Bad Trades and Bad Trading


Date: 2/27/2023
Author: Chris Hood



I get asked about trade ideas daily.

But as an options coach, I suppose that’s what I’m here for.

Last week I had a conversation with one of the subscribers in the TradeCommand room about the two reasons traders lose.

They either place bad trades or practice bad trading.

As similar as these sound, they’re entirely different…and both can drain your account quickly.

Like everything, these come back to your rules and plan. If you don’t have rules and a plan, then no amount of advice can help you.

Those without plans ALWAYS lose in the long run.

Assuming you have a plan, it’s simply a matter of analyzing your losses. For example, did they lose because they were bad trades, or are you guilty of bad trading?

Both can be fixed, but you have to identify the issue.

Let’s look at their differences and how to fix the problem.

Corey Synder recently went live with Emmy Award-winning journalist Seth Allen for American Oil Fortunes to demonstrate precisely

how this one surprising stock could hand you a 1,000% return – or greater – over the next 12 months…

All you have to do is click this link to watch the replay of American Oil Fortunes. 

Bad trades are poorly designed positions that shouldn’t have been placed at all.

I could write a book on what makes an ill-advised trade – mostly because I’ve placed thousands of them over the years.

So I’ll list the top  three and how to troubleshoot them

First, entering a bullish position in a bearish environment or vice versa – not great ideas.

This usually comes down to needing to understand charts or indicators. If you can’t do this, you shouldn’t trade real money.

Take the time to study and learn.

Second, it might be because you’ve used the wrong strategy.

On a bearish stock, you could use a long put, bear put spread, bear call spread, butterfly, or any number of strategies to profit.

But some are more appropriate than others at a particular time.

For example, placing a long put in a choppy market means the ups and downs will likely destroy that option. So for a put to profit, the stock needs to move in your favor quickly.

Time is working against you, unlike a credit spread.

Third, bad trades are inappropriately sized for your account.

Taking on too much risk is a sure way to lose it all.

An otherwise “good” trade can become bad if you bet half your account value. Remember, no matter how great the set-up; there’s always a chance you’ll lose.

All it takes to fix this is to allocate appropriately and stop trying to hit the ball out of the park every time.

Manage your risk.

I define bad trading as consistently poor trade management, an unwillingness (or inability) to follow your rules, and failure to study your losers.

Trading is a skill.

And like any other skill, your performance is directly related to how much time you will devote to it.

Put in the work, and you’ll see the results.

I can coach you, but you’ll lose if you don’t try to improve.

Don’t let this discourage you, but provide some motivation. Market success isn’t reserved for a few talented geniuses.

Anyone who makes an effort will see results.

Chris Hood

PS – My colleague Corey Snyder recently went live to talk about the future of oil and revealed over a DOZEN critical stock plays to make right now if you want the best possible chance of harnessing the $15 Trillion market shift…

Including the one stock that’s perfectly positioned to deliver a potential return of 1,000% or more over the next year.

This broadcast will only be available for replay for a limited time, so watch now.


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