The 30 most costly trading errors

[tomahawk]

I agree with all the comments about averaging down ... very risky, and very strict controls required in order to do it and survive, whether you're retail or pro. I have seen edges that involve a moderate amount of scaling though, with stops.

But in general, few of us can (or wish to) survive a single-day hit upwards of high 6 figures the way some of these pit guys apparently do when they average themselves silly.

 

[c1user]

Great thread throughout. The initial list is a keeper, and true. My personal epiphany of late is to adopt the mindset that trading is mechanical and about probabilities. Stocks and the market do not know me or have anything against me. The market wants my money, and I want theirs, just business.

A losing trade yesterday in a particular stock does not mean the stock is a loser for me forever. It means my timing/positioning was off and needs to be corrected, if I still think the same way about the stock.

I am improving my use of judgment and intuition while leaving the emotion out. I need to act faster on my decisions and reduce the analyzing when I already know the answer and am just looking for more reassurance.

The ongoing battle is to control greed, but the trailing stop takes that decision out of the equation and calms things down. There will always be another opportunity tomorrow, I have to make certain I have the ability to act upon it.

- My first post on ET. Good site.

 

[QQQBALL]

I've been focusing on a few things lately.

!) Discipline over conviction (Todd Harrison)

2) Trade what you see, not what you think(I believe Larry Pesavento said this, but could be wrong).

I've been teaching my daughter to trade via a QQQQ system - its like a very thorough test & review of everything you think you know... It takes you right back & breaks everything down.

If you could get a great mentor right outta the gate, you would be so much better off...

 

[tomahawk]

Quote from c1user:



The ongoing battle is to control greed ...

So true ... that means making sure you have ENOUGH of it as well as not too much (the former being something I often find myself at fault for).

 

[TraderSystem]

Quote from c1user:

Great thread throughout. The initial list is a keeper, and true. My personal epiphany of late is to adopt the mindset that trading is mechanical and about probabilities. Stocks and the market do not know me or have anything against me. The market wants my money, and I want theirs, just business.

A losing trade yesterday in a particular stock does not mean the stock is a loser for me forever. It means my timing/positioning was off and needs to be corrected, if I still think the same way about the stock.

I am improving my use of judgment and intuition while leaving the emotion out. I need to act faster on my decisions and reduce the analyzing when I already know the answer and am just looking for more reassurance.

The ongoing battle is to control greed, but the trailing stop takes that decision out of the equation and calms things down. There will always be another opportunity tomorrow, I have to make certain I have the ability to act upon it.

- My first post on ET. Good site.

Welcome, c1user to the forum. Your post was also very interesting and you have a good positive outlook to trading.

 

[chipmunk]

1) Taking too much risk! Shooting for huge gains and not thinking about the losses this will put you through..

I guess it all comes down to education.

Newbies rush in trying to make $1m before xmas. Lose it all. go back to Mcdonlads. Save up. Go again.

 

[11Bettega11]

not taking any time off is another common mistake. This can result in exhaustion and poor performance.

 

[SuperCruz]

Quote from 11Bettega11:

not taking any time off is another common mistake. This can result in exhaustion and poor performance.

A very good point and the most overlooked one in today’s stressed and mad rat race world. Thanks for reminding us of it!