In today's episode, I'm going to reveal the biggest mistakes that day Traders are making that result in losing money, blowing up accounts, and ultimately having to give up as a Trader Now right now I'm in the middle of a small account challenge a challenge to day trade in an account that I funded with just 1,000 bucks and I am finding that the pressure of trading in such a small account has actually resulted in me making some of the rookie mistakes. I'm going to share with you today. So I want you to know that you're not alone in making these mistakes even a season Trader when dealing with a lot of pressure can make them too. But what I want to do in this episode is I want to make you aware of these big mistakes so you can recognize them in your own trading and so you can Rectify them.

Okay, so as you know, I Finished the last episode on day five of the small account challenge with the biggest Green Day I've ever had that early in a challenge $579 a profit but I didn't know what my fees and commissions would be for that day until the trades settled. All right. So my Pnl going into Day 6 $2,434 193. This is still phenomenal.

The account is up over 140% in just 5 days of trading. but Day six? well let's jump on the screen share and take a look at day Six. All right. So Acon just popped up on the scanners.

Here it's up about 35% on the day. This is a reverse split. so I'm watching this for a long uh, partial fill there. 300 shares in at 481 for the break of five.

Uh, this is up 46% now. Volume is a little light, but we have news that just came out reverse split. There's 99 on the Ask, five on the Ask, 510 on the Ask I'm going to try to take some profit. no fil.

what is. Look at that spread: $450 on the bid I lost $73 on that trade. It's right back to Five. That'd be $60 a profit if I got out at five.

All right, I'm going to put the order for 200 shares I'll put it at 300. Let's see I might get back in if this keeps going higher. Whatever. Three: $7 is no big deal.

503 on the bid, 503 on the bid, 517 on the offer, 48 467 on the bid. Wow. All right, so this one is jumping around a little bit. I'm just going to let it be $7 Loss doesn't matter.

So did you see the mistake I Made there the first mistake and this is a rookie mistake is forcing trades on lowquality set setups that was not an A quality setup. Yes, the stock was moving, the float was fine. It had some news it was a reverse split, but the chart pattern not perfect. I was in very early, it hadn't fully formed, there wasn't a lot of volume, and it was very thinly traded with big spreads.

That's not a quality, it's B quality at best. Now, the problem with trading B quality setups like this is that number one: I've incurred unnecessary loss, which in this case was only $7 but it could be more next time I've definitely incurred some commissions on the trade, I've expended energy and put focus on it. And the worst thing is that while I'm focusing on this trade, what if an A quality setup was happening over here and I missed it because I was fumbling around with this B or C quality setup? That's terrible. So you really have to be super patient.

Trust your system and wait for setups that perfectly fit within your system. Now as you know, right now, I'm using an international broker for this small account challenge and there's some benefits with that broker. One of them is that I can day trade as much as I want, even with an account that has just $1,000 in it. Another benefit is that I can have six times leverage, which means I deposit $1,000 but I have $6,000 of buying power.

So as I started day six, I had just under $2,435 So the math on that is that I actually had at the beginning of day Six over $144,000 of buying power. So then you would think, okay, on a stock that's $4.80 I could actually buy 3,000 shares of it, right? Almost 3,000 shares? Well, not quite. So they have some restrictions on when you can use leverage and one of those restrictions is that you can't use it on any stock below $5 a share. And so this is kind of crazy.

So what it means is that with my $2,400 balance, a stock that's $4.80 Well, I could only afford about 300 shares, but a stock that's $510 Well, I could buy a solid 2,000 shares 2,000 500 and that makes a huge difference in how much I can make. Now you might think oh well, jeez, the stock did just cross over $5 Can you now trade it with bigger size? No, it's typically based on the open price of the stock that day. So the result here was that I put my attention on a stock that Not only was a B quality setup, but was cheaper and therefore I couldn't maximize my leverage or potentially maximize the growth in the account. My sweet spot is going to be on stocks between 5 and 10, but rather than being paid, patient, and waiting for those stocks where I can take the most share size and where a 105 C winner can be $200 or $300 I'm fumbling around on low quality setups incurring losses because I'm dealing with the pressure of feeling like I need to trade every single day and I need to make progress.

less is more. Well, let's look what happens on trade number two for day 6. So you're about to watch me take a Flatt top breakout setup: I'm in 500 shares of this stock at 420 for the Breakthrough the highs. it's not a bad chart pattern.

It's not a bad setup. the Stock's up 40% the float is right at 2.9 Million shares. The daily chart is fine. it's a recent IPO but it's too cheap.

The stock is just too cheap. I'm not able to fully maximize my profits on it. And to be honest, the entry, well, it's a little high. so I'm in here at 420.

