A major factor that separates the successful from the unsuccessful is those who are successful look at each experience as a chance to learn and grow where those who are not move from one experience to another without learning much at all. With this in mind one of the major things that separates the profitable trader from the unprofitable trader is an openness to learning from each trade, and a willingness to put in the effort it takes to document and periodically review each trade that is made.
Traders who document their trades do so in trading journals. This can be as simple as writing down certain details of your trades in a notebook or in a word document, however those who know a bit about excel normally find this a much more powerful option.
Below are things to document about each trade. :
1. The general market conditions for that specific trading day. For example is there a lot of volatility in the market, is the market trading lower or higher, ranging or trending?
2. Why you entered the trade, the time you entered the trade, and the price you entered the trade.
3. Why you exited the trade, the time you exited the trade, and the price you excited the trade.
4. Whether the trade was a long or short trade.
5. What happened with the market from the time you opened the trade to the time that you closed the trade.
6. The money management parameters you used in the trade and which we covered in our previous lessons on the subject.
7. Many traders will also attach a chart with their analysis on it to help them remember the trade when they review their trading journal.
8. Where you were weak that particular day and what you are going to do to address those weaknesses.
9. Where you were strong that day and what you are going to do to address those strengths.
10. Any other thoughts that you had that day which should be noted.