If you followed your plan perfectly and lost, it was a good trade. If you broke three rules and won, it was a bad trade that got lucky. This distinction sounds simple, but most traders still feel and act based on the last result.
Why outcomes mislead
Any single trade is mostly random. Even a strategy with a real edge loses often. If you change your behaviour after every loss and reward yourself after every lucky win, you train the wrong habits.
Grade the process
- A: setup from the plan, correct size, stop respected, exit by the rules.
- B: setup from the plan with one small deviation (early exit, late entry).
- C: not in the plan, oversized, stop moved or no stop.
Track the percentage of A trades each week. If it rises, your results will follow over time. If you win money with C trades, treat it as a warning, not a success.