Process vs Outcome
Evaluating trades by whether you followed your rules — not by whether they made money — because good process produces good outcomes over time.
Process vs outcome is the distinction between judging a trade by the quality of the decision-making and judging it by the result. A well-executed trade that loses is a good trade. A poorly-executed trade that wins is a bad trade with a lucky outcome.
Outcome-thinking is corrosive because markets have a large random component in the short run. Rewarding yourself for lucky bad trades reinforces poor process. Punishing yourself for unlucky good trades erodes the discipline that will pay off over hundreds of repetitions.
Focus the journal on process: Did I follow my entry criteria? Was my stop placed correctly? Did I exit according to my rules? Results will follow from repeating good process. They cannot be directly controlled.
Related Terms
Discipline
The ability to execute your trading plan without deviation, even when emotions scream at you to do something different.
BeginnerEdge
A statistically demonstrable advantage in a specific market setup — the reason your strategy should make money over a large sample.
IntermediateFlow State
A state of peak performance where trading feels effortless and intuitive — pattern recognition is sharp, execution is clean, and distraction disappears.
IntermediateHindsight Bias
The belief, after the fact, that the outcome was obvious all along — distorting post-trade reviews and inflating false confidence.
IntermediateProbabilistic Thinking
Thinking in distributions and expected value rather than in certainties — accepting that any single trade can lose while the strategy still wins overall.
IntermediateTrading Journal
A systematic record of every trade with entry rationale, outcome, and emotional state — the most underused tool in most traders' arsenals.
BeginnerTrading Plan
A written document that defines your entry criteria, exit rules, position sizing, and daily loss limits before the market opens.
Beginner