There is a difference between reviewing your trades and being a Monday morning quarterback. Being a Monday morning quarterback is about the ifs and buts. If I would have held onto that /ES short, I would've made $1,000+! I should've just got out of that trade, and I would have saved $500!
In short, it's about the outcome of what happened — not the performance. And focusing on the outcome will kill your trading. Here's what to do instead.
This is a continuation of our month-long series on how to get better trading every day. For complete access to this series, go to https://blog.topsteptrader.com/topic/september-trading-insights.
What goes into a thorough trade review?
The only way to improve your trading is to focus on a thorough trade review. You could have made a great trading decision, but gotten a bad outcome. Similarly, you could have made a bad decision and gotten a great outcome. That's why you can't look at outcome and derive any insights from your trading.
Instead, focus on the following five questions:
- Did I follow my trading plan? Or did I violate rules?
- What was the market telling me? Did I miss anything?
- Was my position sizing thoughtful? Or did I use max leverage?
- Did I have a clear plan of attack for if the market went in my direction or if it went against me?
- What can I do better tomorrow?
Additional reading: Check out Dr. Brett Steenbarger's advice on three easy questions to answer in your daily trading journal.
Did we miss any questions you would ask? Leave how you review your trades in the comments.