10 big trading mistakes I've made

And what we can learn from them                                                                                                                                                                                                                                                                                                                                                                                                                 July 07, 2024 | [Read Online]( 10 big trading mistakes I've made And what we can learn from them Good morning, After 10-years as a NYS school teacher, I transitioned to teaching trading in 2011. Across the last 13 years I’ve made plenty of mistakes, here’s the top 10 you can learn from and avoid. Here’s 10 bullet points and 10 short, true stories. Gain / loss numbers are rough guesses but likely very close as these were painful moments for me. - Huge position sizes - No trade plans - Changing trade plans to try and avoid a loss - Not journaling performance - Breaking stop loss rules - Averaging down to try and avoid a loss - Keeping up with the Joneses - Using strategies I don’t understand - Gambling - Boom and bust trading Early in my career I launched a day trading service. It was very popular. The first day I got down on a position early. Embarrassed, I broke my stop loss rules, averaged down and later took a big $8,000 loss. The lesson? Stick to your plan and cut losses quick. Also early in my career, in the same day trading service, I was up huge on TVIX, a leveraged ETF tracking the VIX. I think it was like $20,000. I called my trading coach, Jeff Bishop, to tell him how well it was going. He instructed me to take profits. Members in the chat were so excited, the trade was up huge, so I ignored his advice. I was thinking we’d take the profits to take a company vacation and ignored all logic. Later that same day, Credit Suisse announced the ETF broke and they’ve halted the creation of shares. TVIX went into a death spiral, something I’d never seen before. I froze like a deer in headlights. The huge profit disappeared and I took a monster loss of $20,000. The lesson? Stock to your plan, take profits and cut losses if a trade goes from green to even. You had your chance, time to move on. I remember thinking I wanted to quit trading. Early in my career I found swing trading, 1-4 day holds, to be my favorite. I was banging out a lot of great trades on a mobile game developer GLUU. Feeling invincible on the ticker, I would often break my stop loss rules average down. And it worked for me a few times. Once, I kept averaging down across a few weeks and it never bounced. Finally I capitulated, with a huge loss. I don’t recall exactly but $30,000-$40,000. I couldn’t bare the pain anymore. As I recall within a day, if not the same day, the company had huge news and it made a monster bounce. The lesson? Don’t change your plan, don’t average down to avoid a loss. Better to come back to the trade with the good news hit, versus riding it lower and capitulating. Early in my career Eastman Kodak was on the verge of bankruptcy. I lived in that town and saw with my own eyes how the once booming film maker was a ghost town. One evening the news said an unnamed source said they’d be selling their patents for billions. The stock skyrocketed. I believed this was untrue and shorted a huge position of stock into the pump. When you short, you bet the stock will go down. It kept going up, a lot! I held overnight on the verge of a margin call, down $30,000 or so. In the morning the stock market was down about 500 points, and KODK with it. I escaped premarket for a manageable $10,000 loss before the stock ripped higher that day. The lesson? Position size too big. Broke stop loss rules. Didn’t have a plan. Shorted a first day momentum stock in the think after-market. I got good at trading penny stock momentum and was putting up some big years. Jeff Bishop made me a partner of RagingBull and I traded out of a business account. Often donating a lot of these profits to charity. Results not typical. Trading is hard. Nothing is guaranteed. My income was growing from teaching trading. I started to experiment with options trading. I’d seen so many people on Twitter posting much bigger wins than I could get on penny stock momentum. What most traders don’t know about options is the lower the price, the lower the probability one has to win the trade. I would buy $20,000 of a call option at $.50 not knowing it only had a 10% chance of profit. When it would drop to $.20, I’d add another $20,000 worth. And at $.05 another $10,000 worth, often, watching the $50,000 go to $0 on Friday’s expiry. The lesson? Cheaper options are more expensive. Keeping up with the social media Joneses is a bad idea, stay in your lane. And using strategies I didn’t understand was gambling. I don’t have the exact numbers on any of this. The numbers below, and years to follow, would have been a lot higher if I avoided this mistake. Finally, had I been journaling past 2017, it would have been hard to ignore. Not long after that I was having one of my best years of my career. I was nailing penny stock momentum still. And started selling options, which opened my eyes to an amazing edge. That’s now called the $2,000 Small Account Journey. At the time I recall thinking I’m within range of having my first million dollar year. I’d been seeing other traders hit those numbers and felt like I wanted that badge too. Instead of happiness about having my best year ever, which wasn’t typical, I made the arbitrary goal of $1,000,000. To