4 Careless Errors That Cost Traders Big

There's nothing worse than making mistakes during the order entry and trade management stages that could have been prevented. Here are five such errors that are all too common.

No one ever likes to lose money, but the veteran trader knows there are two kinds of losses: those caused by being on the wrong side of the market (because the seasoned trader knows the market is always right) and those caused by doing something dumb and avoidable.

"Did I Want to Buy or Sell?"
The first mistake on my list is entering a buy (or a sell) ticket when the intention was to enter a sell (or a buy) ticket. This usually comes on liquidating-not initiating-a position, and more commonly, it occurs when the trader is short.

Failing to Enter or Cancel a GTC (Open) Order:
In the good old days, you had to call your broker to place a good-till-cancelled (GTC, or open) order. Then, usually once a week, you'd receive a call from your broker reminding you that the GTC was still in force.

Today, we enter our GTCs online with the click of a mouse. Trade errors? You bet, created by traders receiving fills (executions) from GTC orders they had completely forgotten about. Conversely, we see "equal but opposite" errors caused when a trader believed that a GTC was in place, when in fact, there was none.

Confusing Mini and Regular Futures Contracts:
Do not make the mistake of confusing full-sized with mini-sized contracts. Check your order entry symbols carefully before entering your orders. There are, at present, about two dozen mini-sized contracts available for trading, alongside their full-sized counterparts.

Taking Your Eye off the Clock:
Thanks to electronic trading platforms, most futures contracts are open almost 24 hours a day. But not necessarily for an expiring contract on the last trading day! There's nothing more frustrating than placing a liquidating order, only to receive back an e-mail message from your broker telling you your order was TLMC ("Too Late, Market Closed").