Think back to the steps involved in the entire process of completing a transaction, whether these steps can be recorded, and whether they can be quantified for retrospective analysis.
In other words, if I ask you to find a transaction from half a year ago and talk about the detailed logic of entry and exit of that transaction, as well as what you learned and realized from it in the end, can you do this?
If you can’t, it means that you are missing an extremely important link in your trading – transaction review.
Why do we need to review? Reviewing is to recreate the event and find improvement points from the thinking, behavior and final results at that time. When evaluating a person, people sometimes use the word "sense", saying that a person has good understanding, can understand things quickly and learn quickly. In fact, a person with high understanding can be said to be good at learning from past behaviors, improving thinking and guiding next actions. The external manifestation is what people call high understanding.
Trading requires more understanding. Some people are still searching for the Holy Grail for more than ten years, while others have seen through the essence of trading and achieved stable profits in just a few years. Why is there such a big gap? Is it IQ? Or EQ?
Neither. The difference is in understanding. Or, in other words, most people don’t make stable profits because they don’t work hard to find improvements in their behavior. Instead, they keep saying, “I know how to stop loss, but I just can’t control myself at that time. Oh, I must stop loss next time.” This is really boring, and it’s too lenient to yourself. As long as you stagnate, you will continue to lose money until you lose everything and leave the market or start to reflect on your own problems.
The purpose of transaction review is as follows:
1. Record the entry and exit logic of transactions
2. Record the profit and loss of the transaction
3. Record trading insights and improvement plans
4. Facilitate future tracing and adjust system parameters based on transaction data
With these goals in mind, review the entire process of your trading and find out if you are missing a lot of recording links. These recording actions may seem cumbersome, but they are necessary for advanced trading to avoid standing still. A thorough review will help you get closer to stable profits faster.
That’s why there is a comprehensive trading execution process (CTEP), which includes 6 trading steps:
1. Market analysis: Divide the market rhythm
2. Trading plan: develop a complete entry and exit strategy
3. Trading waiting: Evaluate the signal quality and wait patiently for high-quality signals to appear
4. Transaction execution: ensuring transaction consistency
5. Transaction tracking: track orders, complete active profit taking, timely escape, timely set tracking stop loss and other actions
6. Transaction review: record the entire transaction process and review it regularly
Strictly following the CTEP steps will greatly improve the scientificity and rigor of the transaction. It is no exaggeration to say that the secret to stable and profitable trading is hidden in the transaction records.
So, how do you record your trades?
