Process vs Outcome

The poker lesson

In any probabilistic game, good decisions sometimes lose and bad decisions sometimes win. Poker players call judging decisions by their results resulting — and consider it a fatal leak. Trading is the same game: a single outcome tells you almost nothing about whether the decision behind it was sound.

Why outcome-thinking corrupts trading

• A reckless, oversized trade that wins teaches your brain that recklessness pays. That lesson eventually collects its fee.
• A disciplined trade that loses teaches — if you let it — that discipline fails. Traders then abandon sound systems right before the sample size would have vindicated them.
• Chasing outcomes leads to changing strategy after every losing week, guaranteeing you are always trading an untested system.