Not Learning From Mistakes

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We all make mistakes. This happens in real life and in the stock market. We may try new things that we don’t understand or fail to implement things the right way. We have to learn skills. Pretty much anything we do needs to be learned. This includes talking, walking, eating, reading, and investing or trading in the stock market.
This may seem like common sense, but the game changes when real money is on the line. Our emotions can be powerful, and we don’t know when to get in or to get out at the right time. There are many variables involved. We need to learn from our mistakes. If the same mistakes are repeated, we are not learning.
When learning a new skill, very little, if anything, is learned from success. We think we are geniuses and have things figured out and move on after having some success. We think we can get in the zone, but about that time, something happens that we didn’t expect. We need to treat each investment or trade with the respect that it deserves. How we learn is from mistakes. We can learn from success by positive reinforcement, but it is not as powerful because the consequences are greater when we fail. Mistakes hang around longer. A study suggests that it take nine positive experiences to negate one negative experience. We focus on the bad instead of on the good. Even when successful, we obsess over the losers.
If it was so easy, everybody would be actively doing it.
The stock market is not complicated, but it is not easy since there are complex processes going on under the surface. It is one thing to have a plan where things look easy, but when we are in the heat of the battle, things come out differently. In hindsight, we wonder what we were thinking and second guess ourselves. We don’t want to go too far since it can lead to indecisiveness and an inability to admit it was a mistake and move on.
Mistakes can help show us where things went wrong. Finding the right investments is one challenge, and getting in or out at the right time can also be a challenge. We can analyze things and learn where we went wrong. Pride can prevent success since it is separate from our normal experiences and cannot be controlled like other areas in life where people have power and influence. We come up with excuses, or we realize that mistakes and losses happen, and that is just the way it is. When we are humble and have humility, we don’t take things for granted. We don’t assume things and are not presumptuous. We will be wrong even when we have a high degree of certainty for success.
Mistakes can motivate us to learn by reading, studying, or talking to others. We can often find an answer. We can see what we didn’t realize or had overlooked. There are new opportunities that didn’t exist so we can broaden our horizons and become a lifelong learner. Learning never ends, which can be exciting.
Mistakes make us more mature because we realize we won’t always be right. We must use logic and wisdom rather than emotion.
Mistakes can help us to learn what to do differently next time, so we don’t repeat the same mistakes. We must learn our lesson.
Mistakes can help us to develop a plan based on logic rather than emotion. Emotion is like going to Las Vegas and gambling. It can be fun, but success is pure luck. We want to go to the next level. Even though we won’t always be right, but we will be right most of the time.