A cognitive bias problematic in poker and investing. It is the tendency to mistakenly believe that a "good outcome" means a "good decision," and a "bad outcome" means a "bad decision." In high-uncertainty domains, outcome and decision quality do not always align.
How to Do It
Adopt an evaluation criterion during trade reviews that grades "Did I follow the rules?" with a pass/fail, rather than looking at P&L.
Effect
Prevents overconfidence in lucky profits (bad process) and allows proper validation of losses taken while following rules (good process).
How to Use
1. Add a "Process Grade" column to your journal
2. Log profitable rule-breaking as a "bad trade"
3. Log rule-abiding losses as a "good trade" and praise yourself