Ignoring the excitement and the thrill (also the stress and anxiety) that trading can bring, trading is your job – you are a trader. Part of anyone’s job is to look at the work they are doing and see what they are doing well and what they need to improve on. Yes it can be the boring laborious bit but it has such importance to you. Both from a strategic and psychological perspective.
I recommend you put aside time every day or at least two to three times a week to have a look at your trades, both good and bad.
In order to progress and develop you need to examine what happened in each trade and how it fits with your strategy. It will give you a picture of your trading behaviour and help you identify problem areas and times to avoid trading.
Although I recommend reviewing your trades several times a week, that does all depend on how often you trade. If you only take five trades a month then you can adjust the review process to suit. Consider what it is that you want to look at when reviewing your trades.
You’ll want a headline of your overall profit/loss for that month. It would be excellent if you could compare it to the same time last month and the same time of year the previous years – you can start to identify patterns. Look at how many trades you are losing compared to how many you are making a profit in. Also, how are you managing losing trades? Are you losing ALOT of money each time or are you making small losses? As you examine losing trades, consider coding them in someway so that you can start to analyse the reasons you lost that trade. Was it a technical error on your part? Did you exit too soon? Was it just a case of chance or did you enter a trade that didn’t follow your plan?
This will help you understand your losing trades and your behaviours. Perhaps you can see that trades taken at a certain time of day or a certain month of the year are always losing trades. What can you do about it?
After this, go on to look at how your results match your goals and expectations. Did you have a goal in mind? Perhaps you aim for your account to grow 1% a month. If you had no goal, why not try setting yourself a target? It needs to be realistic and achievable.
Don’t forget to look at your winning trades. Were they on plan? How did you feel afterwards? How can you emulate that? Allowing yourself to recognise how well you traded will boost your confidence and increase your motivation to stay on track with your trading strategy and methods.
If you notice one method isn’t working for you, consider trialling another method.
To increasing your profits,
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