One of the most painful things a trader can experience is hindsight. Wishing they let the winner run, cut the loss short, traded bigger, and on and on. Hindsight looks so obvious AFTER the fact. If we followed our trading plan based on our system and method we should not have regrets. Yes, we should regret losing discipline and self control and trading wildly, but we should never regret making a plan and trading it. We should regret undisciplined profits and accept the disciplined losses. We have to understand the market will go where it goes we have no control over it, only ourselves.
- Never regret cutting a loss at your stop even if it turns around in your favor. Stops are insurance against big losses, if you have no insurance you will burn your account down. They are necessary for risk management, it is better to temporarily regret a stop loss that reverses than not taking a stop that causes you to lose 20% of your account.
- Never regret taking an entry that is signaled with in your system even if it is a loss. If you want the big winners you have to take the entries that fit your system. If you do not have a systematic way of trading or a method then you may regret taking entries with no real edge.
- Never regret staying in cash if the market is too volatile to trade, wait for the right set up before committing money. It is better to regret being on the sidelines during uncertain price actions and wish you were in, than to be in that action losing money and wish you were out.
- Never regret not trading bigger in a winning trade. Big position sizes lead to big losses when wrong, not only big wins when right. Consistency in small losses and bigger wins is what makes money in trading not big bets. Traders will regret trading too big when one string of losses destroys their account.
- Do not regret missing a move in the markets because you are still learning. The longer you take to do the right homework the better off you will be. The right time to trade is after you have picked a method, have robust systems, and a trading plan and believe in yourself sticking to your plan. That is when you start very small with real money.