forex-scalping.com

A loss of one pip hardly registers. A loss of ten pips stings. For a scalper, the typical result is many small ones of each sign, and the emotional reaction to them differs from what the numbers say.

Small losses are easy to shrug off, and so they pile up. Ten consecutive 1-pip losses cost the same as one 10-pip loss, but they don't feel the same. Nobody gets angry at a single pip. The damage appears when the account is lower at the end of the hour and no individual trade seems responsible.

The opposite effect applies to wins. Small gains give a quick flash of satisfaction, and they're so frequent that the brain starts to expect them. A losing streak of four trades then feels abnormal, even if it's statistically routine.

Some traders convert results into a single running total in money terms, shown on screen, to counter the fragmentation. Others review in blocks of 20 trades instead of one at a time.

The aim is to evaluate by the sum rather than the individual event. It sounds obvious, and in the middle of a session it's remarkably hard.

Does the sense of how the session is going match the actual number at the end of the day?

The gap between feeling and fact was huge for me when I started. I would finish a morning feeling like I'd had a solid session because most trades were small green ones, then look at the balance and find I was down. It was always the same story, a dozen little losers I'd barely registered plus one trade I let run against me.

What fixed it was putting a running total in my account currency in big numbers on the screen, next to the order panel. Watching it tick down by small amounts made each little loss count in a way the pip figure never did. I also stopped looking at individual trade results until the session was over.

I review in blocks of twenty now as well. If a block finishes negative I go through those trades the same evening, and more often than not the culprit is a cluster of tiny losses taken from setups that weren't really there.