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Thread: Trading Mistakes

  1. #13

    Join Date
    Jun 2004
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    In Your Imagination...
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    4,336

    Arrow Re: Trading Mistakes

    Hello All,

    George (Spaf) left behind some golden nuggets to be 'mined' on TSP Talk.
    This thread is but one example of many such nuggets.

    Start reading from the beginning of this thread... and learn from The Master.

    George may be gone in body... but he is still with us in 'words', and in spirit, I'm sure of!

    Rod
    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

  2.  
  3. #14

    Default Re: Trading Mistakes

    Yes, I've had my share of these. Two many times I had stocks do reverse splits, change their names and symbols. I have some of them still on the books on ETRADE. I bought SIRI for 3.00/share and sold them for five cents. I should of held them to see what would happen.

    This should rate me as the biggest dummy on the MBs. I mean the only one.
    "I'm your Huckleberry"

  4.  
  5. #15

    Join Date
    Feb 2007
    Location
    San Diego, CA
    Posts
    6,972

    Default Re: Trading Mistakes

    Quote Originally Posted by Rod View Post
    Hello All,

    George (Spaf) left behind some golden nuggets to be 'mined' on TSP Talk.
    This thread is but one example of many such nuggets.

    Rod
    Nice Bump!
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

  6.  
  7. #16

    Join Date
    Jul 2007
    Location
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    Default Re: Trading Mistakes

    Quote Originally Posted by Spaf View Post
    Ten (or More) Huge Trading Mistakes

    Acknowledgement: Trading for Dummies, Griffis, Epstein, Wiley Publishing, Inc., 2004

    More actually! Huge trading mistakes that befall experienced and novice trader. Included are some items to recognize, mistakes and ways to avoid them. Any additional suggestions to help steer away from these pitfalls would be appreciated in reply.

    I. Fishing for Bottoms.

    - In a bear market stocks get much cheaper than most of us ever expected or wanted. They won't stop falling until they've run out of gas.

    - There are few good reasons for buying stocks when it is stuck in a trading range. Your best opportunity occurs when the stock breaks out of it's trading range, thus, wait until you are sure.

    II. Timing the Top.

    - Tops and bottoms share something in common. They rarely arrive when they're supposed to.

    III. Trading Against the Dominant Trend.

    - Confirm your analysis by looking at the charts that are one time period higher i.e., if you are looking at daily charts, confirm your analysis on the weekly charts.

    - Always know which part of the market cycle you are in.

    IV. Winging It.

    - If someone says a stock is hot, it's only a reason to look into the fundamental and techinical conditions of the stock, but not a reason to buy it. You can always buy it if futher analysis confirms it's the right thing to do.

    V. Taking Trading Personally.

    - You can't let a bad trade get to you. The market isn't out to get you; it's out to get your money. Get used to it.

    VI. Falling In Love.

    - Trading is like a business. Stocks are your inventory. Don't fall in love with your inventory. They are there to sell, at a profit if possible.

    VII. Using After-Hours Market Orders.

    - You are likely to pay a lot more than what you wanted, or sell for considerably less using after-hour orders.

    VIII. Chasing a Runaway Trend.

    - If you miss the entry point for a stock that you want, waiting is better than entering a position as a trend accelerates. Often a stock will pull back and test the breakout point. Wait for that point, or wait for the stock to take a short breather after it's first leg up.

    IX. Averaging Down.

    - Averaging down is really merely a techinique to throw good money after bad.

    X. Ignoring Your Stops.

    - When you start thinking you want to give a position a little more room to work it's way out of losing territory, you're on your way toward a trading debacle.

    - Close your position when the price hits your stops.

    XI. Diversifing Badly.

    - Exposing all your capital in one trade is a bad idea, and so is trading hundreds of stocks simultaneously.

    - You may start with a dozen and settle on six or so. You could re-create the S&P 500, but to buy and sell that position would cost a bundle.

    XII. Enduring Large Losses.

    - Your sucess depends on how you handle losing trades. If you dispose of the losers quickly, you can become very sucessful. If you hold onto losers you can lose so much money that it may knock you out of trading.

    A loss of........% Gain to Recover.
    5%...............5.2%
    10%.............11.1%
    25%.............33.3%
    50%.............100%
    75%.............300%
    100%............Game Over

    -
    Honoring an old friend by introducing our new friends to some words of wisdom.

  8.  
  9. #17

    Join Date
    Dec 2004
    Location
    NW Ark, USA
    Posts
    2,336

    Default Re: Trading Mistakes

    good timing for the reminder he'd have given if here!
    I hope his family have been able to finish up all the paper work,
    and their accountant has been skilled in the government employee
    necessities......

    Thank you, JTH ....