Although it makes sense as a Flatt top breakout, it would be better to wait for a pullback. I was kind of forcing the trade looking for a move right through the high of day and now as you can see, it's stalling out. What I should typically do is bail out right away. but I really don't want to incur this loss.

So now I'm making the second mistake which is I'm holding a losing position a little too long I could get out right here, right? 418 423 on the offer I could. but I don't I'm still holding I'm still holding I could get out more or less break even at 4 17 but I don't I'm still holding I'm still holding until finally it comes back down to 406 408 on the bid. It's not breaking out and as you look at the one minute chart, you can see that we're starting to form a one minute pullback. So now I'm in to high should I hold through the whole one minute pullback and hope that it resolves back through the highs I could uh, you know, but then that's not really what I planned at the beginning of the trade.

The fact is I hesitated on the entry initially because it wasn't a perfect setup. it squeezes up so now it's moving. so I like it. then I get in a little too high and this isn't a stock I should really be focusing on because the price range is below $5 now I'm stuck kind of holding it and all the attention I'm spending managing this trade is coming at the opportunity cost of focusing on the next winner.

That's actually an A quality setup. Unfortunately, this ends up being a loss I Think that it could have been avoided. It could have been avoided by saying look, the stock under $5 I shouldn't touch it It could have been avoided by getting out a lot sooner I Can't believe I'm still holding it. It could have been, uh, avoided by waiting for this pullback that's forming right now and then getting in only if this pullback resolves because what we're now seeing on the chart is the first one minute pullback happening.

But I got in early thinking it was just going to keep going higher. So I put out a sell order at I think it was 424 there. hoping maybe it gets filled, but you know what's going to happen is it's going to flush. It's not breaking out.

all of a sudden, a burst of sell orders are going to go through. You're you got 406 on the bid and when it flushes I'm going to get slippage on my exit. So now because I'm exiting basically the same time as everyone else when it's obviously failing, I'm going to get a worse fill on my position. So I'm down $74 right now on this trade.

I could sell right now at 406, but now I'm holding kind of a little bit of desperation. Not that there's a lot of money on the line, but there's a lot of pressure on line when you're trading a small account. 411 414 This is probably one of the longest trades that I've had so far of this small account challenge. Now in the one minute, you can see that it doesn't look bad.

You've got high volume green candles, light volume red candles. This could be a nice one minute pattern, but I'm in way too early and I'm down 13 cents 14 cents. And here we go. look at that slippage.

I'm out with $120 loss I filled at the bottom, l lost an extra 15 cents a share that I didn't need to lose and I'm down $127.68 So that $127 Well, when you take off the fees and commissions, that red day gets a little bit bigger. That's disappointing. This was not worth it. So rookie mistake.

Number One is forcing trades. I'm telling you the pressure of trading in a small account or the pressure of feeling like you need to make x amount of money by the end of this month. That takes a real toll. and it can dictate the way you start trading.

And then you're not trading the market. you're trading your emotions. You're trading. You know your P&l That's not a good way to trade.

All right. So Day six is in the books. Not a good day. Let's see what happens on Day seven.

Okay, so I begin day seven with a trade on Bzi. It stocks up 27% It just hit the high day. Momo Scanner We've got like four green candles in a row five. We've got a high up here and I bought as it broke through new highs and I'm looking for a squeeze up to 230 240 now this one.

I can't use my leverage on, but it's cheap enough that I can still buy almost 1,000 shares which is kind of my minimum to buy. So I got 900 shares. My entry a little high at 21 got like 3 cents of slippage. Slippage is a difference between where I want to get in and where I actually get filled.

so little slippage on it. Um and it's kind of stall out here already. So I put out a sell order. it's not filling, cancelled it.

It pops back up here to 28, 29, 30, 33, 35 and I take my profit there. $81 Okay, not quite 10 cents on 900 shares, but $81 is a green trade riding that momentum. Not a bad way to start the day. So trade number one.

Day Seven $81 Now I'm about to make another rookie mistake and the mistake is overtrading over staying. You're welcome and going back for more I know so many traders who make a little bit of money and then they give it back Now I have a window during the day when I know statistically I will make the most money and my next trade is coming at the end of my window. The fact that during my window I was only able to get that one trade and make $81 already should be an indicator that this day is not super hot and I should walk away. but instead that feeling of desperation that I need to make a little more I need to make at least $100 or $200 a day for this small account to still be growing I go in for another trade and that is a mistake trade to on day seven I'm taking a higher day break on Nexi.

stock is up 24% today the bounce day and I get in. I'm going to get in just a second for the break over 750 but I end up look at that I get in at 46, it goes to 55 and I'm like okay, nice but there's a seller at 55 now it's 51 now I'm down 10 cents on the bid and I'm like uhoh, it's up and when it comes back up I put out my sell order I'm like let's just get out of this thing. This is not good. All right.

sell order is not filling now I'm down 15 cents. That's $150 loss I put the sell order out again. Can I get out Can I get filled Can I just you know Escape $150 loss on this the the the and there I'm out with a $9 profit. This is a trade where all of a sudden my sort of goal changed.

