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TOP 5 Day Trading Beginner Mistakes to AVOID - YouTube
Channel: Humbled Trader
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are you learning today trade but always
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seems like you're taking one step
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forward but two steps back you might be
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making these five deadly trading
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mistakes learning to day trade is
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probably one of the hardest things I've
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ever done what besides learning to drive
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a Lamborghini and there's a huge
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learning curve involved when it comes to
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day trading from building up the
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discipline to wake up few hours before
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the market even opens to analyzing news
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and headlines and reading SEC filings
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and spending hundreds of hours of screen
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time observing the market so this might
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be an unpopular opinion learning to day
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trade requires a little bit more work
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just just a little bit more than falling
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chatroom alerts to buy and sell some
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DVDs and some motivational Lamborghini
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posts on Instagram I've been trading for
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more than six years now and I've made
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literally every single mistake in the
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book because the stock market is
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unforgiving the moment I think I know it
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all it's the moments that I will get
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humbled hence the name of the channel
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humbled trader so in this video we'll be
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talking about the top five day trading
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mistakes beginners make my personal
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story with all those mistakes and how
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you can identify and fix them in order
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to avoid blowing up your small account
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as long as you remember to tap the like
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button for profitable twenty twenty the
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number one trading mistake beginners
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make is not having a trading plan
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there's a saying that goes something
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like if you fail to plan then you're
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planning to fail and that couldn't be
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any more true for day trading and I was
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very guilty of this when I first started
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I remember seeing some low flow to penny
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stock running from $4 to $6 within
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minutes I felt so excited my heart's
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beating fast I'm sweating on my forehead
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this is the moment for me to Bank and my
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brains telling myself I must buy now or
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else our mrs. right buy now and ask
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questions later
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well what's a while I'll get lucky
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make a buck or two here and there but oh
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it really takes is one instance why buy
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at the very top and right after I buy
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the stock completely plunges and I lose
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10% 50% of my entire account does that
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sound kind of familiar I've done it many
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times in the past most of us have and
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that's what we call formal fear of
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missing out before jumping into a trade
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we must make a trading plan I spend
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about one half to two hours each morning
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before the market opens planning for all
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my trades that's right
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you cannot just jump out of bed 10
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minutes before the market opens and
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expect it to rain Lamborghinis yes it
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takes time but that's exactly the point
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creating a trading plan will help you
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avoid FOMO by taking the time to write
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down your thesis risk reward potential
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entries and exits you're already setting
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yourself up for a much higher
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probability of success your trading plan
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should at least include your bias long
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or short all the important levels over
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and under your exit plans and your stop
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losses if you're wrong yes that's right
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part of the trading plan should be
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planning for your loss especially in
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this volatile market because it's only
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after you plant and calculated your
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losses that you can keep them in control
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planning for your trades is really 90%
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of the work and once the market opens I
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spend the rest of the 10% of the time
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executing my plans and it's just as
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important to follow your plans as it is
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to make one because if you don't follow
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your exit plans it can easily lead to
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the next trading mistake mistake number
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two the beginner traders make over
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trading because most new traders focus
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on trading their profits and P&L instead
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of trading their plans and following the
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charts imagine this you made a few good
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trades on a day so far $100 here $400
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here and on the screen corner you see a
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nice
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$890 PML you're feeling pretty good so
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far
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but you really want to hit that nice
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round number of $1,000 so instead of
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taking a break during the middle of the
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day you keep on trading and you start
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entering trades that's perhaps not your
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a plus setup and you start losing that
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$190 went down to seven hundred dollars
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and then four hundred dollars this is
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where you start to getting emotional and
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extremely frustrated because not only
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are you not hitting a nice number of
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1000 dollars on the day you just went
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down even lower from the eight hundred
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ninety dollars profit half an hour ago
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over trading leads to emotional trading
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which leads to revenge trading this is
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where you keep on going back to the same
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stocks that you just lost on in
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attempting to get that money back well I
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think we all know how the story ends
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when the market bell rings at four
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o'clock Eastern Time you've gone down
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from being up eight hundred ninety
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dollars on the day to being down read
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three hundred on the day and that my
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friends is the story of the first year
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of my trading journey I knew how to make
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money trading in the market but I could
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not keep it because I let greed and
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emotions get in the way by over trading
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so here's a few things you can do to
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avoid over trading first of all follow
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your stop-loss no excuses if you plan on
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getting out of that trade at $8 do it
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yes I know it sucks to take a loss but
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it's a planned loss that's within your
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risk profile as part of your trading
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plan next walk away from your trading
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computer and take a break
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generally speaking from around 11:00
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a.m. to 2:00 p.m.
