The Psychology Behind Winning Trades & Stop Loss Secrets

Summary

Podcast Summary: Earn Your Leisure

Episode: The Psychology Behind Winning Trades & Stop Loss Secrets

Release Date: November 4, 2025
Hosts: Rashad Bilal, Troy Millings (with frequent contributor Ian)
Podcast Network: iHeartPodcasts

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Overview

In this episode, Rashad Bilal and Ian (with Troy Millings referenced in show notes but not the aired conversation) dissect the psychological factors behind successful trading, the nuances of effective stop loss strategies, and the dangers of comparison and fear in trading. The discussion leans into actionable advice for traders—especially in futures and options markets—while emphasizing the importance of mindset and pre-defined trading plans.

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Key Discussion Points & Insights

1. The Danger of Too-Tight Stop Losses

(02:47 - 04:13)

• Rashad warns futures traders of the pitfalls of placing stop losses too tightly. He recounts a story of someone who "missed out on like 60 grand having a stop loss at 1200 bucks," illustrating how over-protectiveness can hinder trades.

  "Having too tight of a stop loss damn near is worse than having no stop loss at all."
  — Rashad (03:39)

• When traders set stops too close, they can get "liquidity swept," exiting positions just before the trade goes in their favor.

• Key point: Determine your maximum loss and profit target before entering a trade.

2. Emotional Cycle: Regret and Planning

(04:13 - 04:45)

• Ian reflects on the "terrible feeling" of being stopped out, only to see the trade play out as he originally anticipated.

• Rashad highlights the frustration: "It [the price] goes down and then goes where you knew it was going to go. Oh my God." (04:17)

• The segment underscores the need for having a plan and sticking to it, especially considering the volatility of futures and options.

3. Setting the Right Thresholds: Context Matters

(04:45 - 05:41)

• Ian explains how stop losses vary by asset:
  - With equities, a 20% stop often signals a correction,
  - In options/futures, dramatic moves can happen in minutes or seconds.

• He gives examples:

  • He's been more flexible (removed stops) for companies he deeply understands, like Nvidia, 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." (05:08)

• Typical stop loss thresholds for options: "when I'm doing an option call, 30 to 40% I feel like is a safe space."
  — Ian (05:21)

4. Importance of Planning Exits

(08:43 - 09:13)

• Ian emphasizes, "Once it hits a threshold. I gotta go. Yeah, I gotta go. I don't love [the trade]." (08:43)
• Rashad follows: "You have to know the exit because you can't figure out how to assemble a plane on the way down. ...It doesn't work that way in real life. You crash out every time." (09:12)
• Critical point: Have an entry and exit plan before executing any trade.

5. The Psychology of Trade Management

(09:13 - 10:34)

• Rashad ties tight stops and poor planning to fear and lack of market understanding:

  • "It's fear. A lot of it is not knowing your entry, not knowing your exit when you're going to profit." (09:45)

• He encourages trading "one way in, one way out" for data and consistency.

• Ian expands on the psychological element:

  • "The fear comes because of the lack of education and experience, which is understandable." (09:59)

• Social media can amplify comparison and FOMO (Fear of Missing Out).

6. How Social Comparison Affects Traders

(10:31 - 11:34)

• Ian wonders if seeing others’ profits online hurts or helps traders psychologically.

• Rashad responds: "No one wants to lose money and then no one wants to have somebody make more money than them." (10:35)

• The risk of overtrading and overleveraging increases when comparing yourself to others.

• "Just focus on your race... Keep your eyes on your own paper." (10:55)

  "That's a bar right there. The risk of making money."
  — Ian (11:02)

• Rashad cautions that constant comparison leads to unhealthy habits: "When you start to have too much comparison, that's when the FOMO and the over trading and the over leveraging really kicks in." (11:15)

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Notable Quotes & Memorable Moments

• On Stop Losses:
  "Having too tight of a stop loss damn near is worse than having no stop loss at all."
  — Rashad (03:39)

• Emotional Cycle of Getting Stopped Out:
  "It to go down and then go where you knew it was going to go. Oh my God."
  — Rashad (04:17)

