Interview with a Swing Trader | Podcast Episode #454

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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. 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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And today’s episode, we’re going to have a little interview with a swing trader here. No, I’m not bringing on a guest, but the e-mail that I received from a guy who asked to be called

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Cooter Ray, which is phenomenal because I don’t even have to come up with a Florida red nickname. So he just asked to be called Cooter Ray, which I will absolutely go with for this podcast episode.

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So Cooter Ray asks me a series of questions and it felt like a little bit of an interview, so I’m going to go with it.

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I’m going to make this essentially an interview with myself here because the questions that he asks are actually very pertinent questions and I want to give you guys some answers to it.

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So Cooter Ray writes. Hi Ryan, I hope this e-mail finds you well.

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It does. I’ve been following you for a number of years and have been a member of the Trading Block for

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roughly 2 years now and from that I have learned a lot. Here are some questions I’d like to ask you and sorry if you’ve answered them before and the

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podcast, no I haven’t. Feel free to call me Kuda Ray if that works for you and if this makes it to the podcast certainly

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will. Firstly, I’ve been trading with an account with around $10,000 give or take a couple of years, but

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recently came into some money and now have $100,000 to trade with. Tell me your ways man.

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Oh that’s good man. Hey, I’m happy for you anytime you can.

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You can 10X your account. That’s that’s pretty cool.

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We’re just get $100,000. That’s pretty cool too.

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How should I adjust my trading approach to avoid mistakes when trading with a larger account? I’m worried I’ll be greedy and make mistakes based on the larger account.

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Number 2, can you give me a memorable swing trade? Maybe one good one and one bad one and what you learned from it #3 What advice would you give

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someone just starting out with swing trading? I get this asked quite a bit when the topic of swing trading comes up and don’t have a great answer

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other than explaining the concept of managing risk. Hey, that’s a good start though.

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Most people won’t like that though. If they ask you that question they want you to give them a stock pick #4 How has your swing trading

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strategy evolved over time and what prompted those changes? And #5 Are there any common mistakes you see new swing traders making and how can they avoid them?

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So that’s the five questions for this interview here with a swing trader, being myself. So the first one, he says he’s come about $100,000.

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I don’t know, It could have been maybe he sold a piece of property, maybe Uncle Leo died and left him some change.

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Either way, what I would say about going from $10,000 that you’re managing to $100,000 is that it’s going to be much, much more emotional because you’re going to be trading with an amount that you’re

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not used to and you’re going to see losses from a dollar standpoint that you’re not used to either. And I, I talked about don’t dollar watch.

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It’ll probably be hard to not dollar watch when you’re practically 10X in your account size and you’re trading with that.

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So knowing humans to be humans and, and having to look at what it actually looks like to trade $100,000 versus $10,000 because your position sizes, let’s say for a for a second here that Kuda Ray

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is trading with that name is killing me. Kuda Ray is trading with a position size of 10%.

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Well, his position size then from a dollar standpoint on the $10,000 account went from $1000 a trade to $10,000 a trade on $100,000 account or if he was trading 20% position size, hopefully.

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Here’s the one thing I would say though, if if you’re going to trade with a account size that’s, you know, gone up exponentially here, you may want to reconsider how much you’re devoting to each

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position size. The reason why I say that is because there are emotions that come in when you’re trading larger,

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larger positions. I have found that the larger the portfolio, the less capital from a percentage standpoint of that

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portfolio that one’s willing to put towards their swing trade. So if you’re trading $100,000 account, for instance, and you are putting 10% position sizes to work

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there and then all of a sudden you become Elon Musk for whatever reason. Maybe you you figure out the robo taxi and you all of a sudden have $10 billion that your swing

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trade with. I know this is kind of an exaggeration.

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You’re probably not going to be putting a billion dollars on your swing trades, right?

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You’ll probably never be able to get in and out of a trade. So you would be trading with a less of less than amount.

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Granted, that’s a quite that the exaggeration. But even if you go from 10,000 to $100,000, there may be a desire to say, hey, I’m going to maybe

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only trade 6% of my account instead of 10% of my account on each swing trade. And so I would, I get why you would do that because there’s a motion to tie to your swing trade.

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So when I talk about position sizes, you need to find the position size that’s going to create the least amount of stress.

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And when your account size expands, that percentage amount that you want to dedicate to each swing trade is likely to change.

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So that’s the first thing that you want to think about. The other thing is that even if you are comfortable with staying at 10%, and I don’t know what his

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position sizes are, he doesn’t mention that in the e-mail, but we’re just using 10% as the assumption, not necessarily what it’s actually is.

