Mistakes are made

A few weeks ago I wrote to you about some of the biggest lessons I’ve learned in my time as a trader. This week, I’m going to continue that conversation by sharing with you some of the biggest mistakes I’ve made (and the lessons that you can take away from them).

My hope is that you won’t do the same!

Mistake One…

Learn that trading needs to fit your lifestyle, not the other way around.

As an enthusiastic person by nature, when I first started trading I wanted to dive in headfirst. I’d find promising tickers or a five-star setup and snap it up. So, what’s wrong with buying a perfect setup? Well, at the time Leo was an infant, and I didn’t have time to sit in front of the computer all day. I’d find great entries, but then sometimes be too busy to catch the perfect exit. My mistake was not balancing my trading with the other aspects of my life, but luckily it’s easily corrected!

Everyone’s different. Your schedule, your requirements, and your time are unique to you. So in order to not make the same mistake, you have to find a trading style that works for YOU. For instance, your friend may be a great day trader because they can allocate more hours in the day to watch the market, but perhaps you love long term trades because it gives you the flexibility to step away when it’s necessary. And don’t forget to always reassess your lifestyle and how trading fits into it. Your life is constantly changing and your strategies should be changing along with it. Gone are the infant Leo days and I’ve adjusted accordingly!

Mistake Two: Learn that you’ll have losses and that’s okay.

One of the lessons I wrote about in a previous newsletter was about not focusing on chasing money because it leads to people making mistakes. Another mistake people make is just the opposite — it’s when they stop trading out of fear of loss. Understanding that you’ll lose money in the market is a reality every trader must face. No one can have a 100% success rate. But don’t let this thought paralyze you into missing big opportunities. In the beginning, there were times where I saw a momentum move on the rise and I sat out because I didn’t want to lose money. Don’t do this! Instead, find a risk to reward ratio that you’re comfortable with and go with your gut. Otherwise, you’ll be left on the sidelines while everyone else gets a slice of the action.

Mistake Three: Learn not to get too emotional.

Trading is emotional by nature. Steaks are always high when you have money on the line. So when things aren’t going the way you expect, you can begin to act recklessly.

I’ve written to you before about recognizing your Trade Monster and how to tame it — this is the concept that I’m talking about here in Lesson Three.

It’s when your Trade Monster comes out, that you need to recognize it and stop it before it rears its ugly head. Your Trade Monster can come out when you’re trading both to the upside and downside. If you make a great win, you have to come off your high before you trade again. Otherwise, you could be a victim to euphoric trading. If you take a big loss, you have to let it go before you trade again. Otherwise, you could be putting too much risk on a trade in an attempt to earn your loss back. What’s helped me is to write my rules down and reference them with every trade I take. This way logic (not emotion) is leading my trading.

What are some trading lessons you’ve learned?

4 thoughts on “Mistakes are made”

  1. Check the emotions at the door! Like any great pilot, have a check list for takeoff and landing (entry and exist). Rules are rules because they are the Rules. Discipline, Dedication, Determination , followed by more Discipline. Be true to your word and yourself.

  2. Overtrading and Over leveraging are the twin trading demons that i have to conquer
    I am still working on them, though much better now having joined simpletrading.com
    Thank you Danielle for sharing your experience.

  3. do not chase let the trade come to you fomo is real and always have an exit plan know where you will take profits and have hard stops the #1 thing that helped me out was not over tradig


Leave a Comment

Up Next...

Trade Review: Using a Neutral 0 DTE SPX Strategy

  In today’s Trade Review episode, I cover a quick SPX 0 DTE trade from last Friday at market close. In this video review, I cover: Why I decided to make a bet that the market would trade sideways into the close How I analyzed the options chain and technical chart patterns Why I decided … Read more

Read More

Butterflies + Put Credit Spreads Combined

A Bullish Earnings Call Last week, in the trading room, one of our members requested that I analyze the ticker AAP. This ticker belongs to Applovin, a company I’ve never traded before. This find is a prime example of the collaborative aspect of the trading room, and it’s why I appreciate our dedicated traders so … Read more

Read More

Walmart: Earnings in Focus

Walmart Earnings: May 16th Walmart is reporting earnings on Thursday, May 16th, before the bell. This is one of the most important earnings reports this week because it will show investors how the largest retailer in the United States and the world is faring. Between high inflation, consumer sentiment, and behavior, various factors could impact … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now