Your P&L Is Not You

A strategy with genuine edge can still lose money for weeks or months at a time — that's just what variance around a positive expected value looks like. Traders who tie their sense of competence directly to today's P&L tend to make their worst decisions exactly when the strategy is behaving normally but unluckily: they cut a sound position after a bad stretch, or double down out of frustration rather than analysis, both driven by treating the number on the screen as a judgment on themselves rather than a data point about the market.

The practical fix is separating two questions that feel like one: "is my process still sound?" and "how do I feel about today's number?" The first question is answered by checking the strategy against its known statistical properties — is the drawdown within the range history would predict, has anything about the underlying signal or market regime actually changed — while the second is a mood, not a diagnosis, and shouldn't drive position or process changes on its own. Keeping a written record of whether a loss came from the process failing versus the process working as expected (just unluckily) is a simple habit that keeps the two questions from blurring together in the moment.