Learning from mistakes – avoiding losses

Good Traders actually cherish mistakes, saying, “Great, I have just eliminated a problem from my trading that will never happen again”.

This is a follow up to the previous lesson. It is important because it is not enough to just glance over your trades and determine if you made errors. There is a virtual ‘mountain of gold’ in your trading results every day that most people tend to overlook. You can look at a stop out in one of two different ways. You can view it as a loss, or a failure, and nothing more. On the other hand, you can view it as an opportunity to learn about something you may be doing wrong. If it happens several times in the same setting, you can learn to avoid it. Avoid the play, avoid the mistake, and next time maybe avoid a loss.

There is only one way to do this. That is to print out a chart of every play you do. Mark it up with the original stop, targets, and how it should have been managed. Then mark it up with how you actually played it. Note the difference. The first time, people do this, they are amazed. Every time you find an error, mark it on the face of the chart and save it. When you accumulate enough charts, check them all for the most common mistake. Make a vow to do whatever it takes to avoid that mistake. Just erase one mistake at a time.

Here’s some pointers. AgenaTrader makes a screenshot of each trade – if you have set it to do so – when the trade is finished. It is best to wait for a certain amount of time after the trade has ended. It depends in which time frame you trade, but you should wait for at least 20 – 30 candles in this time frame before checking it again with a fresh, objective mind. Just remember, if you had started this process 100 trades ago.  How many mistakes could you have eliminated?

AgenaTrader provides you with a trading journal, where you can document all these findings directly on the platform and thus have no media breaks by switching from one software to another in order to evaluate your trading results.

 

Disclaimer:
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. Hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. All information on this website is for educational purposes only and is not intended to provide financial advice. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold this information harmless in any and all ways.

Risikohinweis:
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