Those of us who don’t learn from mistakes are destined to repeat them. Most traders are busy focusing on trying to understand what moves the market, but an equally beneficial endeavor is understanding what causes you to move.
This involves knowing the underlying, often subconscious to a degree, reasons behind your entries and exit decisions. The inner market. Understanding the connection between your internal state and your behavior is a very effective way to get a handle on repeated mistakes.
In general, P&L is an expression of how well you control your actions, not how well you analyze charts, the market, economy etc. Or more accurately, how well you control your actions when facing the discomfort of uncertainty.
Mistakes become emotional baggage when we choose not to learn from them. Not wanting those moments where we can see the truth about our own issues ensures they return again.
If you’re ready to deal with your baggage and accelerate your development as a trader, consider my Advanced Course, designed to address the problems that all traders face. It is ‘heavy duty’ trading psychology with a lot of actionable steps to improve your performance. It’s for traders who are serious about improving. And if you haven’t already, sign up for my free email newsletter that gives you professional trading psychology tips.
I particularly like the statement ” P&L is an expression of how well you control your emotions, not how well you analyze charts”. I need to continually remind myself throughout the trading day that my sole job is to execute my setups and not think “is this smart, or is this going to work? That is the only way my actual daily P&L will match my system’s P&L The “thing” that permits me to do this is to go into the day realizing that I will ONLY feel good at the end of the day if I have managed to follow my system and not second guess REGARDLESS of the outcome. I feel better on losing days that I followed my plan than I do on winning days where I deviated from it. Thanks for your blog entries. They help.
“Approve”