Top Ten Ways to Lose Money by: Kerry

Everyone has a Top Ten….. Here is top ten ways to lose money trading. Add some additional ways if you like.

1. No Specific Trade Plan or System, trading impulsively.
2. Trading a New System/Strategy without knowing its expectancy. Do not back test or forward test, trading on blind faith.
3. Un-realistic expectations, looking for get rich quick systems and searching for the Holy Grail. Looking to trade for the wrong reasons.
4. Trading too large a size for the account. (#3 feeds #4)
5. Making too many trades for the account size. Trading is boring many times and most people want to be entertained.
6. Trading on hope rather than accepting the markets actions. The market will do whatever it is going to do, regardless of your thoughts, hopes, and dreams.
7. Un-willingness to accept a small loss. All large losses begin as a small loss.
8. Letting winners turn into losers. Only believers in Buy and Hold strategy should never sell. A profit cannot be taken unless you are willing to potentially leave some money on the table.
9. Un-willing to scratch a trade when the trade is not working as planned, the trader switches to #6.
10. Not reviewing past performance and learn from mistakes. Do not expect different results if you keep doing the same mistakes over and over. Keep doing what you are doing and you will most likely keep getting what you are getting.

Equity Curves - by John T (Spiker)

Good morning, Alex and Kerry,

I have enjoyed seeing the equity curves published as I looked at them in a slightly different view than the quarterly competition. With the quarterly competition, one can become a little more reckless or conservative the last few weeks of the quarter, depending on where one is in the standings. The equity curves, though, show whether one or two huge gains or slow and steady gains have them at the top of the "rolling quarter" standings.

Since one is not competing for prizes with this, I have used the curves to pay particular attention to those Spikers who have had consistent winners, limited losses, etc. The curve shape, unless I'm misreading something, tells me something about the targets, risks, that the trader has taken to achieve their performance. Does that fit my trading style? Should I follow their picks closely or look for someone with whom I'm more comfortable? I realize more bookkeeping to do the equity curves for you folks but if possible to keep it as a regular, even if not weekly, feature, I'd vote for that and use it.

This is going to be difficult to appear as an "unbiased" comment on the equity curves since I'm lucky enough to be there but "scout's honor", I had begun to use them. Thanks, as always, and hope you all had time to enjoy the long holiday weekend.

john t