🚩 PRE-TRADE RED FLAGS
The 60-Second Gut Check Before You Click Buy • SMB Capital's Most Common Mistakes, Distilled
How to use this: right before you enter ANY trade, scan this page. It takes less than a minute. It is the fast version of everything else in the playbook — if you can honestly tick every box, you're clear to enter. If even one red flag applies, stop and re-check your thesis.
🚩 THE 8 MOST COMMON WAYS TRADERS LOSE MONEY
- 1. Chasing a move that's already extended. Buying after the easy money is gone, hoping it keeps going.
Fix: if you missed the entry, wait for a pullback to a real level — don't buy the extension.
- 2. Entering before your trigger actually confirms. "Front-running" a level because you're afraid of missing it.
Fix: wait for the actual break/reclaim/hold — a level isn't broken until price closes through it.
- 3. Sizing an idea like it's a proven setup. Trading a brand-new or unproven setup at full size instead of Rule-of-20 size.
Fix: every new setup starts at C-grade size for its first 20 reps — no exceptions, no matter how good it looks.
- 4. Conflating your own grades. Calling a trade a "C" in your head but sizing it like a "B" or "A."
Fix: commit to a number before entry, and take exactly that risk — don't let conviction creep up mid-trade.
- 5. Trading an illiquid name with size. Entering a low-volume, wide-spread stock and getting stuck unable to exit cleanly.
Fix: check liquidity/RVOL before sizing up — illiquid names need smaller size, always.
- 6. Confirmation bias. Only noticing the price action that supports your thesis, ignoring the signals that invalidate it.
Fix: before entry, ask "what would prove me wrong?" — and actually watch for that.
- 7. Mixing up trade classification mid-trade. Treating a fast momentum trade like a patient trend trade (holding too long) or vice versa (bailing too early on a real trend).
Fix: decide BEFORE entry whether this is trend / momentum / mean-reversion — manage it accordingly, don't switch mid-trade.
- 8. No give-back rule. Being up big intraday, then giving most or all of it back because there's no rule stopping you from over-trading a green day.
Fix: set a hard rule (e.g. "I won't give back more than 50% of morning profits") and honor it mechanically.
"If you cannot answer every single ASET question, you do not have a trade — you have an idea." — Jeff Holden, SMB Training
✅ THE 60-SECOND GUT CHECK — TICK EVERY BOX BEFORE ENTRY
Tick the boxes above to see your verdict
🧠 IF YOU JUST TOOK A LOSS — THE ANTI-PLAYBOOK CHECK
Before your next trade after a loss, ask which category it failed in — SMB calls this the "Anti-Playbook":
- Idea failure — the thesis itself was wrong (bad catalyst read, bad setup identification)
- Entry failure — the idea was fine but the entry/timing was wrong (chased, front-ran, or was late)
- Risk failure — the trade itself was fine but sizing/stop placement was wrong
- Mindset failure — everything else was right but emotion (revenge trading, fear, tilt) broke the execution
Naming the category prevents the same mistake from repeating in a different disguise next week.