Trading your PnL curve

 There is no lack of trading knowledge and inspiration out there these days. One can find fairly solid advice from the standpoint of trying to become a consistently profitable trader. However, the nuances of how to actually overcome specific common pitfalls are lost in the advice or interviews you hear. Part of this is people protecting their edge, while other explanations include advice being too abstract or people simply being ignorant of what got them there. Once traders devise a profitable system or become a profitable discretionary trader, many of the hurdles they had to overcome are either forgotten or simply not understood very well. The tendency for someone to say pause after a string of wins or losses may be chalked off as the "obvious" thing to do for a winning trader, ignoring the fact that losing traders more often than not will double down on losers or get complacent when winning too much.

One "hack" to improving the nuances of your behavior on the road to profitability is, ironically, to analyze your own PnL curve. Do you have a tendency to say lose significant sums after a string of small wins, or hit a "resistance" level similar to a stock hits resistance? These observations should guide you to making changes at those critical inflection or resistance points. Individual PnL curves are strikingly similar to how individual equities behave, so if you can picture how a company's stock might consolidate on the grounds of strengthening products/sales, you can accordingly picture how you might "break out" of a personal PnL consolidation period. Doing things well and consistently in the face of boring consolidations is one tactic, while sometimes a losing PnL curve calls for actual tweaks to one's approach (like stopping out at critical points where you might break down and lose more later). At times, the PnL curve might suggest an overhaul in strategy. 

The point here is that we can learn and adopt best practices and take care of ourselves, but we need to be able to correlate those efforts to tangible PnL. A positive change in behavior should also be obvious from a change in the PnL curve, and a repetition of bad practices should also be clear. One final note - be more of an observer of your PnL trends, but don't force any trades to outright shape it in the way you'd like it to look. Work on your trading behavior and strategy, and then correlate it to results. This will guide you not only on what's working and what's not, but also give you extra information on what needs to be done when encountering certain conditions along the way.