5 Day Trading Mistakes That Blow Up Accounts (And How I Fixed Each One)

If you’re anything like me, or the millions of other traders out there, you’re going to make these five trading mistakes. I wish I never did. It would have saved me years of time, money, and frustration.

The truth is, most of these are a rite of passage. If you haven’t made at least one of them, you probably aren’t actually trading yet.

But after 9+ years of trading small caps and coaching more than 20,000 traders over the last 7 years, I can tell you the same five mistakes show up again and again: chasing home runs, indicator overload, trading all day, trying to switch off your emotions, and sizing up without a proven system.

Here’s each one, why it happens, and exactly how to fix it.

Mistake #1: Chasing Home Runs on Every Trade

This is the most common mistake I see. Trying to make every single trade a massive win that makes or breaks your month.

Here’s why you do it: you’re not consistent yet. You don’t have a replicable strategy, so you’re hoping to get lucky on that one trade and make life-changing money. And that hope leads directly to oversized positions, ignored stops, blown-up accounts, and bag holding.

The boring truth? Consistency wins every single day of the week. Trading isn’t glamorous. Small consistent wins don’t get clicks and views, which is exactly why you never hear about this side of trading.

Trade your thesis, then take profits

Before taking any setup, you should know exactly what your thesis is: what you want or expect to happen in that trade. When price starts confirming it, you take profits, trim, and make the trade risk-free. That way, worst case, the trade stays green.

Skip that step and greed takes over. You flip green trades red because you wanted the home run.

Why small accounts make this worse

Traders come in with $1,000 or $2,000 accounts wanting to make $10K or $20K a month because of what they see online. But look at the math. A trader pulling $50,000 a month might be up 1 to 10% on their account. You’re attempting a 100x. It’s all relative to where you are.

This is not a game of getting rich quick. It’s a game of seeing who can survive the longest. Those who survive are the ones who get rewarded. I broke down the full case in why consistency beats homerun trades every time, and if you’re starting small, read how to scale from a $1K to $10K account the right way.

Mistake #2: Indicator Overload and Analysis Paralysis

You’ve got a bajillion indicators some guru on Instagram or TikTok told you to use, and you keep adding more every week. Now you have no idea what you’re even looking at.

Same story with markets. I’ve taught so many traders trying to trade stocks, options, futures, forex, and crypto all at once. They end up mediocre at everything or losing at everything. There’s no in between.

You have to be a specialist. If you’re not, somebody else is, and they’re going to take your money every single time.

Stay in one market (the hometown rule)

Close your eyes and picture your hometown. You can drive around it blind. Every stop, every turn, every shop. Now picture a city you visited once on vacation. You’re pulling out Google Maps at every intersection.

The market works the same way. Stay in one place, learn how it moves, learn every little nuance, and that’s where you find success and scale. I’ve traded small cap stocks specifically for over 9 years. I know how that market moves and breathes. Pick your one thing, and if you haven’t yet, start with how to pick your first trading strategy without confusion.

The only indicators you need: VWAP + the 9, 20, 50 EMAs

Forget the RSI, the MACD, the ATR, the Bollinger Bands. I use two things: VWAP and the EMA 9, 20, and 50. That’s it. Keep it simple. Price action is king.

How to actually use them (real trade example)

When price is above VWAP, buyers are in control. Below it, sellers are in control. When price is above VWAP, I’m looking for pullback opportunities into VWAP as support.

VWAP is also a game-changer for risk to reward, because the distance from VWAP is your downside range. The closer price is to VWAP, the less downside risk. The farther away it gets, the more VWAP acts like a magnet pulling price back down. That’s exactly how I traded ICCM last week: I played every pullback near VWAP, and once price got extended, I left it alone. The risk/reward simply stopped making sense.

Then I pair that with the EMAs for short-term trend. My rule of thumb: I want price above the EMAs and the 9 EMA above the 20. That’s the front side of the move, and it’s fair game. When the 9 crosses beneath the 20 and price loses the EMAs, the move is done. Step away.

That’s the whole toolkit: VWAP, three EMAs, and price action to identify support, resistance, trend, and opportunity. If you want to go deeper, here’s my full VWAP pullback trading strategy and why the 5-minute chart is the most important timeframe.

Mistake #3: Trading All Day (You’re Not Paid by the Hour)

Back before the PDT rule went away, traders got forced out of the market when they ran out of settled funds. Now nothing stops you, which means the discipline has to come from you. (If you missed that change, here’s what the end of the PDT rule means for day traders.)

The first hour is where the money is

A majority of the day’s volume happens in the first hour after the open. That 9:30 to 10:30 window carries around 80% of the market’s volume every single day, and it’s where most of your opportunity lives. It’s where I take 95% of my trades.

