A trader with an edge who follows their plan to the letter ends 53% of days in the red. Another with the same strategy and the usual mistakes has fewer red days, 49%, and still loses money in 82% of years. Judging a day by its result is misleading.
The numbers
The same trader in both columns: wins 45% of trades, makes $300 and loses $200 on average, takes at most three trades a day and stops after two losses. In one column they follow their plan; in the other they make the most common mistakes at medium frequency: doubling after losses, moving the stop, trading on after the daily stop, cutting winners, skipping trades out of fear, trading without a setup and euphoria after a good run.
| Follows the plan | A bit of everything | |
|---|---|---|
| Red days | 53% | 49% |
| Red weeks | 38% | 50% |
| Red months | 24% | 55% |
| Losing years | 2% | 82% |
3,000 simulated paths of 250 sessions per behavior. Week = 5 sessions; month = 21. Losing years use a $10,000 personal account where "ruin" means losing half: 2% following the plan and 79% with a bit of everything.
Why it happens
- The trader who follows the plan has more bad days than good ones, but the good ones weigh more. A bad day is two losses and done; a good one, two or three winners.
- The trader who makes mistakes manufactures small green days: they cut winners early, double to recover and trade on after the daily stop until they're back to zero. Many days end slightly up. The ones that don't end far down.
- The longer the period, the wider the gap: in a day you can barely tell them apart; in a year, one almost never loses and the other almost always does.
What to do with this
- Grade the process, not the result. From 0 to 10: how many of your trades followed your plan. Write the result down separately, with no grade.
- Look at money by months, not days. A red day while following the plan is normal, not a failure.
- Be suspicious of your green days with mistakes. They teach you to repeat them.
- Be ready for streaks. With a 45% win rate, several losses in a row are part of the game: see how many in the losing streak calculator.
The templates to separate what the market did from what you did (the two columns and the bill for your mistakes) are in the free workbook linked below. And to see how your odds change on a prop firm account, try the evaluation simulator.
How it was calculated
Monte Carlo simulation with common random numbers: in each path both traders get the same opportunities and the same market, and only their behavior changes. Wins and losses vary around $300 and $200; plan trades carry no commissions. It's the same simulation as chapter 12 of our upcoming trading psychology book.
Free: The Other Half Workbook. Nine templates for trading with a cool head: your one-page plan, the pre-session checklist, the twelve-patterns test, your size and the bill for your mistakes.
Get the free workbookSimulated and hypothetical results, with the limitations that implies. Not investment advice. Firm rules change: check them on each firm's website. This article contains no affiliate links.