Lesson 6 of 6 · Trading Psychology
Process over outcome
A good process can lose. A bad one can win.
Any single trade is partly random. You can follow every rule and lose. You can break every rule and win. Judging a trade by its outcome rather than the quality of the decision teaches the wrong lessons.
Process produces the curve, not individual trades.
The illustrative WITH RULES curve ends at +18% not because every trade won, but because consistent execution let the edge play out over many trades. A single losing trade in that curve is still a good trade if the stop loss was placed correctly and the rules were followed.
This one is an animated diagram in the app. See it in Vero.
What to measure instead.
Grade each trade on execution: did you follow your entry criteria? Was the stop set correctly? Did you size according to your rules? Did you exit as planned? Over 50 or more trades, a consistent process lets you measure whether your edge is real. A single outcome tells you almost nothing.
You skipped your entry criteria, bought on a whim, and made 3R. That trade was:
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B. Poor process that happened to work, and reinforces bad habits. Rewarding yourself for a process violation teaches you to repeat the violation. Eventually the same behavior produces a large loss.