What is the Critical Mistake Every Trader Must Avoid?

Today's trading session using my Volume Price Analysis (VPA) strategy taught me a valuable lesson about bias and discipline in the market.

I started the day with a major mistake: I was determined to short the market. This preconceived notion went against one of my core trading principles - never predict market direction. By doing this, I'd already set myself up for potential trouble.

NIFTY 50

Despite this initial error, I managed to stick to some crucial aspects of my trading plan. I followed my VPA strategy when executing trades, acting on the signals it provided without letting emotions take over. This discipline proved to be my saving grace.

It's important to remember that no trading strategy is perfect. VPA, like any approach, doesn't guarantee success on every trade. This is where risk management becomes critical. Thanks to proper risk management techniques, I was able to exit both of my trades at the right times, minimizing potential losses when the market moved against my positions.

As the market began to rise, contradicting my initial bearish bias, I recognized the importance of respecting my strategy's signals. I exited my positions according to these signals, demonstrating the value of having pre-defined exit points and the discipline to follow them.

While this trading day can't be considered a great success, it provided an invaluable lesson. The experience reminded me of the dangers of forming biases and the importance of approaching each trading day with an open mind. This is a mistake I've made before and, unfortunately, repeated today. Going forward, I'm committed to avoiding this type of prejudgment and allowing my strategy to guide my decisions based on real-time market data.

For traders looking to improve their skills, particularly in risk management, I encourage you to subscribe to my newsletter . It covers essential topics like these that can make the difference between consistent profitability and frequent losses.

Key takeaways from today's experience:

1. Always approach the market objectively, without preconceived biases.
2. Stick to your trading strategy, even when it contradicts your personal views.
3. Understand that no strategy is perfect - risk management is crucial.
4. Be willing to admit mistakes and learn from them.
5. Continuously educate yourself on proper trading techniques and psychology.

By adhering to these principles and learning from experiences like today's, we can become more disciplined, successful traders. Remember, the market doesn't care about our opinions or biases - it's our job to interpret and react to what it's telling us through price action and volume.

Date	Entity	Invested amount	Amount received	Quantity	Bought	Sold	Tax	P/L	P/L after tax	P/L %
1/7/2024	NIFTY 04 Jul 24000 Put	4904	4265	50	98.08	85.3	54.7	-639	-693.7	-13.03
1/7/2027	NIFTY 04 Jul 23950 Put	1553	1453	25	62.15	58.15	54.7	-100	-154.7	-6.44

NIFTY 04 Jul 24000 Put

NIFTY 04 Jul 23950 Put

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