hey everyone thank you for checking out this video my name is Travis rose I'm a
full-time day trader and investor and I'm also the founder of the master the
market trading educational programs you can find link below in the description I
wanted to make this quick video to go over five of the big mistakes that new
traders make and that often cost them thousands and thousands of dollars and
we're going to talk a little bit about how you can avoid these mistakes and
start your trading career off on the right foot
so mistake number one is following trade alerts many twitter instagram stock
twits and other social media gurus or so-called gurus mislead countless new
traders do not follow their buy and sell alerts you will end up losing even if
they profit so you probably see that these gurus posts all over social media
about how much money they're making from trading and they're gonna post
screenshots of their profits many of the time those profits in the first place
are completely fake and they probably photoshopped a lot of them but even if
they are real that doesn't mean that you can just follow their trades and still
have the same result that they do and the reason for that is because if we go
over to thinkorswim here just for a moment and let's say that we're looking
at this stock here and as ys so if you were looking to trade this stock and you
were looking more specifically to buy this stock and let's say for example one
of the gurus that you follow on twitter bought the stock at about five dollars
and twenty cents down here on this dip because he saw that there was some
support forming in the 480 to five dollar range so if we go ahead and draw
that support down here at about 480
and as I mentioned he bought it let's say at about five dollars and 20 cents
after it started to bounce a little bit and then he alerted to you that he
bought the stock and you decide to follow that alert a few minutes later a
few minutes later the stock is already up to about five dollars and seventy
cents per share so if you waited even a minute to buy into that stock you're
gonna be chasing way above where he bought into it and at that point there's
a good chance that he's already selling and mocking in his profits and by then
you're gonna be stuck up here at the top and more than likely you're gonna end up
taking a loss on this big drop here meanwhile he's gonna be posting on
social media that he just locked in you know 20 or 30 cents per share and profit
while you're taking a loss on what should have been the exact same trade as
him okay so that gives you an idea of how
following the Lord's doesn't work for you and you have to keep in mind the
fact there has never been a single long term successful trader that is became
successful from only following alerts the end of the day you just need to
learn how to trade on your own even though that may seem like the harder
thing to do you're gonna have a much higher chance of succeeding as a trader
if you do that rather than blindly following some gurus alerts on social
media okay so mistake number two is not having
a trading niche new traders often try to trade too many different types of setups
by doing this you are quote-unquote spreading yourself too thin we've all
heard that term before and it actually applies very well to the market as well
so you know if you're trying to buy the dip of stocks you're trying to buy
breakouts you're trying to short sell into resistance you're trying to trade
bull flags and bear flags all these different things at the end of the day
you're probably spreading yourself too thin and you're probably trying to trade
too many different setups you're gonna be much better off by finding a strategy
that fits you the best and focusing on that one single strategy so for example
if you are somebody that prefers to you buy the breakout over the high up day
with strong relative volume then focus on just doing that one thing and avoid
any trade that doesn't necessarily fall into that strategy and if you stick
around through the rest of the video we're going to talk about how you can
actually find which strategies suit you the best and an easy way for you to
focus on just that one strategy alright so mistake number three now is
trading too large you're going to want to avoid putting your entire account
into each trade even if you are trading with the small account now trust me as
somebody who started off with a small account as well it can be very tempting
to put your entire account into each trade because you of course want to grow
that account as quickly as possible and you want to get over that pattern day
trader rule so of course logically the quickest way to do that is by going in
with larger position sizes and making larger profits by doing so and that is
of course true while you are right but on the other side of the spectrum large
position sizes also mean large losses and as somebody that is in
traitor you have to really prepare for losses and not only prepare for them but
also expect them so if you're trading with a majority of your account on each
trade it's really only going to take a few losses to do significant damage to
your account size so just to give you an idea of how important it is to trade
with small size and keep your losses in general small if you look at this
diagram here at the bottom you can see that if you take a 5% loss on a trade
it's going to take you five point two six percent to get back to break-even
now if you take a 50% loss it's going to take a 100 percent gain to get back to
break-even so what that means is if you have a two thousand dollar trading
