Trading Mistakes & Excuses

In this video, Stuart McPhee talks about trading mistakes and excuses. He says that several years ago him and one of his friends ran a full day of presentations. They had all day different presentations, each of them in a different room. Before they started the day, he asked the audience to write their worst ever trade and the people were quite honest. During a break he took those papers and read all of them. Most of them were still in the trade, had their price unknown, just some classic possible worse case scenarios.

Why did he asked for those details? Stuart McPhee picked three typical trades of them and came back in the front of the audience and split the public in three different groups and gave to each group one of those three trades. He even printed a chart so they can see the indicators. Each group had about ten or fifteen minutes to look at the details of the trade and asked them to write down some possible reasons why that person did not exit and close that trade. They had to look at the indicators, at the volume or at the average, at anything that can offer some reasons. He walked out for fifteen minutes, heard some discussions and some noise and came back saying that there must be some great ideas.

So, he sees what was the trade for the group one and puts it on the screen so everybody can see it. Everyone got familiar with that trade. One person from that group had to give the reasons they discovered. The first person gets up and says that they did not find anything. It seems strange, because there was a lot of noise. The rest of the group approved what the first person said. The same answer came from the group one and group two, they struggled to came up with ideas of why the person did not exit from the trade. So Stuart McPhee says that it is funny that now, after a few years from the trade, fifty people could not find any reason for those trades. Yet, one single person in that room faced the same trade years ago and thought to all kinds of excuses and every reason in the world not to exit from that trade.

Submitted by YouTube Trader on Thu, 04/08/2010 - 11:40

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