Swing Trading Lessons At 400 | Podcast Episode #400

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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.

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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.

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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 this is the 400th episode.

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Holy cow.

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I started this podcast in 2017 and here I am in 2024, still going strong.

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That’s what I would love to be able to make it to. If I make it beyond that, that’s great, but if I could make it to 1000, I think that’d be pretty cool to be able to say that I’ve done 1000 podcast episodes.

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So here we are, 400th episode.

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When I hit the century mark of this podcast, I like to do a little bit of reflecting.

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So no, I don’t do an e-mail. It’s more about what I’ve learned since the last century mark and that’s what I’m going to use this episode here for today.

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What have I learned? The swing trading lessons.

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What have I learned about the stock market at podcast episode #400. And you probably noticed over the course of the last 100 episodes, I’ve gone away from drinking bourbon, right?

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I haven’t been doing as much bourbon sipping as I’m talking about the stock market.

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That was like the staple and the earlier episodes. And the reason why I went away from that One, I ran out of counter space.

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Two, it’s an unbelievable cost to keep buying them because eventually you blow through all the cheap, like, you know, 15 and $20 bourbons and you blow through all the samples and then you’re

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stuck with like these 100 and $200 bottles. Doing that a couple times a week and you’re like, holy cow that that starts to add up after a while

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and you can’t drink it all. If I drink all the bourbon that I’ve collected over the course of this podcast, I would be gone.

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I would not make it to 401. So I cut back a little bit.

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I also cut back on the drinking too. I only do about, let’s say, Friday and and Saturdays.

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Those are usually my time to have either an old fashion or a couple ounces of some bourbon. That’s it.

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That’s it. I enjoy having others drink my bourbon.

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It’s it’s also something that, believe it or not, I I enjoy doing. I like seeing people finding or discovering a bourbon that they like that they found from my

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collection. That’s why I haven’t interwoven the bourbon sampling with the stock market talk over the last 100 or

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so episodes. But today, since it is number 400, I am pulling out a bourbon, and this one comes from Buffalo Trace

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Distillery. Never even knew about this one.

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Maybe I’m just, you know, I had my head in the sand, but I did not know that they had a brand called

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Traveler Whiskey. Friend of the family, Brenda and Mark.

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They brought this over to a house one night for pizza night ’cause I do pizzas pretty much every Friday at the house.

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They brought this one over and I was like, man, I gotta try a pretty basic bottle, but it’s a really

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good taste. It’s probably on the Buffalo Trace level and I think it’s around the same price point as Buffalo

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Trace and it’s probably a little bit easier to find too. But it’s good.

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It’s really good. It comes in at 90 proof, beautiful color to a deep rich brown.

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And honestly anything you get from the Buffalo Trace Distillery tends to be pretty good. And I’d give this on a scale of zero to 10.

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I give it a 7-8. I think it’s really good.

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I think it’s easily an everyday sipper. It’s affordable.

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What can you not like about that? So there you have it.

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OK, so you didn’t just, you know, download this episode just to listen to me talk about bourbon.

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Now let’s go back to December 6th, 2022. That was when I did my 300th podcast episode.

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If we think about that time, where were we at? We were in a much different situation as it pertains to the stock market.

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We had just come off of a year long decline after having just a scorching hot 2020 and 2021.

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But then 2022 you started seeing those interest rates go up and the tapering start and the market pulled back and it pulled back dramatically.

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At one point it was over 30%, closed the year down over 20%.

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I didn’t do a lot of long trading that year. I mean, it was a perpetual decline almost that entire year.

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But here we are in March of 2024. We’re way beyond the all time highs that were previously set going into 2022.

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The themes are dramatically different in many ways, but then in other ways they feel like a repeat of 2021.

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You have the meme rallies popping back up again. You have Bitcoin going through the roof hitting new all time highs again.

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You have an AI theme driven market. Anything about AI just goes higher.

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People are obsessed with AI. If you don’t do AI right like Google just experienced, it’s a big sell off.

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If you don’t do it at all, you’re probably going to sell off as well. You better be incorporating AI into your company where the market won’t like you.

