And the reason why I do that is because I can see the cam is on the trade where sometimes, if you’re just typing in the shares, it’s easy to type in an extra zero or an extra one and all of a sudden you’re going way out there.

8:41
Way Beyond what you want to actually be trading from a share size standpoint. Sometimes you get the numbers mixed up in your head but if you know how much money you want to be putting on every one of your trades because you know what the position size of every You supposed to be. Sometimes it’s easier, especially if you’re using thinkorswim, and I think you can do this on Fidelity, to just to type in the amount that you want to put on that trade, then when you’re looking at the order preview, it will stand out to you a lot more if you’re making a mistake on your trading ticket.

9:07
But another thing that he’s done here one, I really liked the fact that he didn’t give up, he reflected on what he did wrong. He scaled down his position size and started getting more comfortable with bigger position sizes. And that’s where he’s at. Now, he’s risking a hundred dollars on each one of his tree.

9:25
It’s, he’s got uncomfortable to be able to do that and he’s reflected on his trade. I don’t print out the charts on my trades, but every approach to trading is different and how people learn from their mistakes is going to be different. I like to look at the raw data numbers, right?

9:42
I like to look at where my getting in, we’re getting out, what kind of losses in my taking from a percentage standpoint? I like looking at all, that kind of stuff. What are my average profits? Other people like to look more on their charts and they can visualize it more and that’s fine. But what he’s trying to do is he’s trying to be Elective he’s trying to learn from his mistakes and by printing it out and writing notes on his chart, he’s planning out the trade and doing a really good job of trying to prepare himself for the risk that he’s taking on with each and every trade that he makes.

10:05
And on the subject of making trading mistakes and bad, trading decisions. One thing you’ll learn, as you get better at trading, you have a higher and tolerance for bad traits things that you didn’t really think about when you were in. Your beginning stages of trading that didn’t bother you will bother you, the better you get at trading because you have a higher expectation for yourself.

10:23
There’s certain things that you know, that you shouldn’t be doing. So the better you get they’re still going to be plenty of things that get under your skin about your behaviors when it comes to trading in the decisions that you make at times. But that’s going to be as a result because you do get better. You don’t have as much of a tolerance level or some things that you might have.

10:38
Just brushed under the rug in your early years of developing as a Trader. Now, I’m to the point about goal setting, well, before I get the goal setting. Make sure you check out swingtradingthestockmarket.com, because swingtradingthestockmarket.com is a really awesome service that you can get that works alongside of this podcast.

10:57
swingtradingthestockmarket.com is going to give you all my stock market research each and every day, that’s going to include weekly. Watchlist, that’s going to include updates on all the big tech stocks and on the overall market and different watch list for each day of trading. So check that out.

11:12
swingtradingthestockmarket.com really cool service and in the process you’re supporting this podcast. Now about goal-setting goal-setting will often times if not most of Of the time, lead to bad traits. Why is that? Because we are setting goals for ourselves. Whether it’s every day, every week, every month, or every year I would actually say the lower.

11:31
The timeframe, the greater the mistake, start getting. I mean, I know people who set daily profit targets that they want to make from the market. What does that lead to that? Leads to over trading. Why? Because you’re trying to get to that Target each and every day. And if you miss it like four or five times in a row, what do you think that’s going to happen? That’s going to cause irritation? That’s going to feel like I’m not doing very good at my trading.

11:49
When in fact you may be doing a good job of trading by Treating at times, how many times this year? I have actually not traded at all in a single day, probably 40 or 50 times at least this year so far, I would say that maybe under estimating it but I’ve gone a lot of days this year and not made a single trait.

12:05
But if you’re making daily goals for yourself, then if you’re just in a really good trade in its having a one or two-day pullback, a light volume pullback and you’re not meeting your goals, then what are you going to do? You’re going to find something else that trade to try to make that profit up, and probably lose even more money because you’re trading based off of what you You need out of this arbitrary goal that never needed to be said.

12:25
In the first place market doesn’t care about your goals, doesn’t even know your goals. So why would it try to help you meet those goals? You set weekly goals? It’s just kind of the same thing. You start getting the Thursday and Friday, you’re going to start pushing your trades a little bit. You’re going to be start, taking trades that you don’t want to take and from a monthly standpoint, same thing.

12:41
Now, can you set a goal to be profitable on a monthly or a yearly basis? Sure sure there’s a lot of time there to be able to make some good trading decisions, but I wouldn’t be tagging like a specific number. To it. I go. I need to make 10% every month. That’s a crazy goal to make and most people think that’s actually easy to achieve and maybe you can achieve it once or twice in a row by taking some big risk.

