Mastering the Stock Market: Embracing Patience over the Thrill of Trades | Podcast Episode #347

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 the Swing Trading the Stock Market podcast and today’s episode we’re going to be talking about the thrill of the trade, needing that thrill, needing that adrenaline rush when it comes to our trades.

0:43
I will tell you this most of the time that I get questions about trades, whether it’s on StockTwits or Twitter or some other social media platform. Oftentimes there’s this need or the thrill, the trade that is driving that question, that need for that Adrona rush, that need to see that stock go from 100 to $1000 a share to hit that home run.

1:05
So we’re going to talk a lot about that in this episode today. And today’s e-mail comes from a previous writer to the show that we’ll call Lola. That was the name that she went by last time and she’s sharing her success stories now. A lot of times we’re getting questions from people about struggles and about problems, but it’s really cool to see the success stories too.

1:24
And so I’m always thrilled when somebody wants to share their success story and maybe even a follow up question that they might have as a result of some of the things that they have learned. I love it when you guys do that for me. And so let’s go ahead and just jump right into this e-mail, she writes. Hey Ryan, my name is Lola.

1:40
I requested this name previously and would like to stick with it. My previous e-mail I asked you if it was worth trying to develop a trading strategy during a choppy, unpredictable bear market. My account is not big enough to short, and even if it was, I don’t think I would be comfortable doing it, preferring inverse ETF’s instead.

1:58
Your advice was that it was a great time to learn in a difficult market. She’s Speaking of 2022 here. I feel that I have always had good risk management and don’t hesitate to get out of losing trades, but I was getting chopped up partly because I was chasing short term moves.

2:13
So I sat on my hands and watched. I am following up with you to let you know that the biggest thing that I have probably learned is patience. I waited for some kind of confirmation on a change in market direction and although I took some small trades on, ETSI mostly watched. The best trade that I had was Ulta, that stock symbol Ulta for those wondering.

2:32
It is surprisingly well during the big market correction and there was never a great time to get in. But in May, June of 2023 it dropped to about $150.00 a share. I waited for it to confirm and when it did by making a high or low, I bought the shares and has recovered about 50% of its pullback.

2:50
I got out of it a couple of days ago because it started to pull back and it has earnings coming up near the end of August. I feel that this was possible because my new appreciation for patience and waiting for the right setup and the short and longer time frames. I thank you for all that you do, it is very much appreciated.

3:05
Sincerely, Lola, this is some really good stuff here and and there’s a lot to actually unpack, even though there wasn’t really a significant question that was asked. There’s some themes that I want to pick up in this e-mail and discuss, one of them being the thrill of the trade. And one of the things that I want to do is like set apart.

3:21
What is some of the strengths of weaknesses that I’ve noticed a lot of the times between men and women traders and with women traders, I often find that they are much more disciplined traders. They don’t get a lot of ego into their trades to where they feel like that they got to hit these home runs. They’re much more disciplined in their approach.

3:37
There’s less ego. There’s less of a need to have to win on every trade. One of the things that I see a lot of times with men and there’s more men traders than there is women traders out there. But one of the things that I think, and this applies to me as well, is that you wanna win on the trade. You feel like when you have a losing trade, your ego’s getting bruised.

3:52
And so I’m not selling, Heck no, I’m not selling. And So what happens that takes a small loss and it makes it a much bigger one. Now that’s one of the reasons why I also preach risk management so much because it’s so easy, especially for us guys for those losing trades that go from something small to something big because we let the ego get in the way.

4:08
But for whatever reasons it is I’ve, I just always noticed over the years that women are a little bit more disciplined when it comes to that. So if you’re a woman trader out there, you know embrace that as as like a inherent strength that you guys have. She also talked about the patients in the in a choppy market and and choppy markets are very, very difficult to trade because you’ll find a lot of false breakouts when you’re trying to play like a bull flag or just trading out of a channel or you’ll find a lot of bounces that just don’t really go anywhere.

4:33
So it’s very difficult sometimes you have to trade a lot of extreme moves that are taking place between the upper end and the lower end of a choppy market. But one of the things that you want to go and look at on a chart and define for yourself Okay, we know that we’re in a choppy market here. It maybe it’s lasting for like 3 or four months, but start to ask yourself what changes it, What causes it not to be a choppy market anymore?

