What’s the most common mistake traders make?
It’s not placing the wrong trade. Traders do that all the time and they live to recover. Heck, I’ve even done it.
It’s not ignoring your stops, although you absolutely should follow your stops.
No, the most common mistake traders make is analyzing trades one at a time.
It’s an easy trap to fall into: you had a big loser, and you ignore the fact that your last six trades were winners that more than balance it out.
Or you had a small win and you feel like a million bucks, forgetting that your previous five traders were losers and completely offset the one winner.
Both of these are rookie mistakes driven by emotion. Just like you wouldn’t judge a business based on one day of sales, you shouldn’t live or die by one or two trades.
You need to look at the bigger picture…
The Better Way
There’s an approach that I think is better. It’s how institutional investors and the wealthy measure performance.
Instead of analyzing your trades, you need to analyze your portfolio.
Here’s a little thought exercise: if you make $500 in one trade, and then lost $50 on each of your next eight trades, are you a winner or a loser?
If you answered “a loser,” you’re thinking with a Cy Young mentality. Pitchers are measured by their win-loss record, and 1-8 is pretty bad.
But if you answered “a winner,” then you’re thinking with a one percenter mentality. Professional traders recognize that individual wins and losses don’t matter. What matters is that you win over the long haul.
If you start thinking about trading like that, you’re going to be able to find better systems and have greater success. That’s how true traders win.
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It’s a brand-new system developed by Roger Scott and his team of MIT math wizards that’s predicted to unlock explosive gains. The system focuses on tracking specific stocks and once they go “on the clock”, they’ll explode in insanely predictable pattern.
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This article is supplied courtesy of BookerWealth.