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AI is essentially going to high school, and it’s the cool kids table. If you want to sit at the cool kids table, you better have AI interwoven through your company right

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now. And right now the people sitting at the cool kids table is NVIDIA.

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That’s the coolest kid. Then you got meta, you’ve got Google, who’s kind of been ousted from the cool kids table until they

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can get their act together. You got AMD, you got Smci.

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SMC is kind of like the charity project with the cool kids. And they’re like, I bet you we can make this guy cool.

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I mean, this guy’s got nothing going for him, but let’s let’s go ahead and include him in our little circle of friends.

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That’s SMCI. But AI is pretty much front and center of this stock market.

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And guess what? the Fed still hasn’t cut rates yet.

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We’re here in 2024. We’re talking about there being some rate cuts, but we haven’t got there yet.

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Now, a little history on the Fed. The Fed, we’ll say one thing and do something completely different.

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And this is not a Fed rant. I know some of you guys will e-mail me or leave a bad review because I get into talking about the

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Fed and because I don’t necessarily like what the Fed does. You know, you guys take offense to that.

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I guess you guys are just, you know, die hard bureaucrats or something. I don’t know.

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But if you go back to the COVID crisis, when they cut the rates overnight down to 0, Jerome Powell goes, I think it was on 60 minutes.

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He might have said this. And he says we’re not even thinking about thinking about raising rates until 2023.

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Oh no, they thought about it much earlier. Not only did they think about it, but they started raising rates much earlier than 2023.

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And so now everybody keeps trying to price in When are when are these rate cuts going to happen?

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I’ll give you one right off the bat here. That’s pretty good for seeing when the Fed is most likely to raise rates or what the market’s

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pricing in. You can go to cmegroup.com and they have all the Fed tools there to be able to see what the market’s

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pricing in on a day-to-day basis. Really cool tool as well.

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So bookmark that website. I have no affiliation with it, but I do do like having that up on one of my tabs throughout each

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day. But we were talking about getting rate cuts at the end of 2023.

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That didn’t happen. Now we’re in March 2024, and we’re supposed to have rate cuts already here.

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We were supposed to be like one or two in Nope, we’re not getting them yet.

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Now we’re talking about June, maybe July. We’ll get those rate cuts.

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Would not surprise me if that gets pushed all the way out to the end of the year and maybe even beyond.

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They like to dangle the carrot in front of the market. They want to give them hope.

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They want to make them think that it’s right around the corner. Just hang on there.

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And then they’ll move those goal posts or they’ll dangle the carrot a little bit longer because they don’t really intend to cut rates when they say they just want to give you the hope that they’re

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going to cut rates sooner than what they’re actually going to do. So they dangle that carrot, they give you that hope, and the market falls for it.

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And so along with AI, you also have a market rally that started in November of 2023.

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Well, it started before that. But the one that we’re talking about right now, the one that we’re currently in, started in November.

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That one has been not only based off of AI, but the fact that the Fed was going to cut rates when it first started.

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They were saying that there was going to be 7 rate cuts in 2020. Four, starting with the second Fed meeting, didn’t really happen.

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So now we’re talking about maybe there’s going to be two or three, who knows? I think it’s going to be less.

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I think you’ll be lucky if you get one. So the things that have changed since podcast episode 300, we have AI.

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We still haven’t had rate cuts. We had a bailout back in March of 2023.

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I won’t get too much into that. I’ve talked about it in other podcast episodes, but basically we bailed out the small regional

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banks. NVIDIA has gone from $159.87 and as of this episode, it’s gone up to 908 dollars or a 550% return.

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It’s gone from being a $400 billion stock to a $2.3 trillion stock. Wild.

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One of the things that I’ve noticed this has episode’s going to continue to be like things that I’ve noticed, things that I’ve learned, things that I’ve incorporated.

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One of the things that I’ve noticed, FOMO is the greatest market driver. And what do I mean by that?

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Usually we talk about fear, and greed is the greatest market driver, right? I mean, fear and greed is what determines everything.

