In life, we are often told that if we want to be successful, we need to be right.
And while this may be true in some cases, it is not always the case.
In fact, for investors and traders, being right is not always everything.
In this post, I will discuss why being wrong can sometimes lead to greater success, and how you, as an investor and/or trader, can make smarter mistakes.
Risk Is Part Of The Game
As investors and traders, our goal is to make profits. And for us to do this successfully, we must take risks and be willing to be wrong sometimes.
This means that when we make a mistake, it is not something to be ashamed of, but rather an opportunity to learn and grow. We must also understand that risk is part of the game – if you want to make money, you have to be willing to take on some level of risk.
Having said that, there is something I need to address upfront, and that’s the myth of “high risk, high return.” While in some cases this can be true, it is not always the case. In fact, taking too much risk for a low reward is often worse than taking moderate risks for large rewards.
Make Smarter Mistakes
Just because you must accept some level of risk does not mean that you should throw caution to the wind. The key here is to make smarter mistakes.
That means taking calculated risks, doing your research, and diversifying your portfolio. It also means following a plan and setting reasonable goals and expectations, so that if you are wrong, you can still come out ahead in the long run.
Moreover, you want to start small. You don’t need to swing for the fences on every trade. Instead, focus on smaller trades to get your feet wet and build up your confidence before diving into larger trades – and eventually scaling your portfolio once you start seeing real results.
Be Honest With Yourself
Above all, you must be honest with yourself. If a trade goes bad, don’t beat yourself up over it. Emotions play a huge role in trading, and it’s important that you stay level-headed.
Instead, assess what went wrong and make changes to your strategy accordingly. Investors and traders must learn from their mistakes in order to become successful, and the only way to do that is to be honest with yourself.
The Bottom Line
At the end of the day, being right is not everything. Making smarter mistakes can be just as beneficial – if not more so – than getting every trade right. So don’t be ashamed or disheartened if you make the wrong decision; instead, use it as a learning experience to help you become a better investor and trader.
You got this! Now go out there and start investing! Good luck!
Terry
P.S. While learning from mistakes is important, you can save yourself a lot of time by learning what works and what doesn’t from others that have gone through similar situations.
If you’d like some help with that, here are 3 resources you may find useful:
- The first is my comprehensive blog post: Going From Absolute Novice To Confident Investor (The Complete Stock Investing Guide). It goes through all the steps you need to take in order to become a confident investor and reach your financial goals.
- The second is our FREE 10 Stock Criteria Checklist, which helps you identify what I consider to be the financially strongest 1% of stocks in the market at any time in less than 5 minutes. Click here to learn more.
- The third is our FREE 90-Minute Online Masterclass, where I’ll show you how I personally anticipate market crashes in advance and prepare for them. Click here to learn more if you’re interested.
