The Psychology Behind Winning Trades & Stop Loss Secrets

0:00This is an iHeart Podcast. Guaranteed Human Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts then add supported streaming music from Spotify and Pandora and as the number one podcaster iHeart's twice as large as the next two combined. Learn how podcasting can help your business. Call 844-844-IHEART This episode is brought to you by PNC Bank. A lot of people think podcasts about work are boring and sure, they definitely can be but understanding a professional's routine shows us how they achieve their success little by little, day after day. It's like banking with PNC Bank.

0:37It might seem boring to save, plan, and make calculated decisions with your bank, but keeping your money boring is what helps you live a more happily fulfilled life. PNC Bank, brilliantly boring since 1865. Brilliantly boring since 1865 is a service mark of the PNC Financial Service Group, Inc. PNC Bank, National Association member, FDIC. So starting off with trading, what's futures trading tip of the week? I don't know if I went over this in full detail before, but to my futures traders, having too tight of a stop loss is almost worse than having no stop loss at all. a lot of times um when we're looking to get into a move we're looking to protect our account um and both of you can speak at this from the options perspective but sometimes you can have a stop loss that is so tight that you don't even give yourself room to be able to let the move fully mature um so i know somebody last friday who probably missed out on like 60 grand having a stop loss at 1200 bucks like i get it if you're trading a bunch of contracts you want to have protection but you need to put your stop loss in places where the brokerages and competition won't hit your liquidity sweep zones and stop loss zones and hunt there and also too like we were talking to one of our good friends before this you have to know the exit before you get in so if you're going to lose six thousand bucks but the upside is 60 grand why cut it off at 1250.

2:15You go into it knowing, put this in chat, go into it knowing what your maximum loss will be and what your maximum profit target will be, but having too tight of a stop loss, damn near it is worse than having no stop loss at all. It's a terrible feeling. It's a terrible feeling. For it to go down and then go where you knew it was going to go? Oh my God. Yeah, it's tough. I think that's why a part of that plan, we always talk about having a plan is figure out what that threshold is. I know some people don't have a strong threshold, so it might be a 20 % pullback. But especially when you're talking about equities, that's a, I mean, that's a correction, right?

2:56Yeah. When you talk about futures and options, that could be five minutes. That's a blip on radar. Yeah. Right? Like that could be in five minutes. And so you got to take that into account how volatile that these assets move or these derivatives move. And so 20%, it feels like, all right. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio.

3:32Think podcasting can help your business? Think iHeart. Streaming, radio, and podcasting. Let us show you at iHeartAdvertising.com. That's iHeartAdvertising.com. This show contains information subject to, but not limited to personal takes, rumors, not-so-accurate stats, and plenty more. What's up, man? This your boy, Nav Green, from the Broken Play Podcast. Look, it's the end of the season. The playoffs are here. But guess what? It ain't the end of your season. You can always tune in with Broken Play Podcast with Nav Green on the Black Effect Podcast Network. Not a team who ain't going to the playoffs.

4:07The Chiefs. Oh, it's a wrap. It's time to rebuild. Who your MVP right now then? Drake May up there. Josh Allen up there still. Oh, my boy, Matthew Stafford. Where the whole Knicks at? He ain't too far behind. He did all this talking. What Matthew Stafford is doing statistically, bro, is crazy. Bro, you know I ain't no Josh Allen fan, but Matthew Stafford got better weapons. Caleb Williams. Hey, he should be in that conversation. In what conversation? MVP? He should be in it. Listen to Broken Play with Nav Green from the Black Effect Podcast Network on the iHeart Radio app. apple podcast or whatever you get your podcast right depending on the company that feels like it's safe but you know like i've said i've depending on the company nvidia i've i've done i've taken a stop loss off because i understand the company i understand how the market moves i understand the long-term vision for it which is why we always buy time so if you don't have time in it right and you're having these you're gonna lose out so putting that there i i like and i know you we've gone back and forth when i'm doing an option call 30 to 40 percent I feel like is a safe space.

5:15Now, like I said, depending on the company, that'll change. My company, I've changed that for. Microsoft, I've changed that for. But like Super Micro, right? Once it hits a threshold, I gotta go. I gotta go. I don't love, I'm not in love with the option trade. It makes sense and I feel like can make money but if it's not making money then there's like there's another opportunity where we can put that capital so have a plan before you enter any position we can say it but most people still don't do it right like we talked about our close friend made money and now it's trying to figure out what should i do you have to know the exit you gotta have a planter yep because you can't figure out how to assemble a plane on the way down i know they love to say that in silicon valley like figure out how to build a plane on the way down it doesn't work that way in real life you don't crash out every time and also too even with the the asset they were trading the es mini the s p 500 i'm like if you knew the market was falling why have such a tight stop and we've been falling but it's fear it's fear a lot of it is not knowing your entry not knowing your exit when you're going to profit and then the other part that isn't talked about enough is you're doing so many different things and when you're trading you end up getting confused on how this is going to pan out.

6:34That's why I say trade one way in, one way out all the time. So you can have a huge data set to know what the outcome is going to be. There's that psychology. We were talking about it before, but it's that psychology. The fear comes because of the lack of education and experience in it, which is understandable. What is the other side of that when you see people win? If you're watching people, especially when you watch people on social media, it's like, man, they've had percentage gains, they've had percentage gains. Psychologically, do you think that works as a detriment or is it more advantageous to say oh i should be involved i often like wonder like how people do that maybe both rashad what you think yeah for sure i think it psychologically definitely plays a part as far as investing is concerned because no one wants to lose money and then no one wants to have somebody make more money than them.

7:28So it's a catch-22 because you don't want to lose money, but then the risk of making money so you constantly kind of, you know, run your own race. Yep. Keep your eyes on your own paper. I think that that's a bar right there. The risk of making money. You remember what he said? The risk of making money, which is like, damn, that just sounded crazy just now. But that's where we're at. because you're seeing other people post their games but not always their losses and on top of that when you start to have too much comparison that's when the fomo and the over trading and the over leveraging really kicks in it really kicks in just focus on your race earners what's up you ever walk into a small business and everything just works like the checkout is fast the receipts are digital tipping is a breeze and you're out the door before the line even builds Odds are they're using Square.

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