You have to be willing to make mistakes regularly; there is nothing wrong with it. “My Guru taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.”
“It doesn’t matter how often you are right or wrong — what matters is how much you make when you are right, versus how much you lose when you are wrong.” — George Soros
In many ways trading is remarkably different from any other profession. Imagine if doctors, lawyers, or company executives were encouraged to “make mistakes” on a regular basis. (They do make mistakes of course. They just can’t admit them, let alone be open about them.)
Because our culture is so screwed up in general in respect to making mistakes, most would-be traders and investors wind up approaching the game all wrong. They think the purpose is to be “right” or “correct,” when in truth these terms have little bearing on P&L at the end of the day and may in fact be detrimental.
The final irony is how many traders refuse to admit “mistakes” in terms of flexibly adjusting market calls — they must go down with the ship that is their original view — and yet casually fudge in areas of process where one should never make mistakes, like neglecting stop placement, position sizing guidelines, and risk control.
What is your perception of mistakes in terms of the trading and investing process? Perhaps the terminology should be changed?