---
title: '7 Trading Mistakes That Keep You Broke'
source: 'https://youtube.com/watch?v=81iw-M_HCvk'
video_id: '81iw-M_HCvk'
date: 2026-08-10
duration_sec: 1896
---

# 7 Trading Mistakes That Keep You Broke

> Source: [7 Trading Mistakes That Keep You Broke](https://youtube.com/watch?v=81iw-M_HCvk)

## Summary

In this video, Jeff Holden, head of trader development at SMB Capital, outlines seven critical trading mistakes that can keep traders from profitability. Drawing on nearly two decades of experience training professional traders, he explains each mistake with real-world examples and provides actionable protocols to overcome them, emphasizing that success in trading is less about strategy knowledge and more about disciplined execution and mindset.

### Key Points

- **The Difference Between Winners and Losers** [00:44] — Traders who blow up and those who make seven-figures often know the exact same strategies. The difference isn't what they know, it's what they do and what they stop doing.
- **Mistake #1: Static Position Sizing** [[01:43]] — Most traders use the same share size for every trade, regardless of the setup's quality. This is lazy and the opposite of discipline. Professionals grade setups and adjust risk accordingly: A+ setups risk 80% of daily stop, A setups 30%, B setups 15%, and C setups 5%.
- **The Math Behind Dynamic Sizing** [[03:47]] — Using the same 50 trades, dynamic risk allocation can yield a 1,006% return on a $10,000 account versus 250% with static sizing. This 4x difference comes from grading trades and betting accordingly.
- **Mistake #2: Watching Your P&L** [[06:07]] — Jeff shares a personal story where glancing at his P&L triggered a loss aversion response (LAR), causing him to freeze and turn a winning trade into his biggest loss. LAR disengages the prefrontal cortex and leads to emotional trading from the amygdala.
- **The 'I Told Myself' Protocol** [[11:06]] — To combat P&L obsession, Jeff suggests writing down one thing you tell yourself you will not do the next day. This builds the habit of following through on commitments, which is more powerful than just covering your P&L.
- **Mistake #3: Chasing Entries** [[12:29]] — FOMO is a structural problem, not a personality flaw. If you only have one setup, missing it triggers panic. Building a playbook with multiple setups turns FOMO into structured confidence, knowing another opportunity will come.
- **Mistake #4: Ignoring Market Context** [[14:39]] — Trading every setup the same regardless of context is a hidden money trap. A breakout on day two with fresh catalyst and volume is different from a day seven extension with declining volume. Classifying context before entry filters out traps and improves hit rate.
- **Mistake #5: No Pre-Market Routine** [[16:34]] — A trader named Mark was talented but lacked a pre-market routine, leading to a big loss on an FDA approval news gap. Implementing a structured pre-market protocol (news scan, watchlist, grading, if-then plans, silence) turned him from break-even to $40,000 months.
- **Mistake #6: Quitting Winners Early, Holding Losers** [[20:07]] — This is the disposition effect, a well-documented behavioral bias. Your brain values a dollar lost twice as much as a dollar gained. The best traders say 'make it stop me out'—they define exit conditions before entry and let the trade prove them wrong.
- **Mistake #7: Not Committing to an Identity** [[22:34]] — Priya knew many strategies but couldn't commit to one. She was 'window shopping.' Committing to one approach means giving up the fantasy of others. After 30 days of trading only one setup, she had her best month ever because she owned one trade.

### Conclusion

The seven mistakes are tactical and psychological, but all are fixable with rules, protocols, and a shift in identity. The key is to stop making these mistakes and start executing with discipline and consistency.

