Brian Lund has a good post up, 5 Mistakes I Made In Trading Yesterday. I want to expand on something he said: “…go back through your trades with the mindset you had contemporaneously to try and figure out what you did wrong.”
In my opinion the mindset, more than the specifics of a mistake, is most often the real problem when mistakes are made. Correcting the mechanics of an error is important in minimizing losses but unless the mindset that led to the error is addressed, the next time around you’ll simply find ways to make new mistakes. The number of potential errors you can make is practically infinite so a rule based response to prior mistakes quickly becomes unworkable (and insulting to your creativity). Finding out the why of your mistakes is more important than the what. For example, is poor stop placement more an issue of number crunching or a fear of losses that leads to avoiding the subject?. Failing to find the answer will come back to haunt you.
The motivations, beliefs and attitudes that lead to mistakes are where lasting changes in the process are made. Think of it this way: If you aren’t hungry, taking a big bite of delicious, mistake-filled apple pie is easier to avoid.