âItâs hard to repeat a brilliant performance, but itâs straightforward to avoid errorsâ - Paul Graham The most costly mistakes usually have one or more of the following characteristics in common. Feel free to add your own suggestions, but only mistakes that tend to cost a lot of money, not minor errors. Also, I encourage anyone to post "war stories" where one or more of these errors was involved. Here goes: 1. Not honouring your stops. 2. Becoming seriously emotionally destabilized (going on tilt, freezing up, getting mad) 3. Allowing a big loss to become a huge loss. 4. Trying to average down on a losing position. 5. Revenge trading 6. Trading too big or too leveraged. 7. Short options premium. 8. Trading too big in illiquid markets, and getting âstuckâ on size. 9. Getting cocky after a good run or a big winning trade. 10. Having on lots of highly correlated positions. 11. Not exiting all positions and going away from your screens when you have a big destabilizing loss. 12. Getting tunnel vision - only focusing on things going right and how much money you think you will make, rather than how much you could lose if youâre wrong. 13. Being in very crowded trades. 14. Having an inadequate or non-existent plan for how to limit losses if the trade is wrong 15. Not reducing size or stopping trading during high market volatility e.g. market crashes, surprise news, gap moves, short squeeze, earnings or figures etc. 16. Major surprise market moves: especially gaps, surprise rate cuts, government/regulatory intervention, takeovers, or other shock news events. 17. Assuming you are right; not thinking of what could be wrong with your position. 18. Taking positions without doing proper preparation. 19. Thinking emotionally about the money or position size 20. âItâs the markets moneyâ - ignoring risk on positions with a large open profit. 21. Failing to double-check before & after a trade for any order entry or position mistakes - buy instead of sell, fat finger, wrong stock/market etc. 22. Failing to reconcile statements with your expected positions. 23. Ignoring counterparty & broker credit risk & financial condition. 24. Leaving open orders when you go away from your screens. 25. Staying in a position past first delivery day or on the day of contract expiry. 26. Ignoring fraud risk (if you employ anyone or give them your money). 27. Trading a deliverable contract without having delivery capacity 28. Not having redundant computer/internet/power/data/broker setups. 29. Trading while drunk, high, exhausted, divorcing, mourning a death in the family etc 30. Trading on other peopleâs tips
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.
I think he knows it better and he has been bitten with that like me. You make money 50 times (small) and once it eats all your money. Do Iron condor instead of strangle or do it on ETFs and not on individual stocks.
May I add Taking 100% accountability for/ of your actions and results and Seeing reality for what it is... not what you want it to be RN