This is the continuation of the series “How to be a better trader?”. Click here to start from Part 1
There is only one thing we need to tell you here
Do not look at your live floating P&L
Looking at your live P & L is a source of stress. It can distract you from your job. It can cause addiction to trading. Yes, gambling addiction that can destroy your life.
Looking at live P&L causes negative and positive emotions. Emotions lead to bad decisions. If you keep looking at the trade, there is every chance that you will make some mistake. Like doubling down, or shifting your stop loss. So once you are in a trade, set a stop loss, set a target to exit, and do not look at the P&L. Look at the market for other opportunities, look at the charts of your trade to seek new information. But do not look at the P&L of your live trade.
More reasons to not look at the P&L?
Human brains function the best when we get enough breaks. Constantly looking at the screen is does not give you breaks.
Also, if you are always looking at your P & L, how will you spot the next big opportunity?
This is so important to us that at many instances, we thought of not putting real-time floating P&L in the positions page of Sensibull
Tailpiece: Interestingly, these points are connected. The one about trading with money you can afford to lose and the one about not looking at the screen. One of the reasons why a trader always looks at his screen is that the money means something to him. If it does not, how does he care? And if he does not, why would he look at the screen? Which also means, not caring (much) is the trick to making unemotional decisions. Ironically, it means that not caring much about trading P&L is a crucial trick in trading.
We do not mean to say you should not care about your P&L. Yes, put every bit of hard work into learning about trading, analysing your trades, designing strategies, and planning your P&L targets. Just don’t look at the live P&L or care so much about outcomes. Passion for trading is not how much you look at the markets or P&L.
As a parting thought, as Lord Krishna said, “Do the Karma, do not care about the results.”