It started with let me see if I can just get a nice 105 Cent winner as it squeezes through the high and then when it dropped I'm like can I just not take a big loss on this and get out break even. The one thing I'll say is that I did not get stubborn I didn't average down and I was able to get out pretty quickly which is great, but this is a trade where I overstayed my welcome in just in the fact that I shouldn't have even taken it. Given the quality of the momentum on this particular day, it wasn't strong enough. So that was trade two On day seven, did I learn my lesson? No.

I go in for trade number three. This is a rookie mistake. so let's look at trade number three. So this is classic.

Nexi has now gone up to $8 a share. It went higher without me. Okay, so it happens. but now I'm going to get back in up here I can't buy quite as many shares.

so I trade with a little bit of a smaller position. but the luck of the draw I'm buying it too high I'm expecting it's going to continue higher and it's going to end up flushing on me and I'm going to take a big loss. you know I shouldn't even be messing around with this stock at this time of day. I am really pushing my luck.

so I'm in there with 750 shares at 820 and I thought okay, it's holding over 8. Next Target is 850 but as soon as I get in it stalls out. It goes down to 807 818 on the offer. Look I already had one close call on this stock.

Why am I playing with fire? Why am I back in? You know I I Don't understand, always why. Even after all these years of experience, I can still make these mistakes, even myself. So what I encourage for you is to develop the awareness of it so at least you can see that you're making them. and you know, hopefully develop the discipline to stop yourself from continuing to make them.

I Think what's going on for me in this case is that I'm dealing with the pressure of being in a small account Challenge and now I'm getting stubborn, right? I should have already bailed right there at 8 I'm down $150 Unrealized. It's going to put me red on the day. And just like my trade on day six, I'm getting emotional I'm holding this way too long. Now the 1 minute is starting to form.

We had five green candles in a row going up, or four in a row going up. and now it's dropping. Now it's below eight. I'm still holding.

This makes no sense to still hold here. Now it's 74 on the bid now. I'm down $350 This is going to be my second biggest loss of the challenge. This is so dumb.

This is a rookie mistake. This also is an example of holding losers too long. So I'm doing two things on this trade that are bad: Number one: I overstayed my welcome I'm playing with fire, trading a stock that has already proven itself to be very difficult. and number two: I am getting stubborn I'm holding my losers too long.

Holding your losers too long is a classic emotional response rather than just cutting the loss and saying all right, you know what, I'm just going to let it go. It's not a big deal, you hold on to it, you're afraid of the loss, and even though the best thing to do is to cut it so the loss is small, you do the exact opposite. you hold and hope because right now I put out my order at like you know profit and look it has come back up. But that doesn't mean that holding it was right I should have gotten out a long time ago.

at this point it's a holding and hoping that with the one minute pattern resolves, it's not a good trade. And and I would also say this sort of Falls a little bit on uh, the first rookie mistake of just not really trading a good quality setup. forcing trades. There's really no reason for me to be forcing this trade except for my own feeling that I am not achieving the performance I wanted to achieve in this account.

Now you may have I may have that in this case because I set a goal of growing this small account and so I I want to perform really well. Obviously there's a lot of people that are going to be tuning in for this challenge. so I feel like there's a lot of pressure. pressure for me is in this case created by those circumstances and look, right now it's back to break even and I'm still not getting out.

I'm still holding it. So the thing is, when I was a beginner Trader the pressure wasn't coming from you know, trying to do well to you know show people on YouTube or whatever the pressure was coming from I needed to make money to pay my bills, right? That was the pressure and in in the at the end of the day. It doesn't really matter what the pressure is. pressure is pressure and your response to it is going to be the same it gener.

It creates emotional, reactive trading, impulsive trading, holding losers way too long, selling winners way too soon. And you know the net result of this trade is that I've just like the first trade. Uh, on day six, I've held this way way way too long and now I'm finally taking a $335 loss. I'm down 250 bucks on the day.

Now we've got a problem. I have two red days in a row in the small account Challenge And what does that mean for pressure? The pressure is now getting real now. I'm starting to get stressed out what's going to happen I I grew the account from a th000 up to 2400 Now I'm back to 2000, you know? I I can't take I What if I have another third red day, you know. And so at this point I'm starting to get really stressed out.

I'm seeing my Equity curve. it was up and now it's down two steps in a row. and this second step down a $250 loss is a big loss. This is the result of a rookie mistake.