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But for example purposes, he’s going from 1000 to $10,000. That’s a big jump.

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That’s a huge jump from an emotional standpoint if you’re not used to trading with $10,000. So what I would do is I would incrementally increase that overtime.

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I wouldn’t go straight from 1000 to 10,000. I would make sure that what I’m trading with two or $3000 that I’m still handling the motions quite well.

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Yes, I get that you’re only trading with 3% of your account, but you’ve also infused your account with a ton of capital.

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If it was something to where you increased your portfolio from through swing trading from 10,000 to 100,000 and you were you had guided up to 100,000, I would, I would be fine with that.

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But you’re doing this kind of overnight, which I don’t know where the necessary where this the funds came from, but you want to be very careful about just jumping up to that $10,000 mark if you’re trying to keep the position sizes from a percentage standpoint the same.

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I’m always reminded so often, especially with the with the times that we’re living in, with the introduction of AI, you see a lot of these crazy inventions.

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You’re like, is that really the best thing for us? Or you, you think about what we did with social media and introducing all this social media stuff overnight, you know, and how much of A toxic effect it’s had its on society.

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And I’m reminded of the Jurassic Park quote and probably the best character and the entire movie series and that’s Malcolm.

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He’s played by Jeff Goldblum, but he had this amazing quote in there where when they’re developing the dinosaurs and everything, he was really the one that was showing the most reservation about the whole thing.

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And he said to them, he says, you’re scientist because everybody else was in awe of the fact that they had created a Tyrannosaurus Rex and a Raptor and everything else.

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And he was the only one with any logical sense in the room. And he said, your scientists were so preoccupied whether or not they could that they didn’t stop to think if they should.

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And so when you’re thinking about going from a $10,000 account to $100,000 accounting and you’re thinking of keeping your percentage size the same, think about Jeff Goldblum from Jurassic Park when he asked not whether you can, because you can definitely keep your position size the same, but ask yourself whether you should.

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Because if you can answer that honestly, there’s a good chance you’re going to realize I probably should just incrementally increase it.

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Yes, I got $100,000 in the account. That’s great. But I don’t necessarily need to keep my position size at 10% just because I can.

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It’s a matter of whether I should. So there’s another story too that I wanted to to put out there and there is a Wall Street Bets guy.

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I, I remember seeing the story about 3 months ago and he talked about how his grandma died and left him at $800,000 inheritance.

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He was a junior in college. He was even a math major and he told his parents that hey, I’m not going to squander this money, I’m going to make something out of myself with this money.

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So he put $100,000 into a high yield savings account.

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Not a bad idea. But he took the other $700,000 and bought up some Intel.

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Probably couldn’t have done it at a worse time. It was just within days and he said he was going to hold it for a decade.

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Maybe it pays off, I don’t know. But you know what happened to him though after he bought this until proceeded to miss earnings,

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suspend their dividend layoff 15,000 people and then their stock has been down as much as half of their share price since then.

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Now it’s come back a little bit, but you’re still talking about losing a huge chunk. He’s probably lost 2 or $300,000 of that inheritance.

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Now, granted, he still has a lot of that inheritance left, but the emotional toll that it that you think about, hey, I just got a $800,000 life changing money and I’ve already blown through a few

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$100,000 of it because I was stupid and, and you’ll load my money into INTC. So for Cooter Ray, he needs to make sure that this money that he’s got and it and $100,000 is a huge

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chunk of change. It can change your life for the better if you use it correctly.

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But I wouldn’t be in a rush to try and do something with it because as easy as you got it, it can also go away just as quickly.

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And there’s nothing more emotional to think that you were gifted with something and that you lost it right away.

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It’ll only create more emotions and more bad decisions. So be careful there, OK, I’m not saying that that you’re going to squander it or anything like that,

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but I would just learn from some of the people in the past. There’s definitely the opportunity to do it, especially when you’re excited to do something with the

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money to make it increase. There’s, there’s always the potential there that instead it could decrease.

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But one of the things that I always tell people that is a good thing to do is check out swingtradingthestockmarket.com.

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That’s going to take you to my share planner page where you can see all the offerings that I have as part of of a subscription service.

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That’s if you like this podcast, you can get all my stock market research. You can get the different trades that I make depending on what you want out of me, but check it out.

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There’s there’s plenty of different options swingtradingthestockmarket.com for a pretty cheap price offers up all of my stock market research each and every day.

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That’s going to include my watchlist that I send out every day.

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Plus I do a watchlist review in the afternoon via video with you guys and I’m going to go over each one of the trade setup, see what’s working, what’s not working.

