Staring at the P&L is not analysis

[Fairman]

Staring at the P&L is not analysis

A scalper watches the number in the corner of the screen. It goes green, then red, then green again. Each change produces a small emotional response, and the response begins to steer decisions.

The profit and loss figure is an outcome, not a signal. It says nothing about whether the trade is still valid. A trade that is down two pips may still be a good one, and a trade that is up three may have already failed its setup.

When emotions follow the P&L, exits come from comfort and discomfort instead of from the plan. Winners are cut early for the pleasure of locking in green. Losers are held for the hope of returning to zero.

Better anchors are price levels and conditions: the stop, the target, the invalidation point. Those decide whether the trade stays on.

Some traders literally cover the P&L with tape or hide the column, and report calmer, more consistent exits as a result.

One trick is converting the display to pips at risk rather than money. A trade that is 1.5 pips against a 4 pip stop is a plan on track, regardless of what the dollars say.

How much does the floating P&L drive exit decisions, and what would change if it were hidden?