It's the result of the rookie mistake of overtrading, overstaying my welcome, and getting stubborn and allowing emotions to take over. It doesn't get better on the first trade for day eight. Let's jump in. Let's get into to it.

Day 8. All right. So I'm beginning day 8 with $2,753 of equity, have to take off the fees and commissions from day seven, and I'm sitting here jumping into acon. This is a stock that's moving.

but look, I get a partial fill first trade of the day I'm in it and I'm up 2530 cents a share. but I only filled 160 shares. Now That should have been a really solid winner. But because I only got a partial fill, I'm only up $52 on it.

You know what, It's a green trade. It's good. This stock is sort of tricky though, because I don't have leverage on it. It was.

It started moving way below $3 so even though it's crossed over five, there's still no leverage on it. Which means ultimately it's going to be hard for me to hit 200 or 300 or certainly four or $500 winners with a Max position of about 300 shares. This is an example where this, really, although it's a good quality set up for my main account, it's not a good quality stock for the small account because it's going to be hard for me to compensate for the fact that I'll have commissions on every trade. You know, 10 cents with 300 shares is 30 bucks, but when you factor in the commissions, it's just not really worth it.

Commissions are too big of a piece of that profit if I win and if I lose, well, they're going to be. They're going to just make the loss even bigger so the profit loss ratio becomes imbalanced simply because I can't buy enough shares I really have a goal of trading at least a th000 shares if I can and in this case I can only buy n uh sorry 300 it's just not worth it. So here look I get back in with 150 shares and this is a really honestly kind of dumb trade. you know.

Okay, look I made 30 bucks on it. but I'm trading with such small size that it just feels like you know this is almost an opportunity cost. where if I was trading this in my big account I'd probably be up a couple thousand, but trading it in the small account with 150 shares, it's just it doesn't make sense. Now the reason I took that second trade with only 150 shares and Hey look it's great that it was a winner I'm up $85.99 on the day.

but the reason I only took 150 shares was because my first trade was so good. it was just unfortunate I got a partial fill I don't want to get in now with even bigger size because if I get in now with big size that 300 shares and I lose, it's going to give back all the profit from the first trade. So considering I just had a red day on day six and day seven, I'm like let's go cautious, let's be easy and just chip away and let's see if I can make you know $100 today. But I don't want to overstay my welcome and I'm going to be quick to take the profit off the table if this is all I can get.

So now for the third trade, I'm adding back 150 shares and I'm looking for the break through the highs. But look at that. I got in with 150 at 6 and it immediately drops 25. Just bad timing I was looking for that flat top breakout.

It didn't work now. I'm down 25 bucks and in this case, stubbornness kicks in right away because I've had these two red days on day six and day seven I am so easily triggered. My fuse is so short and that's why it's so important just to get green and walk away. Now What? What do I end up doing? I'm going to end up adding another 150 shares down here now.

I've got 300 shares at an average price of 593 I filled a little high on the second 150 I added and I'm down $50 Unrealized, this is not looking good. I'm going to take I'm going to have to take the loss if this thing breaks below 75 and if it breaks below 75, I'm going to be down 60 bucks which is basically going to put me up only 20 on the day and then after Feas and commissions is a break even day. So this went from being a day where I was going to have a small step forward to just being a break even day and it feels even worse than that because I had some profit and then flush I gave it back now to add salt to an open wound. acon bounces and goes right back up to $6 and I get back in now I don't really have a problem getting stopped out and getting back in.

stopping out is the right move. The only problem in that case was that I held too long and I average down I'm getting stubborn and now when I add back I I add back with a full 300 shares for the high a day break. Let's see how that plays out all right. So adding back here 300 shares orders entered at 623 it's over six dipping down I'm looking for the break through the highs I punch it I get filled with a little bit of delay.

This routing is not quite as fast as the routing that I'm used to. but and and sometimes it's faster. sometimes it's slower. In any case, I filled at 608 I'm looking for the break through 623 I put the cell out at 633 is a profit Target and it picks it up and you know what? That's not a bad strategy, it's a profit.

Target I'm out. but well shoot. here's the problem with that. The problem is I just capped my winner I'm out with 33 cents of profit.

It went another 30 cents without me. and what am I going to do? Am I going to get back in up here. the high is 79. so now I'm watching for a dip off that breakout and then a rip back up.

I'm in there at 200 shares at 50, there's 67. Are we going to break through the highs? I've got to keep it tight I cannot get caught in another flush I'm lucky to be back up. Nearly $100 on this hand is on the buy hand is on the sell button to bail out on the bid. That would be a hotkey to sell on the bid and it goes up to 70.

