Page 423 - THE MARKET WHISPERER

THE MARKET WHISPERER 41 9

Learn from Your Experiences…
Keep a Diary

No infant learns to walk without falling. The infant keeps trying until the
sequence of actions called walking becomes embedded in the brain and
turns automatic. Every trader undergoes “infanthood” and “childhood” as
he or she learns. Mistakes are part and parcel of a trader’s learning curve
and a very important aspect of shaping the new trader’s capabilities and
resilience.

Mistakes are a vital asset in learning how to succeed. Even old hands
make mistakes, but to lesser degrees than new traders. When I started out,
I made far more mistakes than I do now. I remember days filled with self-
directed anger. There were days when I would lecture to students, teaching
them what to avoid, then go and do exactly that action I had warned against!
Of course I felt like a complete idiot. Now, years later, I still make mistakes,
but far less frequently. The fascinating thing about trading mistakes is that
they are known and familiar, but we make them anyway, even though we
know we are crossing into forbidden territory. It’s as though something
stronger than us is pushing us against our will.

The first step in coping with mistakes is to know what you should and
shouldn’t do. This book is meant to help you a lot in that respect. The second
step is your own determination to correct your mistakes and strengthen
your psychological stamina towards eradicating them one by one. Traders
need to know how to take best advantage of mistakes rather than waste
them. Mistakes, by virtue of their unavoidability, are a valuable asset. As
with any valuable asset, they need to be documented and conclusions
reached. The only way to do that is to keep an activities diary.

Students in my courses are taught how to avoid typical trading mistakes.
I go over, emphasize and demonstrate every typical mistake there is until I
am certain the message is absorbed. At the end of every discussion, there
is that moment I am so fond of when I tell them: “And I know that despite
everything, you’re going to make this mistake…” When I look at their faces,
I see them all thinking, “Does he think I’m a complete idiot? I listened, I