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market time these are usually the time
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where stocks are consolidating in a
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tight range with low trading volume
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focusing your trading at the open and
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power hour will allow you to take the
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meat of the move and not wasting your
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precious time and money and setups that
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won't be profitable due to lower volume
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most importantly when you're feeling
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distressed emotional it's time to shut
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down and walk away from your computer
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most emotional trading leads to even
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bigger losses I know because I've done
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that many times in the past before so
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when you're feeling that emotions start
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to kick in it's time to take a break the
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market will always be back tomorrow and
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the next day now let's move on to the
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third mistake beginner traders make and
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that is not smashing the light button at
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the bottom of this video not only do you
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get no BS day trading content here on
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the channel you also get a free
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subscription of bad jokes beat that
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Netflix and Disney the third mistake
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beginner traders make is not spending
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enough time on paper trading before
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going in life okay I get it people want
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to make fast money I was guilty of that
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myself instead of spending one or two
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months in simulator trading and learning
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all the mechanics I jumped right in with
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live trading accounts and my heart
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earned money and not just say I wish I
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hadn't done that paper trading which is
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trading with simulated money and life
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charts allows you to learn to plan for
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your trades like we talked about earlier
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and getting familiar with all the
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technicalities and broker interface
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there's really nothing more frustrating
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than accidentally selling the entire
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position when you meant to scale out or
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not knowing how to change your long
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orders to a short but hey like I said
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before I've made every single mistake in
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the book so that's why I'm recommending
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all the beginner traders starting out to
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use paper trading and you gotta be
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disciplined and treat your paper trading
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accounts as if it's real money that
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means if you're actually gonna be
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funding a live account with only $5,000
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then paper trade with $5,000 not the
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default $1,000,000 paper trading account
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that many brokers allow you to have not
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only will paper
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allow you to get used to your broker
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interface it will also allow you to get
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a screen time that you need in order to
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learn price action we've all seen these
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charts templates out there with these
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beautiful patterns that make trading
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seem so simple but in all honesty
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memorizing patterns is owing hindsight
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the only real time indicator is price
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action watching hobby screen and read
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Kindle steaks develop in real time and
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observing how the stock reacts to
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various news these are the kind of
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experience that takes time in front of
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the screen to pick up and all the
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traders have to learn at their own pace
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day trading beginner mistake number four
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scaling up your size too quickly I
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remember how happy I was after I started
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making around $100 each day hundred
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dollars a day that's five hundred
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dollars a week not bad for a couple
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hours of work and heading out to my real
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job small games add up and remember I
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was still making pretty good income from
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my full-time job and then one day I had
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this brilliant idea what if I just add a
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zero at the end of my position sighs if
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I just use ten times my normal size then
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instead of just a hundred dollars I'll
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make a thousand dollars a day and five
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days a week there'll be five thousand
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dollars Wow what a genius plan let's
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just say that very genius plan of mine
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didn't really work out that well not
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only did I lose the small one hundred
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dollar winds I built up the last few
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weeks I completely blew up my account
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because you see I did not take into
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consideration all the emotional stress
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that comes with scaling up so quickly if
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my risk was originally losing $50 in
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order to make a hundred dollars now my
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new risk is five hundred dollars in
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order to make a thousand and while I was
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ready to make that five thousand dollars
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per week goal
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I was not emotionally ready to handle
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the $2,000 $3,000 losses when you scale
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up your position size to
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quickly that will lead to emotional
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trading so if you are thinking of
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scaling up that's great good for you
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you're on the right track but make sure
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you're scaling up slowly give it a
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couple of weeks in couple of months
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before adding quarter sizes and then
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doubling your size eventually take it
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slow and allow yourself to mentally
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prepare for the possible bigger
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proportional losses
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mistake number five the beginner traders
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make following chatroom alerts yes I
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know I saved the best for last
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yes I have mentioned before that I think
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it's extremely beneficial to trade with
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a like-minded community of traders and
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receive feedback and trade ideas but
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following chatroom alerts to buy and
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sell that's a completely different story
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I think following others will put you
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months if not years behind your journey
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to become a consistently profitable day
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trader and here's why so first of all
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most of these chat rooms that give you
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alerts they tell you to buy and sell
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without breaking down why they are doing
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so this creates followers which unknown
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a sheep who blindly buys everything the
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moderator tells them to buy and sell and
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guess what most of these sheep lose
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money because they have no idea why they
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bought the stock in the first place so
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when the stock just drops a little bit
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they all hit the bids to get out and
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market order out for a huge loss I'm not
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saying you can never make any money
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following chatroom alerts maybe if
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you're fast enough with these hotkeys
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and you have no internet latency but in
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a long run following chatroom alerts
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will drain your account especially if
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you're in these low flow to penny stock
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chat rooms that have thousands of
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followers this is what we call potential
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chat room pumps so picture this in your
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head the moderator start scooping up
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shares of these low floats low volume
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penny stocks then he alerts thousands of
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his followers to buy and guess what
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because these stocks are low volume and
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low floats the stock actually surges 20%
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50% with
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seconds seeing that the price has surged
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the moderator tells everyone to sell
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after he has already locked in for a fat
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profit and you know what happens next
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all the thousands of followers sell at
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the same time and like I mentioned
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before if you are lucky sheep with
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really fast internet connection you
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probably made some money but the
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majority of those followers will be left
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stuck at the very top and holding the
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bag I'm very sad and embarrassed to say
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that in my first year of trading I
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probably tried out five to six of these
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penny stock chat rooms and I've seen all
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these instances firsthand I was a sheep
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too and I was left holding so many bags
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and let me tell you they are not the
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kind of bags that people actually want
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not the Louis Vuitton and definitely not
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the Gucci but looking back I felt like I
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deserved those losses I bought into the
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dream now I can make millions of dollars
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just by following what other people are
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doing trading is not easy
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but it could be learned if you're
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willing to put in the time in the work
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slowly like I mentioned in so many of my
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previous videos it all comes down to
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sacrifices do you want this bad enough
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maybe it means partying less and
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weekends going out only once or twice a
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week and only getting six hours of sleep
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and basically just not have a life let
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me know what you think about these top
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five beginner trader mistakes I
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mentioned in the video and have you done
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any of these yourself as always if this
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video really helped you out please
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remember to drop a like at the bottom of
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the video I'd really appreciate you my
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friends thank you guys so much for
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watching as always I'm the humble trader
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and I'll see you guys next week
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hey guys thanks for watching I hope you
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enjoy the video and the bad jokes if you
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want to see more day trading content
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make sure to subscribe and follow me on
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Twitter and Instagram for more if you'd
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like to trade with me daily and get my
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free
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we can watch this and trading journal
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make sure to check out the links below
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for more resources stay green stay
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positive and I'll see you guys next time
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