13:02
But over the long term, now that’s crazy town. But when you get to the end of that month, what are you prone to do? You’re prone to start pushing some trays that you shouldn’t be pushing, maybe you’re in some trades that you should be getting out of but because you’re not reaching your goal you keep trying to let that trade play out further and then all of a sudden you lose more money.

13:17
You start not paying attention to stop losses because that stop loss means that you don’t meet Your goal, I set profit Targets on all my trades. But what is the whole purpose for those profit targets? It’s definitely not the goal that I have to meet. Its for me to be able to determine whether or not the reward to risk ratio is in my favorite going into the trade.

13:34
But I’m not going to be hell-bent on reaching that profit Target and if I do reach it I’m not going to take all my money, right then and there out of the trade, I might take some partial profits but I’m going to let that trade run. As long as I can, possibly let it run until the technical analysis tells me otherwise and there’s going to be times before it reaches that goal. Technical analysis says, hey something’s changed on this stock. You need to go ahead and get out of it.

13:51
Now, what I’m definitely not going to do is force the stock to reach that goal, and ignore all the technical analysis. That tells me to get out before then. So profit Targets on your trailer, only for my sake measuring risk reward. And when you’re sitting profit targets from an account, standpoint says, I need to make this much money every week month, whatever it creates desperation for you.

14:08
You’re trying to force the market to give you something that it may not be willing to Give you, it may not be giving you the conditions to be able to get that either.

14:25
And think about it. The markets continuous it just keeps going on Monday through Friday. It’s going crypto markets always going Futures Market. Most of the time 24/5, if you want to call it that and it doesn’t care about your goals or anybody else’s. And that’s where a lot of these like hedge funds and stuff get themselves into trouble because what they’re trying to do, in their trading is not necessarily always followed the will of the market.

14:45
Followed the direction, the markets given them. It’s trying to get them a return for their clients, that may not be attainable. Based off of the conditions of the market. So they start pushing trays and then all of a sudden they’re making even were straight. I mean, look at art, for instance, right? A rkk, Kathy Woods. I think, is one of the most overrated, traitors of our time, and she’s getting a ton of free passes from the media.

15:05
And everybody else involved that she’s heralded as this like genius. I don’t know what she’s done. That’s actually good. Just seems like she keeps losing more and more money on her trades, but she’s got an image to keep up with right? She wants to look good. I would be willing to bet that on some of those trades, there’s probably this need or this desire to be able to show Something to the people who are investing in those fun, but as the market care about that, know the markets going to do, whatever the heck it wants.

15:27
So, when we have goals that were, we have goals that are in conflict with the overall Market. Whether it’s trying to please investors or try to please the client, it creates desperation and it creates bad decisions. Because in the end whether you set your goals for monthly yearly weekly whatever the market doesn’t care about that markets continuous without the labels that we put on charts, you would never know on a daily chart where Your begins or where a month begins and where it ends, it’s just a new one candle after another.

15:56
So wrapping this up, really appreciate this email from lame. I think one of the cool things that I did was letting me know how he did. It following some of the darkest times of his trading, he scaled down the risk. He traded with what a lot of people might see as being meaningless, hey, he made 10 bucks off of the tray.

16:11
Big, whoop. He made 20 bucks off of the tree, big, whoop. But what he did there was hope himself to better understand how to manage a trade without all the emotions involved. And To find that position size that allowed him. That optimal position size that he could trade with without the emotions.

16:29
Becoming the main driver of his decisions when it came to swing trading, it’s good to reflect on your trades. It’s good to think back on what you did, right? And what you did wrong, but you got to have that honest conversation with yourself. You got to be willing to say, hey, I’m screwing up in this area, I need to improve and remember what goal setting.

16:48
It can lead you down a path of desperation. Some bad trading decisions. As Market doesn’t care about your goals, it doesn’t care about what you want to achieve. So just take it a trade in the time and just let it go from there. Maybe you’ll have a year where you make two hundred percent, maybe you have a year where you only make five percent.

17:03
But if you’re being disciplined and sticking to your strategy, and managing the risk on all your trades, then that’s what you should really be measuring your success by. If you enjoyed this podcast and encourage you to leave me a five star review, on whatever platform you’re listening to. I do read them and I do appreciate them and make sure to keep sending me your questions.

17:24
ryan@shareplanner.com and if you have something that you want to share from a This episode that you learn from, maybe it wasn’t even your episode. But if it was something that really meant something to you, and let me know about it. Man, I want to hear about what’s helping you out in your trading and maybe we can make a podcast episode out of it. Make sure to check out swingtradingthestockmarket.com, so you can support the process. Thank you, and God bless.

17:40
Thanks for listening to my podcast. Swing trading the stock market. I 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 email and WhatsApp.

17:56
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, 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.