Podcast Episode #420: What Are You Doing

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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 shareplanner.com’s Swing Trading the Stock Market.

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In today’s episode, we’re going to talk about what are you doing with your trading? It’s probably a question that a lot of us asked.

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I’ve asked that about my trading at times. I mean, I, I can get frustrated and I’ll say to myself, what are you doing?

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It’s a valid question. And so I think that’s something that a lot of traders ask themselves, but even more so, it’s very sincere to the new trader that really doesn’t know why they can’t get the results that they’re seeking.

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Now, First off, I think there’s a misconception about trading. I think there’s a lot of traders that think that when when they start trading, they’re just supposed to be good right out of the gate. One of the famous things that I’ll get or questions that I’ll get is Ryan, I’d like to meet up with you this week and just so I can get an idea of how this trading works. And you know how I can, you know, start making money in the stock market starting next week or Hey, Ryan, been thinking about doing the stock market and won some picks. Guys, I can’t tell you enough that it’s not about picks.

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It’s not about spending a time with, I don’t care if it’s Warren Buffett, you can spend the whole weekend with them. You’re not going to become a great trader just because you spent time with them. It’s like the equivalent of trying to sit down with a heart surgeon.

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Nobody would do this. You go to a heart surgeon and you say, hey, thinking about doing the whole heart surgery thing. You know, the open heart surgery. He’s got some people that I’d like to do it for.

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I was hoping that maybe we could get together and maybe you could show me how it’s done. Could you? Could you imagine going up to a heart surgeon and ask them that? Nobody’s gonna say that to a heart surgeon.

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They think you are crazy. But I think that’s the way that it’s perceived A lot of times with traders is that, hey, give me some stock picks or hey, think about doing some side hustling on the stock market. Show me how you do it and I’ll come over this weekend and, and, and learn from you.

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It just doesn’t work. I wish it did. It would be a lot easier. I mean, I wouldn’t have to have done what is this, my 400 something podcast now?

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Wouldn’t have to have done that many because you could. I mean, you can’t even listen to all these in a single week.

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And so that would kind of go beyond the idea of like learning how to do it over the course of one weekend or over even a week.

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I mean, you just can’t. It’s something that you have to gain from experience.

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I mean, heart surgeons, they go to school, they do lots of school training. You don’t necessarily have to do that, but I tell you what, you do gotta learn.

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You gotta learn a lot from experience. Experience is a brutal, brutal teacher.

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Now, when it comes to a heart surgeon, do you necessarily want the guy learning how to do heart surgery off of experience?

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No. You would like for him to kind of know what he’s doing when he opens you up, right?

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But on training, it’s a little bit different because you’re going to be dependent on learning a lot of things along the way because you’re learning about yourself, things that you didn’t even know about. How you view money, how you react to money, how you react to losing money, how you react to making a lot of money, all those things are gonna be very important because they’re going to shape how you move forward.

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For instance, one of the worst things that can happen to traders is to have a lot of luck in the very beginning to to get onto a hot streak right out of the gate.

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Because every single time they’re going to assume that they are a great, great trader and that they’ve got a special knack for this, and then they’re gonna start taking far too large of risks.

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I did that in the beginning. I had some traders luck in the beginning and I thought I was a lot better than I was.

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And that brings me to today’s e-mail from a guy we’re gonna call Noki. I don’t use people as real, real names.

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I give them Florida redneck names. And Noki hits close to home ’cause I had a uncle Noki.

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My uncle Noki, he was a piece of work. I mean, he was, he was in and out of jail a lot.

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So his real name wasn’t actually Noki, it was actually Andrew, but we called him Noki after Pinocchio.

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Now this thing goes way back, before I was even born, and it goes back to when my dad was growing up and everything.

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But everybody called him no. So in honor of Noki, we’re we’re giving you the Florida redneck title for this podcast episode.

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So Noki writes. Dear Ryan, I have enjoyed the podcast the last couple months.

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I have learned a lot the last couple weeks just even listening to them as well. But I struggle with picking decent stocks.

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They get stopped out and I never seem to make any gains on anything I pick. Thanks, Noki.

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Short, sweet to the point didn’t get much background. So I’m I’m kind of piercing together some things there.

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It sounds like he’s a frustrated trader that has not been able to quite figure things out yet.

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That’s understandable, but I also think that trading’s a much bigger deal than just, you know, a few trades like let’s say over the last few weeks he’s been trading and getting stopped out. Small sample size there.

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You can go through a couple of bad weeks, you can go through a couple bad months. And so it it’s very difficult to base it off of just that sample size and you don’t want to because over time you should get better and better and better at trading.

