| Many stock traders operate with a negative | | | | Crowd Mentality |
| expectancy, and learning not to repeat their most | | | | As the majority does not perform well in this |
| notable mistakes could help new traders get a | | | | industry, following popular trends logically destines |
| head-start in the game. Any one of the mentioned | | | | less-than-optimal outcomes. The major financial |
| slip-ups would interfere with potential successful. | | | | websites, TV news releases function to sway the |
| Insufficient Prerequisite Education | | | | general public toward certain sentiments. Allowing |
| Developing successful strategies for trading (or | | | | these external influences direct one's own strategic |
| investing, which is simply trading in longer time | | | | convictions then naturally leads to losing trades, like |
| frames) absolutely requires at the minimum a | | | | most of the crowd. |
| profound understanding of general statistics and | | | | Lack of Discipline |
| probability theory. It only takes one semester of | | | | Once a plan has formed, only flawless execution |
| college, or a small number of books via self-learning. | | | | could get this kind of business up and running. A lack |
| The added knowledge alone could transpire fulfillment | | | | of emotional intelligence hurts performance. |
| and associated happiness. | | | | Getting in front of the monitor on time, staying alert, |
| Lack of General Planning | | | | avoiding fat-finger mistakes (e.g. keying in a wrong |
| No planning, no profitable trading. It is that simple. The | | | | ticker symbol), holding onto positions while waiting for |
| act of putting in orders seems so effortless, that | | | | exit strategy to unfold are some of the crucial parts |
| many fall into the illusion of getting rich quickly staring | | | | of a profitable trading system. Most fail to control |
| at the charts dumbfounded. It does not work that | | | | urges such as sleep, boredom, anxiety, fear, etc. and |
| way. | | | | end up losing money. |
| Like any business start up, only a properly designed | | | | Gaining Experience and Winning |
| business plan could contribute to a potentially | | | | A successful businessman had once quoted "I'm |
| profitable venture, especially in the highly competitive | | | | successful because I learned from experience." When |
| world of finance. Only realistic estimates of revenue | | | | asked how he gained experience, "by making |
| (trading profits), expenses (transaction fees, bank | | | | mistakes." Learning off mistakes from others is truly |
| wire costs, utilities, living expenses and etc.), and | | | | a privilege, and only after adequate education could |
| effective risk management could make the business | | | | one begin to formulate a practical design for success. |
| model practical. | | | | While difficult and tedious, it is not impossible. |