Okay, 68 on the offer, 67 on the offer. Can we get through 70? We're sort of in a little consolidation here and I sell at the bid I end up making a couple cents on it at $104 now on the day. Okay, so day eight is in the books, but what's the result of overtrading? The result of overtrading, certainly is that you're risking giving back early profits which I did I managed to get them back. But fees and commissions are going to be higher because of all of that trading and all of that churning.

So we got to take the fees and commissions off for day eight. All right. So going into day nine, you know I'm I'm feeling still a bit on edge. My fuse is pretty short because I did have those two big red days I had one green day but it was kind of small and after the fees and commissions, it was even smaller.

So I I'm not really back in a place of feeling confident. It's not going to take much for me to give in to these emotional impulses and give in frustration. This is the reality for a lot of beginner. Traders Is you just? you feel like you're like one bad trade away from getting stubborn frustrated being like ah and just making mistakes.

It requires so much discipline to be able to restrain yourself to follow the system to trade a quality setups. The fact is, if I had been waiting for a quality setups that were above $5 I don't think I would have taken a trade these last three days and I'd be better off for it cuz I'm still net negative over the last three days. All right. So let's jump in and look at trade one for day nine.

Cidu has breaking news that just came out: I Jump in this at 1794. Sidu is a former Momo stock with lots of room up to the 200 moving average and the news has AI in the headline. This can be the type of stock that can move and it's already gone from 16 to 18, but holy smokes I'm in 179 shares at 1794. The stock is a little on the high side of my preferable price range and I'm down a dollar a share on the bid.

What just happened I've made a terrible mistake. This is a disaster. I'm down $255 right now. first trade of day n and another big loss.

and just like that, I'm going to give back everything I made on day eight and I'm going to go further into the red on this draw down. Boom Locked it up $214 in the red First Trade of Day N So where did I go wrong? What was the mistake on this day? Again, a classic rookie mistake I gave into Fomo I chased it desperation. So why am I desperate I'm trying to grow this small account I'm trying to grow it as quick as I can I'm excited and I'm fir fired up I come in I see the stock. It's got news.

It's a stock that I've traded in the past and have made money on that's relevant. But rather than wait for a pullback essentially the second I hit my scan I pull it up and I jumped in. Why? Why so impulsive? Why so aggressive Fomo emotion? The fear of missing out? The fear that this is going to be the one that goes to 18 to 20 to 25 to 30. And if I don't get in now I'm going to miss it I'm going no.

that is emotion talking the system. The strategy is calm cool. Collective is analytical is rules based. Why am I throwing that out the window? All of a sudden, emotion has gotten the best of me in the middle of this challenge.

I've got the pressure I've got the frustration of two red days, a small green day I'm looking to hit it out of the park I'm also thinking I've got to upload and record I've got to record and then upload my next episode real soon. and I don't have a lot of Trades yet I need to get some good trades in here I said I was going to upload these each week. so I see something hit and I'm like this could be the one. This is really a problem now I'll give myself you know a little bit of a break that I understand why this is happening and this is the same type of thing that happened to me early in my career when I was like I need to pay $5,000 of bills by the end of the month and when I would see a stock pop up I was like this is the one that could be my ticket to covering my expenses.

That desperation can come from all different areas. It's different in my case right now, but it's the feeling is the same and the reaction is the same. This is emotionally impulsive, emotionally fueled trading and I'm giving in to the fear of missing out. What I should have done on this trade was throttle myself back and wait for the first pullback.

Wait for a good setup. at least a micro pullback, but on this one really? I just jumped right in and now I've dug myself a deep hole. So on the one hand, perhaps the the right thing to do on this day would have been just to walk away and say I'm done you know I'm I'm read 200 bucks I'm going to lock it up and come back tomorrow, but in this moment I'm starting to get tunnel vision and this is a really risky spot cuz this is a place where I could start to spiral. So trade 2 Nexi is continuing.

This has been a stock that's been in play for a couple of days and I'm in it. But I got a partial fill on my order which is incredibly frustrating. I was actually able to buy a th000 shares of it and I filled 84 shares. I'm not kidding I filled 84 shares at 927.

I should be up 400 bucks right now. Now this stock is moving. The price fits my price range much better than um SAU and it's something that I can trade on Leverage But unfortunately I got a partial fill. That's just the luck of the draw and that's why trading can be so frustrating.

You know you finally have a good setup and then you know you you miss it. For whatever reason it could be because you wore away from your computer, it could be because you got a partial fill. But in any case, I'm in it with 84 shares and although I was up 30 bucks for a moment there and I could have just taken it off the table, I'm holding and I've put the order out to add, but I take it off the table so trade number two $5.9 Hey, by the way, uh, maybe I didn't already mention this, but you know I I have a broken screen back here. the screen screen's broke.

It's not good. So one of the things that I said for this challenge was that I was going to begin this challenge with similar equipment to the way it was when I was starting. When I started trading, I was using old old monitors. Terrible old monitors.