4:55
And so you want to look at those parameters. What would it take for it to not be in a choppy market anymore? One of the perfect examples of that of late has been IWM. Now if you look at the chart on IWM, it’s done really good over the past month, but for most of 2023 it hovered near its lows. If you look at it back in March, it was trying to retest the lows that look like again from June and October of last year and it was very choppy.

5:17
While you saw the NASDAQ just ripping higher the small caps or the Russell 2000 wasn’t really going anywhere. It’s very, very choppy. And then from March all the way up until June, you start to get into a very fine, very narrow price range for I WM.

5:33
My trade set up on I WM was as if it breaks out of that very narrow trading range, it would become a buy for me. And it did. It broke out. I bought it on the pull back to the retest of that breakout level. It held that breakout level and bounced. And then it’s been off to the races ever since then. Now it was also, it’s stuck in some other choppy ranges that go back even further than just a couple of months there from March and June.

5:56
There was also much bigger ranges that was going back all the way into 2022. And so I had to be cognizant of the fact that even though it’s breaking out of the short term choppy range, there was some longer term choppy ranges as well. And if it was able to break out of that, that was great. I would continue to hold on to some of my positions.

6:13
But I was also very quick to take some profits on that position as well along the way to where I got down to about 1/3 of a position and it broke out. And then it broke out again and I was still able to hold on to that position. And if you got a little bit lost in that description there, the essence of what I was just describing there is to be aware of when you are in the choppy market and what it would take to get out of that choppy market.

6:35
What parameters would it have to pass through? What kind of resistance levels would it have to break through or support levels would it have to break to where it’s either going into a now a trending market to the upside or a trending market to the downside? Because choppy markets eventually resolve themselves in a future direction, either higher or lower.

6:56
And so don’t get too comfortable that those choppy ranges are always going to last. I know a lot of people. I remember this one person was asking me about McDonald’s. It’s like, man, every time it gets up to this price level, it drops. And so I’ve been just playing these fades. I’ve noticed the last three or four times it’s done that. And so he started playing and I think he got it right.

7:13
One time it was, let’s say it just goes up to like $100 this year. I don’t even know what it’s trading at right now off the top of my head, but he it would get up to $100 again, fictitious number here. And every time it got up to that number at $100, he would just fade it okay. But one of the things that when you see some of that’s becoming really obvious like that where it just continues to like test it over and over and over again, you got to be aware of whether or not some of those downside fades are starting to lose their momentum to where Okay, if it would go from $100 down to $90.00 and then the next time it’s only going down to like $92.00 and then the next time after that it’s only going down to $95.

7:48
You want to be aware of the fact that yeah, it might be fading, but it’s not fading with the same kind of momentum as it did in previous times. And in that case, it actually just busted right through the next time it tested that $100 level. Again, all fictitious numbers because I don’t remember off the top of my head where MCD is actually trading at right now.

8:04
But the point of it is, is to be aware of the fact that when those choppy markets end, you want to know what causes them to then what price level do they have to breach in order to leave that choppy market and into a trending market. And one thing also that you want to be aware of is swingtradingthestockmarket.com.

8:21
swingtradingthestockmarket.com. Whether you’re watching this on YouTube, you can click down at the join button down below. Or if you’re listening to it on Spotify or Apple or some other podcast platform, it’s a really cool research platform that I provide. Alongside of this podcast. You’re going to get all my stock market research each and every day.

8:38
That’s going to include updates on the S&P 500 big tech updates. You’re also going to be getting some really good watch lists each and every day. That’s also going to include my weekly master updates on my bullish and bearish watch list. So a lot of good stuff, a lot of good videos that I’m sending your way that gives you all of my research that I do each day and preparation for the stock market and throughout the course of the trading day itself.

9:00
Now, for the main topic, because we, we address some of the things that Lolo was talking about here, but for the main topic, it’s the thrill of the trade. The thrill of the trade can get you into so much trouble when it comes to being able to sustain the longterm health of your trading portfolio. And why is that?

