I will add to this page over time. Hopefully, some of the lessons I have learned will help you avoid similar mistakes. I do still believe you must learn mistakes in this game on your own, but perhaps this will add value to someone.
- When beginning a strategy, tip toe into the positions. Do not get overly excited right away.
- Refrain from overtrading. I believe trades provide humans with a dopamine boost of sorts. Like many things, these short term boosts likely will not sustain/work in the long run.
- If you think something is imminent, it’s not.
- If you are about to act on impulse, stop. All decisions should have been made prior to the set up.
- Nothing is a sure thing.
- If you find yourself attempting to “dig” a position out by adding to it as it falls to lower your cost basis, or employing leverage at lower levels to “come back” quicker, then quickly re-evaluate what you are doing.
- Doing nothing is something.
- When you have an opinion and other disagree with it, then that is good. That is what makes a market.
- Don’t trade your ideologies. Trade the price action.
- If a position in an option moves in your favor earlier and more pronounced than expected…take some profits.
- If you are looking for a favorable indicator to buy something, you probably should not buy it yet.
- If you feel as though this is the best price you will ever get again (regarding a short-term trade), then it is probably not.
- There is nothing wrong with selling a position as soon as you buy it.
- Horizontal lines>diagonal lines