I was using borrowed old computers and so this is a broken. This is a computer with three broken keys and this is a monitor that was dropped on the ground. which is why you can see it's it's all pixelated or whatever down here on the side. and I've got some new ones here and these ones are fun because they flicker.

They flicker the whole time when I'm looking at the screen. but hey, there's something you can do about it. So as part of this challenge, I said that once the videos in this series cross over 10,000 thumbs up. You will allow me to unlock a new piece of inventory to expand my trading station.

We are getting very, very close. but that's not the only thing that happens once we cross 10,000 new subscribers to this channel. I'm going to reset the account back to 1,000 bucks. I'm going to keep the inventory that I've earned.

but I'm going to reset back to 1,000 bucks. So those are two things that you can do to help in this challenge: Hitting the thumbs up and subscribing to the video. Okay, so let's now look at trade number three for Day nine. So this is unbelievable.

Nexi is halted up at 11:15 and P just started to pop up and I'm going to jump in This This is a half dooll whole dollar breakout setup. I'm getting in at 881 to anticipate the squeeze through 9 because it's a daily breakout setup up very similar to Nexi. NEX is a daily breakout that's 20 cents. That was my target.

I'm taking it off the table and just like that I Locking up nearly $300 of profit and look at that, Nexi resumes squeezes up to nearly 12. P At 12113 1216, we've got some action, we've got some momentum, and just like that, things have shifted. Trade number three puts me in the green right now and it was a little bit of a swing. Was I aggressive on that trade? Yes was I aggressive in terms of share size? Yes.

But here's the thing when you trade stocks that within that N5 to $10 price range, This at $8 $9 was perfect. The spreads are tighter I can buy more shares the move of 152 cents. it actually is enough to feel like I could take the profit off the table 20 cents with 1100 shares. That's a great win $220 and in this case I got a little bit more than that.

These are solid trades I need to do more of that I need to do less of trading stuff like s do or trading the cheaper stuff where I can only buy 200, 300, or 400 shares. So now I'm starting renewing my commitment that what I really need to be focusing on for this challenge are stocks between 5 and 10 Now I know there's going to be times when there's a stock that's a little more expensive, but it's going crazy. or maybe a stock that's a little cheaper. but it's moving fast and as my account grows I will be able to trade the cheaper ones a little bit better cuz I'll be able to buy a th000 shares.

But the problem with the expensive ones I'm going to deal with spreads. that's what happened on Syu. All of a sudden, the spread opened up to 4050 cents 70s with that big spread, it's really hard to manage risk. So all right, this is looking good.

but I'm not done. I'm still trading so let's go back into day nine. So I got a couple more trades on Nexi. This thing was crazy.

It went from 8 to 10, to 12 to 14 to $15 and I wish I'd been able to do better on it, but the fact is I couldn't buy very many shares. My last couple trades were with 100 share blocks, so I'm finishing Day N up $169 Okay, that's a green day I really shouldn't complain. but man, it got off to a really Rocky start. and although I'm up a couple hundred, well, $169 and then plus 100 from day eight, that's $270 But then take away the fees and commissions right? I'm still in the over these last several days.

My I peaked on day five when that account was at $2,435 and now although we're coming back up, I'm still sort of on the on the rebound. So that's why for this episode. I Really wanted to talk about the mistakes that beginner Traders make. So the the mistakes that we highlighted in my own trading and there were three: Number One and this is.

this is really a big one. forcing trades, trading, low quality setups that just weren't really working. Number two: Overtrading This is a big mistake, generating a ton of commissions, pushing it too hard. Number three: Giving into Fomo getting emotional and getting desperate.

but you know those aren't the only three mistakes that beginners make. I've got a couple more I Want to share with you? One of the biggest mistakes you can make is believing you can make money. Following promotional stock alerts, they usually come text an email, although sometimes they even come on postcards. These are especially bad on penny stocks.

and I want to tell you I get it because I fell into that trap of believing I could make money doing that myself when I was early in my career because I didn't have a strategy I was you know, like struggling to know what to trade So I was like oh, just give me alerts. So what I did when I was getting started was I went on Google and I typed in penny stocks, Hot penny Stocks penny stocks I should buy right now and naturally I got a ton of ads for these different Services that'll text you and email you alerts. The problem is, there's a major conflict of interest here. What you may not know is that a lot of the penny stocks that are being promoted, the companies have paid promoters to promote their stock for public awareness.

Now, as the stock moves up in price, this gives the opportunity for the company to raise money by selling more shares to the people who are buying, which is a form of delution. It's these are offerings and it it's what usually happens. We've seen this chart a million times. I'll show it to you on the Whiteboard These stocks have been beaten up like this.

a promotional campaign Begins the the stock starts to move up like this. some Traders get in and you can make some money on on these sometimes. but something like that's going to happen. And it happened to me that my first big loss I was in right here and I lost $115,000 That was my first big loss and that decimated my trading account now.