• The Need for a Plan:
  "You have to know the exit... because you can't figure out how to assemble a plane on the way down. ...It doesn't work that way in real life."
  — Rashad (09:12)

• On Social Comparison in Trading:
  "No one wants to lose money and then no one wants to have somebody make more money than them."
  — Rashad (10:35)

• Self-Focus:
  "Just focus on your race... Keep your eyes on your own paper."
  — Rashad (10:55)

• On the True Risk:
  "The risk of making money. Like you already said, the risk of making money, which is like, damn, that just sounded crazy just now. But like, that's what we're at."
  — Ian (11:02)

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Timestamps of Important Segments

• 02:47 – Rashad opens with the dangers of tight stop losses
• 03:39 – Notable: "Having too tight of a stop loss..."
• 04:13 – Ian and Rashad discuss the emotional impact of stops
• 04:45 – Ian elaborates on thresholds and asset differences
• 05:21 – Typical options stop loss tolerances
• 08:43 – Ian and Rashad on the necessity of exit planning
• 09:45 – Rashad outlines the role of fear and planning
• 10:31 – Social comparison and FOMO effects
• 10:55 – The importance of staying in your lane

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Takeaways

• Stop loss placement should consider volatility and asset context, not just arbitrary amounts.
• Trade with a plan: define your maximum loss, profit targets, and do not "assemble the plane on the way down."
• Social comparison fuels bad trading habits; ignore the noise and focus on your own process.
• Fear and lack of education lead to mistakes—improve your knowledge and experience to manage both.

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Earn Your Leisure delivers a fusion of practical, psychological, and strategic trading wisdom in this episode, offering both education and encouragement for traders determined to master their mindset and execution.

Transcript

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[Rashad]

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 when we're looking to get into a move, we're looking to protect our account. And both of you can speak of 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. 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 gonna lose 6, 000 bucks, but the up side is 60 grand, why cut it off at 12.50? You 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 is worse than having no stop loss at all.

[Ian]

It's a terrible feeling. It really is. It's a, it's a terrible feeling for.

[Rashad]

It to go down and then go where you knew it was going to go. Oh my God.

[Ian]

Yeah, it's tough. I, 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? Yeah, we talk about futures and options. That could be, that's a bl.

[Matt Rogers]

Yeah, right.

[Ian]

Like that, that could be in five minutes. And so you got to take that into account how volatile that these, these assets move or these derivatives move. And so 20, it feels like, all right, depending on the company, that feels like it's safe. But you know, like I've said, I, 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 you, right, and you're having these, you're gonna lose out. So putting that there I I like and I know Ian you we've gone back and forth when I'm doing an option call 30 to 40% I feel like is is a safe space now depend like I said depending on the company that'll change the company. Yeah probably micro I've changed that for Microsoft I've changed that for but like super Micro.

[Matt Rogers]

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[Rashad]

Ah, there.

[Matt Rogers]

The last one. Enjoy a Coca Cola for a pause that refreshes.

[Ian]

Right. Once it hits a threshold. I gotta go. Yeah, I gotta go. I don't love. Right. I'm not in love with, with the, the option trade. Right. It makes sense. And I feel like it 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?

[Rashad]

You have to know the exit.

[Ian]

You gotta have a planter.

[Rashad]

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 P500, 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. That'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.

[Ian]

Is. There's that psychology. We were like talking about it before, but it's that psychology. The, the fear comes because of the lack of education and experience, which is understandable. What, what is the other side of that? When you see people win. Right. Like, if you're in, like 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 view that.

[Rashad]

Maybe both. Rashad, what you think?

[Ian]

Yeah, for sure.

[Rashad]

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.

[Ian]

So It's a catch 22 because, yeah.

[Rashad]

You don't want to lose money, but then the risk of making money.

[Matt Rogers]

So you, you constantly kind of, you.

[Rashad]

Know, run your own race. Yep. Yeah. Keep your eyes on your own paper.

[Ian]

I think that that's a bar right there. The risk of making money. Like you already said, the risk of making money, which is like, damn, that just sounded crazy just now. But like, that's what we're at.

[Rashad]

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.

[Matt Rogers]

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