With PDT gone, there is so much demand in the market right now. So much opportunity. And yet we keep watching the same thing happen over and over: good people, smart people, motivated people, throwing money into the market and walking away with less than they came in with. It bums us out. That is the honest truth.
So we want to have a heart-to-heart with you. Not a sales pitch, not a hype reel. Just a straight conversation about the pitfalls that take traders out, year after year, market after market. Because most of the time it is not the market that beats you. It is the way you showed up.
You have probably heard that 90% of traders not profitable. It’s true. In fact, that number is actually even higher. Roughly 98.9% of traders fail to make more than minimum wage in the markets.
However, the part nobody tells you is that the reasons traders fail are not mysterious. They repeat.
As a community who has provided day trading education to more than 11,250 traders since August 2018, we have observed the same reasons emerge up close for years, and once you can name them, you can start to dodge them.
Let’s get into it.
1. You’re winging it
Here is the first one, and it is a big one. You cannot win in this industry by winging it.
Everybody has a phone now. Your buddy is trading on his phone, your coworker is trading on his phone, your grandma is probably giving you stock tips at the dinner table.
There is nothing wrong with the apps themselves. The problem is the mindset that comes with them: open the app, see something green, feel a little jolt, and buy. No plan. No reason. Just “this looks like a great buy.”
That is the #1 way to lose. We will say it plainly: the only people who make money are the people who show up to the market every single day with a game plan. They have a watchlist. They are running their scans. They see what is moving and then they zero in. The person waiting for an alert to tell them what random ticker to buy is the person funding everybody else’s winning trades.
You do not have to be fancy about it. But you have to be prepared. Showing up without a plan is the same as showing up to a fight blindfolded, and the market hits a lot harder than you do.
2. You’re chasing alerts after the fact
This one we could talk about for four hours, so we will try to keep it tight.
There are people out there who call themselves gurus. You know the type. “Follow my text alerts, I turned $1,000 into $15 million.” Lamborghinis in the driveway, Rolexes on the wrist, a private island somewhere in the background. They are selling a lifestyle, and the lifestyle is the bait. If you see that pitch, run for the hills.
Here is the mechanics of what is actually happening, because once you see it you can never unsee it.
- A guy parlays himself as a trading expert.
- He builds a following, in a chat room, on YouTube, wherever he can gather a crowd.
- Then he gets into a thin, low-volume stock with nobody around.
- He blasts an alert to ten, twenty thousand people: “Ticker XYZ looks really good.”
- In reality, it is not good. It is a dog.
- All those people pile in at once and create a move that was never organic.
- You get the alert, start buying and chasing it higher.
- The stock runs from $1 to $2, and you feel like a genius, up a thousand bucks.
- The stock runs to $3 and you are giddy. But you are not selling. You are not taking anything off. You say, “this thing could go to $5 or higher.”
Behind the scenes, the guy that alerted the trade has been placing his sell orders and selling his shares right into your buys.
The “guru” says he sold. Stock tanks. Reality sets in and the thing slides from $3 back to $0.50.
Your profits are wiped out and you’re left with a big unrealized loss, bag-holding a company that was garbage the whole time.
You hold on hoping that the stock will run again. Or worse, maybe you even averaged down on the way, so your cost basis is a disaster.
The stock keeps dropping.
You’re even deeper in the red.
You finally stop out for a huge loss, much bigger than you planned.
You might get lucky on one alert. Maybe two. The third one buries you, and you will not even understand why, because you never understood the trade in the first place.
We have been doing this a long time and we have never once seen anyone build a lasting career following someone else’s picks. Not a year, not a month. The whole thing is a fallacy.
The fix is not another guru. The fix is learning to think for yourself. We are not here to hand you a fish so you eat for a day. We want to hand you the fishing pole so you can feed yourself for the next ten, twenty, fifty years. The whole game is self-sufficiency, and you only get there by learning the process yourself.
3. You don’t use a hard stop
This next one transformed our own trading, and we cannot say it loudly enough. You need risk management. More specifically, you need hard stops.
We do not care who you are. We do not care what size you are playing with. If you do not have a hard stop in your trade, one day you can be gone. It really is that simple.
For years, furus taught the use mental stop losses. Why? They claimed that market makers can see those stop losses and will intentionally run a stock to that level to trigger a bunch of stops to provide more liquidity. While this is not untrue, it was more true back in the days of OTC’s—circa 2009.
The only things mental stop losses led to was poor discipline and bagholding bad trades.
Nowadays, most of the market is automated. And with that automation comes the need for an automatic stop loss.
New traders come in excited and they have no idea that when a stock breaks a certain line, you get out of your long, or when a level breaks against you on a short, you cover. They learn that lesson the expensive way.
Here is an analogy we love. Cutting a small loss is taking a paper cut so it never becomes a deep wound.
Picture a river full of crocodiles. If you do not cut the small loss, you are dipping your toes in the water. You add to the loser, now you are in up to your legs. You are gunning for a home run and the stock runs $3 or $4 against you and you still cannot cut it. Now the crocodile comes and takes your whole torso. All of that, when you could have just felt a nibble on your toe and walked away.
Everybody loses. Seven years in, we still lose all the time. That is not the point. The point is that a veteran wins more than they lose, and when they do lose, the loss is way smaller than the win. That asymmetry is the entire game.
So here is the only scorecard you need. You want a small win, a medium win, a big win, or a small loss. What you never want is a medium loss or a big loss. Memorize that. Stop swinging for a grand slam every single day. Go for base hits, doubles, the occasional triple, and protect yourself the whole time. The home run shows up on its own when you stop forcing it. The traders who treat this like a hobby and demand a quick win to buy a Rolex are the first ones to blow up. The day you start treating it like a full-time job is the day the real growth begins.
