Your trading journal, filled out completely as you enter and exit each trade, is full of very valuable data. However, having this data alone will not make you money, nor will it make you a better trader. Traders like yourself will have to spend the time to see what is working, what isn’t and how you can improve your past trading history.
Ask Yourself these Questions
On the topic of each trade’s success or failure:
- Was my entry point a good place to buy or sell?
- Did I exit at a good time for this trade?
- How did the market play into my thoughts about this trade? Were my support and resistance levels accurate?
- Did my thoughts or eagerness to enter or exit the trade, affect my trading profitability?
- Could patience help me increase my profits or cut my losses with this trade?
- If the market moved quickly, unexpectedly, or differently than in the past, were there any big news items I may have missed?
- Did this trade benefit from the tailwinds of another fundamental or technical happening?
On the topic of you:
- What news or research sources affected this trade?
- Was I at my computer as the trade took place, or did I set the trade and leave it to the market?
- Were there any factors that went under the radar?
- Is this trading time a good time to trade, or should I trade when I’m not as tired, hungry, etc.?
How to Improve
Analyzing your past trades will turn data into profits. Consider how you can improve on each trade, and how you might (after enough successful testing) modify a trading strategy and plan for a more profitable trading outcome.