9:15
I think there’s a lot of times when we get into the trade, there’s like these endorphins or there’s these feelings of excitement that comes with getting into the trade. And I used to be like that as well. I think over time, the more you trade, the less thrill you get out of each subsequent trade.

9:31
I would compare it to eating pizza. You guys know, if you follow me on Instagram, at SharePoint or any of the other platforms, I really like pizza a lot. I put them in my stories. I talk about pizza a lot. I make my own pizza. I make my own marinara. My wife actually makes the marinara. She won’t even tell me the recipe for my marinara, but I don’t tell her my do recipe.

9:49
So it works together, you know, it’s like nobody actually knows the recipe. It’s kind of like, you know, Coca-Cola and nobody actually knows how to make it cook. Just people knows how to make, you know, certain parts of it. But getting back to pizza, without going too much off of a tangent there with with pizza, 1st slice is amazing.

10:06
Friday nights we eat pizza. That first pizza comes out, That first pizza pie, they’re all really good. But that first pizza pie, it’s always just pepperoni and cheese. And let me tell you, that is amazing pizza. That first slice, I mean, it scorches the roof of your mouth.

10:22
I mean, it just burns it to The Smithereens. But it is so good. I mean, I love it. And then the second pizza comes out and that slice is really good too, but it’s probably not as good as that first slice. And then the third pizza comes out and I get a slice of that one. It’s probably like Buffalo chicken. It’s not as good as the first two slices.

10:39
And the first slice was definitely better than the second slice and the second slice was better than the third. And we’ll make like 8 pizzas and I’ll have like 8 slices of pizza. I know it’s a little glutinous on my end, but by that eight slice I’m probably throwing like the crust over the fence, probably not, you know, enjoying it too much.

10:55
I’m probably looking forward to that next oldfashioned. But the point is there’s a diminishing margin of return. And I think that the more trades that you place and the longer you do it, there’s a diminishing margin of thrill for or a return for that thrill when it comes to trading. So when I place a trade now, I really don’t feel too much excitement about it.

11:13
Sometimes it might just be because it’s a boring trade, but even if it’s a pretty volatile trade, it doesn’t get me all excited. But I see sometimes with new traders where it gets them excited and it’s like, all right, what’s it gonna do today? What’s the prediction? What’s where we going? Is like, you guys just watch and see what the market provides, and then you react accordingly to the new technical analysis that’s forming each and every day.

11:31
But that’s the thrill of the trade that’s it’s like it’s getting you height and we want to keep the hype out of the trade and and for some that’s just going to take years and years and years for it to happen. Because with each subsequent trade like pizza has a little bit less of a thrill value to it. You take like a baseball player right their first home run.

11:48
It’s it’s amazing. It’s rounding those bases. It’s amazing you get a big league slugger that’s hit is more than his fair share of home runs. He gets like #374 and he’s just rounding the bases. It’s business as usual. No big deal. And similar to trading when you get the big gainers, you know if you get 10% on this trade or 15 or you hit 30 or 40% on trade when you do it that first time, that’s amazing feeling.

12:11
It’s great. I remember this one time when I was just starting to get the hang of things when it came to swing trading. I made like 4.2% on this trade. I don’t know why I remember the exact to the 10th, but I do. It was 4.2. I mean I was, I was so pumped about that. I was like, holy cow, I was like free money off of that, you know?

12:27
And I made it in one day. And it was a stupid trade too. In hindsight, I probably should never have taken that trade. But I got lucky. I made some money. It’s that beginner’s luck that sometimes happens. But 4.2%? I said to myself, OK, if I make 4.2% on every single trade, yeah, I probably have some loser trades, but it’s not gonna be a lot.

12:42
But I just calculated 4.2 on every trade. Man, I was going to be a millionaire before lunch time the following day. It was amazing how exciting you can get about a four 4.2% return on your trade and the early going. But I get that now and it’s like I don’t even really think too much about it.

13:00
Yeah, I do think there’s a little bit of the thrill that’s gone out of the trade that, you know, even if it’s like a 20 or 30% trade, it’s a good trade. I’m not going to discount that at all, but it doesn’t really mean too much to me at this point because I’ve just, I’ve done it a lot. I’ve done it a lot over the years and and that’s not me trying to like flex or trying to brag or anything like that.

