Kardec Trader warns traders not to calculate potential profits before a trade moves in their favor. Pre-calculating profits creates confirmation bias, makes you ignore downside risk, and causes you to skip stop-losses, which increases your chance of losing money.
So avoid looking at what you will potentially make on a trade. So how many of you guys have looked at a trade before and before you even got in, before the trade has even moved in your favor, you start automatically taking your calculator out and you start looking at what will I make if this trade goes up I'll make $10,000. If this trade goes up, I'll make $5,000. And you start looking at all the good parts of the trade. The reason you have to get rid of this is the moment you start looking at the positives of a trade, you start getting a bias right. You start only looking for things that confirm that bia. You won't look at the bad part about the trade. You won't even believe that you can lose money on this trade in return. What traders start doing is they start avoiding their stop loss. They start avoiding what they will potentially lose or if they will lose. And that just kind of puts you in a very difficult situation.
