You're Not in the Money-Making Business Yet. You're in the Lab.

🟣 Tradetopia Field Notes — Issue #35

You've backtested your system. You know it works. The edge is there, the probabilities are in your favor, so you turn on the money printer…

First trade? Loss. Second trade? Loss. Third trade? You hesitate, miss the entry, and it rips without you.

By trade five, you're questioning everything. “Does this even work?” “Am I wasting my time?” You start looking at everyone else’s strategies again...

Sound familiar?

Here's the problem: you're expecting an hourly wage or a salary when you should be treating it like an experiment.

The Pressure Trap

Most traders go live with one goal in mind: MAKE MONEY.

That’s why we’re all here, right? That's the whole point of trading.

Here's the brutal truth though: when your only measure of success is profitability, every loss feels like failure. Every drawdown feels like another sign, you're not good enough. Every mistake feels like evidence that you'll never make it.

At this point in your trading, what if success means something entirely different?

I told a trader in a recent session:

"Right now, you're not in a making money stage of your trading. It's training. It's experimentation."

The END result is money, freedom etc etc. The CURRENT step of the process more than likely doesn’t revolve around your P&L yet.

The Scientific Method Applied to Trading

Think about how scientists work. They don't walk into the lab expecting to find a cure on day one. They form a hypothesis, run experiments, collect data, analyze results, and iterate.

They expect failures. Failures aren't setbacks, they're data points. More context on what doesn’t work and what could.

Your trading should work the same way.

Step 1: Observation

You've watched the markets. You've identified patterns. You've noticed that certain setups tend to work in certain conditions. The market likes to reverse in specific scenarios. This is your observation phase.

Step 2: Hypothesis

Based on your observations, you form a hypothesis: "If I take this type of setup with these criteria, I should have an edge over time."

Notice the phrase: over time. Not on trade one. Not this week. Over a statistically significant sample size.

Step 3: Experimentation

Now you test it. You take the trades. You follow the plan. You collect data.

This is where most traders go wrong. They think the experiment is about whether this trade works. But the experiment is about whether the system works over 20, 50, 100 trades. Better yet, traders just take their assumptions/hypothesis as a fact.

One trade is not the experiment. One trade is a single data point.

Step 4: Analysis

After you've collected enough data, you analyze. Did the system perform as expected? Where did it work? Where did it break down? What adjustments need to be made?

This is how you build confidence. Not by hoping. Not by wishing. By systematically validating your edge through disciplined execution.

The Goal: Lose the Right Way

The best traders aren't the ones who never lose. They're the ones who lose correctly. The graceful losers.

They take their stops. They follow their rules. They don't revenge trade. They don't overtrade. They execute their system with precision, even when it's uncomfortable.

That's the goal during the experimentation phase.

"The goal is: can I lose the right way for the next 20 trades? That's the only thing that matters."

Not profitability. Not being right. Just execution.

Because here's the thing: if you can execute your system flawlessly for 20 trades, you'll know whether the system works. If it doesn't, you adjust. If it does, you scale.

But if you can't execute it consistently, you'll never know if the system is the problem or if you are.

Remove the Burden of Profitability

Is it all about who can best forecast market movements? Or is it about who can perform at the highest level most frequently? What’s the difference? Just because you’re fair good at predicting how things will move, doesn’t mean you’ll actually perform at a high level to even follow your own predictions.

Your job isn't to predict what the market will do. Your job is to execute your system and let probabilities play out.

But when you're obsessed with making money right now, you can't do that. You second-guess. You hesitate. You override your rules because "this time feels different."

So let’s reframe:

Allow yourself to run the experiment without the burden that it has to lead to profitability right now.

Give yourself permission to be in the skill-building phase. To focus on process over profit. To collect data without the emotional weight of needing every trade to work.

Ironically, this is when your trading improves the fastest. Because you're no longer fighting yourself. You're just executing, learning, and iterating.

How to Shift Into Experimentation Mode

1. Define Your Sample Size

Decide how many trades you need to validate your system. 20? 50? 100? Pick a number and commit to executing that many trades perfectly before you evaluate performance.

2. Measure Execution, Not Outcomes

Did you follow your plan? Did you take your stop? Did you manage the trade according to your rules? That's a win, regardless of P&L.

3. Detach From Individual Trades

One trade means nothing. It's a single data point in a much larger experiment. Stop treating each trade like it's make-or-break.

4. Journal and Analyze

After your sample size is complete, review. What worked? What didn't? What patterns emerged? Use the data to refine your system.

5. Iterate

Trading is not a "figure it out once and you're done" game. It's a continuous cycle of observation, hypothesis, experimentation, and refinement.

Put Your Lab Coat On

The best traders I know don't think like gamblers. They think like scientists.

They're curious. They're patient. They're comfortable with uncertainty because they know the process works, even when individual experiments don't.

You don't need to be profitable today. You need to be consistent today. The profitability follows.

Stop treating trading like a job you're failing at. Start treating it like an experiment you're running.

PS:

What would change in your trading if you gave yourself permission to focus on execution instead of profitability for the next 20 trades?

PPS:

You might just find that when you stop chasing the money, the money gravitates towards you.

From Tradetopia,
Mike Navarrete 🧙🏽‍♂️