## Transcript

in a single month. Not because of a bad strategy, but because of seven mistakes he didn't even know he was making. This is completely unacceptable on our desk. So, by the end of this video, you're going
I'm going to show you exactly what our best traders do instead. But, here's the best traders do instead. But, here's the thing. Mistake number five, firm, and it's probably the one you're making right now.
probably had a week, maybe a month where nothing really worked. You followed the strategy, you did the prep, and and maybe you still lost money. I get it, right? I've sat across the desk from over 200 traders here at SMB Capital,
and I'm going to tell you something that might surprise you. The traders who blow up, and the traders who make seven-figures, they actually often know the exact same strategies. The difference
isn't what they know, it's what they do. And more importantly, what they stopped I'm Jeff Holden, I'm the head of trader development at SMB Capital. We've been training professional traders for almost 20 years here in NYC. We see countless
people succeed in trading and live a life beyond their wildest expectations, but we've also seen some people fail, get ground out by the market, or blow up It's been a front-row seat to what trading, real trading, truly looks like.
And every single mistake I'm about to show you, I've watched destroy accounts in real time. Some of these mistakes were even mine. going on. Starting with a mistake that I think
almost nobody talks about enough. Mistake number one is sizing the same in paint a picture. You walk into a poker tournament. You twos. I'm going to push $10,000 into the
middle. Next hand, you look down, pocket aces. I'm going to push $10,000 into the middle. Same bet both hands. That's insane, right? But, that's exactly what most traders do. Every single trade, same share size,
Every single trade, same share size, whether it's an A+ setup or a C setup. And I know why you do it, right? It feels safe. It feels disciplined. It's actually what I read when I started out in my trading, but it's completely the
opposite of discipline. It's completely lazy. Because you're treating every and it's not. What the traders who bet that way so often fail to reveal is that they're actively changing their bet sizing based
at one time. They might be only risking 3% of their account per trade, right? The standard 2 or 3%. But, what they don't tell you, what the professionals don't tell you whether they have one trade on or they have 25 trades on, all
at that 3%. And it's a model that completely breaks down without clarity. So, let's flip that model and talk about what our best traders actually do. They grade every single setup
independently before they enter. A+ setup, 80% of a daily stop. Because and most traders actually have the highest win rate out of any category in
these A+ setups, because they're such high probability trades. So many things are stacked in your favor. A setup, 30% of a daily stop. You usually get one or two of these a week, it's not uncommon. B setup, 15% of a daily stop. You know,
you get a few every day usually. And C setup, 5% of a daily stop. You get many, many C setups every single day. Same number of trades, dramatically different P&L if you are static bet sizing or doing dynamic risk allocation. Let's
think about this. If you took the exact same 50 trades you took last month, same entries, same exits, but you follow this risk plan instead of betting C size on 5%. Let's say in general there's a 50/50 win
rate on B and C setups, a 60/40 win rate on A setups. And by the way, these are real numbers from what traders on our desk are doing every single month. But then we get to that A+ setup and you
Let's take a look at the difference between the P&Ls. Let's start with a $10,000 account, right? A $10,000 account would generate 250% return over 50 trades with a 50/50 win rate and a 3:1 risk reward. Wow,
250%, right? It's pretty solid. I think a lot of people would settle for that. Keyword, settle. It's great, but here's the thing. For a bit more work of grading the trade and then betting based on the grade,
here's the math. All right, same account size grows by All right, same account size grows by 1,006% For just a bit more work you get 4x the returns for the same trades you're
already taking. Now, we're obsessed with these small improvements, right? That 1% better rule, but we're even more obsessed with small improvements that produce the big results. And that's what this video's
all about, those small improvements that produce huge results. And we have to get recognize the value of making this change and you want to learn more about biggest hangup this of this whole allocation protocol we just talked
pause the video and post in the comments now. No, we can do a video just breaking this down, this allocation protocol down. In next video based on feedback.
Whatever mistake is the most voted for out of these seven mistakes after 1 week of this video being live, that's the mistake we'll do in the next video. So, stick around for the others and vote on
the one you want to see more of and we'll do a follow-up video just on that we'll do a follow-up video just on that topic, okay? The sizing in general is mechanical. You can fix it with a protocol and you can follow through on
But, mistake number two, this one's psychological and it's the one that made me the most money once I finally kind of helped myself stop doing it. All right, Uh we'll just call it watching your P&L
And I'm going to tell you something personal about what I went through. For the first 2 years of my trading career, I had my P&L open on my second monitor, get close to it? I want to know if the risk manager is going to come over,
right? All day, every tick. That was just the justification I had for myself. Green, red, green. But, I can trace it back to a moment that almost ended my trading career because I glanced at that number. So,