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And that’s true. But the real driver of greed is FOMO, fear of missing out.

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That is what greed is. The people who got wiped out in 2022 are back in 2024.

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The people who made money in 2020-2021 and got wiped out in 2022 are back to trying to do it in 2024 doing the same exact stuff.

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I just had an episode from a guy who made it big and lost the money in MSTR back in 2021, and guess what he’s back into doing now?

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In 2024 he got back in and he’s trading MSTR again. Lucky for him, he’s got some some profits there to to talk about, but that’s really a huge subset

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that has come back into the market are the people who got mowed over in 2022. They’ve saved a little bit of coin.

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Now they’re right back in it. And you guys know, whether you’re a member of the trading block or Swing Trading the Stock Market,

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podcasts, premium service or you just listen to this podcast, you’ll know that the one thing that I talk about more than anything is risk management.

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It’s like a badge of honor to me because it’s what’s kept me in the game for all these years as swing trader.

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And it’s hard to stay in the game as a swing trader. If you don’t practice risk management, eventually it’s going to take you out.

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And what I have seen of late is a huge influx of people just completely ignoring risk management.

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They may be in fact, be using stop losses, but they’re not paying attention to position size. They’re not paying attention to how often or how frequently they’re trading.

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They’re chasing after everything that’s moving. Yes, they may still have stop losses, but their rate of trading has dramatically changed and it’s

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not because necessary the conditions dictate it. It’s because they’re afraid of missing out.

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And this brings me to my next point of just how quickly history can repeat itself. We’re talking a lot about today of how similar the market is to 1999.

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And I’ve talked about that some too about how the .com bubble is very much in line with what we’re seeing with the AI bubble.

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And if you don’t think that we’re in a bubble, that’s fine. But the very fact that you don’t think that we’re in a bubble is usually a good sign that we are in

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a bubble. The fact that, well, usually when everybody says that we’re in a bubble, which that is not the case

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right now, when everybody says that we’re in a bubble, that usually means that we’re not in a bubble.

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It’s just that contrarian nature that the market tends to feast on. And if you don’t believe me, go to Benzinga, go to Yahoo, go to Wall Street Journal, CNBC,

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MarketWatch, Barron’s, Forbes, any of those websites. They all have articles on there trying to tell you that we are not in a stock market bubble.

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Bloomberg, go to Bloomberg too I forgot them. But just as much as there is a lot of comparisons with 2024 versus 1999 and the .com bubble burst,

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there’s a lot of comparisons to what we just saw in 2021 and 2020, this meteoric parabolic rise and

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so many stocks where you’re thinking to yourself, how are we justifying some of these valuations?

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They don’t even make sense. NVIDIA, I’ll be honest, does not make sense to me.

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Does that make sense to you? Doesn’t make sense to me.

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Nonetheless, one of the things that I’ve gotten better at, even though I’ve preached it in podcasts all throughout the years, I think I’m getting much better at it doing it myself, and that is

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accepting price action for what it is. I think a lot of this rally that we’ve seen since November is based on a lot of stupidity.

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I think there’s a lot of stupidity in it, but it doesn’t mean that I’m not trading still to the long side.

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I am, because that’s the direction that the market’s going. So I can hold that opinion and I think it’s important to be able to keep the opinion that one has.

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Especially like people will get caught up and they’ll start trading stocks based on their opinion of the economy or their opinion of what a certain presidential candidate might do to the economy.

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And they start trading based off of that and they get their heads handed to them. And in that same line of thinking as traders, yeah, we can think that a market rally is stupid or

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that it doesn’t seem justified or the valuations of particular stocks are just through the roof and we were way overdue for a crash or whatever you want to think.

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But in the end it’s price that pays. You have to follow that.

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And in the mania that we’re in right now, you’ll come to find out that fear knows no support and greed knows no resistance.

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So we saw that primarily with fear knows no support in 2022. And you saw it, you know as well in the 2008, you know, market crisis and the .com bubble, where

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the fear can run so rampant that it doesn’t matter what kind of support that’s on the charts, it’s gonna crush right through it because the supply will overwhelm the demand for stocks during those

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moments. And right now, we’re in the phase of greed knows no resistance.