  10.  
  11. #18

    Default Re: Trading Mistakes

    Interesting video - where to post it was the hard part.
    I think there's a good moral in it though.
    ...Or, maybe good for morale anyway.

    "Follow The Bouncing Ball
    This test is easy. I counted 16 passes, but completely failed it. And the cute girls didn’t throw me off either:"

    http://www.trivisonno.com/
    "That's as good as money sir, those are I.O.U.'s" - from: Dumb & Dumber


  12.  
  13. #19

    Default Re: Trading Mistakes

    Moving on (from below), This video is a follow-up video from prior post in "Market Outlook" at - http://www.tsptalk.com/mb/showpost.p...&postcount=293 - about Market Manipulation.
    I think this relates to investor confidence that will continue plaque the markets. Maybe that's what the "Big Players want?" Love to hear the outcome/prosecution on this, someday maybe...



    http://market-ticker.denninger.net/
    Also see here today's "July FOMC Minutes: Interesting Observations" (re: "securities that were "sold" were not really sold - that is, they were shorted NAKED by the seller to THE FED?"
    "That's as good as money sir, those are I.O.U.'s" - from: Dumb & Dumber

  14.  
  15. Default Re: Trading Mistakes

    Quote Originally Posted by Spaf View Post
    Ten (or More) Huge Trading Mistakes

    Acknowledgement: Trading for Dummies, Griffis, Epstein, Wiley Publishing, Inc., 2004

    More actually! Huge trading mistakes that befall experienced and novice trader. Included are some items to recognize, mistakes and ways to avoid them. Any additional suggestions to help steer away from these pitfalls would be appreciated in reply.

    I. Fishing for Bottoms.

    - In a bear market stocks get much cheaper than most of us ever expected or wanted. They won't stop falling until they've run out of gas.

    - There are few good reasons for buying stocks when it is stuck in a trading range. Your best opportunity occurs when the stock breaks out of it's trading range, thus, wait until you are sure.

    II. Timing the Top.

    - Tops and bottoms share something in common. They rarely arrive when they're supposed to.

    III. Trading Against the Dominant Trend.

    - Confirm your analysis by looking at the charts that are one time period higher i.e., if you are looking at daily charts, confirm your analysis on the weekly charts.

    - Always know which part of the market cycle you are in.

    IV. Winging It.

    - If someone says a stock is hot, it's only a reason to look into the fundamental and techinical conditions of the stock, but not a reason to buy it. You can always buy it if futher analysis confirms it's the right thing to do.

    V. Taking Trading Personally.

    - You can't let a bad trade get to you. The market isn't out to get you; it's out to get your money. Get used to it.

    VI. Falling In Love.

    - Trading is like a business. Stocks are your inventory. Don't fall in love with your inventory. They are there to sell, at a profit if possible.

    VII. Using After-Hours Market Orders.

    - You are likely to pay a lot more than what you wanted, or sell for considerably less using after-hour orders.

    VIII. Chasing a Runaway Trend.

    - If you miss the entry point for a stock that you want, waiting is better than entering a position as a trend accelerates. Often a stock will pull back and test the breakout point. Wait for that point, or wait for the stock to take a short breather after it's first leg up.

    IX. Averaging Down.

    - Averaging down is really merely a techinique to throw good money after bad.

    X. Ignoring Your Stops.

    - When you start thinking you want to give a position a little more room to work it's way out of losing territory, you're on your way toward a trading debacle.

    - Close your position when the price hits your stops.

    XI. Diversifing Badly.

    - Exposing all your capital in one trade is a bad idea, and so is trading hundreds of stocks simultaneously.

    - You may start with a dozen and settle on six or so. You could re-create the S&P 500, but to buy and sell that position would cost a bundle.

    XII. Enduring Large Losses.

    - Your sucess depends on how you handle losing trades. If you dispose of the losers quickly, you can become very sucessful. If you hold onto losers you can lose so much money that it may knock you out of trading.

    A loss of........% Gain to Recover.
    5%...............5.2%
    10%.............11.1%
    25%.............33.3%
    50%.............100%
    75%.............300%
    100%............Game Over

    -
    This is great stuff. Thanks for the tips!

  16.  
  17. #21

    Join Date
    Apr 2005
    Location
    Gainesville, Florida, USA
    Posts
    24,244

    Default Re: Trading Mistakes

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

  18.  
  19. #22

    Default 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.

  20.  
  21. #23

    Join Date
    Apr 2005
    Location
    Gainesville, Florida, USA
    Posts
    24,244

    Default Re: Trading Mistakes

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

  22.  
  23. #24

    Join Date
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    Arrow Re: Trading Mistakes

    This bumps' for you...
    "Treat your wife with honor, respect, and understanding as you live together so that you can pray effectively as husband and wife." 1 Peter 3:7

  24.  
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