Unit 4 · Level 2 · Process goals
Good decision, bad outcome
Judge a decision by its outcome and poker players will name your sin: resulting. Fold correctly and the next card would have won you the pot? Still a good fold. Markets deal the same probabilistic cards: a perfectly executed trade can lose, and a reckless chase can pay. One outcome tells you almost nothing; the decision is the only thing you actually chose.
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What you get asked
You followed every rule (setup, size, stop) and the trade lost 1R. How do you grade it?
If your expectancy is positive, losses are simply the cost of playing. Grade the decision you controlled, not the card the market dealt.
Match each quadrant to its verdict
The killer square is luck-money: it feels like skill, pays like skill, and teaches the exact opposite of skill.
Poker players call judging a decision by its result '___'.
Annie Duke's word for the oldest error in games of chance. In any probabilistic game, outcome quality and decision quality regularly disagree.
You broke every rule, chased a pump, and made €500. What did you actually walk away with?
This is the slot-machine trade from the journaling unit, seen from the process side. The €500 is real; so is the habit it just reinforced. One of them compounds.
Why does process-grading matter MORE in trading than in, say, chess?
In chess, good moves win. In markets, good decisions lose all the time in the short term. Over many trades the noise averages out, which is why the process is the only thing worth grading. 🐜
The rest of this unit
Grade the decision, not the dice: poker thinking, process streaks, and the finished system.