What's up Everyone Ross here from Warrior Trading in today's episode. I'm going to walk you through the five most common mistakes I see beginner traders making. We're gonna go through them right here. If you are a beginner trader, I am sharing this with you because as you probably already know, so many beginner traders coming to this market, they lose money and they leave frustrated, disappointed, and out of pocket.

right in the negative. My hope is that by sharing with you some of these really common beginner mistakes, you can avoid them in your own trading. The first on the list is so many beginner traders approach trading with a gambling mentality. This was epitomized during the Gamestop era where we had obviously traders bragging on Reddit and and social media et cetera about buying.

You know, basically placing a bet of 100 or 200 on these crazy out of the money options contracts that 99.9 of the time expire Worthless. Much like a lottery ticket. But in this case, they struck gold. And these were home run trades.

I mean beyond just home runs, You know, these were trades that did make some people very, very wealthy, but that was a once, really in a lifetime event. As far as I'm concerned, I've never seen another stock with an options chain do something like that. Even stocks that have made big moves weren't even close to that. And since then, how many of those traders who struck it big on those lottery ticket trades? How many of them do you think have given back everything they made trying to roll it into the next trade? The next trade? The next trade.

Gambling is not a recipe for success in the stock market. So this brings me right to item Number two. Mistake. Number two.

Trading without a plan. So many beginner traders, whether they come in with a gambling mentality or not, they come into the market without a plan. and they start trading with the real money with no plan. And so essentially you could almost say it's gambling.

They may not realize it's gambling, but if you're just shooting in the dark, you're just guessing, throwing darts at a wall. You're leaving it entirely up to chance. And of course, a game of chance would be gambling. So, and I think that many traders don't realize this, they think that they're They're sort of approaching this in maybe a logical way.

They're focusing on one or two stocks, but they really don't have a set out plan of how they're going to approach trading and a plan. And I'll put a link at the end of this video to sort of walking you through one of my trading plans aka strategy. It involves the type of stocks you're going to trade, the time of day you trade, the amount of risk you take per trade, how many trades you take per day. All of this comes together into a cohesive plan.

Now, the only way to know whether or not a plan is actually profitable is with a track record. so I'm going to just go ahead and jump ahead to number five here. The biggest mistake that I see traders make. I mean these are the top five, but one of the big ones is trading with real money without first having a proven track record.

So you know I'll put it to you another way. How would you feel if uh, you were getting on a you know, a flight and a pilot said hey guys, this is my first time ever being in the cockpit cockpit. I'm gonna try to, uh, you know, get this plane into the air and let's see what happens. All right, buckle up here.

We go because so many traders when they just try to hit the ground running, they jump in with real money with no track record with no plan. They're really leaving it all to sort of hope and chance. And and I think that the the part in this that's that's really a problem is that we know so many traders lose money and so if you want to be one of the few traders who is consistently profitable, you really have to do things differently from how just about everyone else out there is doing it right. Let's be honest, most of the people out there the way they're doing it is wrong.

It's backwards. so it's maybe because they're coming in with a gambling mentality. They're throwing real money on the line really haphazardly with no plan, And I say haphazardly because it's just this throwing a little bit on this. Maybe I'll hold it for a few days, throw in a little bit over here.

Maybe I'll hold that for a few days. I got in this trade. it went up. I'm gonna sell the whole thing for a quick profit, but then they've got these other trades that they've been holding for weeks that keep going down.

Well, I, it's my retirement account. I can keep holding what and it's just there's no plan around it. It's very haphazard and that again, you can't find consistency in that type of approach. and even if you found some profit, you wouldn't be able to replicate it because there's not a set rule of how you did it.

So in some ways, creating a trading strategy might not be too much different from perhaps trying to bake a a cake or something if you don't keep very detailed records in your process. Then when you finally get the cake that's fantastic, you won't be able to look back to recreate it. And so by having a strategy, a set of rules that you follow every single day. The results that you get each day are based on these rules, and so if the results you're getting aren't good, then you have to go back and either adjust the rules or you have to keep practicing.

