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Authors: Ryan Mallory

The Part-Time Trader

BOOK: The Part-Time Trader
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Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Australia and Asia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.

The Wiley Trading series features books by traders who have survived the market's ever changing temperament and have prospered—some by reinventing systems, others by getting back to basics. Whether a novice trader, professional or somewhere in-between, these books will provide the advice and strategies needed to prosper today and well into the future.

For a list of available titles, visit our Web site at
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Ryan Mallory

 

 

 

 

 

 

Cover image: © Alamy/BigshotD3
Cover design: Wiley

Copyright © 2014 by Ryan Mallory. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at
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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

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ISBN 9781118650059 (Hardcover)
ISBN 9781118650080 (ePDF)
ISBN 9781118650042 (ePub)

 

 

 

To my wonderful wife, Keenan Mallory, who has been
by my side every step of the way, and for Jason, the
wonderful son she gave me, who has been our greatest
accomplishment in this life together.

CONTENTS

Cover

Half Title

Series

Title Page

Copyright

Dedication

Acknowledgments

Introduction

Time for Boldness

Move On

Part I: The Basics of Part-Time Trading

Chapter 1: So How Much Do You Really Hate Your Job?

Becoming Determined to Find a Way Out

I Loved Trading but Hated My Job—Something Had to Give

Realize You Still Need Your Job

Chapter 2: How Did I Become a Full-Time Trader?

My Trading Foundation

My Experience with Trading at Work

Don't Obsess Over Profits

Chapter 3: Where Wall Street Meets the Office

Work Ambivalence

Decide How Successful You Want to Be at Your Job

Seeking Out Increased Responsibility versus Effective Trading

Chapter 4: Don't Quit Your Day Job ... SERIOUSLY!

Just Like the “Real World”

Avoid Goals That Give You a False Sense of Hope

Jeopardize Your Trade Before You Jeopardize Your Job

Chapter 5: The Essentials to Your “Workplace Trading Desk”

Environmental Trading

Working with the Computer that You Are Given

Using Your Smartphones and Tablets as Trading Tools

Part II: The Game Plan

Chapter 6: Before You Clock In

Your Research Must Be Done

Being Concise and Actionable with Your Research

Your Strategy for the Day Should Be Tailored around Your Workload

Chapter 7: Your Best Friend Is the Person Who Works in IT

Know How Your IT Department Works

Ideally, Get to Know Someone from That Department

Understanding Their Policies and Designing Your Trading Around Them

Some Final Thoughts

Chapter 8: Flying Below the Radar

Do Not Become a Distraction

Do Not Be a Clicker

Avoid Telling Anyone that You Are a Trader

Keep Things Business as Usual

Funny Stories with a Serious Undertone

Chapter 9: Adding a Passive Income to Your Day Job

It's a Supplement—Not the Main Source

Become Systematic in Your Trading

Being Cognizant of Risk and Reward

Aim Small, Miss Small

Hit Singles and Doubles—Not Home Runs

Chapter 10: The Best Way to Trade at Work

Always Use Stop-Losses

Use Position Sizes that Won't Be Distracting to You

The SharePlanner Investment System

Plan Your Trade and Trade Your Plan

The 90/10 Rule

The Door and Its Hinges

Part III: Becoming the Part-Time Trader

Chapter 11: Trading Habits You Will Want to Avoid

Stay Away from Trades that Force You to Dip into Margin

An Emotional Spasm

Do Not Do It for the Money

Winning Trades Turning into Losers—The Ultimate Performance Killer

Avoid Trading Heavily in Penny Stocks

Chapter 12: You Still Have to Get Your Real Work Done

Emotions on the Job

Planning Around Meetings

Blocking Out Time

Sneaking Out of Meetings

How to Trade When Traveling

Adding New Positions Prior to Travel

Using the Travel Time

Using Your Workload to Your Trading Benefit

Chapter 13: What to Say and Do if Trading Becomes a Distraction

What You Must Avoid at All Costs

How to Deal with Those Who Are Far Too Curious

Getting Coworkers Off Your Scent

Could Have Been Worse

When Boss-Man Comes A-knockin'

Chapter 14: More of My Personal Tricks of the Trade

Image and Performance

Learning to Do Two Things at Once

Network Tricks

Scaling In and Out of Positions

Don't Be Too Social

Spread the Papers

It Is a Tricky Way of Life

Chapter 15: Take This Job and Shove It

How Did I Know It Was Time?

When I Finally Left

Life without Work Benefits

Why Did I Do It?

How You Can Know if It Is Time to Leave Your 9-to-5

Exactly What Are We Talking About?

Turning It On

About the Author

About the Companion Website

Index

ACKNOWLEDGMENTS

I
t would be foolish of me to think that I could write this book all on my own without acknowledging those along the way who have helped bring me to this point in my life and supported me in writing this book for well over a year now as well as the support that I have received well before then that led up to this opportunity.

