STOP trading your P&L

You are guilty of this...

What does ‘Trading the P&L’ mean

P&L, as I'm sure you know, stands for Profit and Loss...

Referring to your account balance and the unrealised profits of trades.

Trading the P&L means making trading decisions—

Such as exiting trades, choosing position sizes, and picking entries—

Based not on the chart context or price action, but on the current profit and loss figures.

Something we have all been guilty of, especially when it comes to prop firms...

Over the years I've gained insight behind the scenes into a lot of traders issues.

We all think our challenges are unique, but the truth is;

Traders have a lot more similarities in struggles than differences.

Getting access to a traders truths also means they share what their mentors typical advice is:

"Hide your P&L, set up a demo account at a small amount and copy your larger accounts to it so you don't see monetary values, reduce your lot size, set yourself a monetary goal and stop trading".

All of these suggestions are just cope. 

The simplistic advice to "just ignore your P&L" doesn’t address the deeper emotional triggers that drive this behavior.

Have you ever caught your inner diolgue pushing these thoughts;

“I just want to get out for break-even”

“I need to recover my last loss quickly”

“I only need one more winner to reach my goal”

“I don’t want to give back all unrealised profits”

So, what do you need to focus on to combat this challenge? 

Get comfortable being uncomfortable.

No progress is made if you simply apply a band aid vs going head on into your discomfort. 

The mind you have won't grow or improve without addressing route causes.

Your mindset will stay stagnant. 

As you progress in your trading career you will have periods of discomfort...

...and you will make mistakes.

In order to grow and develop the right mindset and behaviours for the long term you need to lean into this feeling of discomfort vs trying to hide from it.

Have a clear plan before you enter.

Before entering a trade, know where your stop is.

Know where you're taking your profits.

Know what will trigger an early exit.

Write this down in your trading plan...

...and learn it inside and out.

The last moment of objectivity should be before you enter a trade.

Analyse your trade management.

To understand if your trade management is costing you money, track your trades.

Use a journalling product, like the system I created for Edge members.

Though studying your data you can evaluate management decisions and their impact on your P&L over large samples.

You can only improve what you track.

Don’t look at performance in terms of periods.

Avoid performance goals, as they add stress.

You cannot control your profits.

You can only control the quality of your trades, your risk and your actions...

Setting goals over which you have no control is unhelpful.

Focus on the process.

Instead of focusing on profits, focus on the process.

Aim to become the best trader possible by implementing a solid trading routine.

Have clear rules.

Make the best trades possible.

The best trades are defined by how well you follow your plan and system not the P&L outcome.

 
Build trust and confidence.

A lack of confidence in your trading method creates doubts and emotional problems, like FOMO.

Many traders frequently change their methods, leading to doubts and uncertainty.

Stick to one system and learn it thoroughly.

Seek continuous improvement.

A trader's job is to master their system and execute trades confidently.

Stay disciplined, stay informed, and keep pushing forward.

Happy trading!

- Jonny