Gain more experience because there is the skill and experience component. Unlike, I don't want to say baking doesn't require skill and experience, but but perhaps unlike baking where it fairly first, maybe a simple recipe, the cookies, or something, you just sort of follow these 10 steps and you're going to pretty much get there. That's not exactly the case with trading. As many of you know you can implement a plan.

I could give you a plan for instance, but then your own choices of how you manage risk, your own intuition of do you take this trade or that trade. You're then going to have naturally varying results. So now let's look at um, number three. So we talked about gambling.

We talked about trading without a plan, We talked about trading without track record, and now let's talk about emotional hijack. This is a really big one and one of the things that everyone. I'm not going to say that I've never been emotionally hijacked while I'm trading. Emotional hijack is an expression that we use in in the trading world and it essentially means for instance, you know you started the day and on your first trade, you end up with a loss That's like five times your daily max loss.

It just happened instantly. Maybe it was a mistake, a hot key error. Maybe it was just the luck of the draw. and rather than follow your rules and say i'm done, perhaps because you don't have rules, or perhaps you have them and you just say you know what? Screw it.

I have nothing left to lose. I'm going crazy today and next thing you know, you start snowballing. You start buying this sell. This buy sell, buy sell buy sell.

and you get into this tunnel vision frenzy where in a period of an hour, two hours, three hours, you can blow up your whole account And that's emotional hijack. So experienced traders, we're not without emotion. I feel emotions when I trade. Sometimes I feel very frustrated and you know, upset, disappointed.

I feel all those emotions. But one of the things that you learn as an experienced and seasoned trader is when you start to see these triggers or these red flags. These caution flags coming up in the way you're feeling emotionally. Whether it's your pulse, your adrenaline, you start to develop this self-awareness that I'm no longer in a good place to keep trading.

I can't think off the top of my head of another area in life where this might be particularly important to be able to have a very, very close, um, awareness of sort of yourself and your emotional condition. Because with trading, it can have a profound effect on your performance. If you are not in like, the right headspace, the right mindset. in a matter of minutes, you could.

You could lose tens of thousands 100. You could lose millions of dollars if your account was large enough and you had the leverage. So this is a really important one. As a beginner trader, you you need to start to learn the the signs.

Learn to recognize the signs of becoming emotionally hijacked. So when you start to see them coming up, you can close the computer and get away before you do any damage, you'll You'll have mistakes, but the goal is that you learn to kind of cut your cut yourself off at the pass before it becomes this train wreck. All right now. Um, number four and this will be the fifth.

uh, mistake we've talked about is chasing gains and I think this. You know, these tie in in a lot of different ways, but chasing gains the this sort of mentality of constantly chasing what's moving. I This is important because I want to differentiate chasing gains with some people who would say as a momentum trader, buying anything up 50 or 100 percent is chasing, because buying something high and selling it higher can be certainly part of a valid strategy if you have a plan and a track record to support it. But simply chasing that to me, um, reflects this emotionally impulsive.

I'm thinking of the dog chasing a chipmunk. It's it's almost. It's just like this instinctual impulsive. You don't even know where it comes from you, just it's happening.

this just chasing. And when you start chasing gains, you're thinking only about the gains. and what happens when you buy these stocks that are crazy crazy, high without a plan is you press that buy button That was easy and next thing you know, all of a sudden it rolls over, flips down. You know it halts going down or something like that.

and now the the risk and reality of the trade is setting in and you'll realize after the fact that you're risking this much, maybe to make only this much. And of course that's not going to be sustainable. So and that can be in the form of chasing stocks that are meme stocks that are really popular on social media. You know now? Oh, would you say sorry? I had a I had some questions from the Peanut Gallery.

so um, one of the, um, you know, with Gamestop in these meme stocks, there could be a tendency to to chase it and the fact is, I did very well on Gamestop. Of course my results are not typical and I don't want you to think that there's any guarantee you'll have results similar to me. but I did well on it and I was trading it and I probably did the best on it when it was between like a hundred and three hundred dollars a share. so it was certainly very high from where it had started.

