It is now the end of my trading week and I wanted to ask a critical question:
When the trading week ends, whether it has been a winning or losing week, and you know you will not make any more trades, what do you do?
Most typically shut down the charts, close the platform down, exhale and then walk away.
If it has been a winning week, I’m guessing many of you go for a drink to celebrate your hard work. For a losing week…I’m guessing many of you go for a drink to forget about your mistakes and what you lost.
Instead, I suggest trying another path.
Reviewing the Tape
I noticed a long time ago the best players and athletes spend tens of hours per week reviewing tape. They are looking for what they did well, but also zoning in on their mistakes, so they know what to spend energy on correcting. Ironically, some of the best traders I know do the same.
If you are really passionate about this, and are excited to get back to the chair (win or lose) after the day, week or month – then you’ll come back and work on your mistakes while re-enforcing your successes.
Oftentimes, the difference between a successful and unsuccessful trader, is doing all the little things which add up to a big result. Taking time to review your trades and performance is one of those little things that has a far reaching reward.
There are many ways you can do this easily, using programs such as Jing, Screencast or Camtasia, which are all done by TechSmith (some are free).
How I do it is I have a folder, with sub folders for each month and week. After a trade is done, I take a screenshot (or video), color code the trade (green for a win and red for a loss), and put them in the trading folder for that week. Below is a screenshot from a live trade I video recorded, which I shared in the member traders forum.
When trading is done for the week, after getting a brief cup of tea, I come back and sit down for my analysis on what I did well and what I need to work on. Sure, at the end of the week, I’m a bit tired. But I love what I do, and dedicate a ton of energy to becoming a better trader each day, to increase my skill and craft.
What I often find is there are patterns in the price action, or Ichimoku, that repeat themselves in my winners and losers. These patterns get stored in your long term memory and central nervous system.
If you do this enough, when you are trading in real time, you will be better able (and prepared) to spot patterns, either consciously or unconsciously, which will lead to finding and making better trades.
You will spot patterns on whether it’s time to reverse and go short, or time to exit a current trade, or time to enter before a big move. All of this review builds pattern recognition skills which lead to automaticity – a critical tool for success and mastery of any skill.
Trading is a constant learning process – it never ends, and that means a constant effort and fine tuning of your skills. So the next time your week ends, consider taking a moment to review your week of trading, and build a little habit that goes a long way.