The biggest trading mistake that you are making which is inhibiting you from
being a consistently profitable trader. The biggest trading mistake that you're
making. This is one of the most important videos that I have made in a long time
David Jaffee with BestStockStrategy.com please like, comment, share and
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new video. The biggest trading mistake that people make. There are actually two
of them the first one I have covered in multiple videos is that
traders tend to trade way to any contracts and they trade they tend to
trade too aggressively the second mistake is something that has
substantially improved my performance while also mitigating risk this is the
same discipline and patience that I have exercised which permitted me to make
money in May of 2019 when the market was down around 9%. Yet myself and all of my
students who followed the alerts they were able to profit during May of 2019
and what this this huge trading mistake that people make is that they trade too
often. This is something that is directly counter to what TastyTrade tells you.
Now I don't want to tell you that Tasty trade is biased because they own tastyworks
and as a result they get paid on volume and they get paid commission for
every time that you trade and also you know they get paid by the exchanges as a
kickback for pay for play or like pay for order flow but the fact is from my
experience and I think that this is something that is extremely wrong with
the perception of traders where they think that in order for them to make
money they have to be extremely active they have the perception of a successful
trader as someone who is in front of a computer screen or rather five screens
and who is very anxious is extremely busy but that is not the
reality you make money by making good decisions and the best way to make good
decisions is to be extremely patient. During May of 2019 when the stock market
was down 9% I made around five or six opening trades the entire month so
sometimes I made two opening trades a week other times I made one there was
never a situation where I jumped in and jumped out and then jumped in and jumped
out and tried to guess the market or try to catch a falling knife or any of those
situations and I know that you probably don't believe me but I can tell you that
one of the biggest mistakes that traders make is that they are not disciplined in
their entries and they are not patient enough we do not try to catch falling
knives I've had people sign up for the seven day trial at BestStockStrategy.com/memberships
and then we wouldn't make any trades and then they
would get really upset. The funny thing is that the market in that week was down
around 4% so where is everyone else lost a tremendous amount of money because the
market was down 4% they didn't lose anything and we made money yet they're
complaining because of their perception of how to be a profitable trader is that
you have to sit and watch 10 computer monitors and jump in and jump out and
retards and all of this BS which is not going to help you be a profitable trader
at all. In fact you're just going to lose money let me reiterate something that's
extremely important that I have mentioned on a few other videos you
should never enter a position with the expectation that you're going to have to
roll or manage that position and when you enter and you sell iron flies on
ETFs or you sell a straddle or you sell a strangle there is actually an
extremely high likelihood that you're going to have to manage that position at
a future date. Now I don't care what tastytrade
tells you about, "hey if you have a call that if you have a call that's tested
just roll up the untested side and use that credit increase the strike price on
the call side." The reality is that 98 or 99 percent of people who trade options
do it as a means of increasing their existing income they are not full-time
traders they work full-time jobs whether it's a 9:00 to 5:00 a 9:00 to 7:00 or
they work as an independent contractor and do things such as real estate or
they are entrepreneurs nobody has time to enter a position only to then get
stressed out and have to worry about that position at a later date and that
allows me to delve into and to segue into the next point where when you have
a challenged position it is extremely stressful. It's very stressful. There was
a situation actually right now at this moment I think it's June 12 2009, I
am short a put in Google which is not in the money but it's relatively close to
being in the money and this is a situation where Google has fallen around
20% in just the past six weeks. Now granted we were extremely selective on
our strike prices and we're up money in this position however at the same time
just having the position be relatively close to being in the money means that I
have to think about it I have to watch it tomorrow I have to make sure that it
doesn't fall in the money because then I might have to roll and manage the
position the reason I'm telling you this is that people do not discern and do not
allocate enough money to their A or A+ trade opportunities instead what they do
is they will scan based upon implied volatility and they will not make any
type of discernment between selling a put in Tesla or selling a put in a
company like Amazon and to me there's so much more
inherent risk in selling and trading Tesla than there is in trading
McDonald's or Dollar General or Lockheed Martin or one of those other stable
bellwether cows where we have consistently earned a tremendous amount
of money or another company will be JP Morgan when you sell a put in Tesla or
you sell a call in Tesla just because it has high implied volatility I might
characterize that it's like a C-minus grade trade but because Tastytrade and Tastyworks
tells you that you have to "trade often" when you trade
those C or C+ or even B trades as opposed to allocating all of your
capital to an A- an A or an A+ trade you will find out that it is those C and
lower quality and inferior trays that end up giving you all of the headaches
all of the stress and end up costing you money so my goal for this video is to
have you start thinking about changing your perception about what it takes to
be a successful trader. There are times in my trade alerts where I will make one
or two opening trades a week. Sometimes people will think that you have to make
10 trades every single day in order for you to validate and justify yourself
being an expert but the reality is that those people who are making and trading
too often they are fake gurus and they do not maximize their profits and they're
are also substantially increasing the risk that they're taking because if
you're entering in positions in May 2019 or December 2018 just because you
believe that the market has bottomed and you're trying to catch a falling knife
and then the next day the market opens down 50 points and down 2.5%
that put or the call option that you sold previously is going to end
up showing you a loss the same thing on the
if the market pops up the next day. So what I'm saying is that patience is
extremely important you have to exercise so much discipline because when you
trade you are not rewarded for taking action. Again let me repeat that when you
trade you are not rewarded for taking action, you are rewarded for making good
decisions and you should always try to make a little bit less during the good
times so that you lose a lot less during the bad times. Again you should always
strive to make a little bit less during the good times so that you lose a lot
less during the bad times if you have interest in seeing one of the world's
best options traders at work so that you can follow my trades you can go to BestStockStrategy.com/memberships
and sign up for the Education course or
also take the trade alerts which is seven days for only $19 and I can tell
you you really have to start changing your perception about what it takes to
be a profitable trader because the profitable traders are people who are
extremely disciplined they stick and go they make the trade and then they wait
they are extremely patient hunters they have a few bullets and then they wait
for the game of their choice and then they hunt and then they get the prize
those of that analogy. They hunt and they only take the shots that
provide the highest statistical probability and provide them with the
greatest payoff they do not shoot wildly like a like an automatic whatever and
just hope that it hits something trading off
is false trading often is a fallacy trading often will increase your stress
levels and decrease your profitability while simultaneously increasing your
risk. David Jaffee with BestStockStrategy.com please leave a comment
below like this video and if you have any questions I'm here to help