All professional traders know this. And they openly talk about it on streams and in interviews. But few understand that it is THIS that distinguishes a losing trader from a profitable one.
This grail is called "Trade Diary". Analyzing one’s own trading provides the greatest boost in understanding the market and psychology, and forms correct decision-making patterns.
Every trader has their own approach to analyzing trades, their own tools: some use the old-fashioned way, writing everything down by hand in a notebook or filling out tables in Excel. Others use convenient automated services, such as TMM.
Let me tell you how I analyze my trading. For example, let's take today’s trade on $RPL . Here, I broke through the sloped level. Just to remind you, all the reasons for entering and exiting the trade are outlined in my trading system (TS). Therefore, the main thing I need to do during the analysis is to find mistakes, places where I deviated from the rules of my TS.
My checklist after working through the sloped level on the RPL coin looks approximately like this:
Choosing a coin for trading: + (the coin has low correlation with Bitcoin, increased relative volumes (around $170 million) and volatility.
Reasons for entering + there is a formed sloped level with 3 clear touches, an increase in print tape activity upon approaching the level.
Reasons for exiting + I closed the position when active buying in the tape ended.
Money and risk management - I allowed increased risk on the trade, violating the risk/reward ratio.
Analysis of psychological state - I started trading without analyzing my psychological condition.
During the analysis, I see that I roughly violated the rules of MM and RM. My SL was set below the trading range at a price of 5.969. This means my loss on this trade would have been about the same as the profit - 1%. Considering the 3x leverage and fees, that’s 3% of my deposit. According to my trading system, the maximum risk for one trade should not exceed 2% of the deposit. Therefore, the correct decision would have been to close the position immediately when it began to roll back after bouncing off the lower boundary, and then re-enter from the lower boundary of the slope. Alternatively, I should have reduced the position size and waited out the roll without exceeding the risk.
Thus, despite the fact that I made 3% on this trade, I consider it very bad, as the rules of RM were grossly violated here. The reason for such deviation I see in my unstable psychological state, caused by the fact that I did not get enough sleep (I slept about 5 hours at night) and was irritated.
In addition to analyzing each trade, a trader should separately analyze each trading day, trading week, and trading month. This will allow for quick identification of systematic errors in their trading, making adjustments and additions to their trading system, and being flexible to market changes.
Friends, if you have any questions, I will be happy to answer them in the comments.
Wishing everyone profits!