I didn't quit I didn't give up because I saw the potential to make money in the market I saw I had already made some money I knew it was possible to make money. but what I knew is that I needed to figure out a strategy I needed a system following alerts wasn't going to work. So the next big mistake clearly is trading with zero strategy. If you have zero strategy, you are literally shooting from the hip.

This is not going to lead to success. Success comes from having a system and a set of rules that you follow every single day. Now What? I want to do for you guys: If you check the link that's pinned to the top of the comments or the link that's in the top of the description, I have a link to a trading plan that outlines the simple rules that I follow when I'm trading. Now this is not a comprehensive trading plan that covers my entire strategy, but it's a simple trading plan that you can adopt and practice in a simulator.

I Encourage you as always to practice in a simulator before you put real money on the line to prove that you actually know what you're doing. and I'll remind you as always that my results are not typical. so you shouldn't assume that just because the system works for me, that it'll work for you because you need to generate your own track record of trading this strategy. So you need to have a strategy.

Trading with zero strategy is going to result in losing money, but something that I see a lot of beginner Traders do, which is another mistake is flip-flopping strategies going long and then going short or switching strategies when things get tough. I can't tell you the number of Traders I've known who started trading to the long side and then they're like oh, this is too hard I'm going to trade to the short side, then they get blown out trading the short side and then like ah, I'm going to trade large caps and then they don't make any progress trading large caps for a long time and then they like ah, I'm going to try trading. you know, cryptocurrency and then they have no success with crypto and they're like I'm going to try trading Futures and I'm going to try trading, options and it's like oh my gosh, what have you not traded? You've tried everything but you haven't had the stick tutiven. To be a master of one, you can't be a jack of all trades and be successful.

You need to be a master of one strategy and we could even narrow it down more that it's one setup which is what my trading plan has. So for my trading plan, I'm focusing on sort of a very narrow view of if you could. just Master this one setup This one. Strategy Step One Step Two Step Three Step Four Step Five Just do that.

Do that every single day Now because you're very narrow in your view of what you're willing to trade. You may not find Opportunities every single day as you seen with my trading. but if you are just trading this a quality setup when it appears. listen, monitor your metrics.

You will be impressed. You just have to have the discipline to wait for setups that actually meet your criteria. And so traders who flip-flop they never stick with a strategy long enough to see whether or not it's actually going going to play out and work for them because as soon as it gets tough, they're jumping onto the next one. So you have to stick with a strategy and the best thing to do is to produce a proven track record.

Not having a proven track record before you go live is a major mistake. It's a mistake for a couple reasons. Number one: if you can't make money in a simulated environment, there is no reason to believe you'll make money when you go live with real Money Zero. So let's pretend that your trading account is an investment.

Let's say it's $5,000 That's an investment. Now you could invest that $5,000 in a lot of different places. You could also spend it, and it's gone. But let's say for the purpose of this argument, you could invest it in a, uh, a mutual fund that returns 8% a year.

Okay, you could invest it in a treasury bond. You could invest it in a CD. You could invest it in the S&P 500, which returned nearly 15% over the last year. All right.

So 15 % on a $5,000 account. 750 bucks. Okay, that's not a lot when you're thinking about the whole year, but it's better than losing it. Are you a better investment? you and your strategy and your system than just putting it in the market? You don't know because you don't have your metrics.

So why would you invest if you don't know? So the thing to do is to practice in a simulator, prove profitability, prove that you can grow that account, And once you've had four or five, six consecutive green weeks, once you've made some money in that account, then it's time to flip the switch and go live. Naturally, when you go live. for the first time, you will make some mistakes. There's some learning curves to flipping the switch and going live.

And so when you go live, you want to start with small share size so the costs associated with those mistakes are minimal. You don't trade in a simulator with 10,000 share blocks and then start trading the real money with 10,000 shares on day one. That is not a good idea. You start small and then as you're seeing progress, you increase share size.

But when you have a draw down and you will I've just had a draw down in the small account and you will have one at some point too. What do you look back on to give you confidence to remind you that you still actually know what you're doing? You look back on those metrics, right? So when I look back on my metrics and I see, well, wait a second, you know. Okay, I just had a couple of red days in a row. but this is what I've done in the past.

That's what gives me the confidence to stick with this system to stick through it even when it's difficult. And that's why when you look at my Equity curve over long periods of time from $583 15 on January 1st, 2017, I grew that account slow and steady all the way up to over $10 million. All right, And it took years. but it was slow progress.

