The Only Metric That Matters

Another lesson from last night’s two-hour coaching call.

It’s one of position size.

Every trade begs the primary question. “How good is this deal?”

The quality of the idea leads to the amount that you’re willing to allocate to the trade.

This key lessons changes everything because you’re adjusting the risk up or down each trade.

Trading is NOT once size fits all. The fact is that some ideas are simply better. And as you improve your skills, you’d be surprised how many more good ideas you find.

But, you’ll also discover how many crappy ideas you took too much risk on.

A HUGE outcome here is one of concentration. As in position density. You’ll learn that a few good trades, with bigger size, at the right time makes up most of your P&L.

Most of the other trades wash each other out, but they’re necessary to improve our skills.

So the amount of your positive monthly P&L will be skewed towards a few well timed trade that you sized up, and held longer.

This also means that win/loss percentage doesn’t matter. It’s a vanity metric. The only metric that matters is account growth.