📈 Behavioural Slippage: the return you never capture

“Behavioural Slippage” describes the gap between what your system identifies and what you actually earn. It comes from sub-optimal decisions in real time. Missed trades, hesitation, early exits. Things a backtest never does.

Unless every trade idea is recorded, it is almost impossible to measure precisely. But the gap is there. And it is usually larger than people expect.

One portfolio manager who tracked all ideas and outcomes found a difference of nearly 40% return over 3 years. He was profitable, yet a large portion of potential gains never materialized.

The solution starts with acceptance. The gap exists. It is likely bigger than is comfortable.

Then identify where it comes from, and treat reduction as an ongoing project. Track behavior. Review decisions. Gradually narrow the distance between system edge and actual execution.

The system may already be good enough. Execution is the real variable.

#trading #SmartTrading