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And I do big tech updates, stock market updates as well through video format.

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And I send out a master watchlist at the beginning of each week so that you can see exactly the the stocks that I will be curating my setups from.

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So a couple more questions here from Kuda Ray.

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Gosh, that’s such a fun name.

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He asks, can you share memorable trade, maybe one good one and one bad one, and what you learn from it?

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First one, I’ll tell you that was a good trade.

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One of my recent winners was PayPal. And with the PayPal trade, I got into it back in July of 2023 and initially the trade didn’t work out for me.

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I got in at 6771 and it went against me and I closed out a third of the position at 6615.

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The stock wasn’t looking good so I went ahead and and cut some of my exposure in the trade. But then the odd thing happened.

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It started to go back up and it went up to 7062 where I took a 4.3% profit on another third of the trade and then I finally closed the trade out at 73.

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O3 took 7.9% on the what was remaining and overall in the trade, I came away with three-point 3% profit.

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Now initially the stock looked like it was going to be trash. It just looked horrible.

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And I mean, any time I trade PayPal, I always feel like it’s a drama trade. But in this case, it started off horrible and it came right back up and it would turn into one of my

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favorite trades in a long time because it didn’t stop me out, but I was curbing my wrist because it wasn’t behaving the way I expected it to.

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Now on the flip side, a trade that kind of eats at me still happened this year with KLAC and I only lost .1% on the trade, but it was how I managed it that I think really got under my skin.

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I got into this trade, it had a nice rising trend line off of the April lows and you don’t have to pull up the charts.

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I describe it for you. The one thing I don’t want to do in this podcast is make you have to pull up the chart.

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I want you to be able to listen to it while driving down the road and not have to like pull it up on your phone to figure out what I’m talking about.

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But yeah, on 626, I pulled back to this rising trend line and then it started to bounce nicely. So I got into the stock and then the following day it looked like you were going to get some strong

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continuation and then it reversed lower and I closed the trade essentially at break even or point 1% below where I got in at.

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I look back on that trade and it frustrates me to the core because I could have done so much better on that trade.

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And I don’t feel like that there was enough for me to get out on it at the time. It felt like it because it felt like that the, the market might have been starting to go against me.

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And so I got out of it even though it was still holding that rising trend line. And then from there, it continued to rise higher in the days ahead.

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It went, I got out at eight O 6, but if I would have just held it the next 9 days, it traded higher. Yeah, talk about annoying, right?

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But it went from, I got out at eight O 6, but over the next 9 days it went as high as 896. So there was well over 10% in gains that I could have had over the course of the next 9 days.

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That was a frustrating trade to me. Yes, it wasn’t my biggest loss I’ve ever taken.

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No, it was one of my smallest losses. But it frustrated me to the core because I don’t feel like I did a good job of managing that trade.

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And so that was a squandered opportunity on my part. So good and bad trade.

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You asked for them, I gave them to you. They’re probably not like I think sometimes, you know, it might be expected.

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I’m going to give you the worst percentage loss that I ever had or the best, you know, percentage gain that I ever had for my best and worst.

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But no, usually the truth is somewhere out there in the middle. And, and that that KLAC trade from June really irritated me because I, I just know that I could have

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done a better job of that one in hindsight. So what advice would I give to somebody just starting off in swing trading?

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I would tell them, don’t expect to be great out of the gate. So many people want to do that.

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I get people also that’ll ask me that I know around town, they’ll say, hey, mind if I stop by your house this weekend?

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I just want to figure out this whole swing training thing. I figured you can maybe just take like an hour and show me how it works.

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I don’t know if that’s insulting or not because I wouldn’t go up to a doctor and ask them, hey, you might show me how to do open heart surgery this weekend.

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I just kind of like to know how to do that just in case I ever want to do it. No, a doctor will laugh you out of town.

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And it’s the same thing with swing training. It takes a lot of time.

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It takes a lot of learning. It takes a lot of experience to to see what the market does.

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You’re not going to go into swing trading and be a great swing trader right out of the gate. It’s not going to happen.

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We don’t want to have a Disney mindset where we think that, you know, just because we hope for it or want it that it’s going to happen.

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You know this. You can’t pepper Pixie dust on you and expect it to work out in your favor.

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It’s just doesn’t work that way. So don’t expect to be great in the beginning.

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Don’t expect to make huge profits. And I would say because of that, don’t trade big either.

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Learning the process with a smaller amount of capital, like what Kuta Ray did here, I think that was important.

