3SOF

There are many mistakes that've made in the past because of inexperience.  In fact, I still make some of those mistakes now.  Now I'm sure, all of us has made a mistake in the stock trading world at least a hundred times more than they would like so I wanted to create a thread so we can try to avoid the same mistakes others have made in the past.

To start off with.......here are some of my mistakes / lessons learned.

1)  Never taking a profit when the opportunity arises even though there was breakdown in the chart.

2)  Looking for charts where the trend was down seeking to enter at the bottom.

3)  Having itchy fingers (buying a stock because I didn't want my funds do nothing in my account)

4)  Telling myself "don't worry, it'll recover" just to make myself feel better when I'm already down 20% on a stock

5)  Admitting I was wrong on a stock pick the day I bought it.........hence I hold it and get slaughtered the next day.

I can go on and on..........which I may later on, but I would like to hear some of your mistakes as well.

yeah yeah yeah!!

Wow, that sounds so familiar....

2006 was my first year trading and each day I come up with a new (DON'T), the only thing about this process is that I have to pay for each mistake with money..

I guess my overall biggest, most continious mistake is NOT to follow my own judgement....

There has been times where a new pick comes up, I do my research, i write all over my chart and just don't feel comfortable with trading it. Then someone comes up with a diferent point of view, a different prespective with wider projections and anticipations of the stock price.

By now, I did my research and draw lines all over the chart, but this member/analyist/etc.. has more experience than me in the market with higher ratings and more postings in 3SOF so ...... I go ahead and agree with "his/her" view, thinking to myself "Man, I have to see beyond the chart to make money in the stock market", then I enter the trade.... and it goes against me.....  other times I have not exit a position because of the same reason

I keep a journal and I see this has been my most constant mistake of all. Overall it has been a good year. I was 20% down in my portfolio in the begining of the year, just didn't have a clue about money management, diversification, etc, etc, ect and now I am 10% in the green. In numbers it is not much but for me it is..... the market is a &#@%*& and does not give any free money to anyone..... ( I also know I will never beat it but it is good motivation for the mind )

Anyway, take care and let's keep learning
Rafael

i'm still a little inexperienced but i'll still throw out a few...

1) a pullback is normal

2) don't panic trade (buying or selling)

3) except losses and don't chase (this starts the panic trading)

4) don't fully invest 100% on a margin account. allow room for pullbacks otherwise you'll be stuck selling a few shares just to keep your account.

this is it for now. i'm still learning and trying to figure this all out. one day i'm gonna make some real money.

Positions: CHINA, AOB, NVLS, STEC

Hi thai626

Great idea, I assume you will compile all the comments and post a summary at some time, might make a good addition to my rules list.  So I'll throw in a few that come to mind and that I have done at least once in the last 7 years.

- Rushing in without a plan, or having a plan and not following it or even not following the revised morning after plan "B".

- Breaking your own rules or at least bending a little too much.

- Believing too much of what you read on BullBoards and then acting on it with real money, your money.

- Investing money based on info from your tennis buddy, who's daughter is married to a guy who lives next door to the janitor of a local company, who says all the insiders are buying because some great news is about to come out.  DD and chart don't agree, but you invest anyway.

- Investing in a great unknown stock with a great story, and adding more as the price is still cheap, and more, and more.  Now you own 5 times the average trading volume and have basically no viable exit plan when things go down.  My basic rule is not more than 5-10% max of the ave daily volume, but was in that 5 times range once, worked out OK but very risky.

- Letting a winner turn into a looser.

I have lots more but don't want to write a book here.

Happy trading / investing
Quasi

OH PLEASE!!!!! 

My brother is an "investment adviser" ... and a very good one. He keeps begging me to give him my money and get a real job. Now half of his wish has been granted. I'm a back to 9-5er... 

Couple truths/rules I've figured out over the last 3 years ... or so of trading:

1) You pay for your education ...one way or another. - - The exception to this rule would be all the education I've gotten on the 3sof site.... I guess there really is an exception to every rule...well that proves the rule... right Learn as much as you can from anyone who knows what they are talking about. If you can afford to lose money in the market ... consider spending it on a decent education.

