The 30 most costly trading errors

Quote from lurefo:

31. Not being able to recognize you (or your system) have lost your edge and keeping on trading.
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How is this done ? How do you recognize the markets have turned against your approach ? What is the criteria ?
 
Quote from syswizard:

How is this done ? How do you recognize the markets have turned against your approach ? What is the criteria ?
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When you start having series of losers that are outside of normal bounds and more than expected drawdowns.

Check out Acrary's posts back when he started his system development thread. Very good stuff.
 
Quote from ElCubano:

the most common and most costly is being underfunded and having no rent money .... if one was set with the bills and had 500k to play with it would be much easier than having 25k and having to pay the bills from there....that's why the hit ratio is so low I think...its like starting a business with very little funds...
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Although it is stated often, about the need to be well funded. Whether you start with 50k or 500k the market will (needs to) find your uncle point.

Everything is a double edge sword in this game.
 
Quote from MrPowerBallad:

Not looking at the daily economic events calendar should probably be on the list.
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Good point, I have been burned once or twice by being lazy and doing that, then missing a speech or meeting somewhere. Nothing like scalping for a few ticks and getting hit with an instant 2-3 handle move in your face.
 
Quote from Unit001:

the greatest mistake you could make, is to give up. Giving up is what does most of you in. People simply can't put in 5 years or more of work, and that's what it takes.
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for the vast majority, the greatest mistake is not giving up, but giving up not soon enough.

It seems there are plenty of guys here throwing away golden years of their working life, generating commissions for 'prop firms', going nowhere.

say you and your classmate graduate at the same time... he took a regular office job, starting at $50k, with raises and job hops, 5 years later he is at $100k, and put away $50k a year in the retirement account, that money then compound at historical return of 6% + inflation.

you on the other hand, wasted 5 years going nowhere, no have nothing to show for, have no experience to look for a real job, may have to start working part time somewhere, may have to go back to school, then get back to the real career track.

You do the math, at age 60, your classmate is gonna worth $millions more than you do.

That, my friend, is the most costly error you can make with your life.
 
I agree with in theory but less than 5% of people are able to put away 50% of their income away in a retirement account.

The average person is most likely at 10%. Trying to do half your income is not feasible for most people.



Quote from dozu888:

for the vast majority, the greatest mistake is not giving up, but giving up not soon enough.

It seems there are plenty of guys here throwing away golden years of their working life, generating commissions for 'prop firms', going nowhere.

say you and your classmate graduate at the same time... he took a regular office job, starting at $50k, with raises and job hops, 5 years later he is at $100k, and put away $50k a year in the retirement account, that money then compound at historical return of 6% + inflation.

you on the other hand, wasted 5 years going nowhere, no have nothing to show for, have no experience to look for a real job, may have to start working part time somewhere, may have to go back to school, then get back to the real career track.

You do the math, at age 60, your classmate is gonna worth $millions more than you do.

That, my friend, is the most costly error you can make with your life.
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Quote from dozu888:

for the vast majority, the greatest mistake is not giving up, but giving up not soon enough.

It seems there are plenty of guys here throwing away golden years of their working life, generating commissions for 'prop firms', going nowhere.

say you and your classmate graduate at the same time... he took a regular office job, starting at $50k, with raises and job hops, 5 years later he is at $100k, and put away $50k a year in the retirement account, that money then compound at historical return of 6% + inflation.

you on the other hand, wasted 5 years going nowhere, no have nothing to show for, have no experience to look for a real job, may have to start working part time somewhere, may have to go back to school, then get back to the real career track.

You do the math, at age 60, your classmate is gonna worth $millions more than you do.

That, my friend, is the most costly error you can make with your life.
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No, the most costly error is wasting 40 years of your life doing something you hate so you can be an old millionaire.

Not to mention, the vast majority do not retire millionaires. Most people don't start saving til their 30s, most put away maybe 10% of income from then on. Most don't earn 100k+. Some working stiff saving 10% of $60k per annum will put it in stocks but sell in bear markets at the lows, chase hot trends and get raped when the bubble bursts. After 3 decades of this he'll have saved 180k and probably grown it to 250k (real terms) after taxes. That is not enough to retire comfortably on. And this assumes he doesn't get raped by divorce, alimony, child support, or medical problems.
 
Quote from dozu888:

for the vast majority, the greatest mistake is not giving up, but giving up not soon enough.

It seems there are plenty of guys here throwing away golden years of their working life, generating commissions for 'prop firms', going nowhere.

say you and your classmate graduate at the same time... he took a regular office job, starting at $50k, with raises and job hops, 5 years later he is at $100k, and put away $50k a year in the retirement account, that money then compound at historical return of 6% + inflation.

you on the other hand, wasted 5 years going nowhere, no have nothing to show for, have no experience to look for a real job, may have to start working part time somewhere, may have to go back to school, then get back to the real career track.

You do the math, at age 60, your classmate is gonna worth $millions more than you do.

That, my friend, is the most costly error you can make with your life.
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Yes, but let me guess, you never gave up and are now a very profitable trader.
 
many portrait the corporate life as this monster... and the moster does sound scary to some fresh grads, who are used to the free-wheeling lifestyle on college campus.

think of it this way... bottom line is we want to make money, while having fun doing it.... so it's a 2-piece puzzle, easy.

How do you weight the 2 pieces in selecting a career, between money and fun, should it be 50-50? 60-40? 80-20?

Only a complete idiot will put 95% weight on fun, 5% for money. With negative sum game, trading is probably one of the worst careers out there. If you think of yourself as a grown-up, then get real.

Take a look at your choice again... why do you trade?

For the money? wrong answer. Negative sum game.

For the thrill? do a brain storming and find a career with thrills, and that PAYS

For the freedom? forget it.. trading is like running a small biz, and usually small biz owners work much harder with longer hours than corporate jobs.

Or are you simply anti-social? then you need to fix the root problem. Trading is not gonna be an escape.

I am not advocating to get stuck with a job you hate for 40 years.... as a matter of fact, if you hate your job, the money will NOT be there... Money will follow you if you find something you love.

Then you say, you love trading!

Wrong again - read above - negative sum game!

I meant find something you love, with POSITIVE expectancy!
 
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