When Was The Last Time You Were Wrong?
I am asking you this question in regards to being wrong in the markets. When did you make a call and it was wrong?
It is more of an important question than you may think. The reason being is that to say you were wrong requires you to have a good look at your trade/trades and decisions, strategies and rules and then make the call to say, “Hey, I was wrong”. It is after this realisation that you can look to learn from the mistake you made if in fact you made a mistake at all. I know this all sounds a bit confusing?
Let me make it very simple for you to be able to admit you are wrong and then improve on it. Here is my simple step-by-step measurement tool.
- Have a written checklist
- Take screen shots of all trades and all the time frames that make the trade relevant
- Add text to the screen shots so that you can easily look back and see what it was you were thinking when you made the decision to trade
- Take an “outcome” screen shot and add it to the other screen shots you took with further text you deem relevant.
- Take the time when the market is closed to go over the trade against your checklist. Make sure you followed your rules and if you didn’t then don’t hide them under the rug, acknowledge these mistakes and move on.
Finally, there needs to be a “punishment” to breaking rules and not following your plan when it comes to trading decisions. For me, my punishment is that I tell someone. You will no doubt have someone you know that once told of your trading faux pas will be able to realise the mistakes you made and hold you accountable to them. This is important because just like giving a child a lollypop for doing bad behavioural things if you don’t punish yourself you are ultimately telling yourself that this is OK and it’s not.
When it comes to trading it’s not just about taking the trade or looking at charts. Like Debussy said, “Music is the space between the notes.” One could also say that successful trading is the space between the trades. Make that space a space to work on improvement while you wait for your next outstanding trade. Perhaps a simple trading measurement tool like the one I use could help you in your down time.
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The TWP Team
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