Lose your money,but keep your discipline.

Trading is about following a method, system, or rules that give you an advantage over other market participants in the long run. There are good bets and bad bets. There are traders who follow a trading plan with discipline and others that start trading out of fear and greed after strings of losses or wins. Just because you lost money does not mean you made a mistake. Just because you made money does not mean you did not make a mistake. The goal of trading is to make money over the long term not be right every time. Losses are a part of trading. There is a big difference between a loss after following your plan versus a loss after a loss of discipline.

Losses are simply getting out of a trade with less capital than you entered it. The question is was the loss due to your method or your lack of discipline?

A mistake however can be many things, and mistakes can be profitable which is dangerous to the long term health of your trading account.

  1. Trading a position size so big that your risk of ruin is inevitable is a big mistake whether your individual trades are a win or a loss.

  2. Abandoning your method to start trading a different time frame or style than you have researched is a mistake because your edge is gone.

  3. Adding to a losing position is a big mistake because eventually you will be in the trade that does not revert to the mean and you lose your whole account.

  4. Believing that you are above your own trading plan and can start just trading as you wish is a death wish for your account.

  5. Trading based on beliefs instead of reality is a dangerous place to trade and is a mistake.

  6. Taking your entries a little sooner than they are triggered or an exit a little later than your stop loss is a mistake.

  7. Diversifying traded markets or stocks before doing the proper research is a mistake.

  8. Trading so big that your emotions interfere with your trading plan is a mistake.

  9. Trading when you are very sick or going through emotional personal problems is a mistake.

  10. Making trading decisions based solely on ego, fear, or greed is always a mistake whether you win or lose.