[j5eb6ach]

SkyMarshall said Those will all teach you what not to do, which is just as, if not more important in investing and trading than what to do.

Anyone can notice the successful investment decisions after the fact: buying Apple Inc on March 6, 2009 at $83.50 or selling BP on January 19, 2010 at $62.30. No stock or mutual fund can beat the market, each year, over twenty years. Neither can you.

What you can do is not beat yourself. Within the nuts and bolts of a portfolio, some trades may cost you dearly in terms of capital gains tax. Lopsided distribution of your investments in too few asset classes will also wreck havoc. Avoid these mistakes and you can greatly improve your rate of return.

<another_shameless_plug> I run the investment website http://blog.realized-app.com and companion web app for getting these decisions right. </another_shameless_plug>

[SkyMarshal]

Yup. And one more consideration to add to that, the math of losing money is brutal.

For example, say you start trading with $100, have a bad day and take a 50% loss, and are down to $50. What % gain do you need to get back $100?

Not 50%, as many new investors answer without thinking. To get from $50 back to $100 requires a 100% gain.

If you only a 25% loss down to $75, you need a 33% gain to get from $75 back to $100.

If you took a 75% loss to $25, you need a 300% gain to get back to $100.

Given the loss, the odds of getting the gains required to break even are not good.

Avoiding losses is a huge part of making money trading, which is why I particularly like both What I Learned and Taleb's stuff.

[dedward]

That highlights a fundamental error many people make - you can't average percentages. A graph of an index fund on a percentage basis for the last 20 years tells you nothing useful (at least not directly).