Most traders judge a trade by one thing: whether it made money.

It’s understandable. A profitable trade feels like validation. A losing trade feels like a mistake. But according to trading psychologist Andrew Menaker, that way of evaluating performance can actually slow a trader’s progress.

In his recent Trading Psychology Seminar, Dr. Menaker introduces a framework for classifying every trade into one of four categories. Rather than focusing on profit and loss alone, the framework encourages traders to evaluate the quality of their decision-making.

The first category is straightforward.

A Type 1 trade is one where the process was good and the trade made money.

The trader had a plan, followed it, managed risk appropriately, and the market moved in their favor. It’s the outcome everyone wants, but Menaker argues that the real success isn’t the profit itself, it’s the quality of the process that produced it.

That distinction matters.

Many traders unknowingly reinforce poor habits because a trade happened to work out. Likewise, they sometimes criticize themselves for perfectly executed trades that simply didn’t produce a profit. Over time, this creates confusion about what’s actually improving performance.

By separating process from outcome, traders begin rewarding the behaviors they can control instead of the results they can’t.

It’s a subtle shift, but one that can fundamentally change the way trading performance is evaluated.

Of course, Type 1 is only the beginning.

Type 2: Good process, but your stop gets hit
Type 3: Poor process
Type 4: Poor process, but you’re making money

The remaining three trade types reveal why some losing trades are actually signs of good trading, and why some winning trades deserve far more scrutiny than traders usually give them.

In the full seminar, Menaker walks through each category in detail and explains how tracking these trade types over time can expose patterns that most traders never notice.

Watch the full Trading Psychology Seminar to learn the complete four-type framework and start evaluating your trading in a way that leads to long-term improvement. 

Note: This seminar is exclusive to Alphatrends Premium members.