Lessons › Why traders lose › Find your leak
World 11 · Why traders lose · lesson 29 · level 2
Find your leak
Tag every trade, add up each tag's results in R after at least 20 trades, and the tag that loses the most is your leak.
In one line
Your account may not be losing everywhere. It may be losing in one place, like a leak in a bucket.
Explained simply
A bucket with one hole does not need a new bucket. It needs you to find the hole, and your account may be losing in one place too. Give every trade a tag, a short label for why you took it, like "my setup", "news" or "winning it back". Use the same few tags every time. After at least 20 trades, add up each tag's results in R, the amount you risked. The tag that loses the most is your leak. Stop that kind of trade for a month, and change nothing else.
A worked example
An example, not real data: after at least 20 trades, the tags add up to my setup +4R, news −2R, winning it back −9R. The leak is winning it back. Next month: no winning-it-back trades, everything else unchanged, then compare.
Mistakes to avoid
- Using new tags every time, so nothing can be added up.
- Judging a tag after a handful of trades, when one lucky trade can fool you.
- Tagging a bored trade as "my setup".
- Changing three things at once, so you can't tell which one helped.
Check yourself
In this lesson, what is your leak?
The tag that loses the most. Add up each tag in R. The one that loses the most is your leak.
Why use the same few tags every time?
So each tag's results can be added up. Tags only help if you can add them up. New labels every time hide the leak.
Example tags after 20+ trades: my setup +3R, boredom −6R, news −1R. Which one is the leak?
Boredom. Boredom loses the most, −6R. That is the one kind of trade to stop for a month.
You have logged 12 trades, and one "news" trade made +3R. What now?
Keep logging until at least 20 trades. With fewer than 20 trades, one lucky or unlucky trade can fool you. Twenty is a floor, not a finish line.
You found your leak. What is the best next step?
Stop that kind of trade for a month and change nothing else. One fix at a time, so you can see what it did. Change three things at once and you cannot tell which one helped.
Goal of this lesson: Add up your results by reason tag, and pick one leak to stop for a month.