Saturday, January 26, 2008

Top Ten Trading Mistakes

I'm the guy that's made every mistake in the book. If Dr. Steenbarger were to write another book, the whole book could indeed be about me and all of my mistakes posted on this blog. Today, I'm going to review my top ten trading mistakes.

10. Getting up late and missing the morning open.

9. Trading the afternoon dull drums and churning all my morning profits.

8. Trading counter trend, especially when market internals are heavily favored in one direction (Advance/Decline has strong bias and market up/down volume has strong bias)

7. Trading from open to close without a break or lunch, causing mental exhaustion and poor trading performance in the afternoon.

6. Letting a scalp trade turn into a short term trade or overnight trade.

5. Letting a winning trade turn into a loser.

4. Taking impulsive trades that are not part of the system I've designed.

3. Widening my stop or using no stop at all.

2. Adding to losing positions.

1. Trading too large of a position for the account size, causing emotion to control the trade instead of the system I've designed in advance.

Exrta Mistakes regarded to trading-

1.Not taking profits at the end of the month and waiting for a bad day to come around so I can lose all of the gains for the month in one day.

2.Trading before I have to leave for work or an appointment causing added pressure on open losing positions.

3.Having an open position before an economic # is released or before FOMC makes interest rate announcements.

4. Trading OPEX Friday and the day after OPEX Friday. (Seriously, take Trader Mikes advice on this one.

I've opened up the comment section for registered people. No more anonymous comments.


Blah123 on 9:58 PM said...

Ignore the fools

Every expert trader has had multiple blow ups like yours

You will become elite in no time because:

Your attitude about this is great

You analyze your mistakes and correct them

It's that simple

Troy on 9:58 PM said...

Your number 5.

Anonymous said...


Ignore Steenbarger and all that psychobabble. In reality, he doesn't know you. You don't know him. So don't put too much stock into his analysis...reminds me of the psychiatrists that would go on CNN and tell us all about OJ. I know I probably sound like an idiot when I say that...but there it is. You know exactly what to do. I hope you don't puss out on yourself. I jumped on the bandwagon and called you out for emotional jackassery, but did so as a fellow trader who has done the same. Now get back in there and do your thing man. You're too good let one blow-up stop you.


mindfook on 12:09 PM said...
This comment has been removed by the author.
Trading Goddess on 2:25 PM said...

lol! @ jackassery!

yarddog on 6:52 PM said...

Great blog, only another trader could appreciate that negative P/L and the top ten trading mistakes. I have done every one of them, plus some. Hell, I have even done some of them twice after swearing I would never do that again.
BTW, I totally got the Trader Mag joke. Hell, I just want to make a living not drink a bottle of 15K Cognac while flying aboard my new gulfstream jet, wearing a new suit that cost more than my cumulative entire wardrobe going all the way back to my first diaper. (I wouldn’t mind having a fishing yacht stocked full of Bordeaux wine…lol)

A great trader told me that “the market is like a psychiatrist. She knows all of your weaknesses and if you let her, she will exploit them with no mercy.”

I know you can recover from this, and you do to. You are probably pissed off as hell at yourself.

Before you can get your head back in the market, you will have to forgive yourself for your latest shenanigans.

good trading,

JFreeman on 6:56 PM said...

Hi there,

I got to know your site due to your infamous video clip last week. At first I thought you were just a gambler who wanted to strike it rich w/ futures and got burned badly in the process. but after reviewing all your posts from 2006 I realized you actually know what you're doing and your recent blow up was due to deviation from your own plan/strategies. don't give it up. let this be a valuable lesson that you'll never forget. i'm quite confident that in due time you'll do quite well. you just gotta not let greed overcome you and just follow your plan accordingly(always have stops). also, i read in one of your old posts that you're back in school for RN. i was also a premed in undergrad but didn't make it to med school. if i were you, besides the RN program, i'd also look into anesthesia tech program or physician's assistant program. the pay/demand is high for both and hours are relatively more reasonable.

i enjoy reading your website and hope you'd keep up the good work. good luck to you. btw, have you ever used point and figure charts?

FX on 1:29 AM said...

In 10 years when you get your chapter in some new market wizards book that blow up video would be most interesting part. That's so nicely documented blow up and example of psychological state in which holding negative position can take trader.

sage08 on 2:25 AM said...

I'm glad i found your blog. It's got link to virtual offices of part time traders just like myself, who are not afraid to tell the world abt screw up days. I'm not alone! Cool and keep this up!

Rod on 4:43 AM said...

I have said this before ... "you have it in you to trade yourself out of this situation ..."

Remember, there's nothing impossible in this game - this is the best money game that I have come across in my life - what a trader needs to do to make consistent money once he or she has become experienced, is to keep focused on the game and apply the rules that he/she has learnt - comparing the life of a professional trader with that of a professional racing driver, which one would anyone want to be ...? ... traders can make loads of mistakes and still end up winning at the end of the year but can a racing driver do the same? So thank god me and you are in the earlier category!

Hope to see you back on the winnig side soon.

Anonymous said...

Impulsive trades, especially when I'm down, seem to be my greatest weakness.

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