2) Stocks REALLY can go to zero... even when they start out @$100.  And trust me ... a good tax loss SUCKS!!!!!!!!!!!!!!!!!!!!!!!!! Don't ask.......

3) When someone tells you to set a stop on a goofy stock you've bought ... just do it. Don't ask.......

4) If you're going to buy on a tip ... make sure you have the right ticker. D'Oh! And ... if you do happen to buy the wrong stock on an obscure exchange ... and you can't figure out how to get out of a really thinly traded mistake stock ... that has a couple dollar spread ... set a high ball ask and pray there is another bozo out there (much like yourself) who sill mistakenly buy it from you... ya... Don't ask.......

5) Don't inside trade ... Martha taught me this one. BUT if you do ... just tell the truth, pay the fine and save yourself a couple years in jail.

6) If you buy a million shares of a company @ $.0001 ... ya that's $100 ... you'll feel like you just bought the damn company ... and you're wondering why the company isn't snapping up their own stock...but know that they can always do a reverse split and now you own 100 shares @ $1 ... and I will guarantee you it can and probably will fall back to $.0001 ... which I have found is never worth selling because the transaction fees negate any "profit". Don't ask.......

7) Don't try to buy at the low tick and sell at the high tick. I can't seem to pull the trigger when the stock bounces because I "missed" the bottom. So I am forever watching stocks just run... and run... and run ... and run... I know what a rally looks like. I've just never been in a stock that's rallied.

Don't buy and hold indefinitely ... especially if it's something like MSFT. I look back to 2001 ... and I could be here ... or I could be there... but someone other than me was making a lot of money on the up/down in the interim. Don't ask.......

9) If you find a good mortgage broker with great ideas... do not bite if he suggests that you way over buy on your house and then use you stock as collateral. If your stock goes down and you overbought, now you have essentially an over priced mortgage and a margin call. Don't ask.......

10) Do not short a penny stock ... if they even let you. I've never done this one ... but it just seems like a pretty good rule to me.

11) If you think you've come up with a fool proof trading plan ...look around... think again and then reconsider your thesis... Don't ask.......

12) Don't get emotionally wrapped up in the stocks you buy ... know enough about them to make an informed decision ... but don't buy and cling to a stock because you believe in their cause. And if you sell the stock and you have to go hurl... you're too attached. Don't ask.......

13) Always know that when you buy a stock, there is someone on the other side of the trade ... who probably has more information about the direction than you... Don't ask.......

13) And last ... but certainly not least... IF YOU'RE (even relatively) HAPPILY MARRIED... DO NOT HAVE AN AFFAIR WITH A DAY TRADER/STOCK BROKER ... you know ... someone who shares your interests and isn't glazed over when you tell them about your day...WELL OR ANYONE FOR THAT MATTER... I guarantee you, It's an easy way to lose 1/2 of your money ... um ... Don't ask.......

OK ... that's my short list. I'm sure I can come up with more if this thread takes off ... hahahahAHAHAHAHHAHAHA
-Samantha

I drank too much before Christmas and am now reaping the rewards    of my actions...over the porcelin altar.

happy hurling...Jody

1) Don't try to make a million ,be happy with the thousand that you made, as that will eventually grow to be a million.
2)Never chase the losses.
3)When you have taken a big loss and are not thinking straight ,shut down for a day.That will give you time to think rationally.
4)Take some profits out every month and use it,because today is real and nobody has promised us tomorrow. Good luck

Hi thai626,

Instead of writing everything here. It would probably better for you (if you choose) to just check out the mistakes I made in the thread I started called, "Daytrading with Consensus".

Ares

Heard some one saying ... "We over estimate what we can do in short term and under estimate what we can achieve over the long term."

I think the short term mentality makes us commit more mistakes. Its pays to listen to what David says 

my 0.02cents.

Anycase, nice thread we have here.

Quick lesson I learned not too long ago:
- Don't buy stocks pending FDA approval of any kind.

My 2 cents...