Sunday, May 20, 2012

Making the same mistake, twice

Trading is mainly a mind game. Traders often make a mistake, then tell themselves - how could I have been foolish to have done such a thing. I will never do such and such, again.

Traders will take thousands of trades over their trading life cycle. It is quite likely that many trades will be mistakes of some kind, and,some of these mistakes will occur again and again. Why worry about it?

In the book, 'Market Mind Games', the author says "Knowing, not controlling, your emotions can be your secret weapon'. She says that our mathematical approach gives us a natural desire to be correct, causing discomfort when we realize we have made a mistake. There is no need to 'control' our mistakes. We just need to be aware of them. Once, the trader is aware that he has strayed from his chosen path, his mind will slowly bring him back to the road. A deliberate attempt to control our emotions may be counter-productive. Just be aware of your emotions.

My Notes: If this is a bit difficult to read, do not worry. Read it again.

1 comment:

Jitender Yadav said...

Respected Sudarshan Sir

I have got the message- making mistakes are part of our lives and we do need to forgive ourselves too, and move on.
The fear of making mistakes lead to more mistakes e.g. If I fail to control my losses(first mistake) in a trade, I'll try to correct that by averaging my position (second mistake). Now losses are compounded and it will lead to revenge trading ( third mistake ). So the best option is forgive yourself at the first mistake itself, accept the losses and move on. this way you can save yourself from making more mistakes.
Your Fan
Jitender Yadav
New Delhi

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