Ativo Capital

Rigorous Thinking


Financial and economic commentary reflecting Ativo’s world view:

Trading Errors

Friday, April 16, 2010

POSTED BY

As an investment advisor, trading errors are infuriating. They are the equivalent of unforced errors in sports: if you make too many of them (or make the “Big One”), you will be out of the game before you know it. The client, of course, is always made whole and the only bottom line that gets hurt is the advisor’s. It is critical to understand what caused the error and make whatever changes are required to the system to make sure that same type of error never happens again. Trading errors are (expensive) tuition.

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