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You should improve your risk management should get better. Your profit management should get better. The selection of stocks that you’re getting into should be better.

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So you don’t want to base it off at just like a few trades. Now, the key to all of that if you want to stay in it beyond a few trades is you got to manage risk.

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You’ve got to have a plan that you go into the trade with before you ever actually pull the trigger and buy the stock. You got to know where you’re going to get out before you ever get in.

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So again, my three principles, you plan the trade, you manage the risk #3 you let the profits take care of themselves.

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Now, that doesn’t mean you ignore profits. But what I want to talk about here today is five questions for Nokia, 5 questions.

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And I think this is relevant for all traders to to be asking themselves because how you answer these questions is gonna largely depend on how well you’re gonna be at trading.

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My first question is, what are you trading? Are you trading penny stocks?

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Are you trading large caps? Are you trading crypto?

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If you’re trading crypto, are you trading stuff like Dogecoin or what’s the other Shiba? You trading Shiba?

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Some of the other ones that you could be asking yourself, are you trading forex or futures? There’s a lot of different things.

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So you wanna ask yourself, what are you trading? Because if you’re basing it off of this year’s trading and all you’re doing is trading small caps like a lot of new traders will do, They won’t go towards like Amazon because it’s trading so high in, in terms of price per share.

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They won’t trade Netflix or Google or Microsoft or Meadow or Apple or a lot of your large caps. Like they’re not gonna trade Home Depot.

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It trades at $400.00 a share. But they will trade small caps because they’re trading at maybe 5 or $6 a share or maybe even less.

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Maybe they’re buying something at 1520 cents a share because it gives them the feeling that they’re they’re owning more of that stock they own.

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You don’t necessarily own more of the stock, you just have more shares. And who cares how much of the company you own?

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We’re not in it for company ownership. We’re in it to try to make money.

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So whether you have one share or you have a bazillion shares, it doesn’t really matter. What you’re worried about is trying to extract profits in a short term off of your trades.

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Not necessarily be able to say, hey, I’m a .00000 0001 percent owner of this company. Nobody’s impressed, man.

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So what are you trading? So my point being here is, is that you have the S&P 500, you have the NASDAQ.

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They’re well in the green for the year. But if you look at the Russell, it’s not as pretty of a picture.

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It’s pretty crappy, actually. It’s been trading sideways for the entire year.

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Traders are very frustrated trading the Russell because it’s not giving traders a lot to work with. Go ahead and look at it, look, go back to January of this year.

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It’s simply in an up and down manner. I mean, it’s a pretty wide range, but it just keeps going higher and lower back again, back and forth.

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So what you’re trading is very important, especially when you’re trying to get perspective on why you’re not doing as well as you’d hoped for.

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What sectors are you trading? If you’re not trading the right sectors, like for instance, energy’s been a struggle all year and that if that’s all you’re trading, shouldn’t be surprised if you’re not making a lot of money.

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And if you haven’t trade tech at all this year, you shouldn’t be surprised that you haven’t made any money off the stock market.

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So what you’re trading is very important. Also important swingtradingthestockmarket.com.

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Yes, this is my website, my service that goes alongside of this podcast. And with it, you’re going to get all of my stock market research each and every day that’s going to include my daily watch list stocks that I’m looking at potentially getting into.

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And at the beginning of a week, each week, I also give you guys my master bullish and bearish watch list of stocks that I’m going to be extracting my setups from.

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Plus you’re going to get a watchlist review.

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So every day that I give a daily watchlist, which is every day, I’m also going to do a watchlist review on it.

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I’m going to tell you, hey, this is what worked out with this trace up. This is what didn’t work out.

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Now I’m thinking about this stock now after, you know, seeing the first three hours of trading or whatever, plus you’re going to get my big tech updates, you’re going to get updates on all the big mega cap stocks and you’re going to get my stock market updates all for a pretty decent price too.

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It’s they’re really not expensive. It’s like $29.00 a month.

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So check that out. swingtradingthestockmarket.com. It is a deal.

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And that’ll take you to my SharePoint website where you can sign up. OK, so number one, what are you trading #2 how are you trading it?

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This is very important. Are you leveraging yourself with options?

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Well, if you are, there’s a good chance that you’re losing a lot of money, especially if you don’t really understand how options work.

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There’s a lot of variables that go into options beyond just whether or not the stock goes up or down.

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There’s a time element, there’s a time decay that is very critical. And if and if you’re trading with options that are expiring tomorrow, there’s a good chance you’re not going to win it. Hardly any of them.

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So how are you are trading? It is important.