First, I am thankful to my beautiful wife, Keenan Mallory, who has lovingly supported me in this long journey that comes with writing a book, and stuck through it with me until the very end. She understood the late nights and early mornings, and always made sure that I was taken care of in the process.

I am also thankful to my son, Jason Mallory, who has been a light in my life that goes beyond the realm of trading and gives a meaning to life that cannot be comprehended. Hopefully, he will find my book just as riveting as all of the children's stories he has been read each night.

I would be remiss if a huge heartfelt amount of gratitude was not sent to my parents, Duane and Linda Mallory, for their years of dedication and determination, the example they have modeled for me in life, and supported, though apprehensively at times, my unorthodox adventures, and making sure that I had the best upbringing a son could ask for.

My sister, Tracy Rodgers, despite being 14 years my senior, has been a terrific example and role model for me, and a great person to talk to late at night when the rest of the world was fast asleep.

My brother, Duane, whom we also simply referred to as “Brother” over the years, has been a best friend to me and a person to ping ideas off on and encouraged me in some of life's greatest challenges and leaps of faith, including becoming a full-time trader.

Not a day goes by that I do not wish my other sibling, Jason Mallory, could be around for a five-minute conversation to tell him about all the adventures life has taken me on and perhaps he could have even joined me on some of them. He was the best friend a man could ask for and someone I always wanted to emulate.

Over the years I have been blessed to see my extended family grow as well, and though I didn't dedicate the book to them, as they would all have liked, I do hope they realize that they mean the world to me: Shelby Rodgers and Jessica, Luke, and Danielle Mallory. I am grateful to call each of them family and see them grow up through the years into some wonderful kiddos.

Close friends play a huge role in life, and I am thankful for people like Mark Billman, who has been there for me countless hours into the early morning helping me fix my computer, servers, networks, software issues, and anything technical; he has had a role in making it right for me.

I'm also grateful to my cofounder of SharePlanner.com, Matt Walters, who has help me grow the business over the past seven years into a company that has helped countless traders realize their dreams of full-time trading. And Matt's brother, Nate, through constant reminding, helped me acknowledge in my formative trading years that long-term investing was no longer the path for me to go down.

As a first time author, I am incredibly thankful for the opportunity that John Wiley & Sons has given me to put my pen to paper and have my writing made public to the world. A book lasts the test of time, and I am incredibly grateful to Laura Walsh for reaching out to me and encouraging me to write a book and for putting her backing and support behind me during the whole process. I also could not have done it without the editing team of Judy ­Howarth and Tula Batanchiev, who coached me throughout the process and made sense of my ramblings throughout the book.

And, of course, all things in life, including the blessing listed on these pages, would not be possible were it not for my merciful Savior in Jesus Christ, who washed away my sins of past and present and accepts me as His own.

■
Introduction

Sitting behind a fake mahogany desk in a chair I believe was made from some form of polyester, and staring at the walls of a musty, windowless office, I had just about all I could take. I had been a part of Corporate America for the past eight years and at a job where, if I stayed there much longer, my biggest fear may in fact become a reality—becoming a “career man” doing a job I could not be any less passionate about, just to pay the bills and support my family. Had it come to that, I may in fact have ended up in a place where I was chained to a bed surrounded by people in white coats.

■
Time for Boldness

That is when I knew I had to quit my job and became a full-time trader and blogger at the site I founded, SharePlanner.com. But getting to this point was not something that happened overnight. No, waiting for this dream to come to fruition probably created more anxiety inside of me than doing what I had only dreamed of doing in my mind: giving my two-week notice.

The night before, I had typed my letter of resignation. This was something that I did not have a lot of experience at, so I decided the best course of action was to google the search term
two-week notice
and simply copy what someone else had done, which might have been a bit impersonal, but come on—how personal do you really want to be with the company that you are notifying you have no desire to work at any longer? There was no turning back at this point. I was certain I would do this, though I probably was at the point where even if a fresh dose of reasoning against the decision I had set out to make came my way, it would have been pushed aside. I was determined, nervous, but set in the decision I was going to make.

My wife could not have been more nervous about the decision, and my reasons for doing so probably made no sense to anyone but myself. Of course, I did not want to burn any bridges because I was not entirely sure if what I was planning on doing in my post-corporate career would actually work out in the long term, and just maybe I would have to take the long walk of shame and ask for my old job back. So despite having a deep, deep hatred for my line of work, I had to be respectful and try not to burn any bridges in the process.

This Is It! Don't Get Scared Now

The time had come. I pumped myself up and re-read the letter of resignation for probably the 73rd time just to make sure it said what it was supposed to say, as if it would make a difference after I verbally told the boss man that I was quitting my job. There was also a hint of humor in doing that, since I really did not bother to take the time and put my own thoughts into the words that were on the two-week notice.