I had this great trading setup, right? I had a trade that just literally fell into my lap and I sized it well. It was an A+ trade. It was a good trade to size up and almost everything worked right from the second I entered it.
"Nothing's going to stop this trade. Oh man, I did everything right here." It was that first feeling of like, "Yes, I got it. I can be a trader, right?" And out of my greed, I just innocently looked at my P&L.
Didn't think much of it, just like, "Yeah, let's just see." Right? Justified it to myself. I'm just curious. Just going to take a peek, right?" It felt like at that moment, as soon as I saw that number,
the market knew I had done that. And they were like, "Nope, let's take all that back." Literally, it felt like that single moment happened to me. it doesn't matter if that moment happens to you. It'll happen to you, maybe it
hasn't. I hope it hasn't. It's not about me. No one at Goldman Sachs or or Citadel or Virtu, any of the market makers were were saying, "Jeff just looked at his P&L. Time to sell it." No, that's not what
happened, right? But here's what happens in your brain. And this is the science, it's not just an opinion, right? When you see your P&L, your brain triggers something called a loss aversion response. We'll call it
loss aversion response. We'll call it LAR, right? Loss aversion response. Your prefrontal cortex, the part of your brain that makes rational decisions, it literally goes offline, goes and gets a drink of water, right? It's not at the
drink of water, right? It's not at the desk with you anymore. thinking brain anymore. You're trading from your amygdala. You're trading in that fight or flight response. You're not analyzing the tape,
you're not reading the chart. You're trying to manage the performance anxiety that's kicking in based on how well or how poorly you're doing in the trade. it's ticking against you. They think the LAR only occurs when it's ticking
It can really trigger that loss aversion response. which is even worse. But it also happens when you're green. When you see that number climbing and your brain starts to say, "Protect it,
lock it in, take that profit." That's your loss aversion response kicking in. So, you wind up cutting your winner short. because the trade told you to, but because the T P&L told you to.
that almost ended my career, and I'm almost embarrassed to talk about it, because it really is such it's so undisciplined. It's not something we should never do. But I saw that number, and it was a big green
Everything had worked perfectly in the trade, and somehow, looking at that number, and then a little tick against me, I just kind of froze, right? I think I was a little shocked by the number, and then how quickly the the
the stock started to trade against me, just for a second, right? But I froze. The trade started to turn against me, but not too fast. It was just a little bit. It was a weird tick, right? Then it started to grind against me. And
my brain was my brain was so attached to that big number, that high watermark in the trade, that all I could mentally process was that every pull and every going to set up the next move higher, right? And I was going to get that P&L
trade, and then probably even move beyond it. So, I made it worse. My LAR was triggered based on that number I saw at the top. So, I kind of had to keep trying to get back there. I had anchored
to that P&L. And I just wanted to make all that back So, what did I do? Kidding me? I added on a pull-in. At its core, not the worst idea, but this wasn't the situation to do it. I
was not trading the trade at all. I was trading my P&L. And we almost all know At the end of this trade, I'd gone from being up more than I ever was
to my biggest loss ever. And it wasn't even the loss that almost ruined me. It was the loss aversion response, and how it nearly destroyed my psychology. It crushed my ability to trust myself for a period of time.
When you can't trust yourself, you cannot trade. Here's a single exercise that kind of pulled me back together. I call it the I told myself protocol, right? Each night, you'd write down one thing you tell yourself you are not
going to do the next day. Or, you can do something that I'm going to do the next something that I'm going to do the next day. I told myself XYZ, right?
down. Like I told myself I would not look at my P&L intra-trade. That stays on there until you don't do You're building the habit of following through on things you tell yourself
that matter so much. Way more powerful than just telling you to cover up your P&L. But it's about the same thing, right? If the P&L focus is your biggest challenge, say challenge number two in the comments and we can do
a whole video just about P&L focus. It's super interesting. But all right, you've stopped flat sizing and you've covered your P&L now. Maybe even you took on your P&L now. Maybe even you took on that I said so, I told myself I would I
said I would challenge. Now you're set up to make good decisions. But mistake decisions after you've already made them. All right, mistake number three is chasing the entry after missing
All right, watch this. This is actually a trade that works out. It's still a mistake. This is a chart of a stock breaking out. You see that level right there that's formed on the intraday? You can see where the setup triggered
before because it broke that, right? And then it builds this intraday pattern. then it builds this intraday pattern. Clean entry, beautiful risk reward.
waiting for that. They'll see it start to go and they'll actually chase higher. They saw the move happening, but then they started to panic when they
were missing it and they chased. In this example, they actually got rewarded, but there's so many examples and far more examples where they don't get rewarded. And here's what's interesting. The FOMO is not a personality flaw. It's a
structural problem. If you only have one setup in your head and then that setup triggers and you miss it, your brain tells you that that That you have to get in, right? That if you don't, you'll be sitting there
