We live in a world of increasing complexity. Even the most expert professionals in their respective fields struggle to master the tasks. Longer training and use of advanced technology fails to prevent the errors.
While dealing with complex tasks, two types of errors can occur. “Errors of Ignorance” and “Errors of Ineptitude”. Errors of ignorance are errors we make as we do not know enough. On the other hand errors of ineptitude are errors happening when we fail to make use of what we know. Errors of ineptitude are a real problem especially among professionals.
Acclaimed surgeon and writer Atul Gawande conducted extensive research on this subject in Health Care He found and adapted the humblest and simplest solution from Aviation industry, “The Checklist”. He published a book on this subject titled “The Checklist Manifesto” which became a Best Seller. (Read Summary)
As you know trading is also a very complex and complicated task. Mistakes are virtually inevitable: It is too easy for a trader to miss a clue, or overlook a prominent level in the stress and pressure of the moment. Failing to notice a small stuff is failing to plan properly for the eventuality
Can’t we, traders, make use of Checklists?