I got out of that itchy, synthetic polyester office chair and walked unsurely into his office, where his administrator (I guess that was the politically correct version of secretary) sat. Now this lady had it out for me. It was almost like she was spending all her hours building some grand case for why I should be fired, for reasons unbeknownst to me. She had no idea, but whatever her motivation was for constantly trying to throw a stick in my wheel spoke, her plans were just about to be set on fire and go up in smoke.

I asked her for the boss man, but he was not there. “DARN IT!” All that effort to build up the courage and walk into the office and make my intentions known was for naught. I would have to repeat the process again in two hours when he was back in his office.

Same Song, Second Verse

Once he came back, the process of being bold and walking down the hallway and into the boss man's office had become easier. I started off by making some small talk with him in my pointless attempt to put off the inevitable. While I had imagined how it would all play out many times in the past, I simply found it rather difficult to put it into reality.

Finally, though, I found the courage to move on to the matter at hand and tell him that I was giving my “two-week notice.”

The silence was deafening. I am pretty certain that, despite it being early in the morning, the crickets outside had found a way to voice the awkwardness of the moment.

“What are they offering you?” he asked.
“Who's offering me what?” I said confused.
“The company you are going to.”
“Nothing,” I said squeamishly.
“What company is it?”
“There is no company.”
“Your job title?” he asked.
“Trader and blogger,” I mumbled.
“Did you say what I think you said?” he asked sarcastically.
“Yes, sir,” I said, with a bit of forced respect.
“Obviously, you're not leaving for the money,” he concluded.

And that was the gist of our conversation. We made some additional small talk thereafter, and of course the admin in the next office over could hear it all and at times I might have even elevated my voice so that she would no doubt know what was going on. You might have thought she was going to go into cardiac arrest by the gasp she made when I made my intentions known to management.

Her simmering contempt for me would simply have to stay with herself—I was leaving on my own terms, and because I wanted to.

■
Move On

I was a short-timer who was ready for the gates to open and release him into the outside world.

Now that the cat was out of the bag, everyone knew for the first time that I was a trader. They also knew I owned a web site called SharePlanner.com. The conversations with coworkers that evolved from that point forward ranged from jealousy to admiration and curiosity to hatred.

In the eyes of many in the office, I had essentially engaged in an act of high treason against the company that put food on our table for so many years. By giving my two-week notice, I had essentially told them that I didn't need their paycheck and it wasn't because I was getting paid more somewhere else. The message that was conveyed to them was that “I don't want to do this anymore—I found something better to do.”

Coworker Backlash

That didn't bode well with the kids on the playground. Over the next two weeks, everyone in the department tried to dump on me as much work as possible. But once the last week rolled around, I simply didn't care anymore. I would have these people in a near feverish panic asking me when I would get to a certain assignment, but my only response was, “Next week.” That definitely irked some, but the notion that I could somehow get months' worth of assignments done, so that they would not have to be responsible for it after I left, was not possible, and as the short-timer, I was ready to be released back into society.

Some took their argument to the boss man with requests that he focus entirely on their work and corner my remaining time in the organization on their needs and wants. There was even one person who tried to stand in the doorway until I verbally submitted to her every need and want.

There were actually a few people, though, who just wanted to talk to me more about the stock market and which stock I thought might be the “next Apple.” Suddenly, the old-timers on the verge of retirement wanted me to help them with portfolio allocation, and advice on various interest ­bearing assets. The problem was that I was just a simple trader, not a financial adviser. However, talking with them about the financial market was highly enjoyable, and being able to open up with them about what I was actually really good at, for the first time ever, was a special moment for me.

Curious Management

Then came the meeting that I had with upper management about reasons unrelated to my departure. I remember sitting in a meeting with a bunch of those “higher-ups,” and they all had to give me their opinion on the lunacy that I was engaged in. Apparently, there should be no other company that I would want to work for but the one that was home to the office chair that I had parked my derriere in for years on end.

I think for them my move was even harder because here was a kid in his 20s who, in a matter of days, would not have to answer for anything to those who had controlled a large portion of his life for so long. One told me how it was a “bear market” and a horrible time to be trading, and another made me sit through his stories as a full-time day-trader that capitulated in 2000 as a result of the “dot-com” bubble.

In fact, on the last day, the admin that I told you about earlier, who had this mysterious hatred for me, reported me to Human Resources for being 15 minutes late to work on my last two days on the job.

You got me there! Guilty as charged. Directors, vice president, my immediate boss, and Human Resources were e-mailed to let them know how essentially I had not taken my job seriously on the final two days on the job, and that the company should not pay me for that time.

To make things right, I made sure I left 45 minutes early on my last day and into the world of full-time trading.

No longer would I have that biweekly paycheck to support me and my family. Trading was no longer a side job that I had become really good at.

Sharing My Secrets

For years now countless traders who visit SharePlanner.com have written me to ask about my journey from pushing paper and filling out forms as a contracts manager to trading full-time for myself. But, more important, they wanted to know what I did to become a successful part-time trader while holding a full-time job. That is, how was I able to trade while I was supposed to be working?

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