watching everyone else make money. And when that feeling hits, you're going to chase every single time. But that's only true if you don't have a full-on playbook. At SMB, every trader is build what we call a playbook. It's a
documented setup of specific trades, specific setups, right? Not one, but multiple. We challenge everybody to get to five. Each within its own entry criteria, its own grading system, its own exit rules.
But when you have a playbook, missing one entry isn't really a crisis. It's kind of like a nah. Because you know your next pitch is coming. Maybe it's a different setup. Maybe it's the same stock pulling back
to give you a second chance at entry. The playbook turns FOMO into structured confidence that another opportunity exists. We tell our traders from day one, the markets are opportunity generating
machines. So, now you have a playbook, multiple here's where it gets subtle. Mistake number four is about traders who have setups, good
setups, but they trade them all exactly the same regardless of the market context. And this one, this is where the real money hides. Mistake number four is real money hides. Mistake number four is trading every setup the same regardless
of the context. All right, let me show you two charts. Both of these show a breakout pattern. Same price action, same candle structure. One of these was an A+ trade that made
our trader like $12,000 as a developing trader. The other was a trap that actually cost him $3,000. Can you tell which is which? If you can't, that's the mistake. All
A A on day two of a big move with the stock already up a ton on a fresh catalyst, heavy volume, institutional interest, Right? A breakout on day seven extended from
every moving average, declining volume, no new information, it's a completely different animal. They're both breakouts, right? But contextually, they're so different, and context is everything.
SMB. We don't just track setups, we classify the entire context around them. This day two break with fresh catalyst energy, or is it a day seven kind of grindy extension that might actually roll over? Is the volume expanding or is
up on the tape, or is this all kind of retail playing hot potato? When you classify context before you enter, your actual hit rate goes up. because your exits are better, but because you're filtering out the traps
aren't actually the same thing. It's same pattern recognition, it's just better filtering. That's the edge. Okay, four mistakes down. But remember at the beginning when I said mistake number five nearly ended a
We're here. Mistake number five is not having a pre-market routine, or even worse, having one that you sort of ignore. You pretend to do. All right, we had a trader here, I'll call him uh Mark. Mark
was talented, genuinely talented, good pattern recognition, really good risk market structure better than most traders with twice his experience. But every morning, Mark would roll into the office,
you know, 8:00, and he wouldn't really go through his some other people would. He'd be interesting. He'd be glancing or just kind of generally talking to people about which watchlist they had,
You know, he'd be looking at X and and then he'd kind of pick a symbol and then he'd start trading it. For the first 6 months, he was actually Which kind of frustrated everybody because we could see that talent. It was
right there. On the screen, you'd see his talent and his reads, you'd see the talent. He just couldn't convert that into consistent results. Then one morning, stock on his watch list gapped up 40% on news he
He sized it big because the pattern looked right. He was like letting pattern." But the context, the news driving the move was a one-time FDA approval, right? The buying was going to exhaust pretty fast because the move had
a shelf life and Mark didn't even know about it. Because he hadn't done the about it. Because he hadn't done the work before the bell. that trade. He almost quit that week.
it took him a little while. And here's what changed for Mark. He came in and said, "My trading sucks. I need to work on it, blah blah blah." Right? I said, "No, we're not doing anything about your trading. Your trading isn't the problem.
prep. And I want to see so much urgency about have a checklist just for your pre-market prep and you have to do it every day. We built him a pre-market protocol. Not a suggestion, not a hey,
try to do this when you get a chance, not a it kind of sort of works, a protocol with hard rules, right? By the time he was in the office at 8:00 a.m., news scan. What's moving and why? Build your own watch list based on your setup,
not somebody else's list, yours. Before you get into any meeting, before you yours. At 8:30, grade each setup, each opportunity, A+, ABC. 9:00 a.m., define your if thens for the
top three names, right? If a stock breaks this level on this volume, then I breaks this level on this volume, then I do this. And actually write it down. 9:25, 5 minutes of silence. No screens, just
feeling intention. Mark followed this for 90 days. He fought for that process every day for 90 days. He went from break even to his first $15,000 month, then $28,000, then $40,000. Same talent, same strategies,
just different morning. The protocol didn't actually teach Mark teach Mark anything new. It gave him a structure to use what he already knew. trader with potential and a trader with results, right? So, Mark fixed his
morning, but here's the cruel irony. You can do everything right before the trade and still destroy it during the trade. And that's mistake number six. Mistake number six is quitting winners too early and holding losers too long. Now, this
is the oldest mistake in trading, literally. There are academic papers on this from the 1970s. Behavioral economists have a name for it, the disposition effect. And knowing that it has a name does
doing it, all right? So, watch this. Here's a trade that's working, up $2,000, right? The trader cuts it, takes the profit, feels good. The trade continues for another $5,000 without them. Now, watch this one.