4. You don’t have a daily process
Process is the quiet engine behind everything else. Every single day, we come into the market prepared, and “prepared” is not a vibe, it is a routine.
We are reading the watchlist. We are building the watchlist. We are setting our lines and our levels before the bell. And here is the part new traders get wrong: even when sixteen stocks are running, we are focused on one to four. Not twelve. Four, max.
Do the math. If you try to trade twelve names at once, you are not focused, you are not zeroing in, and you are going to lose. You are spreading yourself thin trying to make a little on everything instead of making real money on the one or two setups you actually understand. Keep it simple. Pick your handful, draw your lines, check the float and the shares outstanding and the short interest, read the filings, and form a thesis built on data and back-testing and experience.
Then you map the trade before you are in it. You know where you will add. You know where your hard stop sits. You know the exact line that tells you that you are wrong and it is time to leave. That is what going in prepared actually means. Everything good in trading flows from that one habit.
5. You’re hunting for a holy grail
There is no holy grail. None.
Anytime one of those gurus tells you he has the perfect setup, the magic combination of Bollinger Bands stacked on top of some secret indicator, it is bull. Think about it for half a second. If a single strategy printed money for everyone, 90% of traders would not be failing. Everybody would just run the magic system and buy a private island. That is not the world we live in.
Here is the honest version. Trading is hard. It is not easy. But it is simple, and simple things can be cleaned up and repeated. You shrink the difficulty by simplifying your process, not by hunting for a secret. Stop looking for the cheat code. It does not exist, and the search for it is just another way to lose.
6. You’re skipping your education to chase profits
Profits before education might be the most backwards thinking we have ever heard.
People say it all the time. “I’ll invest in my education once I make some profit.” Stop and ask the obvious question: how do you expect to make that profit in the first place? You are trying to win in one of the hardest arenas on earth with no training and a big ego. Doctors go to medical school first. Lawyers go to law school first. Nobody expects to walk into a brutally hard profession, skip the learning, and start cashing checks. Trading is no different.
Let’s talk opportunity cost, because this is where it really stings. Take Trader A and Trader B. Both start with $5,000.
Trader A says they will do it themself, save money, and figure it out alone.
Trader B spends a little on a decent setup so they can actually see the market, puts some money into real education, and walks in knowing he is a guppy in a pool full of sharks and whales. Trader B is not trying to win as a guppy. They are learning to swim with the sharks.
A year later it is not close.
Trader A has probably lost money, and worse, they have built terrible habits that now have to be unlearned, which takes even longer than learning right the first time.
Trader B is profitable, compounding, and miles ahead. By the time Trader A finally decides to get educated, they are starting over from zero in year three, right where Trader B was at the beginning.
That gap is opportunity cost, and it is brutal. The money you spend learning early is the cheapest money you will ever spend.
7. You’re trying to do it alone
The last one ties everything together. Most traders fail because they have no community.
Remember what this market actually is. For every dollar lost there is a dollar gained, and for every dollar gained there is a dollar lost. The old saying holds: the stock market is a vessel for moving money from the uneducated to the educated. There is fear and panic baked into every chart, every candle, every bit of price action. Either you are on the smart side of that emotion or you are the emotion somebody else is taking advantage of.
A community is how you stay on the right side. It is not only a place to learn process. It is a place to stay humble. When you are locked into your own bias, certain a stock is going to zero because of one filing you read, somebody who has been watching the other side can show you what you missed. You get accountability when you place a dumb trade. You get different perspectives so you are not trapped in your own head. You get networking, content, tools, and people you can actually call.
Nobody got anywhere in any industry without a good mentor. Real estate, business, the markets, all of it. If you are going to start going to the gym and you do not know proper form, you hire a trainer so you do not hurt yourself and you actually get results. You find a gym buddy who keeps you showing up.
Trading is the same.
We teach having a trading accountability buddy (TAB). This is the person that you talk to every day while you are trading and studying. This is the person that is going to help you hold yourself accountable. In return, you hold them accountable. You help each other study. You help each other learn. You help each other become better traders.
Many will argue that TAB’s are just the blind leading the blind. That simply is not true. We have seen our TAB system improve the success rate of traders dramatically over the years that we have been doing this.
Consider a college course. A professor, an expert on the topic, is teaching. You and your buddy are taking notes in class. You leave class, compare notes, recount the lessons, study for the test, and eventually score much better on the test than you would have alone. A study published by Stanford University psychologists found that students working and testing in pairs performed significantly better on exams than those working solo.
In our case, our co-founder, Alex Temiz, is your professor and the market is the test. So, don’t try to attack it alone. Asking for help is not weakness. It takes real courage, and it is the single best place to put your money when you are new.
Pick the version of this story you want
So that is the heart-to-heart. The market does not lose your money for you. You lose the game by:
- winging it
- chasing some stranger’s alerts
- skipping your hard stop or using a mental stop
- trading without a process
- hunting for a holy grail that was never there
- putting profits ahead of learning
- trying to do the whole thing alone
Flip every one of those and you become the trader on the other side of the table. Show up with a plan. Cut the small loss before it becomes the big one. Focus on a few names you actually understand. Learn first, then earn. And find the people who will pull you up when you are wrong and back you when you are right.
That is exactly why My Investing Club exists. Not to hand you a fish. To hand you the pole, and stand next to you while you learn to use it.
