We all jump into trading because we aim to gain a significant amount of profit in a short amount of time, but trust me when I say this, to become successful in this career, you’ll need to go and grind your way up! In the last 11 years as a trader, I’ve made all the stupid mistakes in the book, and I’m not afraid of saying that. Today we will go over the five biggest mistakes (so we don’t make this a novel), and let’s try to make sure you learn something from them.
Mistake #1 I Dreamed Of Finding Perfect System
Right from the start until my second year in trading, I searched for that one system, one that is easy to follow and one that won’t have any losing trades. Don’t get me wrong, I found good systems during my first two years of trading, but I always looked for that “better system.” I know that this was a mistake that I made and from my experience, 98% of traders make at some point in their career, but I would suggest you stop doing that now.
When you find a system that can give you an edge, with a minimum 50% win rate, stick to that system! It’s going to be much easier to tweak any system when you master how it works, and you can always improve it by 10-20% within a few months of work.
After I realized the power of Elliott Wave, I’ve never changed it and constantly work on improving it. Yes, I know you’ll say, but you have many systems yourself, and that’s true, but each of my systems is based primarily on the Elliott Wave Theory, and other factors that I believe can make my trading slightly easier.
Mistake #2 I Trusted Others More Than I Trusted Myself
When you start trading, and even when you have some experience, it’s always hard to trust in your own opinions and judgments. We have so many “Experts” online or on television that will give you views on one instrument that are completely different from what you think. Trust me, when you realize that you are the one who needs to make a decision, It’s going to become that “AHA” moment in your career.
Let’s look at it from one quick story. My good friend Vladimir Ribakov and I talk from time to time about opinions on the currency market. I respect his opinion, he respects mine, but most times, we have entirely different views. Everyone would say that one of us will be better, but we both have similar results in reality. We are different traders; Vlad loves swing trades, can hold his positions for months or even years without opening his eyes; while I enjoy day trading, even though our views may be different, we both know how to make the most from our ideas.
The lesson I want you to understand is that you must have an exact reason for each position; only if you believe in that reason, there won’t be any problems or uncertainties when the trade is live. It’s good to hear other people’s opinions, maybe you missed something, but in the end, YOU must know why you want to take that trade.
Mistake #3 I Traded When My Emotions Were Scary Bad
One of the first lessons I got from a fund that helped me become a successful trader was never to trade when my mind is not 100% in the game. Of course, that is much easier said than done, we all have our egos, and today when I look back on my worst trading days and the mindset during those times, I know what happened.
One of my biggest losing days came a night after I broke up with a girlfriend and got drunk. Of course, I didn’t want to admit to myself the next day that I was still drunk and that I had five hundred things on my mind, and not even one was related to trading. I lost over $130,000 that day, and right after my last position hit the stop, I asked myself why I really tried so hard! Ego, ego and just ego, that was the worst day in my trading, it was also the last day of my trading when my mood is not at the best levels.
Trying to trade under stress will never be a good thing; trading in any market requires a lot of focus and discipline, so if you feel that you are not at your best, skip a day! The market won’t go anywhere; there is always tomorrow.
Mistake #4 I Didn’t Want To Work As a Team Player
Trading Forex or Stocks requires a lot of work; our job is to generate new ideas every day. How much it’s possible to do all the work alone, trust me I know that the best, it’s much smarter to start working with other traders,
My entire life, I tried to push my limits and try to work harder than others; I won’t say that’s bad for sure, but I think after my six years as a day trader, I burned out, I started to crash every few weeks. When the doctor asked me what I do, I told him I’m managing a hedge fund with three other traders; he asked me, ok, but why do you work 18h a day while others work only eight? That moment I didn’t want to admit to him or anyone that I pulled 18h every day to make sure everyone was doing the job correctly, and after two years of working with that team, I never found one mistake.
The lesson to take from my mistake is that you need to find one or maybe two friends that will cover the things you are not an expert or don’t enjoy working on. Instead of wasting 6-8h of just doing the average research, you and your friend will do much better research in 1-2h, and both of you can have better results instantly.
Mistake #5 I Stopped Enjoying Trading
The first time I took a trade, I can still remember the feeling I had in my body; it was the best adrenaline I ever experienced. I got hooked; with each new trade, I felt like a kid again; I enjoyed what I was doing; yes, I indeed came into this business because of money, I had that idea to make millions fast, and everything was great for the first few years, I didn’t care about how much time I’m going to spend in my room or office watching that screen, but something happened.
After joining one large fund, I don’t want to name it since they were good for me and my career. I realized that every day I go to the office, do the same thing repeatedly, and just look for more capital. I wasn’t fucking happy, don’t get me wrong, the team and company were doing great; that was my best year ever in terms of results, but I wasn’t happy anymore; I didn’t feel love for new setups. Soon after, I realized that my results started to go down, so I quit fund trading and took 30 days off to cool down. I discovered that working for larger institutions didn’t work for me, at least not during that time; I moved to trade just for myself the way I originally planned
The point is that you shouldn’t force yourself to be a trader, just because of money, it’s like in every other job, you will only become successful if doing it makes you happy, because you will feel great every day when you come to the office.
I could probably tell you 101 more mistakes I’ve made in my trading career, but these ones impacted my trading, so make sure you don’t go over them in your trading career.
In case you have one or more mistakes that you think other people can benefit from, write them down in the comment section.
Have a great day, Trader.
Hi, my name is Ken Dixon. I know you through Adrian Jones at Tradeology. (But you know that already, don’t you?)
1. Over-analyzing: systems, markets, brokers, trades
2. Indecision: about the above items
3. Not committing regular blocks of time to trading – learning, practicing, trading
Over the years I have studied Elliott Wave and Fibonacci principles and systems, so I am looking forward to your presentation tomorrow.
Hi Ken, i love that you posted here, looking forward to see you on webinar.
Great advice, funny how I have made the same mistakes. I have copied and pasted your top 5 so I can review on a regular basis to remind me to walk the straight and narrow path. Thank you for your words of wisdom, I look forward to learning from you!!!
Looking forward to work with you in the future.