Here's a trade that's losing, down 1,500. The trader holds, hoping it goes to down $6,000 numbers might change, but does this sound familiar to you?
Here's why. Your brain values a dollar lost roughly twice as much as a dollar That's not a metaphor, that's neuroscience. It's been replicated in tons of studies. So, when a trade is green,
So, when a trade is green, the pain of potentially losing that gain is twice as much as the pain of you holding through it. You grab it. You have to lock it in. Think about that. Your brain is talking
what if this fails? But what if this fails? What if I start giving back? What if I start giving back? And it's valuing that twice as much as it is looking for the trade to continue.
But when the trade's red, the hope that it might come back is completely intoxicating. So, you hold it. You wait. You negotiate with that chart. rational in the moment, but neither one is.
Our best traders have a phrase for this. They say, "Make it stop me out." It means I've defined my exit conditions before the trade. My stop is set. My target is set. And my only job now is to let the trade prove me wrong. In fact,
make the trade prove me wrong. If it stops me out, great. That's the system working. If it hits my target, fine. That's also the system working. The one thing I will not do is make a decision in the middle without new
information. Because in the middle, I'm emotional. I'm not thinking. I'm usually reacting. Make it stop me out. That phrase alone is worth more than most trading courses. All right. Six mistakes.
All tactical. All fixable with rules and protocols. But mistake number seven, this one isn't tactical. This one is all about who you think you are. We need to tell a quick story about a trader I work with. We'll call her
Priya. All right. Priya came to SMB Capital with 3 years experience. She'd taken every course, read every book. She studied everything. Uh she knew about ICT, Wyckoff, smart money concepts, Elliott Wave, volume spread analysis,
Bollinger Bands, tape reading, options flow. Uh could even tell me about dark really know about. She knew more strategies than most of the profitable traders on our desk. Or at least knew about more strategies than most of them.
month. So, I sat down with her and I asked her one question. All right, pri- what's your trade? started listing all these strategies. Well, if it's a trend day, I'll do this.
And if there's a breakout, I'll do that. If the market's ranging, I switch to this other thing. And on Friday, sometimes I do I stopped her. All right, that's not what I asked. I didn't ask you what you can trade. I asked what's
your trade? The one where you see it and you feel it really just in your chest, right? The one where you don't have to think. So, you just know. Here's crazy because she didn't have an answer. She knew about
have an answer. And here's what I've learned training hundreds of traders. Most people who are stuck aren't stuck because they need more information. committed to an identity. They're kind of still window shopping.
They're trying on strategies. They're kind of looking at them and on this one. And then they'll return to those strategies when they don't fit when something else doesn't fit. And
reason that has nothing to do with trading. Committing to one approach means giving up the fantasy up the fantasy of all the other approaches in trading.
It means saying I'm a breakout trader and accepting that you'll miss the mean Accepting that some weeks the market won't give you the setup that you want and you'll sit on your hands while other traders around you make money.
That requires something most trading education never really talks about. It requires letting go of the person who needs to be right about everything. It requires being somebody totally new. So, we gave Preena an assignment. 30
days, one setup. She got to pick it. She picked the failed breakout of range. That's it. Nothing else. If the failed breakout of range didn't trigger, she didn't trade. First week for her was agony.
She watched breakouts happen without her. She watched trend days she could have traded. She just sat there. But week two, something started to shift. She started to see her setup everywhere.
often, but because she finally had the bandwidth to actually see what she was patterns anymore. She was looking for one. And her eyes got really sharp.
Week three, she started seeing it and being able to step into it with size. Before the pattern even fully formed, she could feel it sort of coming. That already know where that false breakout was likely to happen. But by the end of
she had had her best month ever. Not because the strategy was magic, because she was different. She wasn't a trader who knew 30 strategies anymore. She understood them, but she was a trader who owned one.
work that I think about a lot, right? The idea that your identity, the story you tell yourself about who you are, is the ceiling on your results. If your identity is I'm a trader who's
match that story. You'll keep figuring it out forever. becomes I'm a breakout trader who waits for A+ setups and sizes aggressively to follow that identity. They just have to.
contradict who you've decided to be. Strategies didn't change for Priya. She And that's the mistake most traders never fix. Here's the interesting thing now. If I see a failed breakout, I don't even
and I can guess she's pretty high up there. Okay, seven mistakes. You've seen all of them. You probably recognize yourself in, you now what? I want to challenge everybody to post in
the in the comments section what their biggest challenge is, one through seven. Okay? Post it in there. And at the end of the week after this video being live,
we're going to go back and do a video just on whatever the number one winner Thanks, everybody. Have a great day. Missing the best trading opportunities? Well, there's a reason. You're using retail tools in a professional's market.
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