Trading Mistakes

[Birchtree]

My first rule of investing is only believe 50% of what you read and none of what you hear.

 

[amoeba]

mistake-free trading for me starts today

Excellent post - I have vowed to not make any of these particular mistakes for the next year - here is a summary of what I am following and what I am not:

1. Fishing for Bottoms - yes - I have done that several times this year. Got taken to the cleaners...even at 1,090

2. Timing tops - yes - me again, tried that this week....taken to the cleaners, even after a runup of 11%.

3. Trading against the dominant trend - not really - I just do #1 and #2.

4. Winging it - yes - I sometimes use IFT's just because I have them, or haven't made one in awhile.

5. Taking it personally - yes - but only because I have been so bad at it, and have a history of 4-5 bad trades in a row.

6. Falling in love - no - I don't keep TSP funds because I like them, birchtree does that. He will never get back to even because he buys and holds stock funds that go nowhere for decades.

7. Using after-market prices - no - it is just not a consistent predictor;

8. Chasing runaway trend - yes - in fact, I just did that yesterday.

9. Averaging down - yes - in fact, I just did that today.

10. Ignoring your stops - no - and that's the only reason I'm in positive territory

11. Diversifying badly - no - I do diversify TSP always; and that is another reason I'm not at the bottom of the chart.

12. Enduring large losses - no - and that's why I have never had a negative year - but I fear that may end soon.

 

[Birchtree]

Are we having fun yet? I'd throw you some rope but ...

 

[Rod]

This bumps' for you...

 

[TSPIntel]

The biggest mistake, in my opinion, is not to have an exit point when there is a sytematic bear in place. Second biggest mistake is selling at the bottom.

 

[TSPIntel]

The best psychology in my opinion is to apply the virtue of patience going in and going out...

 

[RealMoneyIssues]

Not having a plan BEFORE you start a trade...

 

[nnuut]

Letting emotions steer your moves.

 

[Boghie]

My most expensive mistakes have been to get overweight into equities too early 'after' a correction. I've done that a number of times.

My most current mistake is to assume a correction is just around the corner.

Kinda the same mistake, eh...

 

[Frixxxx]

Not starting soon enough!

Not watching what is going on!

Thinking I'm an expert!

The other stuff is minutiae, but impacting.

 

[JTH]

Letting the F-Fund pay you nickles, when the C-Fund is paying out quarters...

 

[Bronco07]

Planning a future retirement date without a income plan to support the thought process ....... assuming funds from social security, TSP, & retirement funds will add up to support their mental retirement lifestyle!

It's magic ..... the money will amazingly show up & support their dream state retirement lifestyle!

(I deal with this type of mentality all the time amongst all generations in my organization)

cheers

 

[PLANO]

 

[wavecoder]

Re: mistake-free trading for me starts today

Every investor seems to be their own worst enemy. I don't have the most experience, and am far from great at it, but I tend to do a lot better the less I look at the market.

Early in my 'trading' days, I would fall into that trap of giving into fear and selling at the bottom / buying at the top. In the past few years, instead of TA I started to look more into the psychology of the market, and it really isn't rocket science. Buy when the market is fearful and sell when the market is euphoric. Ever since then I started making money instead of losing it.

Stopped trying to make sense of the market based on news as well, I just look at price action. If the markets 'made sense', then the market moves would be predictable and everyone would be millionaires. It takes practice but the only rule of thumb I have is be brave when everyone else is afraid, and be cautious when the market is overly bullish. The stock market game is designed for average joe to get sucked into bad trades, so don't think like the average joe.