BarroMetrics Views: Traders and Errors

I was having lunch the other  day with a friend and budding trader. During the course of the meal he said: “It’s OK for you, you don’t make mistakes!”

Ah, if only that were true!

Only a few days ago I made a beauty: I put on a position with an extra ‘0′ when entering my position size. Yep, 10 times larger than I wanted. Worse, I chose the next 24 hours not to check my open positions on a daily basis (something I usually do without fail). So I had this position, ten times normal size that was in debit (loss mode). I thought I had left those mistakes behind many moons ago.

The difference is many moons ago, the mistake would have cost me my account. I’d have either added to my losing position or stubbornly held on. Nowadays, as soon as I realize I have made a mistake, I cut the position. This left me with a clear head to decide what to do next.  This is what I did as soon as I discovered the error.

I won’t tell you the boo-boo did not hurt;  it did - it cost me 3%, the whole month’s profits in one stupid mistake. But had I not exited, the loss would now be double and worse, I would not have taken the positions I now have, positions that are in profit.

So far from not making mistakes - I make  huge blunders. What I do do differently is own up, exit and ensure that I live to trade another day.

Refer this blog post to a friend or colleague…