Reviewing executed trades and reviewing charts for missed setups is critically important in a trader’s day/week, and is mandatory for progress. With the benefit of hindsight, it’s easy to spot mistakes. The key to progress is not repeating the same mistakes too many times. Likewise spotting things that were done really well – those things need to be written down and repeated as often as possible. Let me share some of the points
stemming from the review of the most recent sessions…..
Ok – the trading profit & loss for the week: Pretty shit – loss of 3.24R over 16 trades. All in the last 3 days. Complete shambles. I was not hitting them right this week, with most of the trades being losses. Yes, I am continuing to refine the trading strategy – this of course unsettles things a bit and makes trading more difficult for me.
On Wednesday night, as I was falling asleep, I was running through some of my trades in my mind one more time. Suddenly, the key thought that came to me was where my trade entries/setups had been relative to the support/resistance zones I had identified at the start of each session. My thinking specifically was that I had actually been shorting into support, and buying into resistance a lot of the time – seems rather stupid right?
On the other hand, I felt that my trend analysis and identifying of levels had actually been good. Ditto for my anticipations of trades at the start of the session.
Thus, in the office today, I took another look at the charts, and concluded that my late-evening insight was in fact fairly accurate. Over Tuesday and Wednesday, I took a dozen trades. For half of those, I traded on the wrong side of support/resistance in one way or another.
See the DAX trade below (from Wed’s session):
With my strategy, I generally attempt to trade with the trend. In this case, I had established a down-trend in place. However I shorted just prior to price, focusing my attention on the highlighted bearish bar, but not paying attention to the preceding three bars that indicated that the 11,860 level was indeed providing support, rather than trading in a manner where I short below 11,860 and place the stop loss above the support-turned-into resistance level.
This seems like a real beginner’s mistake. However, this does not mean I am still a complete beginner. This was something my trading buddy (why have a trading buddy?) and I discussed last week – just because one makes a mistake now and then does not render his trading utterly useless, as long as one is making those mistakes more and more rarely.
On a good note, I recognised this fairly quickly and am going to pay more attention to it going forward – all 5 trades executed today were on the ‘correct’ side of support & resistance, for my style of trading.
In a nutshell then, things that went well this week (repeat!):
- Focused on a small number of instruments
- Detailed session preparations – marking of support/resistance zones, analysing trends on multiple timeframes, anticipating the trades I might take during the session
- Significant progress in technical studies (the Voigt market structure book) during the days I was at home with ‘man flu’ [Sat-Mon inclusive]
- Reviewing charts and identifying valid setups at the end of each session
Things that I did not do well/mistakes (avoid!)
- Taking setups on the wrong side of support/resistance multiple times
- Failing to spot high correlation between two trades entered within a few minutes of each other (short USDJPY and short DAX)
- Lack of planning in target setting and position management
- Productivity not as good as it could have been – progress with strategy development was limited
Any aspiring traders out there, I would highly recommend to regularly review your executed trades. In order to that, you obviously need to document your trades to begin with.
No trading for me tomorrow. Catch you again next week.