Experienced traders, do you still lose due to emotions?

outthislife

Well-Known Member
I've been trying to iron this part out. I want to only lose when my analysis fails, not when I personally fuck it up. It's gradually being fixed, but not 100% yet. I notice I'll bail, switch or doubt my analysis somewhat often.

Do you still do these rookie moves after years, or are your losses mechanically sound at this point?
 

jack

Administrator
Staff member
outthislife said:
I've been trying to iron this part out. I want to only lose when my analysis fails, not when I personally fuck it up. It's gradually being fixed, but not 100% yet. I notice I'll bail, switch or doubt my analysis somewhat often.

Do you still do these rookie moves after years, or are your losses mechanically sound at this point?
To err is human.

I see hella profitable traders with 6, 10, 13, 15+ years of experience make execution errors. The big difference is how they correct for it once identified, and how frequently they make such mistakes. They aren't robots; experience just helps them reduce how much of an impact such mistakes have on their P/L.

The bigger problem isn't execution errors, it's people holding onto erroneous positions in an attempt to not lose on them. They'll take on silly risk, often in the opposite direction of their trade plan's setup, just to get out break even... it's perplexing, and illogical, but the behavior ties right into 'loss aversion'.

For this, I like the phrase: "The only thing worse than being wrong, is staying wrong."
 

jonnycab

Well-Known Member
Jack is on the money.

I would add one thing that might help with this: trade frequency. You need practise. Trade your analysis every single time until you hit that mechanical consistency. You cant learn anything if you don't have a position on. The longer you spend with a position on, the more you learn.

You need to have a reason to get in.
You need to have a reason to get out.
If you're in, leave it alone until the market takes you out.
 

Gruber

"I learned the game"
Jack said:
To err is human.

I see hella profitable traders with 6, 10, 13, 15+ years of experience make execution errors. The big difference is how they correct for it once identified, and how frequently they make such mistakes. They aren't robots; experience just helps them reduce how much of an impact such mistakes have on their P/L.

The bigger problem isn't execution errors, it's people holding onto erroneous positions in an attempt to not lose on them. They'll take on silly risk, often in the opposite direction of their trade plan's setup, just to get out break even... it's perplexing, and illogical, but the behavior ties right into 'loss aversion'.

For this, I like the phrase: "The only thing worse than being wrong, is staying wrong."
I don't think traders with +5 yrs of experience commit execution errors.
 

sqa

Village Scribe
Gruber said:
I don't think traders with +5 yrs of experience commit execution errors.
If there's a wrong button to push and a bad day, outside of trading, going on, you'd be amazed how much stuff you can screw up in life. Not just trading.

Everyone makes mistakes, occasionally. It's human nature.
 

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