Lessons Learned

R

rs7

OK...time for a new thread. Instead of talking about what works, why not discuss what does not? I think we all agree that we learn from our mistakes. So how about talking about our blunders and what we learned from them? Maybe we can actually cut out some by learning from the mistakes of others.

Who wants to start? I expect to hear some doozies. I also hope we don't get too many idiotic BS stories. We can do another thread devoted to those. But for those who wish to exchange useful information, please share whatever you feel is relevant.

Let's hear them. I will spend a little time trying to sort out my own biggest blunders and what I learned from them. My only problem is I have had so many, it is hard to know where to begin:)

This could be fun, and hopefully informative and helpful. Especially to the newer guys. If you can learn from other's mistakes, you will be way ahead of the game if you can avoid them yourselves!!! This could be as close to a shortcut to learning as anything I can think of (so far...still working on more...as I always have).

Good trading and good luck to all!
RS7
 
"A smart man learns from his own mistakes... a wise man learns from the mistakes of others"... (Maybe nobody really said that. And if not, well I just did. Ha!)

Biggest mistakeS I've made over the years is not taking enough risk... hoping for a lower risk shot at certain trades. I've often seen "set-up JUST past", and waited for a retest of the highs, lows, trendline, something. Had I taken in my mind was "additional" risk and made the play with the recognition that I might not get a 2nd shot or a better shot than what I have right now, I think I'd have... oh, 10 TIMES the money I have now? Sickening personality flaw.

To compound the mistake, not paying up the next day or the next.

I think the biggest mistake anyone can make is to break down on stop discipline. Eventually, that behavior will TAKE YOU OUT.
 
Some days the floor just has control, because of the lack of real order flow. Not recognizing this is costly and frustrating. These days can be traded, but must be handled circumspectly.
 
Clearly my biggest mistake was thinking that "Good" tech companies would have years of growth ahead of them. And to a degree, knowing that something like 1/2 of the world has never made a phone call leads me to believe that there is still opportunity, just not now.

Patience is my biggest fault, especially on the short side. I was short ARBA at 65 and QCOM at 92. Don't ask where I covered them. And as far as that goes, not being much of a short seller has cost me lots of opportunity. But, I am getting better at shorting.

Not looking at all asset classes for trades and investments has been a mistake. Could have made a lot more money in Munis than I did this year, but I focused too much on stocks.

Not being more active in my IRA and Annuity have been bad moves, not only because of the ability to trade tax free, but because I could have scaled out at higher levels just like I did with my individual accounts.

Not finding a way to kick out all my losers by year end and avoid paying so damn much in taxes will be the final error that will be corrected this year. But that goes along with the whole having an opinion that can be just a little too strong and wrong.

These are just generalizations, the details might cause me to start drinking again, so I will leave those to the imagination.
 
There is a story in "Reminiscences of A Stock Operator" about several traders who decide they want to purchase a $10000 fur coat and they will just have the market pay for it. Of course everyone of them ends up taking a loss in pursuit of this coat. The lesson of trying to make the market pay for something was unfortunately lost on me a little over a year ago. I decided to purchase my first house and figured I would put down a large down payment by making a little extra money in the market. I had been enjoying a good run so I figured I would just increase my position size and trade a few more setups than I normally do. The end result was a 40% drawdown in my account and I almost had to forget about the house. Luckily I was able to stop trading for a week and reassess my situation. After taking a step back I could not believe the mistakes I had made (doubling down on losing trades, buying large option positions where I had no edge, just hope.) All of my trades were based on taking some money out of the market and had nothing to do with favorable risk/reward setups. It is amazing how quickly emotions can completely take over your trading and the speed with which damage can be inflicted upon your account. I pray this never happens again, and it definitely helps to talk about these things as we always need to be reminded of what can go wrong.
 
Trading NASDAQ. NYSE rules.

[Sorry, I know this is a statement more about me than the instruments...]

nitro :cool:
 
My worst mistakes have usually been due to rushing into trades before all of my indicators have given the green light. Usually in such cases I get stopped out quickly, only to see the stock move back in my direction afterward.
 
Biggest mistake: expecting the market to "pay me" money like a paycheck every week. the two worst trading days i ever had both occurred late in the week, late in the day when i left good trading at the door in the stupid pursuit of "profitable week" ANn ounce of failure beats a pound of pain. ACCEPT TH FACT: you wanna be a trader, you goota takes some lumps even when traveling the road to success.
 
Originally posted by larrybf
Biggest mistake: expecting the market to "pay me"
More...

The market has made it VERY clear over the years that she owes me absolutely nothing at all and knowing this is 1/2 the battle :)

PEACE and good trading Larry,
Publias
 
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