For beginner or novice traders, one of the most common mistakes they can make is by manipulating the facts. This mistake can be committed by inexperienced traders either consciously or subconsciously. It usually stems mostly from traders trying to make the facts hold towards certain market theories they learned or read about.

Some traders may think that they already know about how the market works through their endless studies and readings of theories supposed to govern markets. But sometimes they encounter a situation where they try to implement a particular theory where current market indicators don’t seem to fit into. Such traders can easily make the mistake of trying to force making sense of the theory and try to fit in the facts while ignoring some that don’t seem to make sense.

Overcoming Fact Manipulation

The main reason why many trader get trapped into this mistake is because they try to force a certain market theory that they don’t try to base on the current facts that they see. Here are some ways that traders may be able to avoid fact manipulation in the market when trading.

  • Make a detailed trading plan based on a particular strategy that you are comfortable with.
  • Avoid trading in a market environment where the facts don’t fit into your strategy.
  • Let the facts dictate what strategy or theory to use and not the other way around.
  • Constantly monitor and track your trades to determine if they are working well under the current market environment while using a particular strategy.

Making the mistake of manipulating facts can be quite easy if one tries to fit them into a certain theory or strategy. It can be a case of trying to fit a square peg inside a round hole. A better understanding of a theory or trading strategy and the realization that current facts tend to be more reliable indicators compared to expert opinion can be a way to avoid making such mistakes.