What are some of your biggest trading mistakes and what did you learn from them?

I was trading the US markets earlier.

Yeah, I always like to be understated, as there will always be people who are waaay more experienced and knowledgeable that me. Plus personally (psychology), it keeps me humble.

ohh that’s cool @NewUser123 .
Just curious, are you from/in India ?

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Yes, born and brought up here. Left for work in 1995.

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@Karthik sir, I don’t know if I’ll able to express how much ur answer means to me. I went through the same thought process and as a result have taken quite a bit hit and am on the sidelines now trying to recover emotionally. Working on positional paper trades which honestly seems to be quite a relaxed way compared to scalping. Will slowly focus on positional more and once I have recovered my emotional capital too, will start trading. Thanks again :pray:t2:

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@Kiran_Divagar Some are cut out for scalping and some just cant scalp or day trade. Identify what works for you and improvise on it. Good luck!

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Thanks a lot for the response @Karthik !! I could exactly relate to ending up over trading and blowing up account multiple times and finally left with loss of confidence and money. I was thinking that I was the only one who would make such drastic mistakes. Ur Answer gives me hope that I still can make it if I can truly look at what works for me and do that.

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Definitely you can. All the best!

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#13 Buying in long term scrips with short term profits and later booking the losses in delivery trades to cover short term trading losses

This mistake has given me more losses than trading. It basically eroded good portion of what all I made in trading for last 2 years. When i made great trading profits in 2019, I felt I was invincible and invested almost all the profit I made in long term scrips (which were sound and did great later as well). But. as I was going through a temporary downcycle in my trading for couple of months, I had to forcibly cut my holdings to manage my trading and to pay other expenses. Still hurts to see the notional gains i would have made had i held on to those holdings.

Summary : The lesson that I learnt was to Never mix up holdings and short term trading. I decided to make a separate plan for holdings which will not have any direct connection with your short term trading.

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Bhaisahab, ye kis line mein aa gaye aap.

#14 Taking in Too much information

Knowledge is not always power. All data is not good data. Just because you can understand the information, doesn’t necessarily means you can use it. But the unlearning is a necessary part of learning, so might as well.

In the first 2-3 years I used to stare at multiple monitors for almost the entire day minus whatever sleeping I did. Reading every book I could find, following every trader I could on twitter, Watching minute by minute charts ad nauseum. This is generally because when we are dropped in a system where we don’t or can’t control many variables we spam what we can and that gives us comfort. I still have a tendency to crunch an ugly amount of data and information. But now I catch myself doing it, and divert myself elsewhere.

But yes Markets have a beautiful way of teaching the Price of everything but the value of nothing.

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#15 Free is better

I started trading lured by the zero brokerage Reliance Money trading account that came packaged with a zero balance ICICI account. I still hold the ICICI account. But I moved from RMoney to Indiabulls to Interactive Brokers to Zerodha in search of the right balance between user experience, execution reliability and cost. If one hopes to trade the markets well, free option may not be the best or better option.

Too much comparisons…

In search of perfection and accuracy I wreck head over
which instrument is the best…? Nifty, bank nifty, usd/ inr,
which is better option trading or futures trading?, which timeframe is the best? 1min, 5 min, 10 min or 15 min…?
Option buying is better or option selling?
Which trading session is better morning, mid afternoon, post afternoon?
Which broker is the best…? Zerodha, SAS online, Finvasia, fyers, navia market,upstox, sbi cap securities, asit c mehta, samco…( had acoounts with all):sweat_smile:
Which trading platform is the best…? Pi, kite, fyers one, tradingview…?
Which trade set up is the most accurate…? Breakouts, support resistance, reversals…
Spot chart or futures chart or options chart??
Which youtuber is the best to follow…?
(By the way according to traders from youtube the word ‘loss’ doesn’t exist in the stock market dictionary…:stuck_out_tongue_winking_eye:)

End result of these comparions was I wasted my precious time…
Had I just focused on my live trading instead of such comparisons, I would’ve started making money much early…:frowning_face_with_open_mouth:

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Push-up (Pushpa) Rukega nahi :muscle: :muscle: :muscle: :sunglasses:

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Har trade pe push up karo…3 months pe body bana loge… :laughing:

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Why didn’t I think of this before? Thank you.

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Trading is my mistake. :smiley: Learned not to trade.

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#14 being reversal trader

I was a reversal trader especially with parabolic SAR and that too in USD/INR market and paid a nasty price blowing my account. It was a short amount of money but I learnt lot from it. I think you can be a reversal trader in stock and commodities market but not forex. Better to be trend trader than a reversal trader .

Watching live P& L and seeing graph

I think more worse than losing money, this is literal anxiety and a torture. Thank god zerodha wrote a line never see live P&L while taking positions. I was so dumb. And frankly nobody tell this too. If you are trading higher time frames such as 1 hours or daily just 1 min before candle close is enough to make decisions

Lacking discipline and fear of dread

I had a system that gave 6% return. With leverage the return becomes 20% having max DD of 10% with risk 2%. I forward tested it and made 6%. But trading with live money it plays a lot of tricks on the brain. That dread of losing comes back. Discipline holds during those scenarios. Back then I didn’t have discipline over leveraged , chased loses , did every mistake like every other trader. My biggest takeaway is I learned more about myself and it made me a better person.

Trading on major news events and fundamental analysis

One thing I learned is better off trading on news events and fundamental analysis don’t even work. Fundamental analysis makes more sense in investing world than in trading world.

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Once I was managing a conservative options trading position. Family wanted me to have lunch as it was late( around 3:25-3:30) and started shouting . I got irritated and closed the position at 3:29 by giving exit all. Zerodha then said some Banknifty strike being ITM had poor bid-ask and you have to place Limit order (trying to help me). Market closed 3:30 and I did not get time to exit the PE sell position. Next day market tanked and the naked PE gave loss to me.

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I read it somewhere in the internet. Don’t remember exactly. Line is- “If you do it once, you will do it again” I smiled when i read it for the first time. So true!

Blindly Trading on Recos of TV Channels

When I entered markets for the first time, I had no strategy/rules of my own. I just traded on calls of CNBC/Zee Business/Economic times. And it actually worked for me for 5 months. After that my bad days started and sl started getting hit in 9 out of 10 calls. In 4 months, I ended up wiping out my 40% capital. Then took a 2 month break and restarted to recover my losses. And it took 3.5. years to just recover the original capital.