When I started out actively trading and investing in the stock market I greatly underestimated the learning curve. I my early years in the stock market in the 1990’s I was very lucky as my main focus was buying into tech companies and letting my winners run in the uptrend. This simple strategy gave me a false sense of skill as it worked all the way into March of 2000 as the NASDAQ always made new highs for years on end until it all ended around NASDAQ 5000. Buying dips quit working and holding and waiting for a rebound slowly faded as the 2001-2002 time period was a deep bear market especially for the NASDAQ. I learned from this 50% drawdown in my own trading capital that I needed not only a way to buy into a strong uptrend and let my winners run but ways to lock in profits when they were there. I learned the lessons  below on my journey to get my capital back to even in a few years when the market turned back up in 2003, and I went on to produce great annual returns and avoid another big drawdown in the 2008 meltdown. My trading lead to my financial independence. 

  1. No research: I should have done backtesting and studied historical stock market charts before I ever put money at risk in the stock market. 
  2. Not adding enough cash to my account: I relied to much on compounding capital in the 1990’s and I should have systematically saved and deposited more money into my accounts in the first few years. 
  3. Not creating a trading system: I should have traded using a specific method and created a trading plan for entries, exits, and position sizing. 
  4. Trusting my opinions & predictions: I should have understood earlier that my opinion did not matter and I could not predict the future. I should have focused on indentifying and following the trend. 
  5. Listening to other’s opinions & predictions: I should have never listened to other people I should have focused on executing my own trading system. 
  6. Being stubborn: I should have cut my losses short when a position was proven wrong and not stubbornly held on and hoped it would rebound. 
  7. Not using signals: I should have had a reason to get into a trade and a reason to get out. From the beginning I needed to trade with signals that have an edge over the long term. 

How many of these mistakes are you making?