Focus on trade execution, not your PL

That’s probably the hardest part of trading, or at least it is for me, I mean it’s human, we correlate making money to doing good because that’s how we are brought up – if you do well you will be rewarded. It’s pretty counter-intuitive that doing something great will end up making you lose money.

(Maybe if we were to give more to charity that wouldn’t be the case, but I am myself not the biggest donor out-there so I am not going to preach you to do something I personally do not do)

But in trading you will have to accept the fact, sometimes a “perfect” trade will be a loser.

Sometimes I feel like this when it happens – shouldn’t but hey I’m human

Sometimes a shitty trade you definitely shouldn’t have taken will result in a winning trade.

Yet, you should feel bad about yourself when you make money by taking trades that aren’t part of your trading plan, and feel great when you end up losing capital when taking a trade that fits your trading plan.

We are in the industry of playing out our edge, the aim is to stick to it and in the long-run avoid fucking it up.

Sometimes a “perfect” trade will be a loser.

(that does suck, but you have to accept it)

One trick you can do to start accepting the fact that you will take amazing trades – that result in losses is look at the balance statement of your favorite company. Are you thinking about Amazon? Tesla? Blizzard? Starbucks?… Whatever it is, they all have costs associated with their business, even your local coffee shop (even if you live in Amsterdam)

Try to understand and see trading as a business, not as something entirely different.

Another trick to trade your plan instead of your profit and loss is, once you are in a trade, hide your risk reward – instead of managing it according to your potential return it really increases the likelihood of you moving your stop according to the structure instead of potential return

EU on the 19th of August

For example, I am currently short on EUR/USD my stop is “randomly” placed a 1.14% profit, had I placed it at 1.25% or 1.5% I would be out of this trade by now, I barely stayed in it

The only reason I placed it at that level is because I didn’t know it was 1.14%, otherwise I would’ve made it a round number

If you use tradingview to get your charts, here’s how to hide your RR tool:

Don’t forget, trading is a business, you will incur a loss and a similar business model to ours would be a casino, they make insane amount of money every single year, but they have down days too when there’s a really good/lucky player betting big

Like read this:

The University of Las Vegas found that the 23 Vegas casinos bringing in over $72 million each in the 2013 fiscal year ended up with over $5 billion of their visitors’ money, altogether. That’s an average of over $630,000 a day, per casino

All they do is apply their small edge day in day out and they don’t care about the daily or even weekly profit, they know that in the end, they’ll make money.

We are in the same game.

Focus on your trading execution, not your PL

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s