Click here for an archive of Cramer's "Mad Money" recaps. Bad trades are going to happen, but if you can learn from the people who've been there, chances improve that you can learn how to spot the true winners and how to limit your losses. That was the message Jim Cramer offered on Thursday's "Mad Money" television show. Billing the show as a "day of atonement," Cramer said he wanted to own up to his biggest mistakes, with the hope that others not be destined to repeat them. What traders and investors need at the outset, he said, is discipline, because most mistakes come about either from being too hopeful or from plain arrogance. He started his cautionary tale by going back seven years to a time he owned paper that would prove to be problematic -- the common stock of Cendant ( CD). In 1998, he bought shares in the new company that was created by the merger of CUC International and HFS. The trouble began when past accounting irregularities were revealed at the old CUC. Cendant's stock dropped. But Cramer, still working for the hedge fund Cramer Berkowitz at the time, was in "hope mode." He saw the decline as a buying opportunity, and he picked up 200,000 more shares, taking his total to 1 million. That only made the pain that was coming that much worse. Cendant's stock got cut in half. And Cramer's partner at the fund had to call him while he was on vacation to let him know they were down $17 million on the Cendant position. His advice here was simple. "When you see any accounting irregularities, you sell," he said. Not only that, but stay clear "until it's well over with." A more recent stock on Cramer's list of regrets was Dick's Sporting Goods ( DKS), a company he believed in strongly and said could be bought, even as late as the day before its earnings report in August. Turned out to be a bad idea. Dick's came out with disappointing numbers and took down its guidance. The stock got slammed. "I think I'm going to be eating crow about this one for at least the rest of the year, if not the decade," he said. Cramer believed that Dick's was like "Achilles without the heel," but he had made a crucial mistake -- he trusted management, and he failed to look closely enough at the company's takeover of Galyan's. "When you're playing with retail be skeptical, more skeptical than I was," he said. Another trade Cramer said he'd like to have back was Montpelier Re ( MRH), which he played by going against the Hurricane Katrina anxiety. Again, he had erred. "It's just too risky to bet against Mother Nature," he said. Something else you don't want to bet against is the Federal Reserve. Unfortunately, Cramer said he had done that, too, holding Commerce Bancorp ( CBH) and Annaly Mortgage ( NLY) even as the Fed was continuing to raise rates. Learn to limit your mistakes, he advised. Do the homework, and not just a little. Listen to conference calls, watch presentations on a company's Web site, read the financial statements. Otherwise, you won't know if a stock that's falling is actually a good buying opportunity -- or a chance to sell before it gets even worse.