I’ve been trading for little over a year now with a detailed trading journal, and I created a equity curve with Microsoft Excel, so I’m pretty clear how I doing, I have some good months, and some like 4 months straight with little gain or little loss, and then follow by a losing month like over 10% loss. So now I try to look hard into how I did all these, but little confused what should I look for to make me a better trader, I know I have some risk management problems sometimes risking too much, but recently I just created my trading plan and I tend to follow it, I have limit my risk level with Max 2% per trade, and so far I follow it alright, and I also eliminated some bad trading behaviors like over trading, none sense trades, revenge trades(I’m able to walk away from my trading station after a big loss and try not let the emotion to get me),
and my trading strategies for now I only trade popular patterns, channels, FIB retracement, major support or resistance level, sometimes I tend to catch some pairs top/bottom with a trailing stop, and I try to look for or create a trading system to generate the trade signals for me.
So my question is:
What should I look for when I reviewing my trading journal?
Am I on the right path of developing my trading skills?
Anything I didn’t do or I should do as a growing trader?
Seems you are already looking at a lot of the right things and already making positive changes as a result. But analysing losses is not the only side, it is also worth looking at your profits. For example, are you exiting trades too soon and missing potential additional gains or, alternatively, are your targets set too high and trades that would have earned a smaller gain have actually ended up losing because they never reached an over-ambitious target.
I also keep a detailed log of my trades and I include two additional columns. In one I compute the maximum price reversal beyond my entry point during the trade and in the other I compute the max price gain available during the trade. These results help me to identify (a) what is a suitable stop level (e.g. if price reversal is usually 5-10 pips then a stop at 13-15 pips is not going to get hit too often unless the trade was actually wrong - and a stop of 25 pips is unnecessarily large) and (b) what is a realistic target level for the timeframe concerned (e.g. if price usually reaches 40-60 pips on a particular timeframe before reversing then a target could be in the 40-45 range. 30 pip targets would be missing potential whereas 60 pip targets would not be reached very often).
It is often said that, “it is never wrong to take a profit” but I don’t agree with that. Taking profits prematurely destroys the optimal potential of a trading strategy and seriously weakens the risk/reward ratio. Losses are an accepted part of overall trading performance and they are just one of the various business costs incurred. And like any business cost it must be included in the profitability calculations. This means your loss coverage is included in your gross profitability and if your gross profit is not sufficient to cover your business expenses then you will go bankrupt like in any other form of business.
Reducing your business costs arising from trade losses is very valid, but optimising your business earnings is equally important.
We are only talking about analysing your trade log here, but naturally, you could also include analysing all your trading factors such as comparing performance with other pairs, looking at trading times, fine-tuning entry/exit signals and so on. All with the joint objective of “minimise costs, maximise profits”.
Trade journal is good to look for some small changes that can improve either on risk management or pushing your profit to limit.
A successful trader path always come with solution to make money, then go to money management. Remember, neither technical nor fundamental or holy grail play a big role in trading. Always remember, trading is all about maths.
Another advise, forget about those curves. Those curves are for lazy person or an investor, not for a trader. Trader cannot be lazy, you must know all those figures, not those nice picture curves. Always remember to differentiate between an investor and a trader.
your doing good. on the right path. you only need to practice it more and become more stable. now you need to work on your “edge” of reading the market. to me it seems you have yourself under control and that is the biggest challenge to trading.
so you have your self control after a big loss you said. thats great. but do you have self control after a big win aswel? <- thats tricky at times. give it a thought as what you are describing suites this problem very well. you have a good month then a neutral one then a loosing month.
good month: overconfidence
ok month: overconfidence still staying and blaming the market
bad month: reevaluating yourself and see your own mistkaes and return to good market behaviour and make gains again
good month: overconfidence
ok month: overconfidence still staying and blaming the market
bad month: reevaluating yourself and see your own mistkaes and return to good market behaviour and make gains again
good month: overconfidence
ok month: overconfidence still staying and blaming the market
bad month: reevaluating yourself and see your own mistkaes and return to good market behaviour and make gains again
The key is consistency, and I’m not really seeing that from your original post.
That is fine, b/c you’re still learning and we can all learn from one another.
The idea is to establish 2-3 “ideal setups” and trade them every time you can check off the requirements in the boxes.
Trade for 90 days, review.
Trade for 120 days, review.
If you consistently approach the markets, each day, the same way in-and-out, you’ll have a much better idea as to whether or not you have a strategy.
This is the problem. Most folks new to trading are simply lazy, and don’t want to take the time to determine whether or not they actually have a profitable strategy. So, they’ll either search out some “backtested” system, or, trade a system which will work for a few weeks, stop working, then they move onto something else. Rinse and repeat.
You need to grind day in and day out.
To become a professional, you need to treat your trading activities as if it were a business and you’re the CEO.
Make bad decisions, and you’ll be on the street.
Apply consistency, common-sense and remain level-headed and you will be profitable in the long run.
Thank you very much Manxx! It’s very nice of you to share your secret with me, it’s a very good practice to include the visualize target and potential reversal point on the trading log, and set target and stop accordingly, I think I’ll start doing that from now on, and your idea of Taking profits prematurely destroys the optimal potential of a trading strategy and seriously weakens the risk/reward ratio, I agree with that, I have so many trades that exited early, and I noticed the bad behavior behind them, like fear of losing, I’ve been working on that for few months now and it’s getting better, thank you again for enlightening me.
Thank you turboNero for taking your valuable time to go through my post, I think you’re right about I overlooked the overconfident emotion, I’m able to walk away when I loss, and I didn’t walk away when I had a big win, and I have noticed my trading pattern, so this gives me another idea where to working on, thank you for point that out for me, TurboNero.
Thank you forexunlimited!
I think the idea you giving me is deliberate practice, day in and day out, it’s very important for a trader like me, I’ll definitely keep that in mind, thank you forex unlimited!
Looking our trading journal is good for improving our skill in forex trading, but it need more details because we won’t able to find the mistake from out jurnal trading.
That’s why Excel is perfect for trading. But believe me, most people lazy to fill those sheets and only look on their own statement and actually find nothing there.
Yes I think so. But not all of them will same like you.
I think that using trading review will help us to improve our skill, all my review while trading in mayzus broker also documented in my personal agenda.