Ways to destroy your trading account:
- NOT having a trading plan with capital preservation built into every trade.
- NOT having a trading plan.
- Position size too large for the account size.
- NOT choosing your buys/sells using sound technical analysis.
- Following some idiot on stocktwits or similar web site thinking you can trade whatever drivel they say and make money.
- Overtrading - You don't have to trade everyday or every week. Let the trades come to you, don't chase stocks.
- NEVER Trade on the fly or using gut feelings. Each trade needs to follow your trading rules. Gut feelings are emotions, which are not good for trading.
- NOT having an exit strategy OR allowing the price to go against you well past your stop loss thinking that the stock will pull back and THEN you will get out. Bad idea. Your first loss is your BEST loss. Get out and look at it again from the sidelines. It's OK to be wrong.
If you protect your capital and have a sound trading plan, your account will grow. The 8 deadly sins above mean a lot more than they seem. I know people that buy 200 or more contracts on weeklies for small scalps. The scalps may add up to serious cash, but those potential for loss is MUCH greater if it goes against you.