Profit and Loss Trading Psychology Mind Over Markets

P&L. This term gets thrown around a lot in stock trading, but what does it really mean? Profit And Loss is the obvious answer, but the P&L means a lot more to many different traders. In this episode, we’re going deep into why focusing on the P&L can be detrimental to your trading strategy.

For stock traders, especially new traders, focusing on the P&L will only lead to emotional trading. Emotional trades will force you off of your intended plan and will almost always end up in losses. We know this from personal experience. George used to be one of those traders, staying glued on the P&L, completely ignoring the rest of his charts.

This is so common among traders. Since we’re in a competitive situation, we instinctively want to keep score. How else will we know if we’re winning or not? But that’s the problem - you can’t keep score if you want to win. 



Keeping score is for the fans. The players - the traders - they need to create the score by focusing on what needs to be done to make the best trade. A good trader focuses on the steps they need to take to follow their plan in order to make the best trade possible. When you think about winning, or worse - breaking even, then you’re missing out on what the markets are really about. 

In this episode, we take a look at why the P&L is important to sock trading and why it’s even more important that you don’t pay attention to it. We take a closer look at some of the most common trade scenarios we’ve seen fall down the spiral of a P&L mindset and offer up a few strategies you can use to pull yourself out of that hole. 

There are 6 techniques we talk about in this episode that you can build into your trade plan right now, and we tell you exactly how many you need to master in order to get the most out of your trade strategy. Remember - trading isn’t a solo activity. We want to hear about how these techniques are working for you. Visit us at Trade Pro Academy to talk strategy, join the community, and catch up on all of our latest episode of Mind Over Markets. 

In This Episode You Will Learn

The real definition of P&L 2:08 
Why traders need to stop saying “I just want to break even” 15:20
One trade cannot make or break a trader’s P&L 31:32
6 techniques to prevent the destructive P&L mindset altogether 45:40
How to focus on your next best trade instead of worrying about the last loss 55:00
A little bit about Canadian hockey, courtesy of Mark 58:57

Some Questions We Discuss

What is up with our psychological fixation on the P&L? 5:40
When does the P&L mindset start creeping into your trade strategy? 24:15
Which toward-motivated techniques can traders use to stop that mindset? 26:25
How can you keep your mindset positive even after a string of losses? 38:21
Can you remove the P&L column from your trade station? 50:00
How many of our solution set-ups should you master first? 61:08

Resources

Connect with our community online: Trade Pro Academy
Catch up with our earlier episodes: Mind Over Markets Podcast
Sharpen your mental toughness with this episode: #8 Mental Toughness
Leave us a review on iTunes: Mind Over Markets on Apple