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Thread on trading lessons & mistakes:

I always keep my mistakes & lessons learnt in front of my screen while trading.
Bcz we as traders tend to commit the same mistakes everytime.

So seeing your learnt lessons everyday ensures that you avoid them.
#trading #mistakes
(1)
In 2017, I analysed all my trades and saw that I have majorly lost in stock futures and profits came only via index trading.

I accepted that I am not great at stock trading and been trading index only majorly since then.

(2)
I decided to adjust all of my past losses to 1 % of capital to see what the effect of capping the downside.
I would have had a gain of more than 230 % if I had capped losses at 1% of cap.

Lesson: Keep losses less than 1% of capital

But still sometimes losses are >1 R😓

(3)
While trading index options, I lost sometimes due to IV rise,flash crash, and option freezes.

Lesson: Always keep otm protective stops in the system to keep loss in control in case of blackswan.

(4)
Being an option seller, I have a tendency to manage my position by rolling up/converting to calendar etc.

So many times I have wasted 1 or 2 weeks just to close a loss making trade at cost.

Lesson: I do manage now but exit as soon sold options become ITM or 2 x in value.

(5)
“Option sellers eat like a chicken but shit like an elephant”

So always always manage risk while selling.

Eg. Corp tax rate cut, demontisation, 2020 steep fall etc are black swans and if not managed properly can take years of profits.

(6)
I used to commit the same mistakes for years. Inspite of knowing that I shouldn’t commit them.
Bcz we as humans tend behave in a certain manner everytime.

So , it’s best to keep your lessons/mistakes hand written in front of you and read everyday before trading.

(7)
If possible also write about your biggest losses and how you felt that time so that you make sure you never go thru that emotional pain again by repeating earlier mistakes.

Just keep losses less than 1R :)

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