If you’re not making mistakes, then you’re not doing anything. I’m positive that a doer makes mistakes.
–John Wooden

We had our first losing day in quite awhile last Wednesday. And that’s not to say that we are loss free intraday everyday…quite the contrary in fact. We take intraday risk management losses almost daily. However, we do not often suffer overall losses for the day. Wednesday was an exception.

The loss was related to trying to force the market to give us our Daily Goal when it was not being offered. The loss was within our risk parameters, so it was not a big deal…except it was a big deal. We were annoyed. We were angry. We wanted revenge. Worse, we were up on the day only to gave it all back and then some. Worse still, the loss was due solely to a trading mistake we made as we approached the end of the day. A MENTAL mistake. Worst of all? We KNEW it was not prudent when we were doing it.

We recovered the losses on Thursday and had extended gains on Friday, but coming into the weekend, the only thing we were thinking about was why we made such an obvious mistake and, more importantly, how to avoid that mistake going forward. Our answer? We are unlikely to avoid repeating this mistake in some form or another.

Trading is risky by definition. Our job, as we see it, is to engage that risk intelligently in order to secure profits. We take steps such as minimizing our position size and using stop losses to mitigate the inherent risks, but we cannot remove them completely without removing the opportunity to profit (no risk, no reward).

So what do we do? We remind ourselves that we will not make our Daily Goal everyday…and that is ok. More importantly, that particular form of mistake is now a part of our experience and will subconsciously inform our trading in the future. It will become the little voice that speaks to us the next time we are three quarters to our Daily Goal at the end of the day and maybe, just maybe, we will heed that warning.