36. Two Trading Mistakes Which Will Destroy Your Account
Posted by admin in Finance Sunday, 24 October 2010 09:06 25 Comments
www.informedtrades.com A lesson on two of the most common mistakes that traders make when trading the stock, futures and forex markets. One of the most common mistakes is sticking in a trade where you know you are right in your analysis, but the market continues to move against you. As the famous economist John Maynard Keynes once said: “The markets can remain irrational longer than you can remain solvent” Perhaps one of the best examples of this are those who shorted the NASDAQ into the runup in 1999 and early 2000. At the time it was pretty obvious that from a value standpoint NASDAQ stocks were way overvalued and that people’s expectations for growth that they were buying on were way out of line with reality. There were many great traders at the time who recognized this and began shorting the NASDAQ starting in late 99. As you can see from the below chart and the huge sell off that ensued after the peak in 2000, these traders were right in their analysis. Unfortunately for many of them however stocks continued to run up dramatically from already overvalued points in late 99 wiping out many of these traders who would eventually be proved correct. So as we learned about in last lesson, people’s strong desire to be right will often times keep them in trades that they should have moved on from even though the market may eventually prove them correct. For those traders who are able to initially move on from trades where they feel they are correct but the market moves …
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lose.
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What this guy in this video says it’s true, but obvious! A trader who makes this mistake doesn’t even deserve to be called so. Don’t jump to conclusions guys, because what you can learn from these videos it’s less than 5 % of what you really need to know to make money. Unfortunately, nobody will ever explain the 95 %.
This is the reality, so dig it! But for those of you who have just begun…good luck!
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I thought you’d like to know about a glaring mistake you made so you could fix it or not do it in the future. The word you meant to use is “lose” (not loose). Teenagers wear pants that are loose. People lose money.
Otherwise, you have great trading info!
I thought you might want to know that you meant to use the word “LOSE”. You lose money. Teenagers wear pants that are too loose that they alsmost fall down. You used the wrong word.
Great video!Thanks.
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The account in the market – here the basic mistake.
Think, how many money will be, if except you anybody does not trade in the market. Only reflect.
I really appreciate your lessons, I thank you.
Excellent video !
Dear
May I know if u mean to say after have support three times it may fall
Very helpful, especially to new traders, thank you.
Rose East
great vid dave. no hype just real facts
did exactly as you cited w/ Lucent Technologies , the broker ( crook ) loved it , the commissions , I averaged down ( real brilliant ) as many as 6 times . Excellent site , Thank You
there is one 100% Free Robot if anybody want.
although i know a combination of studies needs to be used, which one is more reliable, MACD, RSI or Schocastic ?
thx.
Its very true you know why cause i use to do it and i still do it sometimes but my account got devastated in the past so i learned now but there are certain times when it works.But anyway Best trading lessons.There are some even paid not as good.Thanks David for sharing with us.
Make sense is the name of this guy. Thanks for the great stuff you share.
@laton2010 hey man whats a good legit place i can buy and sell gold or trade stocks thanks
@laton2010 man..its bullshit..I know a strategy that works very well, even if the market seller is a devil or not…follow them, and you’ll get lots of pips…
(0:50) This is why you don’t initiate a short until you have a confirmed head-and-shoulders reversal (or climax top) with a breakdown below the neckline and failed rallies. You don’t short when the bulls are overeager; you short when the bulls are throwing in the towel.