What are the biggest mistakes a trader should avoid in stock trading?

Discussion in 'Professional Trading' started by Vincent S. Ashmore, Dec 25, 2015.

  1. What are they?
     
  2. Trading a big account when you don't know how to control risk.
     
    AAAintheBeltway likes this.
  3. Trader22

    Trader22

    Underestimating the power of emotion
     
  4. arna

    arna

  5. You can read endlessly on these type of typical cliche trading rules...but they won't really register with you unless you actually start trading and inevitably more or less encounter all of them to a certain degree. :vomit::eek:

    All successful traders have their so-called battle scars where/when they sharpened their teeth and mettle. :Hell Yeah:
    [​IMG]
     
    Last edited: Dec 25, 2015
    d08 and onemoreshot like this.
  6. 1. Not trading with stops.

    2. Taking too big of a position relative to the normal daily handle. If a trader, you want to be able to buy and sell without moving the market much. It's rarely advisable for you to "become the market" because of your size position. Personally, I don't make a play bigger than 0.5% of the usual daily handle in thinly traded issues. That makes my position about 1/200th of the usual trading market, and that's plenty. Even those are relatively extreme cases. I prefer to trade in the big and liquid markets... where I can come and go without making a dent in the bid/ask.

    Big-Time players like hedge funds and Carl Ichan take 8-10% positions in a stock. Those are not "trading" plays.
     
    Last edited: Dec 25, 2015
    aqtrader and Handle123 like this.
  7. Q3D

    Q3D

    Purchasing Al Brooks books, webinars, or courses. Or, however tempting, attending his swanky Vegas expos.
     
  8. Day trade with TA.
    Thinking they can outsmart the volatility in short term Trading ( aka playing with noise).
     
  9. HOGWASH!

    Proper TA is applicable to all time frames.
     
  10. Just download a random number generator online, run it and assume one pip up when you have the even number and one pip down for odd number. Another more fun way is go to casino and look at roulette, plot it as one pip up when it is dark, and one pip down when it is red.

    Plot those data and compare with your favorite chart and see if there is any different ? You can use TA to predict the next move and try to make money out of it. The outcome is always the same.
     
    #10     Dec 25, 2015