Everyone likes a good profit from their trades and of course hate the losses to an extent that traders even don’t let the trades hit the stop losses and exit even before the stop loss has come and later regret when the stock or index goes exactly in the direction that they had anticipated, one of the biggest reason for this is to see P&L (Profit & loss) screen more than that’s necessary , below we will learn how this impacts your trading psychology and how you can counter it.
Beginners keep looking at P&L every few Minutes –
Looking at P&L generally causes you to take quick profits and prolong the losses which is detrimental to your trading account because that losing trade that you might hold on to hoping for a miraculous recovery will engulf all the quick profits you have taken over the past week.
Every experienced trader who was once a beginner will agree that they also used to look at the profit and loss screens every few minutes or hours but one of the reason of their success is that they stopped giving importance to the P&L as they went ahead in their trading career , P&L screen plays with your mind , if you are in good profit then looking at the P&L screen can tempt you to close all the positions even if targets have not been met because fear might be induced in your mind that you might loose the profits , similarly when in loss the P&L screen might tempt you to hold the position even beyond the stop loss because you just don’t want to take such a big hit in your trading account.
Concentrate on your Strategy –
Instead of looking at the profit and loss screens the whole day you should concentrate on the strategy and the technical charts , of course if you are a full time trader then you can look at the technical charts tick by tick but you should never look at the profit and loss screen every minute , now people might say that even if they look at the chart they can mentally calculate the losses or profits , but i can guarantee that mentally calculating the loss or profit is not detrimental to your psychology , but looking at those amounts in red and green can really shake the psychology of traders.
You should just place the stop loss order and the target order and wait , though you can look at the technical chart for any gap downs or gap ups which might prevent your stop or target orders from being hit , so just stop staring at the P&L screen.
How to make sure that you don’t look at the P&L screen ?
This is a very simple technique which can help you and make you stop from looking at the P&L , if you are trading from the brokers charting software then simply switch your charting to investing.com or tradingview both have good trading software , in fact investing.com has tradingview’s charting system built in , when you change your charting tool that can help you in stop looking at the P&L provided on the brokers terminal , you would look at the brokers terminal lesser and lesser hence the temptation to look at the P&L would also be lesser , just place the buy order , stop loss order and the target orders and close the brokers terminal window and follow the charts using other websites like investing.com.
This might seem very simple but it can have a deep impact on your trading psychology and can prevent you from getting greedy and fearful while managing your trades , by apply this simple tactic you can improve your trading results to a greater extent.
Note : This is not a promotion of investing.com or tradingview , in no way i have got any monetary benefits by recommending these charting tools.