The ability to learn from mistakes is an important part of the skill development process. In addition, those who trade well tend to adopt a “perpetual student” mentality toward the markets which also helps keep their ego in check.

However, learning from mistakes you make is not as simple as it sounds. Equally important and challenging is figuring out which mistakes offer a lesson and which mistakes are just a routine part of trading. For example, sometimes I run into traders who think that in every losing trade there is a lesson to be learned and that’s simply not true unless you see a specific pattern repeated in other unsuccessful trades. As any experienced trader will tell you, a trader can make all of the right moves and their analysis may be 100% correct, but that doesn’t guarantee a successful and profitable trade. Perfection and trading well do not go hand in hand and not all unsuccessful trades offer a lesson to be learned. It is in the ready identification of patterns when making mistakes that you see within the more experienced and high performers.