But that was all part of my strategy. But I think that chasing mentality whether you're chasing because people are posting things on social media or you're getting email text alerts to buy buy. You know, buy alerts, sell alerts. Things like that you have to be really careful.

It's It's certainly valid to see what other people are trading to hear that someone else has bought something, whether it's me or any of the millions of other traders out there. But you also have to, with a grain of salt, take all that information and then with your own strategy, make the decision of is this a setup that is valid for me? Is this a setup that falls within my plan and then if it is, then that's great. You know other people brought it to your attention? That's totally fine. But if it's not, you have to have the emotional composure and the discipline to say no.

So I would say probably one of the biggest um traits that beginner traders don't realize they need to be a successful trader is discipline. And this is something that, um, I suppose in some way is a bit of a natural aptitude. Some people are naturally more disciplined than others, right? And so people who are naturally disciplined, whether it comes from their upbringing or other careers they've had, they're going to probably do better than someone who has very, very little discipline and constantly gives in to emotional impulses. And so people that are on the gambling spectrum.

This is a very emotionally impulsive side, and that's very. it can be very hard to untrain those impulses. It's not impossible by any means, but it's difficult and so it's important to know When you're coming into the market, you know what kind of attributes and what kind of, um, just natural skills are you coming in with. And if you're not coming in necessarily with the you know, fullest deck of cards or whatever the case is, then you may have to take some steps in your trading to try to mitigate um, your shortcomings and and try to mitigate the risk that could come along with being more emotionally impulsive.

for instance, So I, I would say in summary, the five beginner mistakes that I see most frequently: Number One Gambling mentality. Number Two Trading with no plan Of course, gambling and no plan are pretty much hand in hand. but trading with no plan and not necessarily thought of as gambling Number three: Trading while emotionally hijacked. uh, we all can get emotionally hijacked from time to time, but being able to recognize we're in that state and choose not to trade, that's sort of the best level you can get to as a trader.

Number Four: Falling into the habit of chasing stocks, chasing gains, Thinking about the P L. And when you're thinking about the P L, just the number, you're not necessarily thinking about the pattern, because as a technical trader, we're thinking about patterns. First candle to make a new high abcd pattern. A scalp at the half dollar.

The Whole dollar. So I'm happy to trade any of these patterns. But at the end of the day, what I would really like is to be able to print out every single one of my trades and say yeah, that based on that candlestick chart, that was a good trade. The money came separate, the money was sort of a a product of the good trade.

If you focus on just the money, then you can end up buying very, very high risk stocks that don't have a good setup, and then when it goes wrong, the damage can be really significant. and then number five trading without a track record. I, I don't wanna underestimate. Um, or I don't wanna.

You can't understate. Um, how important it is to practice in a simulator before putting real money on the line. I know that there is valid. Uh, there is a valid argument that maybe it's better just to trade with real money from the beginning, but with like one share, two shares, or ten shares.

Especially with a commission free broker. Because what you're doing during that period is you're training yourself not only on learning patterns and level two tape reading things like that, but you're also beginning the process of emotionally conditioning yourself to experience gains and losses. so that's valid. But what a lot of traders do when they're trading with no track record is they're trading with like, you know, the share size that someone might trade with if they've been doing this for uh, five years.

and they're doing it with no track record with no trading plan and they maybe allow themselves to trade while emotionally hijacked chasing gains that all basically comes back to gambling behavior. Whether or not they realize it, they may realize it eventually. And so my hope is that if you're watching this right now, any of that falls you know into a way that describes you to take a really good look in the mirror and say, all right, if I want to make this happen, the ticket and I'm going to be real with you is discipline. How badly do you want this? If you want it badly enough, you will get disciplined.

It's as simple as that. Get disciplined. That means disciplined and following strategies, testing strategies, and not trading with real size like big size until you have a track record that supports putting real money on the line. I hope this episode has been super helpful.

I'll put a link to a couple more right here and right here and I'll see you back here for the morning show right here on Youtube. Thanks for tuning.