The enormous cost of having to be "right"

S

smile

If I can't admit I'm wrong or that I could have done something better, I can't improve.

I also can't take small losses before they become large ones.

The cultural model is to mercilessly attack and annihilate people who admit they made a mistake, were wrong or changed their mind.

Many view people who admit they are wrong as "weak" or wafflers.

The only way to improve as a trader and as a person is to admit to myself my mistakes and learn from them.

Obviously, I have to buck the cultural ego-based model of having to be right to succeed as a trader.

I also have to be honest with myself about my behavior.

How much has having to be "right" cost you in your trading career?
 
There is no right or wrong. All that matters in trading is your account balance and whether it's growing or shrinking over time.

That's why I took up option trading many years ago...because no matter what I did or thought - I was wrong most of the time. Then... when I did the opposite of that I was still wrong most of the time. Options (for me) give me a nice wide window to be really wrong most of the time and still grow the account. I have no idea where the market is going in the next 10 minutes, 10 days or 10 months, I can only hope it moves in a way that will suit my positions.

If you are going to be a successful trader, you need to embrace being wrong and grow very comfortable with being wrong a lot.
 
Better to learn to be right than wrong. Letting others get away with being wrong costs a lot, especially politicians. Not making the same mistakes over and over is Einstein's definition of being sane.
JFK had a flawed foreign policy but later politicians just can't get out of that groove. So the US is destined to keep making the same mistakes and has done so in Iraq, Afghanistan and now Syria.

China is about to make the same mistakes of Japan in the 1930s i.e. using it's new economic might to expand it's territorial borders.

With Russia it is the same sad story. Putin is trying to emulate the efforts of 18th century Imperial Russia and nibble away at it's borders. Not content to be the biggest country on the planet.

The biggest cause of major wars is territorial expansion.
 
Last edited:
smile said:
If I can't admit I'm wrong or that I could have done something better, I can't improve.

I also can't take small losses before they become large ones.

The cultural model is to mercilessly attack and annihilate people who admit they made a mistake, were wrong or changed their mind.

Many view people who admit they are wrong as "weak" or wafflers.

The only way to improve as a trader and as a person is to admit to myself my mistakes and learn from them.

Obviously, I have to buck the cultural ego-based model of having to be right to succeed as a trader.

I also have to be honest with myself about my behavior.

How much has having to be "right" cost you in your trading career?
More...

I REALLY don't know in my personal life cause I doubt I have ability to know what normal is in life in general. I am one who gets older and make even more mistakes in my life that when I was younger, but all who know me or friends, I laugh of the mistakes I do and often times broadcast them to show others that mistakes don't embarrass me but I embrace them as I have taken a risk, I don't look at mistakes as failures but an opportunity to do it again a different way.

In Business it is different, it has been huge losses of money, and at time they were not funny, but I find some of the idiot events that I have done are quite funny. I can't change them but have learned from them. Trading early on was good stock trader/investor, I have always wished I stayed doing that and never "tried" day trading, I lost seven great years in stock trading to overcome day trading. Lost over $100k learning about Commodities and have done well trading them, but the seven years of losing money but even worse finding all the horrible emotions I learned about myself I could have been happier never have learned. I had already know I had ADHD and bi-polar so I thought I knew how to deal with that and maybe because of that made me to preserver even more. But the constant being wrong meant losing money, losing time cause force me to take extra jobs beside full time job to pay my education. Less time to relax or vacations. I always knew why I was losing and why I was wrong, each having a different answer. I was losing cause I needed to learn how to program and back test, and why I was wrong.....too personal to answer.

You have to overcome lying to yourself.

At some point as a trader, you simple don't care what people think about you, they will never understand.

First 32 years it was not important to be "right", it was to make money trading and be consistent, NOW it is about being right, I feel I have been at this such a long time, I should be right, should be profitable and that is what I stride for on each trade. But I never bet the farm, I am not perfect, but often told I am a perfect A-hole, well, I have worked hard at being that as well. LOL

So you can be that person who stands up to the world at top of your lungs yell "I MADE A MISTAKE AND I AM PROUD THAT I TRIED AND WILL TRY AGAIN" or you can be the twerp sitting on the couch laughing at me cause I failed and they will never be truly happy.
 
A huge psychological element here is not "right" or "wrong" based on whether or not the trade made money. It's whether you would take the trade again if you saw the same thing. The answer should be yes, or you should not have taken it in the first place.

Your urge to make money does not create better market opportunities. You sit back and wait for something that you have to try. It should have a risk/reward that is carefully calculated.

This doesn't mean it will work in your favor 100% of the time; it means it was a solid idea with favorable risk/reward that is likely to work enough of the time for it to be profitable over many repetitions.

If you know that, and believe it, why would the trade not working out upset you?

You weren't "wrong." It didn't work this time.

If you are finding things aren't working the majority of the time and you're just losing money, step 1 becomes: lose less. Get smaller. Risk less.

So you're not trying to be "right" on the idea. You're entering favorable conditions that should yield more than you risk the majority of the time, but not every time. When your stop, mental or literal, is hit, you are GLAD. Because that was your plan and you just did the pro trader move of following your plan and exiting for a small, manageable loss.

That's "right."
 
Right or wrong should be connected to your system, not to what you think is right or wrong like OP probably means.
Being right means following your system, being wrong is NOT following your system. So being right can never cost you enormously, and if it does you should revise your system. Because then the system is not good. A good system should never cost enormously.
 
smile said:
How much has having to be "right" cost you in your trading career?
More...

Cost must be measured in mental / emotional - as well as monetarily


No matter the $ amount - mental / emotional always costs more..., last longer..., takes more effort to recover from

==============================

Society..., reveres being right - deplores being wrong..., equates being right to a winner / being successful..., being wrong to a loser / being a failure

We otoh - right is when we follow our process / each trade plan ..., to the letter - wrong is when we deviate ..., even the slightest with either

And the results - screw em



Ain't trading such a blast


RN
 
You need to have the discipline to cut your loss. Why not cut it before it becomes too big? You're a bigger loser if you hold your loss.
 
smile said:
How much has having to be "right" cost you in your trading career?
More...

This is mainly a beginner's issue. -- along with a plethora of other issues :confused:
...All of these kind of goes away, or you don't think about it that much, as you progress.

(but to answer your question...when i first started...i lost about 40% of my account in three months, before i stopped trading completely -- and really studied the market for a long time.)
 
You must log in or register to reply here.
Back
Top