A Quick Way to Improve your P&L

I know, it doesn’t come naturally. Traders like to see wins.

“How can I make more, how can I extract more from the market?”

But I find the biggest wins come from working on your losers. If you can reduce your losers it automatically improves your P&L. It’s not discussed because it’s not sexy. Often it’s the quickest win too. 

Here’s what to do: (takes 25 minutes max)

• Start with last week’s trades
• Print out the charts for each day and mark up your trades
• Now sort into this order: best winners to worst losers (This could be days not trades if you are a daytrader)
• Then study the top three worst losers

Things to look for:

Any obvious mistakes?

Chasing, not waiting for a valid setup, etc.

Any common theme in market conditions?

• Aggressive trend
• Choppy
• Data day

Keep looking and you’ll find a common thread that runs through the losers. Once you’ve identified that you can work on a fix.

EG: You notice on trend days you just get mashed. Get better at identifying trend days quickly…

Here’s the best bit:

You can look at those past trades and work out exactly where you’d be P&L-wise if you made that fix.

That’s super encouraging!

The numbers are clear. “If I did X, here’s my P&L”

Try it…