Why R beats dollars and percent.

There are three ways to record a result: dollars, percent of account, or R. Dollars are raw emotion — $2,000 lost is a bad night’s sleep regardless of whether it was a disciplined −1R or a reckless −4R. Percent feels more neutral, but your brain instantly multiplies it back into dollars, so the emotion returns through the side door. R is the only unit anchored to the single thing you actually controlled: the risk you chose before the trade existed.

In R, a loss reads “−1R, exactly as designed” instead of “I lost $340.” A win reads “+2R” instead of “+$680, but I could have made more.” The story stops being about the money and starts being about whether you executed the plan. Over a hundred trades, the R column tells you if your process works; the dollar column only tells you how you felt.

Position size is the loudest variable in your P&L and the least informative about skill. A trader who doubles size on a whim looks brilliant in dollars on the good days and blows up on the bad ones. Strip size out — which is exactly what R does — and what remains is the quality of your decisions. That is the only thing worth grading.