13:18
It’s just, I mean I’ve been doing this since I was 11 years old. I’ve had a few good trades along the way and and like the pizza, it just has like a diminishing margin return. But that’s a good thing. I guess that’s what I’m trying to get to. It’s a really a good thing to have that diminishing margin return to of that thrill because you’re not thrill seeking when it comes to trade.

13:37
You don’t need to trade, and Lola here is is noticing that too. She’s learning to be patient with a trait and not just making trades for that thrill. Some people get really impatient with me when I go like a week without making a trade. It’s not that I don’t want to make a trade, it’s just that there’s not a good opportunity out there.

13:53
And if I do take that opportunity, why am I doing it? I’m not doing it for the thrill of it. I’m just doing it just because. And that’s kind of stupid. And so that’s where the patience kicks in, because if I’m not doing it with it, like the need to trade or with that thrill or I’m not trying to seek after this like endorphin release that comes from trading, then I have no reason to trade until there’s a really good trade setup worth taking.

14:15
And that’s when you’re in that sweet spot. But for most of you, especially those that are just starting off with trading, there’s still that excitement in the air. There’s still that desire and that need to want to trade. And I think for me, with trading, I think one of the things that I’ve really enjoyed over the years is teaching people to trade.

14:34
I offered coaching services and everything else on the website. It’s really good. There’s training courses as well, but and then there’s the trading block to where I’m in the Discord chat room there each day. But I enjoy that so much because I get a lot of satisfaction off of watching other people learning how to trade and how to trade well.

14:51
And I think that’s where I get my thrill at these days is being able to do that. And then there’s the, the saying that like those who can’t teach, you know, I don’t agree with that. I think you can actually enjoy teaching. My wife’s a teacher, She loves it. She wouldn’t have to work right now. She didn’t want to, but she loves it. She there’s no way she’s giving that up.

15:07
She loves it. And so same thing for me. I really love teaching people to trade, to harness some of those emotions that to understand the psychology behind the trade, because I don’t think that’s preached enough by people on Wall Street by any means. Psychology and the mindset of trading is about 90% of the trade.

15:23
And so that’s why I focus on it so much in this podcast is because it’s so important to your success as a swing trader. And so I think I’ve been kind of like all over the place on this podcast episode. Hopefully I haven’t been. Hopefully you guys have been able to learn a little bit from it. I’m actually doing this one pretty late at night, so maybe that’s part of the whole equation that there might be a little bit of tiredness seeping in.

15:46
I’ve got some coffee that’s been keeping me up tonight, but the summary to all of this is that try to minimize that need to trade, that thrilled seeking mentality when it comes to trading. You don’t want to have that in your approach to swingtradingthestockmarket.com. Also, when it comes to choppy markets, make sure you’re defining the parameters of when a market goes from a choppy market to a trending market.

16:10
And if you do those two things, you’ve done a lot for yourself when it comes to trading. I think those two elements of trading can take you a very long ways. Not seeking after the thrill and being able to understand when a market goes from a choppy market to a trending market. And if you enjoyed this episode, I would encourage you to leave me a 5 star review on whatever platform you’re listening to me on, on YouTube, just like and subscribe.

16:31
That’s all. That’s all I appreciated quite a bit. Also check out swingtradingthestockmarket.com if you get the chance or click join button down below on YouTube. Make sure that you send me your e-mail, send me your questions. ryan@shareplanner.com I encourage everybody to do that. I do read them. I do try to put every one of them into a podcast episode and believe it or not, I have a very high percentage, almost every one of them turning into a podcast episode.

16:53
So make sure to keep sending them my way. 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.

17:09
With your membership you will get a seven day trial and access to my trading room including alerts via text, e-mail and WhatsApp. So go ahead, sign up by going to shareplanner.com/trading Block. That’s www.shareplanner.com/trading-block and follow me on SharePlanners, Twitter, Instagram and Facebook where I provide unique market and trading information every day.

17:30
If you have any questions, please feel free to e-mail me at ryan@shareplanner.com. All the best to you and I look forward to trading with you soon.