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He started off with a small amount. And hopefully, you know, Kuta Ray doesn’t get over his head with a exponentially larger account and

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start losing some of that money just because there’s going to be more emotions tied to it.

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So as you’re learning, do it with smaller capital.

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People don’t want to start with small capital because they go, I can’t make any money off of that. But you’re not.

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That’s not what you’re starting off swing trading for to make money. You’re learning the process.

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You’re learning how to manage the risk, how to get into trades, finding trades that work for you, learning what you’re about as a swing trader.

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I’ve learned more about myself as it pertains to money through swing trading than any other means. And some of the truths have been ugly.

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The next question Cooterie asks is how is your swing trading strategy evolved over time and what prompted those changes?

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I would say one of the bigger ones was that I trade much less than what I did before. I’m much more patient with not having to make a trade every single day and I’ll wait for the better

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opportunities to arise. The other big one was partial profits.

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I used to go all in and all out. Now I still go all then because I want to have a full position when I start off the trade.

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I don’t want to add overtime because I feel like that that expands your risk parameters. So I don’t do that and I don’t think there’s really ever a need to do that.

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But what I do do is Doo Doo gosh, I feel like I’m being a little immature here, but anyways, making comments about everything.

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But what I do is I use partial profits. And I think what prompted some of those changes was the fact that you don’t rack up massive amounts

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of commissions. When I first started trading, it was $20 to get into a trade, and every time I made a transaction

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with that trade, it was another $20. If I was doing personal profits, I could be $100 deep and to Commission cost for one trade, who the

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heck wants to trade with that kind of a burden on you? So you get really had to get in and you had to get out and you there was really no room to take

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partial profit. Sometimes you would take maybe half of it off, but you would never do like thirds or quarters.

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Here you can take one share off and it doesn’t matter. And finally, are there any common mistakes that I see new traders make and how can they avoid them?

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Yes, I think that a lot of traders become attached to their trades, especially like the smaller dollar caps.

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They start believing in the story. Don’t get attached to a story.

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Not as a swing trader, maybe as a long term investment, sure, But then as a long term investment, that’s a whole other can of worms that we’re opening there if we start to get into that.

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I’m just focused on the swing trading and you can’t get attached to your swing trades. You can’t attach your hopes and dreams, and you can’t anchor those hopes and dreams to the trade

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itself. Because when you do it, the market doesn’t care about your hopes and dreams.

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The market doesn’t care about what you want to get out of the trade. The markets more than likely going to punish you when you start putting these extra variables into a

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trade that shouldn’t be there in the 1st place. Because then you’re emotionally managing your trade.

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You’re not managing risk. The emotions are managing the trade and it’s going to be about what feels good or what feels bad,

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and you’re going to make your decisions based off of that. Going to the trade expecting to be disappointed.

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Yes, I know that’s depressing. This is kind of a depressing podcast in in some ways because I explained the realities of trading,

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not necessarily what you want to hear. I tell you the inconvenient truths, not the convenient lies.

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And so expect to be disappointed, and then that will make you want to manage the risk. What I do is I let myself be pleasantly surprised.

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I like being pleasantly surprised. I like being pleasantly surprised to take partial profits on a trade and to take them again.

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And then they close out the trade with a pleasantly surprised profit. In fact, I sound like my grandpa.

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Every time I close out a, a trade or start to take profits or I see the breakout going in my favor, I’m like, well, would you look at there?

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That’s what my grandpa used to always say. He would give you a little and then you would follow it up with a, what would you look at there?

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It’s I feel like I say the same thing when I’m looking at my trades. I’m like, well, would you look at there?

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So be pleasantly surprised when the trades work out in your favor. Manage the risk accordingly and expect to be disappointed with your trades.

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That way you’ll always be cognizant about the risk, that you’ll be willing to manage the risk, and that you won’t get attached to your trades in the process.

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If you enjoyed this podcast episode, I would encourage you to leave me a five star review on

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whatever platform that you’re listening to me on, whether it be Apple, Google, Spotify, iHeartRadio.

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There’s tons of them out there. Whatever you’re listening to me on, just leave me a review. That would be very much appreciated.

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And make sure to check out Swing Trade in the-stockmarket.com and send me your questions. I thrive on you guys sending me questions. ryan@shareplanner.com.

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I get them. I’m the only person that reads them.

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I’ll give you a fake name, good Florida redneck name, and we’ll make an episode out of it. Thank you guys, and God bless.

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Thanks for listening to my podcast, Swing Trading the Stock Market. I’d like to encourage you to join me in the Share Planner Trading Block where I navigate the stock

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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.