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We just keep blazing through some crazy resistance levels. I think back on NVIDIA some, you know, and in the end of 2022 remember charting out this inverse head

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and shoulders pattern like I don’t know man, it’s run like 30% non-stop into the head and inverse head and shoulders neckline not gonna go by the breakout when it’s yet to have a moment of chill at

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all. And then what does it do?

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It goes from like, you know, the one 50s all the way to 900 or at the end of November you had a cup and handle pattern forming and it goes from the mid 5 hundreds all the way up to 900 and under, you

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know, four months. And it blew through resistance levels.

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It blew through levels that you thought, OK, it’s not going to go much higher from here and it does.
So in that sense, greed knows no resistance and we’ve seen that play out dramatically for over a

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year now. And COVID, believe it or not, still impacts everything that we do because we have so much money
still floating out in the market, whether it was from money that was received from the PPP loans or
just from all the Stimi checks that were sent out.

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You look at the money supply, the M1 money supply, we’re like at that $17 trillion on an M1 supply,
that’s off of the $20 trillion readings that we were getting at one point.

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So we’re, you know, down a little more than 10% off of the all time highs, but we’re still up like
four times the amount of where we were at prior to the COVID pandemic.

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So that money sloshing around.
Often times you’ll see the market rally and it doesn’t necessarily sell off, it just rotates into

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something else.
It’s like the money’s always looking for another home.

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It’s not really looking for the T-bills, it’s looking for another sector, another stock, or going
back into something that worked before.

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And speaking of something that works, check out swingtradingthestockmarket.com.
This is my service that goes alongside of this podcast episode.

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If you enjoy this podcast, I also do videos pertaining to stocks each and every day, whether it’s
watch lists or watch list reviews.

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I also go through the big tech stocks.
I provide general stock market updates on the SPY and the NASDAQ and the Russell 2000.

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It’s really good, a really good service.
I’d recommend you checking that out.

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That’s at SwingTradingTheStockMarket.com.
One of the things that I’ve made a big change to in my own trading is I’ve taken partial profits in

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my trades.
I take that along the way always.

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You know, if I’m up 3 or 4%, I might take a third out, and then if I’m up like 8 or 9%, I might take
another third out and then I let the rest run.

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But I’ve also started making changes.
And this is a credit to you guys because I never really thought about it.

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Too much of my trading before I I used to be like, OK, I get into a stock and I get stopped out, OK,
move on to the next trade.

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But one person told me about taking partial losses.
And I really gave it a lot of thought and considered it quite a bit.

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And I thought to myself, that’s really not a bad idea.
And so I started working on a concept that I could use, taking partial losses along the way.

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One of the cool things about taking partial losses is that it tightens my risk and it improves the
odds of a trade working.

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So sometimes in the past, let’s say I have like a bull flag pattern here and it breaks out
beautifully and then the next day it completely fakes out on me and goes back into the bull flag

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pattern.
Well, in the past that would be a clear signal for me to go ahead and get out.
The pattern failed.

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It’s a no-go, let’s move on here.
But now I take like a third off.

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I’ll see what it does.
OK.
If it continues to sell off, it hasn’t hit my actual stop loss yet, but the fact that it had a nasty
head fake there and came back inside of the pattern, that’s enough for me to go ahead and take some

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profits off the table.
What happens is if I do end up getting taken out of my stop loss, I will be getting taken out from

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an overall loss standpoint on the trade at a much smaller amount than if I would have let it hit my
stop loss.

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So instead of like a 5% stop loss, I might be only taking a 3% stop loss.
And how it also improves the odds for success is because I’m still in the trade, it gives me a

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little bit more time to actually see that trade because it’s not unusual for a stock to have the
head fake and it looks like doom and gloom.

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Then all of a sudden you get a big CPI report that comes out the next day, the market rallies and it
forgets that it ever head faked and it goes right back up.

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And so I’ve had trades before where I’ve taken a third for a loss, I’ve taken another third for a
loss, and it looks all doom and gloom.

