Trading Mistakes

Discussion in 'Trading' started by Cutten, Nov 17, 2008.

  1. What are the most common, damaging, and avoidable mistakes you can make in trading? Let's start a list - I'll throw in a few to begin.

    1) Taking too much risk/trading too much size
    2) Letting a loser get out of hand
    3) Failing to have a stop
    4) Not having a trading plan
    5) Going "on tilt" e.g. revenge trading
    6) Getting married to a position
    7) Thinking "it's different this time"
    8) Trading on tips, rumours etc
    9) Taking profits just because you have them
    10) Being inadequately capitalized
     
  2. I can think of two off the top of my head:

    1. Improper backtesting & curvefitting of data.

    2. Overtrading or trading when your system/plan is flat.
     
  3. Knowing the market and seeing the market are requirements. In a partnership with the market, the market offers (speaks) and you obey.

    The principles are few and complete.

    1. Price change is how money is made,

    2. You have to be in the market to make money.

    3. You have to be on the right side of the market to make money.

    4. The variables of the market, P and V must be regarded and the market follows the P, V relationship.
     
  4. 11) Spending too much time at message board sites. :cool:
     
  5. Good ones Mike. How about:
    1. Not using market volatility metrics in trade size calculations.
    2. Not enough system diversification.
     
  6. 12) Surfing porn on the net - especially during the trading day
    13) Posting *anything* on *any* "chat" or "politics" or "religion" forum, *anywhere*, *ever*.
    14) Following "gurus"
    15) Not paying much attention to mistakes, thinking about big winners, success etc.
     
  7. 16) Leaving the workstation unlocked and at risk to cat paws. Can you say hotkeys?
     
  8. Darshan

    Darshan

    I have to say hands down it's not hitting your out and averaging into a trade...

    Surfing the web is a bad habit I have. I'll be surfing, I'll see something from the corner of my eye, jump in and !wham! get nailed

     
  9.  
  10. Not taking a loss quick enough, not being patient enough before entering a trade

    Then there are also stupid fat finger mistakes I make occasionally, buying instead of selling for instance.
     
    #10     Nov 17, 2008