3 Top Tips For Reviewing Your Trade Results
For those of you who want to bring your trading to its full potential, there are a few things that you should know about how to review your trade results. One of the most important is that those traders who tend to be the most successful use a number of different best practices to reach their goals. Similar to reviewing a movie to critique the good and the bad, to improve your trades, it is important that you consider incorporating some of these best practices into your overall plan. That being said, here’s 3 best practices that you can use to achieve the best results.
Keep A Journal Of All Your Trade Results
Devising a plan of attack to improve any type of process takes time and a bit of skill too. Therefore, when it comes to earning money or losing money because of bad or questionable decisions, the strategy that is used must be carefully considered. With this in mind, people who enter into trading and want to continue, will usually discover that keeping a journal of what is going on can be very beneficial.
This is one of the primary reasons why keeping a journal of your trades can be a big step in the right direction. Keeping a journal entails documenting the time of trade, price and how many shares have been traded. With this information, you will have an opportunity to not only track your own process from the beginning to end of the trade, but will also have a chance to identify any bad habits that will need to be eliminated.
Look For Common Trends
Once this data has been documented, you can begin to review what is actually going on during these activities. By looking back at what has happened in the past, you can identify specific trends in your winning trades and in your losing trades too. For instance, in some cases, traders may find that their worst time for trading may be around the lunch hours when it is slower and volume is lighter. Whatever the case or situation, they may find these trades should be completely eliminated so that they will not continue to lose money. Simply put these times can be noted as the riskiest of all and should be avoided.
Another area of concern that involves high risk may be due to investing too much on a specific trade that only has limited potential. So, they are putting in much more than they can actually get out of the trade. This means adjusting this strategy can help to minimize losses. Additionally, sometimes the data that is reviewed may also indicate the person is putting too tight of a stop loss in, while not letting their winners run long enough. Again, an adjustment can be made to make better trading decisions. By find tuning your win percentage with your risk/reward ratio, you will be able to develop a winning strategy that will make you money over the long run.
Record Trades to Review Later
Because of all the latest advances in technology, there’s a lot that people can do with the use of various kinds of software applications in reviewing your trade results. Meaning reviewing these trades does not have to be performed with a long drawn out tedious manual process. Instead, a trader can use software applications like OBS to record their trading activities.
By recording this information in advance, the trader can go back at a later date when they have time to see what is really going on with a clear mind so that they can make better and more informed decisions going forward. Typically, when the trader reviews all of this information without the added stress of trading, it is easier to see when poor trading decisions are being made and when to capitalize on those that can bring in more money.
Most traders know that trading is risky business. However, they may not know how that they can minimize their risk. Fortunately, there is some great information online that tells you what you need to do to maximize your efforts. Some of the most valuable information tells you and others how to use best practices to get better results. From keeping a journal to record trades and looking for common trends to review this data using various kinds of software applications, people can use these best practices to get the best results possible.