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Are you going well into margin in order to trade these stocks? Are you trading stocks that you can’t really manage the profits on?

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And that brings me to my next question is how are you managing the risk on the trade? Are you using stop losses?

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Now, Noki, he says he uses stop losses, but he’s getting stopped out of them a lot. So then my question would be is how tight are your stop losses?

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Are you trading with stop losses that are too tight? That is often times what a lot of traders think to themselves is like, well, I’m gonna go above and beyond what Ryan’s saying and I’m going to really manage the risk. I’m gonna have half percent stop losses on all my trades.

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And then when I’m right, I’ll have like A8 or a nine percent reward to risk ratio on like a four and a half percent gain.

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True. You would if you trade with a stop loss, that’s a half percent and you make 4 1/2 percent off the trade.

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Yeah, that’s not a bad return, right?

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However, you’re setting yourself up for a lot of stop losses being triggered because it doesn’t take much for a stock to move 1/2 percent.

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It can do that just by sneezing practically. So what you want to ask yourself is how are you managing the Do you have your stop losses too tight?

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If you’re getting stopped out a lot, that’s usually a good sign, regardless of how good you are at stock picking.

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It’s usually a good sign that your stop loss is so close and that this the volatility within each of your stocks are so great that it can’t really trade within those confines. So like if you have a 5% stop loss on HD that’s Home Depot and you get stopped out at a 4% loss,

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there’s a good chance there was a significant thing that happened during that trade that caused the sell off.

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Maybe it was a a broader market sell off, maybe it was some company specific news, but usually a 4% move in in Home Depot that goes against you and get you stopped out and breaks below a key support level, that’s significant.

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What is not significant is a 4% move that goes against you at GameStop or AMC or some of these meme stocks.

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Those trades will mess with you all day long. So if you have a tight stop loss there, you’re going to get stopped out.

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You’ll get stopped out regularly for no reason at all on a 10% stop loss with those trades. They have a lot of volatility.

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So if you’re getting stopped out a lot and you don’t want to increase the risk parameters on your trade, which I don’t really like to do myself, then I would start looking at the beta of each of your stocks.

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If it has a high beta, like if we’re talking about a beta that’s like 4 to the market, there’s a good chance that you’re trading too wild of stocks for the kinds of stop losses that you’re putting on.

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The other question would be is what are you avoiding?

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Are you avoiding the higher priced stocks? Are you avoiding the large caps because you think they’re too boring?

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Let me tell you, the more boring you make trading, the better off you’re going to be. Boring traders are usually successful.

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It’s the wild traders, the ones that are trading the things that get you hyped, that get you excited, that makes you want to put that little rocket emoji after every stock symbol that you post about on StockTwits or Twitter.

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That’s the kind of wild trading that will get you into a lot of trading. That’s where you start to hope.

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That’s where you get emotional about it. That’s where someone gives you an opinion about a stock that you’re in that you don’t necessarily like.

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You want to completely disown the person. If he’s your friend, you never want to be friends with him again.

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I had a guy on StockTwits. I get this actually a lot.

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I’ll post a chart. This one was about AMD and this guy got so triggered over my chart about AMD.

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All that I was essentially saying is that hey, it’s coming up against some resistance. Watch this resistance level here should be like thank you Ryan for I didn’t see that.

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Thank you for letting me know about it And when I when I’m posting about it, I don’t know if it’s going to breakthrough the resistance.

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I don’t know if it’s going to be rejected after resistance, but it’s a level that you want to watch and see how the stock reacts to.

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But this guy, he lost his mind. He not only blocked me, but he had to make sure that he posted about how he blocked me and he couldn’t even tell you a reason why he blocked me.

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So there’s people out there that are so emotional with their trade. And quite frankly, it’s very common to be emotional about your trades.

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So if your trade in the wild stocks, if you’re going into the really small like micro cap stocks, if you’re going into penny stock world, there’s a good chance that you’re setting yourself up for disaster.

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And really what you’re avoiding trading speaks volumes about what kind of trader you’re you’re wanting to be.

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If you’re trying to trade the crap stuff, there’s a good chance that you’re trying to, you know, hit it big with one big trade.

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If you’re trading more legitimate stocks, if you’re trading like Meta or you’re trading Home Depot or Caterpillar or or stocks, not that they can’t go down, not that you can’t lose on them.

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I lose on them all the time, but they’re stocks that have a reputation that they’re, you’re not worried about them necessarily going out of business the next day.

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In the penny stock world, you could wake up every day to whatever you’re trading and say, oh, stock company went out of business.

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Shocker. Those are the kinds of things that you want to avoid.

