Over 20+ million people opened stock brokerage accounts in the last two years…
With the majority of them knowing one thing: Stonks Only Go Up!
I wonder if they still believe that?
All kidding aside … I started trading in my 20s, and believe me, I made A LOT of mistakes early on. Some are too embarrassing to even mention here.
Joining Tim Sykes’ Trading Challenge was the first step on my way to becoming a millionaire trader.
Today I want to pay it forward by sharing with you the three most important lessons I’ve learned over the last 10 years. And discover what’s helped me reach over $3.5 million in career trading profits.
Lesson #1: Patience, Patience, Patience!
If I could give my younger self one piece of advice, it would be to patiently wait for ideal setups.
I’ve always been a relatively conservative trader. I’m not a gunslinger like many other retail traders.
I believe that singles add up. A consistent string of small wins is better than a handful of home runs because it proves that your strategy is repeatable.
But when the market’s as volatile as it is right now, newbies tend to get overexuberant.
Trust me, I get it — trading a broad market correction can be very tempting. For a trader with a negative bias like me, it can be downright tantalizing.
WARNING: We must fight the urge to force trades just because the market’s volatile.
A volatile market doesn’t turn a mediocre setup into an excellent one — but it can certainly fool newbie traders this way.
I made this mistake when I was first starting to trade. As a young ’un with no discipline, I’d enter trades without an excellent setup.
CAUTION: Don’t be like young me!
I wish I could get in a time machine and tell my newbie-trader self to be even more patient than I already was.
I would have avoided some brutal losses — and potentially made even more money than I already have.
The lesson? Patience is a virtue for any trader — harness it to your advantage.
Lesson #2: Control Your FOMO
Sometimes your setups just aren’t there, even when the market conditions seem to be playing into your overall strategy.
When this happens, it can be frustrating to watch other traders crush it while your account languishes.
But this is where you have to dig in and stay DISCIPLINED.
As a newbie, I occasionally allowed FOMO to bring me into setups I shouldn’t have been trading.
Heck, I still make this mistake sometimes. Like when I FOMO’d into Meta Platforms Inc. (NASDAQ: FB) calls at the beginning of February. HUGE MISTAKE!
Giving in and trading a subpar setup is the worst thing you could do. (If you do this, you’re letting FOMO control your trading!)
Do the opposite. Control your FOMO to help set yourself up for success.
As an options trader, you should be like a Zen master — confident in your mindset and discouraged by nothing.
The lesson? Stick to your plan and don’t let FOMO get the best of you.
Lesson #3: Volatility Is a Double-Edged Sword
NOTE: This lesson is especially important considering the current market conditions, so listen up!
As options traders, most of us love to see big price swings…
If you’re an experienced trader who knows how to capitalize on your strategy, you may view general volatility as a huge red bullseye. (I know I do.)
And depending on your trading skills, this isn’t necessarily the wrong way to look at things…
After all, when the market’s scrambling, HUGE trading setups can emerge out of the madness.
That being said, I often see newbie traders make the mistake of diving head-first into a volatile market.
They hear other traders talk about the big opportunities waiting in the volatility. This leads some newbies to overestimate their abilities — and enter trades they aren’t prepared for.
WARNING: This is a CRITICAL ERROR that you MUST AVOID! (Especially in the options market, where implied volatility (IV) can massively affect the value of your contracts.)
If you’re a newbie, and the market’s currently tanking, don’t go for a home run by shorting the market (or attempting to call a bottom and go long).
Bottom line: I wish I had studied more and traded less in my first few years…
Take this piece of advice to heart: When market anxiety is high, don’t try to be a hero…
Instead, take the opportunity to sit on the sidelines and STUDY what’s happening.
The lesson? In the options market, volatility can be your best friend — or your worst enemy!
I hope these lessons help you avoid some of the mistakes I made early on. I wish I’d had this advice when I was at your stage in my trading journey.
That said, this is some of the craziest price action I’ve traded in my 10+ years in the stock market. You need to be prepared for ANYTHING over the coming weeks.
Stay focused, study hard, and wait patiently for the perfect setup to emerge.