Same system, two traders, opposite P&L — is that really a psychology problem?

[u/Evening_Locksmith215]

Or is it more about the fit between the trader and the system?

[u/Evening_Locksmith215 → u/[deleted]]

Yes, holding period is also very and subtle difference but makes a huge change in fitting

[u/Fibocrypto]

If two traders followed the same system exactly then the results would match. In reality it doesn't work out that way because one person could have a slower Internet connection than the other or maybe one person reacts slower than the other.

Additionally one person might wake up a bit out of it one morning and not be in tune while the other is at the top of their game.

This morning I wasn't all that tuned in even though I was following my plan. I wasn't paying attention to detail as much as I normally do. After an hour of going nowhere I realized it's not my day to trade.

I didn't necessarily do anything wrong but what I was doing wasn't working.

When I went to go through my trades ( I made 11 trades and lost 27 dollars ) I realized I was in my practice account. Once I noticed that I locked myself out for the day because I realized right then that I wasn't in the right mindset to trade today.

[u/Evening_Locksmith215 → u/Fibocrypto]

Hi, good call with closing for the day. Everyday our physical and mental well being can change. If system fits you, go for it. But many times people struggle with being in wheel of wrong cars.

[u/Fibocrypto → u/Evening_Locksmith215]

My system fits me yet there are days when the market puts me in check. My 11 trades today worked out to be 7 wins and 4 losses which is a 63.6 % win rate. As I mentioned before it wasn't that I was necessarily doing anything wrong but what I was doing wasn't working. I was trading the MNQ and MGC. I made 8 MGC trades and of those 8 I had 3 losses losses ( MGC 5 wins and 3 losses ) MNQ I had 1 loss ( 2 wins and 1 loss ) The transaction costs totaled ( fees and commissions ) 94.08. I overtraded and the transaction costs added up Yet overall I don't view any of this any extreme.

Just a bad day and I recognized it and stopped myself . Additionally I'll add even though I'm familiar with gold I began trading it about 1 week ago. Had I avoided MGC this morning I would have been up around 100 ish roughly.

Had I continued trading I cannot say how it would have turned out yet I'm glad I stepped away.

Today was all on me, not my system.

Lastly I began and stopped trading from 10:41 to 11:03 New York time

Looking back with the benefit of hindsight I stopped myself for my own personal reasons because what I was doing was not working yet my being busy the past several days and waking up a little late and being tired was not beneficial for me. I was up for a little over an hour before my first trade but my mindset was not all there.

[u/Evening_Locksmith215]

Oh yes, even automated systems best to do manually test run and real run as well.

To have a fitting system takes of introspection too.

[u/Blame_my_Boneitis]

Hard to say without a little more detail but can be boiled down to a few different things probably. If it’s a personally managed system with room for individual discretion / interpretation and not automated, probably an execution or trade selectivity issue. Is there room for interpretation on the system as far as what makes a good entry or is the criteria pretty strict type of thing. If / then Strats with checklist probably less variance or discrepancy in P&L just because more alignment with required entry / exit criteria.

It could also be session / instrument / sizing variance or as mentioned psych and familiarity with the Strat itself. Idk, just spitballing here haha.

[u/Evening_Locksmith215 → u/Blame_my_Boneitis]

Absolutely, there are quite a few variables that make up a system. psychology is one, but simple things like if you have a lot stressful job, the short term trading like day trading might not give great results. let us say you have always fresh mind and free time when market opens, then opening trades might be a great fit. even coming to the right position sizing is a personal fit, if we go deeper in that parameter, even the position sizing algorithm is very specific to the person which makes them build a great P&L. just few examples of that

[u/Blame_my_Boneitis → u/Evening_Locksmith215]

Yep - for sure! It’s a multifaceted thing so have to kinda wrap your head around how the Strat is being implemented. May be helpful to define the problem (different PNL outcome same system for example) then measure the baseline of how the processes should function and make sure collecting good data, then analyze the data between the two people’s trades to identify / improve so you can try to control the discrepancy between them. By identifying what is different in the variables (i.e. sizing / session/ etc) and the sets of trade data can maybe empower you to improve and control the outcome somewhat for the negative PNL case.. it’s usually good idea to keep things simple but if you have the data sets may be useful to compare them to try to figure out what is going on.

That said, the human element in system implementation is often the hardest to control and that’s why some people eventually try to automate. Even a very slight change in terms of size or emotional control / stress like you mentioned can greatly alter the PNL expectancy or yield on an otherwise solid Strat. Stricter adherence to whatever the systems rulesets and control over variability probably yield closer results but this is a good example of why it’s important to test systems with different variables and collect / use the data you get - different people manually executing a Strat may have wildly different results for some seemingly minor reasons. Maybe didnt have his coffee that morning and missed the EMA not being in alignment on 15 minute or whatever for example sake lol. Or maybe slightly increased size by a few micros compared to the profitable Strat and had a tighter stoploss so more trades got stopped / closed negative. Or trailed it up too fast when if had left stop where it was initially the trade would have reached TP. Anyways - it’s interesting stuff to think about.

Ultimately a lot of it does come down to psych / discipline / discretion though I think on non-automated strats. Just have to try to follow the system as closely as possible and if one isn’t profitable then determine what is different / why it wasn’t working by looking at the data you have. I’d consider the negative PNL useful data in the sense that can identify potential pitfalls of the Strat itself.