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Do you look back at bad trade?
- Thread starter a529612
- Start date
It depends if the bad trade was part of a growing pattern. It is like baseball, where a hitter can fail seven out of ten times and still be successful. If he looked particularly bad on one at-bat, yet is still maintaining his average big deal. The same with trading, the market can make anyone look bad from time to time, but if the bad trade fits into what is the traders normal losses for the week or month, you just move on and do not let it affect tommorrow. If it is part of a slump, then you have to consider it. This is where the seasoned trader uses his experience to tell the difference.
I think you need to define "bad" trades. For too many traders a "bad" trade is a trade resulting in a loss. For me, the only bad trades are the ones made out of my rules, win or lose. I had my fair share of "Profitable" trades which, based on the wrong reasons for trading, were teaching me the wrong lessons. If you trade with probabilities, the x% losses that your system generates are not bad trades.
Now, by looking at bad trades all those trades out of the rules of the system, one can learn, ie, profits taken too soon, impatience in entry, not respecting a stop loss because, "this time is different", etc..
Now, by looking at bad trades all those trades out of the rules of the system, one can learn, ie, profits taken too soon, impatience in entry, not respecting a stop loss because, "this time is different", etc..
You have to be brutally critical and honest in analyzing your mistakes...Quote from a529612:
10% or more equity loss.
And respond to each "disaster"...
By working harder... and building elements into your trading that will prevent repeat mistakes.
Every "disaster" I have endured in 13 years...
Has made my business stronger because of the above approach.
Also... you should be suffering > 10% losses rarely...
Certainly not more than once/year...
Or else your Risk of Ruin is too high.
This means learning how to hedge expertly...
Something that is rarely addressed at ET...
Which says a lot about the crowd.
Why not create a Wall of Shame on a cork style bulletin board placed right next to your computer?
As funny as this sounds, it works. If you lost thousands of dollars on one trade, then you should just throw it up right in front of you. Then you will be constantly reminded of your mistakes and you will have more drive to make up for the lost cash.
The first step to solving a problem is admitting that you have one. If you lost money, then there is a problem somewhere. If there is a problem, then you must take swift and immediate action to solve it.
I bought in afterhours a few times and resulted in losses. Therefore I put up a sign next to me stating "Do not buy in afterhours."
All professional traders use these tactics as mistakes are usually repeated. Without a thorough brow beating, you cannot learn. . .
As funny as this sounds, it works. If you lost thousands of dollars on one trade, then you should just throw it up right in front of you. Then you will be constantly reminded of your mistakes and you will have more drive to make up for the lost cash.
The first step to solving a problem is admitting that you have one. If you lost money, then there is a problem somewhere. If there is a problem, then you must take swift and immediate action to solve it.
I bought in afterhours a few times and resulted in losses. Therefore I put up a sign next to me stating "Do not buy in afterhours."
All professional traders use these tactics as mistakes are usually repeated. Without a thorough brow beating, you cannot learn. . .