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Just what is a Trading Mistake?

Recently I read an article that attributed losses to trading errors. I didn't think much of it until I started to try to define what was a trading error. By expanding the definition (at least for me) I have been able to improve my trading:

I had thought of mistakes as being:

1. Trading impulsively/emotionally (not following a plan)
2. Entering a trade at a price outside the plan's range.
3. Errors in order entry, software etc.
4. Usual list of not using stops, too much size etc...

Now I have expanded the list to include:
5. Not taking an entry that your setup indicates should be taken.
6. Not following your system's money management rules.

I long ago proved to myself that I have no ability to "pre-determine" if a rade setup is more or less likely to win or lose. Gorget it. Let the market decide. After all that's what is meant by a trade setup. BUT I never considered NOT TAKING AN ENTRY as a MISTAKE.

By including 5 and 6 I am forcing myself to take every valid signal and follow my MM rules or I HAVE TO LIST IT AS A MISTAKE in my trading journal.

What mistakes or errors occur in your trading that you need to get rid of?
Pleasure Guy,keep up the great work my friend.

Originally posted by Khalsa

.... Problem is my wife now knows the SYSTEMS and thinks like me so that does not work anymore.

That is histerical.
Hi Bakrob99,

I am not sure of the context of your reply but maybe mine was not clear.

What I meant to say is that if one has a SYSTEM, then it needs to be traded mechanically without emotion.

When my wife had no idea of the markets and economic news and earning reports etc. she could trade them "without emotion".

However now she knows the SYSTEMS and the markets better, emotion always sets in when she sees a profit (or a loss) and therefore does not see the "SYSTEM" through to its max.

Hope that clarifies my comment.


I understand and think that it is quite amusing that human emotions creap in as soon as you "learn something" about the market ... surely a case where ignorance is bliss.