What your last 20 trades actually say — and why dollars lie

You can read a hundred trade journals and still not know whether your last 20 trades were good. Not because the journals are wrong — because they all add up dollars, and dollars lie. Here is the honest alternative, and it fits on one page.

Why dollars lie

Two traders take the same ten setups with the same skill. One has a $100,000 account, the other $2,000. In dollars their histories look nothing alike — one "made $3,000", the other "made $60". In every sense that matters they did the same thing. Dollar P/L measures account size first and decision quality second, and the two get tangled immediately.

There is a second lie. A trader who risks $500 per trade and wins $250 "made money" on a trade that was a half-R loss. The dollar line goes up on the same day the process is broken. That is how bad habits survive profitable months.

R: divide by what you risked

One number fixes both lies. Call the amount you risked on a trade R. Then record every result as a multiple of it:

Now the account size is gone from the story. A +2.3R win is the same achievement on a $2,000 account and a $200,000 one. And the broken win — "+$250 on $500 risked" — finally reads as what it was: −0.5R.

What 20 trades can actually tell you

Twenty trades is a small sample. It cannot prove a strategy works. It can tell you three true things:

1. Your average winner and loser in R. If your winners average +1.1R and your losers average −1.0R, you need to win more than half the time just to tread water. The arithmetic is not negotiable.

2. Your expectancy. (Win% × avg winner R) − (Loss% × avg loser R). Positive is the whole game; the size of it decides how much room your plan has for bad luck. Expectancy has the full formula.

3. Whether you followed your plan. Mark each trade planned vs improvised. The improvised ones are the story of the month — they usually cluster, and the cluster usually has a trigger (a loss, a news event, a Friday afternoon).

That third column is the one most traders skip and the one that changes the most. Sizing mistakes and plan breaks leave bigger signatures in R than bad entries do — which is also why position sizing and drawdown deserve their own lines in the review.

The one-page review

Once a week, twenty minutes:

• Average winner R, average loser R, win rate → expectancy.
• Best and worst trade of the week — read them for process, not outcome.
• Count the plan breaks. Name the trigger.
• Decide one change. One. Write it at the top of next week's page.

The spreadsheet that does the dividing

The free PipAtlas Trade Log does exactly this: every row divides P/L by your risk, the running balance and expectancy calculate themselves, and the Summary page shows plan-adherence as a percentage — so "how am I doing?" has one honest answer instead of a dollar total. (Pair it with the 1% rule if the risk column is still guesswork.)

Twenty trades won't tell you if you're a good trader. They'll tell you the truth about your last twenty — which is the only version of the question with an answer.

Education only, never financial advice.