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One of the biggest mistakes a trader can make is expecting the market to provide them with something. For example, a trader might want to buy an extravagant item and make a trade in hopes that the market will "give" them the gift. Whether it's stocks, futures, forex, or commodities, the market doesn’t offer anything to anyone. This mindset is one of the surest ways to lose money in trading. Why? Because you end up making trades outside the context of your usual strategy, with an artificial monetary target and a huge emotional burden attached. It's the perfect recipe for disaster.

Interestingly, there’s a passage in Reminiscences of a Stock Operator where Jesse Livermore’s trader friends see an expensive fur coat in a store that they can't justify buying due to its high price. They start a sort of internal competition to see who can make a trade to earn enough to buy the coat. Livermore eventually notices that the entire office is on the brink of going broke trying to make enough money for the coat, so he goes to the store to buy it himself, only to find out it has already been sold.

Throughout my career, I've witnessed many similar episodes. A trader I worked with used to say, "That's not too expensive, it's just 10 points on a big S&P" (at the time, one point in S&P Futures was $250). In Trading Tales, I wrote a story related to this behavioral pattern. The story is titled "Tick-Tock Trades" and is part of the short-story collection in the book Vivian Steele: The Queen of Wall Street. In the story, John Spinner, the most emotional trader in the room, wants to buy a watch he saw in a Fifth Avenue store but decides he’ll buy it with market earnings. Here's the story in full.

Tick-Tock Trades

The atmosphere buzzed with conversation at the brokerage, and Spinner's remark sparked curiosity.

"Hey, have you ever noticed," John Spinner began, "that all the big-time traders sport a killer watch?"

Maxwell Dither, sharp-witted and polished, nodded in agreement. "Absolutely, John. It's a symbol of old money, of success. An expensive automatic watch always looks good, giving the wearer status and class."

Mortimer Sagecroft, the elder statesman of the trio, glanced at the wall clock. "Speaking of time, it's the opening bell."

Maxwell turned to Mortimer with curiosity. "Mortimer, what watch do you wear?"

Mortimer smiled faintly. "The same one as always. A manual wind watch that belonged to my father."

John couldn't help but crack a joke. "One of those that's only right twice a day, Mortimer?"

Mortimer chuckled. "Not at all, John. It's accurate and precise, made in Switzerland."

John's eyes lit up with excitement. "I spotted one at the boutique on the avenue. It's a bit steep, but in market terms, it's like pocketing a quick $1 profit from a 2,000-share trade. Easy pickings for an afternoon's hustle!"

Maxwell raised an eyebrow. "That kind of thinking can be very costly, John. You might make a hasty trade, not that you're not used to it!" He laughed heartily.

Mortimer leaned forward, his tone serious. "Spinner, forget about the watch immediately! Trying to fund your watch through the market could cost you the value of a car. You'd be better off taking your bills, soaking them in gasoline, and setting them on fire!"

Maxwell interjected with a playful quip. "Well, in winter, that little bonfire might warm us up..."

Ryder Riskmore chimed in, "But I think I know what's going on here... John wants to impress Vivian with a classy watch. Even if it means risking financial ruin to buy it with money 'gifted' by the market!"

John, playing the wise guy, responded, "Alright, cool. I'll hold back this time. I'll settle for half a watch from the market... I'll stick with a 1,000-share trade!"

Mortimer shook his head in mock exasperation. "You guys never learn. As for me, that's enough for today. I'm out for an afternoon walk."

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