You’ve got the setups. You’ve got the tools.
Trading is hard, and 90% of traders lose money.
Trust me. I’ve made every mistake there is to make. For a while, especially early in my career, I kept on making the same ones over and over.
It wasn’t until I realized exactly what my blind spots were, and how to check for them, that my trading went to another level.
After more than 4,000 losing trades, I’m still sitting here with over $25 million in career trading profits.*
My point isn’t to brag. But if you think you can make millions of dollars without taking some brutal losses, you’re wrong.
You will take losses.
But the more you can eliminate these 6 common blind spots, the more you’ll avoid them.
Perfectionism
Perfectionism is the arch-nemesis of profitable trading.
You don’t get an award for the perfect trade. If I nail the absolute top on a position, nobody shows up at my house with a blue ribbon and says, “Jack, you nailed the top on PLTR … to the cent!”
It doesn’t happen like that.
I’ve learned to forget about perfection. Exiting a trade 2% below the ultimate top gives me almost as much money as the top itself would, without breaking my rules.
And it’s all about small, steady growth anyway. You want your equity curve to be nice and gradual.
You don’t want it going up and down in huge swings. Small wins, small losses (and when it all lines up: Supernova gains).
If you strive for perfection, you’ll never find it. You’ll just be disappointed, because your goal was never realistic. Which brings me to the next one.
Unrealistic Expectations
If you come into this expecting easy money, you’re going to take risks you have no business taking. You’ll overtrade, size up bigger than you should, all to chase the dream of getting rich quick.
That recklessness ends one way: account-ruining losses.
Trading is a skill. Mastering a skill takes patience and time. I got to see the hot market in 2017 and 2018. Then I came into 2019, didn’t see great setups, and I just kind of waited. When the opportunity presented itself, I was prepared.
Trade like a surfer. Wait for the right wave to come to you.
Poor Risk Management
No strategy works without risk management.
Risk too much on a single trade, or skip your stop losses, and you expose yourself to downside that can wipe out weeks or months of gains in one move.
Here’s the part people miss. I only win about 50% of my trades. I follow the rules, especially cutting losses quickly, and I’ve lost thousands of trades along the way.
You only need to be right a few times and let your winners run.
That’s the whole game. My average loss is a few hundred dollars against six-figure winners. Six figures of upside against a couple hundred bucks of risk. That asymmetry only works if you actually protect the downside.
Set your stop losses. Never risk more than you’re willing to lose. Protect the capital first, and the gains take care of themselves.
Failure to Adapt
Markets are always changing. What works in one month might not work the next month.
Think of it like this: the market wants to take your money. It’s changing, it’s not the same thing every single day, so you have to learn to counter it with strategy.
The thing that made you money that one time may be dead right now, and clinging to it is how you lean into a losing approach.
But a pattern that stops working isn’t necessarily broken forever. If you only trade the dips and the dips stop paying, you need to take a step back, do something else while they’re not working, and come back when they are.
If your pattern’s not working right now, that doesn’t mean it’s not a profitable strategy. It just means it’s not a profitable strategy right now.
Emotional Decision-Making
The emotional rollercoaster is where good traders go to lose money. Fear makes you hold a loser too long, hoping it turns around. Greed makes you dump a winner too early and miss the run.
For me, it was never about the money. The day I lost $367,000 on a trade, I still finished that week up around $1.3 million.* It didn’t really affect me. I never got too high off a good trade or too low off a bad one. It was just the process, and working toward the goal.
That detachment isn’t a personality trait. It’s a decision. You manage the emotions and you stick to the rules regardless of how you feel in the moment.
Embrace discipline, reject emotion.
Confirmation Bias
Once you’re committed to a trade, you start seeing only what you want to see.
You hunt for the information that supports your position and quietly ignore everything that says you’re wrong.
It’s all driven by ego. People need to win for their ego, and that’s why they don’t cut their losses. You have to be humble in this game.
So go the other way on purpose. Actively seek out the opposing view. Try to honestly poke holes in your own thesis. If you can’t find any yourself, you’re probably onto something.
If any of these sound familiar, take a step back and find the one that’s costing you. Then cut it out.
And if you’re holding a loser right now? Cut it. I don’t care what stage you’re at. If you can’t cut your losses quickly, you’re done. Cut it, and start a new chapter. Trade another day.
Stay safe. Stay disciplined.
Jack Kellogg
