A Quick Way to Improve your P&L
Looking at Losers for Improvement
Focus on Losers
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
- 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”
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