Three destructive habits every trader must avoid.

Three destructive habits that will kill your trading day, week, month, or career.

Not having a plan. Get a plan, who cares if it is bad, start with something. You can build off of it and refine it. You have to be willing to spend the time to make the plan yours. You do not start anything without some level of planning. Trading is hard; your brain spends a lot of time in fast forward, affecting your memory. You can slow it down by having a plan and increase your brains ability to remember.  A plan makes it possible to improve. Most importantly, a plan gives you a chance at removing emotion.

Forgetting why you are trading.  The purpose of trading is to make money.  Every action should bend to that goal. That does not mean every trade makes money.  It means every trade gets to closer. If you are looking for comfort, get a teddy bear. If you are looking to be right, play trivial pursuit.  If you want excitement, drive fast.

Letting it go. It is really important to separate what happened from how you felt. The more distance between the two the less time it takes to learn from that situation.  Admitting you made a mistake or are wrong are necessary for letting it go.  Unlike life, you get no credit for admitting you are wrong, it is just a part of trading. Neither matter unless you take action.

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  • aynonmous

    Don’t fall in love… these things have no memory.. neither should you.

    • disfiguredskating

      Agreed.  Some of my best / easiest trades were stocks I didn’t really know what they did and didn’t care about them.  Followed the set-up. 

  • Greg Cunningham

    It means every trade gets you closer to that goal.
     
    Great stuff!

  • I’ll add not tracking your progress.

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  • Anonymous

    I lost a lot of money in 2008 by compounding my mistakes in thinking that I could get it all back with some smooth trading. Wrong. I am just now getting back to even – a full three years later. I learned the hard way that there is no free lunch, no shortcuts, no books/tapes/blogs/courses/ experts/gurus/ad nauseum that can tell you what to do, when to do it, or how to do it.

    (New) traders are like the little kid you tell not to touch the stove because it COULD be hot, or not touch the wet paint on a bench. Hey – we’re all gonna touch these things, so get overyourselves. Make the mistakes, learn from them and, if it takes you three years to get back to even – unlike the three months I THOUGHT it was gonna take me, then it takes three years. The good thing is, I am a much better trader for it – and no expert/guru/blogger can take that away from me.

  • Mark

    Guide for the
    New Year’s Eve investor:

    Look left
    (on the chart), apply your indicators and then turn right.

    Zigzag in
    your lane and put your foot down if it’s a fast lane.

    Mind the shoulders!
    If you swerve into the ditch get out. Flag down someone and have another short.

    Take a
    position for the New Year. Give up the shorts, the swinging, and the (Benson)
    hedges. Consider your options, your futures. Watch your pennies and have a
    Happy New Year!

7 Responses to Three destructive habits every trader must avoid.

  1. aynonmous says:

    Don’t fall in love… these things have no memory.. neither should you.

    • disfiguredskating says:

      Agreed.  Some of my best / easiest trades were stocks I didn’t really know what they did and didn’t care about them.  Followed the set-up. 

  2. Greg Cunningham says:

    It means every trade gets you closer to that goal.
     
    Great stuff!

  3. zentrader says:

    I’ll add not tracking your progress.

  4. […] Eli: Three destructive habits traders must avoid.  (TraderHabits) […]

  5. Anonymous says:

    I lost a lot of money in 2008 by compounding my mistakes in thinking that I could get it all back with some smooth trading. Wrong. I am just now getting back to even – a full three years later. I learned the hard way that there is no free lunch, no shortcuts, no books/tapes/blogs/courses/ experts/gurus/ad nauseum that can tell you what to do, when to do it, or how to do it.

    (New) traders are like the little kid you tell not to touch the stove because it COULD be hot, or not touch the wet paint on a bench. Hey – we’re all gonna touch these things, so get overyourselves. Make the mistakes, learn from them and, if it takes you three years to get back to even – unlike the three months I THOUGHT it was gonna take me, then it takes three years. The good thing is, I am a much better trader for it – and no expert/guru/blogger can take that away from me.

  6. Mark says:

    Guide for the
    New Year’s Eve investor:

    Look left
    (on the chart), apply your indicators and then turn right.

    Zigzag in
    your lane and put your foot down if it’s a fast lane.

    Mind the shoulders!
    If you swerve into the ditch get out. Flag down someone and have another short.

    Take a
    position for the New Year. Give up the shorts, the swinging, and the (Benson)
    hedges. Consider your options, your futures. Watch your pennies and have a
    Happy New Year!

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