Trading Mistakes to Avoid – Intro

Since ancient times, people have speculated on goods, hoping to profit from rising or falling prices. If you trade stocks, options, or other financial instruments, you’re doing the exact same thing. You buy stocks or calls when you think prices will rise and sell when you think they’ll fall. If you’re right, you make money. If you’re wrong, you lose.

It’s really as simple as that. Trading is a game of chance where you risk your money on every trade. It’s probably the only “job” where you can do everything right, put in a full day’s work, and still come out losing money. Why? Because you are at the mercy of forces beyond your control. You might do all the research and analysis humanly possible, and believe with all your heart that a particular stock will go up—so you buy it. Then, out of nowhere, a news story breaks, a new regulation is passed, or a major hedge fund dumps shares to raise cash, and BOOM, the stock tanks, leaving you with a hefty loss.

You did everything right, but you still lost. How frustrating is that? Unfortunately, it’s part of the game, especially for retail traders like us, who are at a severe disadvantage compared to professional and institutional traders—what’s known as the “smart money.”

We’ll dive deeper into the smart money later in this book, along with strategies for trading with them instead of against them. But make no mistake: as a retail trader, you’re handicapped. You’re like a toddler swimming a race against Olympic athletes.

Still, you can make money as a retail trader—plenty of people do. But to get there, you’ll most likely have to go through the long, painful process of making mistakes and learning from them. Let me be clear: you will lose money. Everyone does. Read the Market Wizards books and you’ll see that every one of those legendary traders blew up accounts early on.

Ironically, the worst thing that can happen when you’re starting out is making a lot of money quickly. That’s because it’s almost always due to dumb luck, which will inevitably run out. Worse, it gives you a false sense of confidence and makes you bet big as if you actually know what you’re doing.

I know because it happened to me.

I started trading in the spring of 2020, not long after the market hit its COVID lows and began its epic march back up. On paper, it was the best time to start trading—everything was going up! But from a learning perspective, it was probably the worst.

Here’s what I did: after learning the bare basics of technical analysis, I dove right in. I bought as much TSLA and AAPL stock as I could afford, along with deep in-the-money calls. My “plan” was to hold until they split in August, then sell.

It worked. I turned $50,000 into $150,000 in a few months. Trading is easy! All I could think about was how much money I was going to make.

In hindsight, tripling my account so quickly was the worst thing that could have happened to me. My profits weren’t the result of skill, discipline, or risk management—they were the result of dumb luck.

Flush with confidence, I entered 2022 ready to trade my way to riches. And then the market pulled back hard, and I had no idea what hit me. I thought stocks just went up forever. I kept trading, and before long, I gave back all my profits—and then some.

Welcome to the reality of trading.

It took me years of trading, losing, and learning to finally become consistently profitable. I learned a lot—mostly from my mistakes. I still make mistakes, but far fewer than I used to. I also try not to repeat them (though it still happens sometimes). Mistakes are part of the job—even for the most experienced traders.

The most important thing I’ve learned is that successful trading depends far more on risk management, psychology, and understanding how the market operates than on finding the “perfect” strategy or chart pattern.

I’ve written this book to help you avoid some of the most common trading mistakes—mistakes I wish I could have avoided when I first started. I won’t cover every single mistake traders make, like fat-fingering an order or not getting enough sleep. I also haven’t included charts because the lessons here aren’t tied to any particular setup, and charts never look great in print. If you want to see one, you can pull it up in seconds on your computer.

Instead, I’ve focused on giving you clear, honest advice that’s easy to digest and put into practice. I’ve also shared some of my personal experiences to help bring these lessons to life.

I hope this book saves you time, money, and frustration—and helps you become a more successful trader.

To your success!