Trading Mistakes to Avoid – Looking Back

The key to successful trading lies in sticking to your plan, not obsessing over every outcome. When you enter a trade, you’ve already evaluated the setup, assessed the risk, and made your decision. The market will do what it does, and once you’ve exited a position, the outcome is no longer within your control.

What is within your control is how you handle yourself before, during, and after a trade. If you follow your strategy and respect your risk management rules, there’s no need to second-guess yourself. It’s easy to get caught up in the “what ifs”—what if I stayed in the trade longer? What if I exited earlier? But these thoughts only create unnecessary stress and doubt, and they don’t improve your trading.

Let’s say you sold short 100 shares of XYZ at $80, with a stop just above $82—the 89 SMA on the daily chart—because your technical analysis suggested the stock was heading lower. The stock initially drops to $79 but then reverses on heavier-than-usual volume, breaking through the 89 SMA and stopping you out at $82 for a $200 loss. After consolidating for a while, the stock reverses again, breaks below the 89 SMA, and eventually drops to $73.

At this point, you might review the trade and kick yourself for losing $200 instead of making $700. But doing so is both unfair and unproductive. There was no way to know XYZ would reverse and go back in your direction. It just as easily could have surged to $92, resulting in a $1,200 loss. The next time you’re in a similar situation, you might hesitate to follow your stop, thinking, “What if it reverses again?” Instead of protecting your account, you’ll hold on longer, hoping for a turnaround—and when it doesn’t come, your small loss turns into a much bigger one.

The only thing you can control in trading is how you manage your risk and follow your plan. If you did that—entering and exiting based on your strategy—then you traded successfully, regardless of whether you made or lost money on the trade.

Looking back in frustration erodes your discipline and tempts you to abandon the very rules designed to keep you in the game. A single trade going your way after you exited doesn’t mean your stop was wrong; it means the market did what it always does—move unpredictably. If you followed your plan, you traded well. Period.

Bottom Line

It’s important to review your trades to evaluate and refine your system, identify mistakes, and look for areas to improve. But if you followed your process correctly and still took a loss, there’s no reason to beat yourself up. Losses are part of the game, and as long as you stick to your plan, they’re simply a cost of doing business. Looking back and obsessing over how you could have played it differently doesn’t change the outcome—it only weighs you down with regret and frustration. By clinging to the past, you risk sabotaging your ability to execute in the future. The market will always present new opportunities, but you can only take advantage of them if you’re focused, disciplined, and not weighed down by “what-ifs.”