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But then that last third takes off and it does really good and all of a sudden I come away with a
win on the trade.

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Whereas before I might have gone ahead and taken my losses on the trade and moved on to the next
one.

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I think too, I become a much pickier trader. If you go from #300 to #400, I’ve become a much pickier trader.

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And often times that’s a critique from others, they’re like, Ryan, you should be trading more. I’ve had periods of my life where if you look at, I guess if I back up a little bit and say, well,

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if you look at the timeline or a vote of my trading career over the years, you go back to say 2010. I’m trading much more frequently than I am in 2024.

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It’s not because I don’t want to trade, I enjoy trading, but I’ve become much pickier with what I’m trading. The threshold for

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what constitutes a trade for me has become much more stringent. So I’m forcing less trades, I’m chasing less and the drawdowns are getting much smaller when I do

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have them. I also think, and this is the last one that I will focus on here for this podcast episode.

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The last one is news. You look at the news events these days.

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Oh my gosh, it is nuts. We have so many news events.

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It’s unbelievable how much affects the market from a news standpoint. But the thing is, it’s not really the news that we need to be concerned with or it would be like,

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oh, we got CPI coming out, OK, button down the hatches for the next three days. We’re not going to trade at all.

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Or oh, we got PPI coming out, button down the hatches. We can’t do that either.

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And then you’re trying to figure out, OK, is CPI going to come in hot? Is it going to come in cold?

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What? What do we expect?

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You’re looking at what? You know, this analyst is saying or what that in the end none of the news matters.

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It’s just the reaction guys. And so I don’t even pay attention anymore to the news.

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I really don’t. CPI is coming out. I could care less what the estimates are.

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I don’t care. I know that it’s coming out at 8:30.

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I know there’s a volatility event. And that’s really what I look at it as.

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I say to myself, OK, there is a volatility event coming up, all right. Could care less that it’s CPI or whether it’s GDP.

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The fact is it’s just an event that’s bound to create some volatility. OK, then we go from there.

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But how the news is interpreted careless. If I focus too much on the news aspect, all it will do from a trading standpoint is frustrate me

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because you’ll look at it and it’s like, oh, that CPI came in hot, just like they did this past week, came in above expectations.

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The rationale would be that the market would sell off, but it didn’t. It rallied and it rallied pretty good.

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But if I get worked up about it and I get caught up in the actual news event itself, the expectations, where it comes in at the actuals all that I’ll do is just rack my brain, get

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frustrated, and then I’ll start trading on principles like the market shouldn’t be going down, the market should be going up, and I’m going to be trading as a result this way because I’m trading on

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principle. And a lot of people do that.

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They start trading on principle. They trade off of beliefs.

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The market doesn’t care about your principles and it doesn’t care about your beliefs. The only thing that matters is price.

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And so we have to keep focus on price. What is a volatility event?

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It’s something that can shock price, whether it’s with the S&P, an individual stock or whatever. Our job is to manage the risk the best that we can.

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And so when we have these big events coming up, whether it’s GDP or employment or CPI or PPI or OPP if you remember the 90s, you’ll get that reference.

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I think that’s the second OPP reference I’ve done just recently. So that’s kind of embarrassing.

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But you’ll know that the only thing that matters at the end is not what the actual news was but what and how did price react.

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So there’s a lot that we covered there in this podcast here. This is one of my longer podcasts. I didn’t mean for it to go on that long.

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But I also want to thank my podcast editor Mason, who does an incredible job with this podcast and has really helped it become as successful as it has over the years because of his diligent editing

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and putting up with my wild schedules. Appreciate him for doing that.

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So thank you. If you enjoyed this podcast episode, I would encourage you to leave me a five star review if you

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can. That would be a great way to treat me for doing 400 of these episodes for you.

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I would appreciate that. Also check out swingtradingthestockmarket.com and keep sending me your questions.

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Well, we’ll be back at it for episode 401 going over your questions and I’ll be trying to do my best to give you my answer.

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Thank you guys and God bless.

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Thanks for listening to my podcast Swing Trading the Stock Market.

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