When Your Trading Sucks | Podcast Episode #60

0:00
Hey everybody, this is Ryan Mallory for the Swing Trading the Stock Market. My new episode today, When your trades Don’t Work. And let me tell you, that’s gonna happen to you. If you trade this market long enough, you’re gonna have some pretty bad days in the stock market. Best thing you can do is just always be a constant manager of risk that even when you do have a bad day, that the risk keeps it from being too bad.

0:21
Um, today was one of those days for me. Did not have a good day in the stock market, but I wanted to create a podcast episode of it because I, I’m pretty frustrated today, you know, the, the stock market, it had a huge sell-off on Monday. I avoided, avoided a lot of pain and suffering there.

0:37
I came into the day with McDonald’s. It sold off a little bit, but it just was basically giving back a small amount of my profits that I had made from the week prior. Yesterday, the market bounces, McDonald’s goes back up. It’s sitting right there at a, at a breakout. It’s looking good. I don’t get short on the market. I don’t try to play the rally at all.

0:54
I just, I sit on my hands. I have been sitting on my hands since the, uh, Thursday of last week. So 3 days have passed, no trades coming in today, 4th day of trade, possibly even not making any trades. Market’s down. Actually, at first it was up like 8 or 9 points going into the pre-market, then the pre-market, it, it about an hour out, it decided to start dropping like 30, 40 points.

1:17
And so you’re looking at a very negative open in the stock market, and that’s exactly what we got. S&P ga completely below the previous day’s lows, and it looked like we were going to be testing Monday’s lows once again and basically looking at like a 50 to 100% sell-off on the S&P 500 today.

1:33
I thought we were gonna get it. I don’t get short at the market initial. I said, Look, I can’t chase after. I can’t chase after one of these, uh, 50 point gap downs. You just can’t. The risk is too much if it reverses and goes back up, you get smoked. So I’m having to sit there and wait. But in the meantime, I do raise my stop loss in McDonald’s because I was up like, I don’t know, like 1%.

1:50
It’s not much, but I don’t really feel like going all the way down and taking a 3 or 4% loss on the trade because the market decides to crap a brick today. So I raised it up, I raised it up just a shade above break even, um, essentially just trying to prevent taking a loss on the trade, well. The, the, the stock gets me stopped out and, um, as soon as it stops me out, it goes down about a buck or two more and looks like it’s a good decision initially and then the market starts to rally back up.

2:17
Still not paying too much mind to it, but McDonald’s keeps going, market keeps going, and then it starts to struggle just a little bit there. And I said, OK, I think this market is actually gonna start coming back down. I really don’t see too many times where you have a huge gap down, you have a dead cat balance, and then you have, uh, A gap down and then then a bounce back up.

2:38
Usually that gap down is so demoralizing people are like, OK, we’re resuming the down trend. I’m out. But that didn’t happen. And so I get short via SDS, which is actually me getting long on an inverse ETF of the S&P 500 that provides a 2 to 1 return.

2:54
And at first it looks OK, but then the market starts rallying, then it comes back down again and it’s, you’re just stuck in a real choppy session. And then the last, I don’t know, 3 hours of trading, the market just goes, you know, gangbusters goes all the way green on the day. Now I’ll admit, I, I really don’t see that kind of behavior out of the market.

3:11
That’s why I really didn’t take it too much serious. Now, I, I took a small loss in the trade. I actually got out before my stop loss triggered and And if I hadn’t done that, my stock loss would have ultimately been hit. So I saved about, you know, 1% of a loss on that trade. But ultimately, I came away with 1.78%. I could have come away with like, I don’t know, 2.7% to 3%.

3:30
I can’t remember exactly, but I did prevent a little bit of an additional loss there, so that’s good. But it was just frustrating because McDonald’s gets me stopped out. It goes on to like finish at all-time highs today. I kid you not, it goes down to like 211.

3:46
I get stopped at out 21263. I stopped watching it because the last time I saw it was like at 2:17. It would have been a really phenomenal trade. I would have been up, you know, 2.5% overall in that trade, and it would have been great. It would have been a good day, but instead, I’m not in McDonald’s and I’m in SDS, which is basically just, you know, a short position that’s not working out on the market because the market keeps rallying and I get stopped out of that trade.

4:12
So. Even though I make a small profit on McDonald’s, the trade still suck for me because, you know, I get, I get washed out early on, watch it go back to highs. I can’t do that, you know, when you, when you’re trading, that’s gonna happen. That’s, that’s part of trading, that’s part of the frustrations of trading.

4:28
You’re gonna get stomped out all the time just to see the stock go back. But what these stock losses do is they prevent you from having major, major losses. Like if you’re trading, um, A big name and then all of a sudden the market, like, like Dell, OK. I got into this one, I took a 2% loss on it.