account and you get into some high-risk high-reward trade hoping that you hit a
homerun and make a big profit but instead what happens is you take a 50%
loss on your trade your account balance is now going to be at $1,000 and to get
back to that same $2,000 that you were just at you would need to double your
account or make a 100% return just to get back to break-even so when it comes
to trading or investing rule number one is always to keep your losses small and
one of the easiest ways to do that while you're just getting started is to simply
trade with smaller size now mistake number four is going to be not having a
trade plan you can use some very simple technical analysis and strategy to have
a trade plan before you enter the trade itself ideally your trade plan is going
to consist of profit potential or reward that is more than your loss potential or
your risk so if I go back over to thinkorswim here just to give you an
idea of how you can actually form your trade plan we draw some simple lines of
support and resistance you can see that down here we have some support at about
4 dollars and 85 cents and we have some resistance up here at about 5 dollars
and 76 cents so if I were looking at this stock in waiting for an opportunity
to buy it I would know that I would want to cut my losses quickly below this
support level because when a stock breaks below support it often goes lower
until new support is formed so I would use this for dollars and 85 cents area
as my risk level and I would to cut losses just below that if the
stock did break below it on the other side of the spectrum I would use this
resistance level up here in the 575 area as an opportunity to lock in my profits
on my long position so if the most I was willing to lose on this trade was say
for example $200 and I knew that I wanted to cut my losses add 4 dollars
and 80 cents if the stock happened to move against me and I was planning on
buying it at $5 per share that's gonna be a 20 cent per share loss if the trade
moves against me with a maximum risk of $200 I then know because my trade plan
that the most amount of shares that I should buy in this case would be 1,000
shares so I'd be risking $200 and because I know that the nearest
resistance was all the way up at 5 dollars and 75 cents per share let's say
I wanted to lock in my profits just below that at 5 dollars and 70 cents per
share that would be a potential for 70 cents per share or $700 in profit on the
overall trade while only risking $200 so that would be a good trade plan if you
were watching a stock and you saw something similar to that with a much
stronger reward and there is risk and realistically I always have some
kind of trade plan similar to that before getting into a trade and I
recommend that you do so as well I'm not going to lead us now to mistake
number five which is not tracking your trades you want to keep data of all of
your trades in order to see which strategies are working the best for you
which are costing you money things are doing well and things you can of course
improve on so this is really going to go hand in hand with mistake number two
which is of course not having a niche in the market so as I mentioned you're
gonna have trading setups that work best for you
and you can have some that maybe don't work the best for you and you end up
taking more losses than you should on when you're tracking your trades and
you're keeping track of all of this data you're gonna see which setups work the
best for you and you can focus soley then on those trades making that your
niche and that's going to improve your accuracy in the market and improve your
overall profitability in your trading as well
and those are the five top mistakes that many new traders make and just as a
quick bonus mistake number six many people dive into the market with
little to no education too many traders are starting off without having any
proper education and really that's a recipe for disaster and take it from me
as somebody who started off on their own as well and you know I thought I knew
what I was doing when I really had no idea and it took me years and years of
studying and learning on my own and of course thousands of dollars in losses
that I could have very easily avoided if I would have just learned from somebody
that is already trading profitably so in my recommendation to you is find some
kind of education that takes some time and study it before you dive into the
market and before you put your hard-earned money at risk if you're
interested in learning from me personally I have some educational
sources below linked in the description and if you stick around for the next
slide I'm going to talk about some of those in more detail
so if you enjoyed this video and are ready to learn more make sure to go to
the links in my description to enroll in my day trading courses starting at only
$10.99 learn more and even enroll in my full mentorship program where you're
going to learn step by step how to become a profitable day trader you can
even view the link to open a funded trading account where you're going to
have the opportunity to trade with an investment firms money even if you have
no prior market experience in below you will also find my email which is 10%
trader at gmail.com so if you have any questions or concerns about anything in
my description or anything discussed within the video feel free to reach out
to me there and I'll gladly help you with that but without further ado thanks
for watching make sure to subscribe good luck with your trading and I'll see you
in the next video
you