Examining Your Trading Log

You'll have a lot of fancy-schmancy data and insights about the market and yourself after a good number of deals...

It's pretty straightforward:

• Find what works for you and stick with it.

• Determine what isn't working and quit doing it.

And figuring out what works and what doesn't is all about careful observation and probing questions.

Break down your trading outcomes into smaller categories, such as day of the week or specific currency pairs, to improve your analysis.

Here are some examples of the kinds of questions you should ask yourself when reviewing your journal:

• Which chart patterns or technical indicators have proven to be the most effective for you？ Which ones don't？

• How can you tweak your indicators to help you get into trades faster or prevent whipsaws and fakeouts？

• Are you making the mistake of closing winning trades too soon？ Are you worried about losing your unrealized gains, or do you need to change your profit targets？

• Do you keep losing transactions for longer than necessary？ What steps can you take to strengthen your stop-loss procedures？

• How often do you stick to your trading strategy？ Have you been successful with the ones you do follow？

• What trade setup did you pass up, or why didn't you take it？ Was that, according to my approach or system, a legitimate signal or setup？

• What could you have done differently to avoid or minimize the loss, or to maximize the gain？

• Do you win more on multi-lot transactions or single-lot trades？

• In what types of market conditions have you been successful？ Is it better to be trending or ranging？

• Were the majority of your gains or losses concentrated in a few currency pairs？

• Which news developments triggered the type of volatility you wanted to trade or avoid？

• Which trading sessions have benefited your trading style the most？

• Do you have a pattern of losing transactions on specific days of the week, such as Mondays and Fridays？

These types of questions might help you rapidly identify the activities that have prevented you from making profits.

The goal is to get to the point where you've worked out what works best for you and only do those things.

Once you've discovered out what works, the next stage is to continually execute those activities until they become second nature.

Finally, keeping a consistent record can help you stay on top of your performance and detect when the markets change–and the markets do change all the time.