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Now my fifth question is how are you handling the profits? Are you seeing a lot of your positions go from green to red?

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And if you’re seeing a lot of positions go from green red, there’s a good chance that you are mismanaging the profits.

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And that’s really working against you in the sense that you do have winning trades, you do have trades that are working in your favor, but you’re mismanaging it.

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And and if you’re mismanaging it, having winning trades that turn into losers will be incredibly detrimental to your end of your performance.

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That’s one of the things that I really try to avoid a lot of. And my trading is letting my winning trades go to losing trades.

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So that’s why I take partial profits along the way. What I don’t want to see is to be up firmly in the green and then go to red.

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Now there’s times where I’ll take a third off the table, maybe I’ll take a third off at like 4% or 5% on a trade.

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I’m up 5%, boom, let’s take like take a third off Great. And then the stock goes against me and then all of a sudden I’m selling the other 2/3 for like a 1% loss or a 2% loss.

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But guess what? Because I took some profits in the early going there, I still walk away with a profit. It wasn’t as good of a profit as I hoped for.

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But in the end of the year, it’s just another trade that I made a profit on overall. And I think that a lot of times traders, they look at the trades that they are in as being their defining moment.

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Almost every single time you got to move beyond the idea that every trade is your defining moment.

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It only becomes a defining moment for you. Not if you make money off of it, but if you don’t manage the risk and you let it get away from you and you start to lose big on it, that can become a defining moment.

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But don’t ever look at a trade that you’re getting into hoping to get rich off of and that somehow that’s going to be your defining moment because that’s not how it works.

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So much of trading is not about getting decent stock picks.

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It’s really not. You can have a person that has an incredible track record and he’s almost right on every one of the stock picks, but you give the stock picks to somebody else and they’ll be wrong on it every single time.

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It’s not about the stock picks, it’s about the manner in which we trade.

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I would far more rather put my money on somebody who is a great manager of risk and can manage the trade really well but has horrible stock picks, then somebody who has great stock picks but can’t manage the risk.

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In fact, I’ll even take it a step further. I would rather put my money on somebody who’s going to manage the risk while blindly choosing what stocks to trade.

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Like letting a monkey take a whole bunch of letters, you know, letter blocks, and just give him a stock symbol with three or four blocks to have the alphabet written on him and he trades that versus somebody who doesn’t have discipline, who doesn’t have good risk management, but has excellent stock picks.

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That’s how I view trading.

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So in wrapping up, one, remember, what are you trading #2 how are you trading it?

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Three, how are you managing the risk #4 what are you avoiding?

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And #5 how are you handling profits? These are the five questions that you should write down, think about, and have an honest discussion with yourself about.

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Now, like I’ve been talking about before, I’ve been doing these old fashioned reviews, right?

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I mean, I got tons of bourbon bottles here. I got to use it somehow.

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So I’ve been taking the bourbon bottles that I have and doing old fashioned reviews on them.

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So I love old fashions. I like old fashions more than any other drink.

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And for this episode I’m going to use 4 Roses Single Barrel Barrel Strength Kentucky Straight Bourbon.

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It’s a 54.9% alcohol, so that’s like a 109.8 proof. I think that is pretty good.

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I like single barrel from 4 Roses. You can get it at like Costco and Sam’s Club pretty cheap.

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Every time I’ve ever been there, it’s it’s a pretty good deal for Four Roses there, but I’ve never tried it in an old fashion so I thought I would give this one a try.

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So overall it’s got a lot of sweetness up front and then it really hits you with a strong bite at the end.

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It’s two very distinct flavors almost that you get out of it. I think the simple syrup that I put in it complements it pretty well.

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I only put like 3/8 of an ounce of simple syrup in it complements it well, but it quickly fades away and the finish is really sharp.

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I like it. I do like it.

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I would I give it a 7.8. I don’t think I like it more than the Maker’s Mark French oak edition, but and that was at a 8.3,

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but this one is pretty solid out. You know what I’ll give it A7 point 97.9 would be would be the rating that I would give it for an old fashioned really solid.

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I like it a lot.

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If you enjoyed this podcast episode, I would encourage you to leave me a 5 star review on whatever platform that you’re listening to me on.

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I appreciate those. I read them.

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And if you decide to do so, check out swingtradingthestockmarket.com That will be a great help to supporting this podcast.

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Plus, make sure to send me your emails ryan@shareplanner.com. I do read them all I want.

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I honestly need more from you guys. I really do.

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Send me some questions, send me your story. I wanna hear what you guys have to say ryan@shareplanner.com.

19:58

Thank you and God bless.

20:04

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20:12

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20:18

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20:27

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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.