And yes, I had dips I had losses I had draw down and I always recovered them all right I had the confidence I had the conviction in the system and the strategy they trade. Now as always, those results are not typical, but the example is still relevant. Another mistake a lot of beginner Traders have and and I'm even struggling with this a little bit in my small account. challenge is focusing on my P&l instead of trading the market I'm in.

The problem with focusing on your P&l is now you're trading a number you know I'm up $80 I want to be up 100. The market doesn't care that you're up 80, doesn't care if you're up $80,000 or $80 doesn't matter. the market doesn't care. So now you're not saying I want to trade because this is a great setup and it has a lot of potential.

You're saying I want to make $20 so I can be up 100 on the day. that's that's the that's the wrong way to look at it. You've got to focus on taking the best quality setups and so something that I will sometimes do and I encourage you to do if it's helpful for you is take a little poit little sticky note and pop that right over your P&l so you can't even see how much you're up on the day. Don't even look.

Try it. Give it a try. Try it for a day, See what it. see what it's like.

Now you're going to. You're going to have a sense of where you're at. You know you're going to know if you're red because you got in. you got out at a lower price.

You're going to know if you're green. you got in. You got out at a higher price. But you're not going to know exactly where you're at.

So why don't you try that? Just trade based on the price. action. Is the market strong, Does it look good? And then when you say you're done at the end of the day, take the sticky note off and see how you did. You might be surprised.

And you know what. Regardless of whether you're up more than you thought or you're up a little less than you thought, be done. At that point. This is enough.

I'm walking away because the market is giving me the queue to leave. It doesn't matter what my P&l is on the day and so in that trade that I took um, on day nine where I capped my winner because I put the sell order out saying oh once I hit my daily goal I'm going to walk away. It's the same thing. There's no reason to do that.

The reason to walk away is because the market is no longer giving you opportunities to trade. So if it's still giving you opportunities at 10:30 11:30 12:30 then I'm going to keep trading I'm going to keep pushing it until the opportunities go away, right? I mean I think that's the right idea. Another mistake that I see happening all the time is Traders taking too much share size. When you trade with too much share size, you bring out big emotions.

I'm telling you right now, if I bought 100,000 shares of a stock, my heart would be pounding. my palms would be sweating. You know it's like you're white knuckling it when you get in really heavy. Now for you, that might be at 10,000 shares and that would be huge size.

The problem is when it's it's important to push the the limits of your comfort zone so you can expand the trader. You do not want to be stagnant, you want to be pushing, but at the same time you also want to recognize that when you're trading with with share size, it's too big. You're going to start being a little more emotional. which means you might get stubborn holding losers and you might sell the winners too soon because you're in too heavy.

Which means you're not fully maximizing your winners and your losers are going to get big. And you're going to see that in your profit loss ratio. The Profit Loss ratio is the average winners versus the average losers. and when that starts to go negative, it's going to make it really hard to make money you're you're going to need to have really high accuracy to make money.

if you've got a really negative profit loss ratio. SO Trading with too much size is a big mistake and trading without discipline and falling into downward spirals is the worst mistake that can happen. This can happen, not just for beginners. I've seen it happened to many season Traders Falling into downward spirals, getting emotionally, uh, emotionally impulsive, emotionally influence And it It begins generally with a lack of discipline.

It begins with a day where things got tough and rather than follow your rules and say I'm just going to walk away here with a small loss, you got stubborn. The loss got bigger and bigger and bigger and bigger. You end up taking the huge loss on that day. You come back the next day and you're like I'm going to make it all back and you're stubborn.

Your fuse is short and you now double the loss. You have a two red days in a row and then three, and then four, and then five, and then six and then all of a sudden you're like my account's down 80% right? Or it's gone. My account's gone I didn't turn the corner ultimately until I hit rock bottom myself. So I understand what it's like to hit rock bottom and to feel like I don't know if I can keep doing this.

What motivated me to come back and to keep pushing to fund my account again and to keep going was my track record. The knowledge that I had that my system worked when I had the discipline to follow the rules and that therefore for me the difference between success and failure came down to my willpower to maintain discipline. If you found this episode helpful I hope you hit the thumbs up to help me unlock my next piece of inventory. I hope you subscribe to the channel and I hope you check out the trading plan that is linked in the description and in the top of the comments pinned to the very top.

That's a trading plan is going to walk you through the basics of how to get started and how to focus on one simple strategy each day. So we finished: Day N The account is a little bit lower than it was when we started this episode, but I'm going to be back at it for day 10 and I hope that we see things starting to turn around soon. It's only going to happen if I can focus on Trading stocks that are within my sweet spot window. That's where I have to lean in and be the most aggressive and have to try to cancel the noise of everything that's happening outside.

That, All right. So thank you for tuning in and I'll see you for the next episode Real Soon.