keep up with the Joneses once again. I started taking huge positions and gave back hundreds of thousands before as the year ended. The lesson? If you’re strategy is working keep doing it, the results will follow. Changing goals midstream to hit arbitrary numbers is a sure fire path to big losses. Which spirals into revenge trading. This is how you boom and bust. Something I’ve struggled with across my career. In 2021 I was only able to trade the second half of the year and I was on the war path. I’d recently had my biggest win ever, on TSLA puts, for $250,000. I’d learned cheap options are more expensive. And delta 70+ options were more like directional stock plays but with leverage. As the year came to a close I had about $1,800,000 in trading profits. Of course this wasn’t typical, I’d never done it before. What we all know now is that was the peak off the 10-year bull market and as the saying goes, easy come, easy go. By the halfway point of 2022 I’d already given back those gains. The lesson? Boom and bust trading at its finest. In 2023 when the banks crashed I knew I’d have to wait longer for penny stock momentum to come around. The small-cap index has a lot of regional banks. So instead I started trading UVXY puts, betting against fear. And IWM calls, because of the extreme volatility. I’m very experienced with UVXY puts and IWM calls and puts. I was up hundreds of thousands early in the year. I felt invincible again. And starting betting big that Charles Schwab stock would bounce back. But I’d never traded Charles Schwab before. And I’d never trading a bank stock in a bank crises. The calls didn’t work. Schwab stock stayed depressed for more longer than I anticipated. I averaged down and took positions too big. The losses wiped out my gains on the UVXY puts and IWM calls. The lesson? Stick with what you know. Stay in your lane. The goal is to make profits, not trade names you’re not familiar with in market crash you don’t understand. And when experimenting with something new go small until the strategy proves itself. In general it’s very wise to journal trades. It brings awareness to what’s working and what’s not. I have found a direction correlation to success as a trader when I hold myself accountable. Sometimes I only do it for my services, to prove the strategy works, but then gamble outside of that. Sometimes I don’t do it at all and turn a day trade into a swing trade and then into a long-term trade as a result. The lesson? What gets measured gets managed. Trading is too easy to turn into gambling, versus treat like a job. The best traders I know reflect on their trades daily. The goal of all traders should be profitability. I’ve had many years in a row where I was profitable. And other years where I messed things up big time trying to do way too much. Trading things I didn’t understand. Taking positions way too big. Taking big losses and make it worse with revenge trading. Sound familiar? As a teacher of trading I figure there’s 3 categories we all fit into. The first is a losing trader who blows up their account and quits. The second is the boom and bust trader, which is where I still fit in. The third is the trader who is profitable year after year after year. We can’t arrive in category there and stay there. We must learn how to be profitable and apply that education over time. We must build good habits. The lesson? The $2,000 Small Account Journey isn’t about growing $2,000. Sure, I’ve had a few balances go as high as $32,000 and $48,000 in the last 18-months. But it’s so much more than that. It’s about learning how to get into category three and staying there. It’s about building the habits necessary. The blueprint I’ve created in the $2,000 Small Account Journey is solid. There are never any guarantees, but that’s what I’m trying to teach people. Monday I will start what might be my last $2,000 balance. My goal remains exceeding $100,000 on it. Have I finally mastered this strategy and can I be consistent with it? Can’t say for sure, but I’m betting on it. And over the next year we’re going to find out. Want to go on this journey with me? Step 1: WORKSHOP TODAY: How the $2,000 Small Account Journey strategy works and why you need to know it. 11 AM EST in the [Market Masters chat room](. Step 2: Join the challenge: The NEW $2,000 balance starts Monday July 8. The next 50 41 subscribers save 75% with coupon code: SAVE75 A $1,999 yearly subscription for [ONLY $499]( A $2,999 2-year membership for [ONLY $749]( [Click here to subscribe]( and start your $2,000 Small Account Journey Monday July 8. Coupon code: SAVE75 Let’s do this! Jason Bond WARNING: This isn't one of those "get rich quick" things that promises you a fortune for doing nothing. I do not believe in "get rich quick" things - only in hard work, adding value and serving others. I can not and do not make any guarantees about your ability to get results or earn any money with my ideas. After all, it takes hard work to succeed at anything in life. Your results are up to you and the amount of effort and resources that you are willing to put into succeeding. I want to help by giving great training, direction and education that move you forward. Questions or concerns about our products? Email Support@ragingbull.com © Copyright 2022, RagingBull DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at . FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. AnyRagingBull Service offered is for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation, or be relied upon as personalized investment advice. 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