So I’ve gotten pretty good about keeping a detailed trade journal. However, as it is commonly said. Learn from your mistakes. What type of things am I looking for? What kinds of things can I learn from? I’m following my rules, risk management is great (1% on every trade). I feel like when reviewing the charts from my losses, I’m just looking at chart that did not move in the direction I had thought. Any guidance is greatly appreciated.
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i offer one suggestion
look also (and write in your journal) the trades you “kind of thought about” but didn’t take, and why, and see how they would have gone, too - it can be quite instructive and helpful
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That is a great idea! When looking at different pairs I notice a setup that I didn’t take but would have been winner. But by now, I have no idea on why I didn’t take the trade in the first place. I shall try this. Thank you.
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That’s more than Forex, I guess. I have a strategy for these situations, I try to WRITE. I write a lot and I learn almost everything by writing that. I suggest you to try it too or you can even find your own learning strategy.
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Yes it is hard. Try to find similarities in the charts. And dont only look on your losers. Try to find similarities for your winners too.
It could be anyhing. Time of the day, certain pairs, buying right into resistance and the other way round. Maybe your winners could all have been higher if you would have let them run a little longer. Maybe your SL is too tight and you should give your trades a little more wiggle room.
It really could be anything. If you dont see it now, maybe you’ll see it later.
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The first step in learning from mistakes is to reflect on whether you followed your trading plan. If you didn’t, then you need to figure out how you can ensure that you follow it in the future.
If you did follow your plan and your success rate after 20 trades is less than 50%, there may be a serious issue with your plan. In fact, if you go against your plan, you may have a higher win rate. The win rate is interconnected with the risk-reward ratio, which is typically 3:1, 2:1, 1:1, 1:2, or 1:3. You need a strategy with a win rate that complements your risk-reward ratio.
However, recently I was challenged by someone that backtesting may not be a reliable tool if it does not accurately predict future performance. Nonetheless, it is still important to believe in the power of backtesting as a future indicator of performance, as long as it takes into account market circumstances that may not be conducive to our strategy.
During times of bad trading performance, we should try to minimize losses or break even if possible. To learn from mistakes, we need to focus on how to optimize a particular strategy with respect to risk-reward ratio and how we can handle situations differently in the future.
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Much respect! Thanks for sharing.
Thanks for the insight!
When reviewing your trade journal, you should look for patterns or tendencies that may be causing you to lose money. For example, are you consistently making the same mistake, such as entering a trade too early or holding onto a losing position for too long?
You should also review your trade entries and exits to see if there are any common factors that may be contributing to losses, such as trading during low liquidity periods or failing to properly analyze market trends.
It may also be helpful to review your emotional state during the trades that resulted in losses. Were you feeling anxious or stressed, and did this affect your decision-making process?
What mistake? What mistakes do you mean?
When you look at a chart and you see TA that suggests price will probably rise but it falls, what is the mistake? The mistake was not necessarily in your bad reading of the chart, but it was definitely in not being ready to take advantage of a downward price movement.
Charts do not tell you what price will do for you, they tell you what you should do about price.
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