The 11 AM walk-away rule

Years ago I was the guy at the desk all afternoon, taking trade after trade. On green days, you’re never green enough, so you keep going and give it all back. On red days, you keep trading to get back to even, and it never ends well. Sound familiar? Here’s how to stop overtrading for good.

Now, regardless of where I’m at by 11, I step away. Because if the day was going to work, it would have worked in the first hour.

Mistake #4: Trying to Trade Without Emotions

This is the hardest one, because everyone tells you to “remove your emotions.” You can’t. You’re a human, not an AI, and pretending otherwise just makes it worse.

Awareness beats suppression

Even after 9+ years, there are days where frustration ruins my morning. I still feel FOMO. I’m still tempted to overtrade and oversize. You can’t get rid of the tilt or the anger. All you can do is know they’re coming, respect them, and step away.

So that’s my system: if I’m tilted, I step away. If I feel FOMO on a stock, I get off that chart and watch something else. Feel the fear, feel the FOMO, feel the frustration, then remove yourself from the situation. That’s all you can do. (More on that in the psychology behind FOMO and how to recognize emotional trading.)

Big wins are just as dangerous as big losses

It goes both ways. Yesterday I caught CRVO into a halt and it rocketed from about $5.33 to $6.50 out of the halt in a couple of minutes. After a trade like that, I make myself sit back, because excitement distorts your judgment exactly like frustration does.

If you’re not mentally flat, you should not be executing a trade. Be aware of it, accept it, respect it. And if psychology is your weak spot, start with these 5 deadly day trading psychology mistakes.

Mistake #5: Scaling Up Without a Proven System

Nothing is more upsetting than watching a new trader risk thousands of dollars per trade with zero proof of profitability. Two or three months later, the account is empty and they’re out of the game. That is how 90% of traders fail.

The vending machine theory

If a vending machine eats your five bucks and nothing comes out, you don’t feed it a twenty next. You say “this machine is broken,” toss in a dollar, and see if you can wiggle the chips out. Only when the chips start coming out do you put more money in.

Your trading system is the vending machine. Until you’ve proven profitability, even if that’s making $10 a day on 5 or 10 shares, you have no business sizing up. Every new trader should be trading 50 to 100 shares max while they learn, risking a couple of bucks a trade. This is exactly how you avoid blowing up your first trading account.

And here’s the old saying that’s extremely true: if you can make $10 a day, you can make $1,000 a day, you can make $10,000 a day. The only thing between those numbers is share size.

The numbers that earn you the right to size up

Don’t guess whether your system works. Measure it. For trading small caps, the holy grail is win rate and profit factor: you want a 65 to 70% win rate and a profit factor of at least 1.3 to 1.5. Anything less, and you shouldn’t be scaling. Across my profitable students, the pattern is the same: win rates over 60% and profit factors over 1.5.

If you’re not tracking those yet, start here: the day trading performance metrics that matter and a trading journal template to track like a professional.

Scale up, scale down

Scaling isn’t one-way. When the numbers make sense, size up slowly. When they stop making sense, size back down. When they make sense again, scale back up. Sizing follows your statistics. Never your emotions, and never your impatience.

EDITOR NOTE (do not publish): Insert Bootcamp CTA component here. Suggested copy: “You don’t build a proven system by guessing alone. The 60 Day Trading Bootcamp gives you the system, the mentorship, and the accountability to prove your stats before you size up. Apply for the next cohort.” Button links to: https://freetrialoffer.trademomentum.org/60daytradingbootcamp

How to Stop Making These Mistakes

Now it’s your job to analyze your own trading, figure out which of these five mistakes you keep repeating, and put guardrails in place so you physically can’t make them again.

Just try to be a better trader by 1% every single day. Do that, and you’ll be very surprised where your trading is one year from now.

Watch the full video for more insights

For a deeper dive into all five mistakes, including the ICCM trade breakdown on the charts, watch the video:

FAQ

What is the most common day trading mistake?

Chasing home-run trades without a consistent, replicable strategy. It leads to oversized positions, ignored stops, and blown-up accounts. Small consistent wins beat home-run swings every time.

How many indicators should a day trader use?

As few as possible. Kevin trades with only VWAP and the 9, 20, and 50 EMAs, because price action is king and stacking indicators creates analysis paralysis, not edge.

What time of day is best for day trading?

The first hour after the open. Roughly 80% of the day’s volume trades between 9:30 and 10:30 AM, which is where most of the opportunity lives.

When should I increase my position size?

Only after your stats prove profitability: a 65 to 70% win rate and a profit factor of at least 1.3 to 1.5. Until then, stay at 50 to 100 shares per trade while you learn.

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