Why You Shouldn't Watch Your P&L While Trading
The more you watch your profit and loss, the worse you’re likely to perform
Every trader has been there: staring at their daily P&L, watching those numbers fluctuate with every tick, feeling their heart rate spike with each swing. It’s natural to want to know how you’re doing. After all, the whole point of trading is to make money, right?
But the more you watch your profit and loss, the worse you’re likely to perform. Constantly monitoring your P&L is one of the most common mistakes traders make, and it can sabotage even the most well-researched strategies. Here’s why stepping back from the scoreboard might be the best trade you never make.
Red and Green Flashing Numbers
When you see red numbers flashing on your screen you might suddenly abandon your carefully planned strategy or you might exit a winning trade too early because you’re terrified of giving back profits, or you’ll hold a losing position far too long, hoping it will magically reverse.
The opposite is also dangerous. When you see green numbers flashing, that rush of euphoria can make you feel invincible. You start taking bigger positions, and ignoring your risk parameters.
Both are enemies of consistent profitability.
“we feel losses about twice as intensely as we feel gains”
Behavioral economics has shown us that we feel losses about twice as intensely as we feel gains. It’s hardwired into human psychology. When you constantly watch your P&L, you’re essentially amplifying this asymmetry. A $500 loss creates more psychological pain than the pleasure from a $500 gain, creating an emotional rollercoaster that clouds your judgment.
This becomes particularly destructive over the course of a trading day. You might have five small wins and one larger loss, ending net positive, but because you felt that loss so acutely in the moment, you walk away feeling like you had a terrible day.
Constant Flashing Numbers Creates an Irresistible urge to “do something.”
If you have a sound trading strategy with a genuine edge, that edge typically plays out over weeks or months, not minutes or hours. Intraday fluctuations are mostly random noise. The problem is that when you watch every tick, that noise feels significant. Every dip looks like the start of a collapse; every rally looks like a rocket ship you might miss.
This constant stimulation creates an irresistible urge to “do something.” And in trading, doing something at the wrong time is usually worse than doing nothing at all.
The Solution to P&L Watching
The solution isn’t to ignore your P&L. Check your P&L at structured intervals, not every five minutes. Focus on executing your process and letting your edge play out over time. Don’t micromanage every tick. Give your strategy room to work.