4:44
Let me tell you, if I didn’t do that, I’d be sitting at like, like a 15% loss right now on that trade. Stop loss is helping. Now, with that said, the market doesn’t say, oh, you got hit by your stop loss. I’m gonna keep selling off just so you’d feel better about the fact you get stopped out. No, it can go back up. It did that with McDonald’s State.

5:00
It’s frustrating. You’re gonna have it as a trader. I think what happened was I, it was kind of like I was dog piling on myself a little bit today. So I got hit with another trade, um, where that didn’t work out for me. So I, you know, I lose out on some decent profits on McDonald’s and then I get stopped out of SDS for like 1.7%.

5:19
Actually, I didn’t get stopped out. I got out early, but I would eventually have gotten stopped out if I didn’t do that. But the thing is, is that you’re not always gonna be on the right side of the trade. Yes, as traders, you want to be on the right side of the trade more times than not, but sometimes you’re not. Today it was obviously that, OK?

5:37
There’s gonna be days where you feel like you’re doing everything wrong. I did it wrong on McDonald’s, I did it wrong on SDS. But what did I do? I stopped trading. I decided at this point, holy cow, I’m not gonna keep trading and just keep piling on to the misery here. So I stopped trading.

5:52
I completely stopped. I wasn’t gonna do it. Yeah, the market kept rallying. Yeah, the market finished green on the day. Yeah, it was frustrating. But I stopped trading because I didn’t trust myself at this point. I was clearly disconnected from what the market was trying to do today, and there’s a lot of volatility and there’s a lot of opportunity to do wrong.

6:11
I mean, I could have easily see myself getting long on the market when they started rallying and then the market tanked back down. And then I would be like, man, why did I get out of SDS? Why did I uh get a long position? I should just stuck to the original plan and everything would have been fine. I’m trying to prevent that because that’s a lot of emotional capital that gets really.

6:29
Frustrating to, to, to just waste. So, I’m trying to preserve myself, self perseverance. Whatever the market does today, it’s more important that I preserve my emotional capital. When you’re in these situations and you feel like you’re constantly on the wrong side of the trade, follow your stops, tighten your stops, whatever you gotta do, but don’t just go risk-free on this stuff where you’re just, I’m just gonna close my eyes and hope that it works out.

6:51
You gotta have stop losses, OK? You gotta follow them. And then you just gotta wait for a new day because there is always a new day in trading. Tomorrow is a new day of trading for me. I’ll get a good night’s rest. Let’s see how it works out for me, OK? And it’s the same for you. Don’t get so caught up on this.

7:08
I stopped trading because I just didn’t want to keep creating more problems for myself that I’m gonna have to fix tomorrow or the next day. I, I’m 100% cash right now, and now I get to go into tomorrow and I’m able to Going with a fresh outlook, see how the market wants to play. Maybe I’ll be short again tomorrow, or maybe I’m wrong.

7:24
I don’t know yet. And you gotta remember, when you’re in this situation, the fewer trades the better, especially when there’s a lot of volatility in the market, when the market’s just whipping people all over the place, and it did that today. I’m not the only person frustrated with today’s trading session. There’s a lot of people that are upset because the same thing that happened to me happened to them to guarantee it.

7:44
The whiplash can be very demoralizing. So the fewer trades that you’re making the better, especially when you’re not on the right side of the trade. So, let’s just summarize this up for you guys real quick, OK? And I’m gonna let you go. One. You won’t always be on the right side of the trade.

8:00
It’s good to be on the right side, obviously, but you gotta know that you’re not always going to be on the right side of the trade too. There are gonna be days when, when you’re on the wrong side of the trade, that everything you do just feels completely like a failure and everything is just going against you, like the market’s picking on you.

8:16
At that point, just stop trading. And make sure that you’re always following your stops too along the way. Wait for a new day. Remember that the fewer trades that you’re making, the better when you’re on the wrong side of the trade, and that, and that don’t let the whiplash because you feel like you have to keep on trading, demoralize you.

8:34
Stop trading. Wait for a new day, and I think you’ll be just fine. I know I’m going to be. I’ve, I’ve been doing this long enough. I’ve, I’ve messed up enough in the stock market, you know, with trades and everything else and had weird moments. I bought, I got stopped out of LinkedIn one time and if you’re in the swing trading splash zone, everybody’s heard me talk about this story.

8:52
I got stopped out of, and I think I’ve talked about this on the podcast too, quite honestly, but I got stopped out of podcast out of, I got stopped out of LinkedIn 30 minutes. Before the market closed on a Friday afternoon, only to wake up the next morning and find out that Microsoft bought them out at a 60% premium.

9:09
Guys, the market will try to take your pride, your morale. It’ll try to destroy you in every which way. You can’t let it do that. You gotta, you gotta live for another day. All right? I’m gonna leave it there. Take care. God bless.