20 Most Common Trading Mistakes: And How You Can Avoid Them

Introduction:

This is a book about trading mistakes. It is not, however, a negative book. Each mistake is followed with the information and steps you can take to ensure these mistakes need not happen to you. The mistakes discussed within the pages of this book are the more common mistakes made by traders in general, the world over, regardless of the markets they trade. They apply to stock market traders, foreign exchange traders, traders using tic charts to scalp the equity indexes, traders using long-term breakout systems to trade futures or stocks, and everything else in between.

While the title refers to 20 mistakes, there are actually far more than that covered within the examples and experiences shared by the interviewees. I encourage you to read and study the contents of each chapter carefully and look out for the hidden gems. Often the remedies for the varying mistakes are similar — one remedy might cure a number of ills.

Trading is a wonderful business for those prepared to take the time to learn about themselves and the markets and to do the hard work necessary to become consistently successful. Disciplined, patient and consistent traders will be well rewarded for the time and effort they put in. Those who lack discipline and patience will suffer at the hands of the master of fear and the mistress of greed. They will bounce around from one idea to the next, one broker to the next and one system to the next with no clear plan in place for what they are doing and what they hope to achieve. Eventually they will dwindle away their trading accounts to zero, or stop trading altogether through frustration and stress.

Too often impending traders are sold the dream that trading is easy, and that once you have mastered a few basic skills you can lie on a beach on a deserted tropical island and watch the cash roll into your bank account in a protected tax haven. Nothing could be further from the truth. As with any profession or business, trading requires learning and skill development, a plan and lots of ‘blood, sweat and tears’ before it becomes rewarding. Despite the media hype, no-one is an ‘overnight’ success in trading—or any other venture in life, for that matter. Many of the traders interviewed in this book struggled for years before becoming an ‘overnight’ sensation or whiz kid. They were then able to build on these experiences and what they had learned from the markets to become well recognised for their trading prowess.

All of the interviewees will openly admit that they never stop learning—and neither should you. The markets will continue to change and evolve in the years ahead as new products are made available and technology continues to advance and change the way we trade. As traders we need to constantly evolve, learn and grow with these changes. Through education, awareness and studying the results and experiences of those who have gone before us, we can continue to actively participate in these markets without necessarily having to reinvent the wheel.

Regardless of your level of skill or knowledge you will learn from the experiences shared by the traders and market professionals who have contributed their time and knowledge to this book. Be it the simple necessity to always trade with a predetermined stop-loss, the personal issues of how to manage your own biases and psychology, or more complex issues concerning money management and risk management models, the examples and testimonials of these market professionals are enlightening and encouraging. Many have been happy to openly share personal examples of the mistakes they have made and how they have learned from these mistakes. This honesty and acceptance is what makes them all true professionals in their field. If you aspire to consistent, rewarding and profitable trading you will gain much from reading the stories shared within.

Contents:

• It’s not my fault — I didn’t even know it was a mistake!
• The horse goes in front of the cart
• Failing to plan is planning to fail
• Get that monkey off my back
• Nice knowing me
• Easy come, easy go
• Complex complexity
• Too many contracts, not enough shares
• 1000 per cent return in three days — sure, it happens all the time
• Heads, I win; tails, you lose!
• Bet big to lose big
• What’s the time, Mr Wolf?
• Where the is the exit?
• But the guy on TV said it would go up tomorrow!
• Half price and still too expensive
• I’m right! The market’s wrong
• The emotions of a robot
• Overworked and underpaid
• Fat fingers, 10 000 too many, and busting trades’
• I’m sure I filed that somewhere …

20 Most Common Trading Mistakes: And How You Can Avoid Them By Kel Butcher pdf