I've read a lot of books on trading. It's funny, but you know all of those mistakes you tend to read about in these books? I seem to make a bunch of those mistakes. I don't learn from my mistakes till I screw up a bunch of times. Lets see, here are two of my favorites:
Overtrading -> check. One of my favorites. Part of the reason for this blog is to make me busy so I won't just trade to much or without good reason. Reading other, more competent traders online makes me want to do something. So I overtrade on some weak justification.
Overriding my indicators -> check. You see, I'm a genius (LOL). I know better than the highly trained, super smart folks who do this stuff for a living. Sure they have decades of experience, supercomputers, and time tested strategies. But I ... umm. I just seem to think I know better. My last bear call spread on the NDX should have been sold at a profit, but I held on to the spread, it is now a loss. Which brings me to ...
Holding on to losers -> check. I should be selling my losers quickly. On my NDX bear call spread (-5 NDX jun 1925c / + 5 NDX 1950c) I got a buy signal on the MACD on Monday. I should have taken it. Once the trade became a loss I should have closed it. I don't do this as often as I used to, but when I get cocky I make mistakes.
Top / Bottom calling -> check. I'm too smart to follow a trend. I need a challenge.
Emotional Trading -> Don't trade on emotions. I got over this one after getting smoked day trading a few years ago. But I still feel the fear often enough to list this one. I think it kind of ties in with overtrading.
Perma-Bearism -> A chronic condition I suffer from. It's a twelve step program I'm in. I'm good enough, I'm smart enough ...
The list goes on. Maybe I'll finish it some day. I'm activly working on these issues. For me, these are my top trading faults. Perhaps I should use these as a checklist before I make my next trade and see if I am trading wisely.
I like that idea.
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