Hey Traders,
We’ve all done it… had the perfect trade lined up… timing was perfect… the stock was looking good…
And then something goes wrong!
You click the wrong button… or maybe pick the wrong expiration date on an option…
As if markets are tough enough on their own, sometimes we can be our own worst enemy.
To save you time, frustration, and hopefully money…
I’m baring all and sharing the list of the biggest market mistakes I’ve made…
Yes, believe it or not, in nearly 40 years of trading I’ve made each of these mistakes!
Mistake #1 – Not knowing your platform
I know it’s exciting to get in there a “do something”…
But if you’re just getting started with trading… or if you’re using a new platform that you’re not familiar with… slow down!
Take a deep breath and make sure you know what you’re doing before you click that mouse.
There will always be a great trade around the corner, but your precious capital is limited and you don’t want to waste it by clicking the wrong button or not understanding what you’re doing inside your trading platform.
Mistake #2 – Wrong ticker
Have you ever traded the wrong ticker? Statistics show that you’re not alone.
Sometimes people typing fast will trade TLSA instead of TSLA.
Or maybe they guessed at a ticker, like people who trade FORD instead of F. The second one is actually Ford Motor Company.
Back in 2013 when Twitter filed to go public, a bunch of people went out and traded TWTRQ, causing it to surge over 1000%…
Big mistake. Twitter wasn’t even on the market yet! And when it finally started trading a month later, the ticker symbol was TWTR. Never guess!
Mistake #3 – Forcing a trade / Boredom trades
You just funded an account, you’re reading market news. You’re excited to click some buttons and make a fortune.
So you see something that kind of looks like a setup and you click and BOOM you’re in the trade.
Next time you know, it crashes — or goes sideways — and you’re left holding the bag.
Never “trade just to trade” — It’s the fastest way to the poor house.
Mistake #4 – Trading against the broad market
In most cases, I try to trade with the broad market. It’s not a 100% rule. But if you are going to go against the broad market, you have to have a VERY good reason.
Think of it like swimming in the ocean and using the wind and waves.
When the ocean is going in one direction, you waste a lot of energy trying to swim the other way. It’s the same with stocks.
Mistake #5 – Placing a trade without being 100% sure of what you’re doing
This is similar to #1, but I specifically want to talk about understanding your strategy.
Maybe you’ve only ever traded stocks and you want to start trading options.
Or maybe you’ve been trading options and you’re getting started with advanced options strategies.
Always make sure you understand the strategy you’re trading before you ever place a trade.
Mistake #6 – Don’t “sleepwalk” through your trades
Here’s another mistake that’s might seem similar to #1. But this is a little different.
Even as a pro, I’ve placed a trade when I was in a bit of a rush, or not paying close enough attention… in other words “sleepwalking” through a trade.
Once, I actually placed a debit spread trade when I meant to place a credit spread!
If you don’t know what that means, I basically took the exact opposite position that meant to take.
Thankfully, I went back to check my trade and I closed it out in a hurry.
When you’re trading, treat it seriously, like getting behind the wheel of a car.
Mistake #7 – Forgetting about a trade
Have you ever bought a stock and then thought you sold it… Only to find out you didn’t ever put in the sell order?
Now the stock is down 10 and you have to take a loss. The most painful part of this is when it was a winner that you just forgot to book and now it’s turned into a loser.
Mistake #8 – Trading with money you can’t afford to lose
Did I ever tell you about the story about when I was a young stock broker working in New York City…
I went half and half with a friend of mine on a “sure thing” option… I thought I was going to fly home to Indiana first class like a Wall Street Bigshot to impress my family and friends.
But that “sure thing” option expired worthless and I had to borrow money for a bus ticket and come home with my tail tucked between my legs.
Never, never, never, never spent money you can’t afford to lose in the market. It doesn’t matter if you think it’s a sure thing. It doesn’t matter if you got a good tip from someone.
I’ll even say this: even if the trade works out, you made a HUGE mistake.
Mistake #9 – Letting a little loss turn into a big one
The market will throw you every kind of curveball you can imagine. We’re all going to be wrong at some point, no matter how good of a trader you are.
Amateurs stick with a trade hoping it’ll come back up eventually…
Smart traders know when to close a trade and move on to the next opportunity.
“Live to trade another day” is the best way to trade.
Mistake #10 – Not knowing when to take a huge profit
This is the opposite of #9 – a trade you enter goes to the moon.
But you keep holding on, thinking how bad you’ll feel if you sell early.
Guess what? No one ever went broke taking profit.
Mistake #11 – Not starting with the end in mind
This is related #10. Before you ever enter a trade, you should know your exit plan.
At what point do you book a loss and move on?
At what point are you willing to book profits and close out the trade?
Whatever your specific answers are, you should NEVER enter a trade without an exit plan.
Summing It Up
Was that tough to read? Have you ever made any of these mistakes?
Or maybe, like me, you’ve made ALL of them? Don’t feel bad, it’s only human.
Just remember: trading isn’t just about big wins. It’s also about avoiding mistakes.
The smart traders learn from their errors and form a plan for how to not repeat them.
Later this week, I’ll share with you some ideas on how to avoid each of the mistakes I’ve listed here.
Trade well,
Jack Carter
P.S. Want to trade with more confidence? My latest project, Profits Countdown Club focuses on identifying high-probability trades based on massive Wall Street money flow, taking the guesswork out of stock selection and trade setups.
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