The Power of Trade Reviews

One of the hallmarks of a great trader is a robust trade review process.
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An after-the-fact honest assessment of your performance on a particular trade.
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​But why are we bothering to do this?
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​After all, the trade is over, right?
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Let’s focus our energy on finding the next trade…
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Not so fast.
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You don’t have to spend hours on this task, but a solid debrief and trade review is one of the most valuable things you can do as a trader.

1. It allows you to see things on the chart you may have missed in the heat of the moment.
2. It helps you highlight areas for improvement.
3. You can give yourself a (probably rare) pat on the back for the positives.

And the thing is…
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Reviewing a trade helps you improve and be ready for a similar setup that comes along again in the future.
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So what should the process look like?
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Well, I don’t think you need to spend ages on this. You just need enough time to review the major pieces.
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Print off or screenshot your chart and start making some notes:
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​#1 Trade Idea

• What was the trade idea, how did you develop it and what was the process?
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  ​E.g. “The market was over-extended, and I wanted to see one final push higher to get short.”

#2 Context

• What was the market regime like, any news? A catalyst?
• Any significant chart patterns?
• Day of week, time of day, price position.

Everything about the context of the trade that’s important.
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​#3 Entry

• The trigger.
• Was it structured?
• Why there?
• Did you enter correctly, how could you have improved it?

What could you reasonably do better next time given the information you had in the moment?

#4 Management

• How was your trade management?
• Any adds to the trade? Scale outs?
• Should you have done something you didn’t?
• Was the stop moved? If so, was that right? (based on the info at the time)

#5 Exit

• Did you hold to target?
• If not, why not?
• Was the exit good, bad, ok?
• How would you manage it differently next time?

Important things to bear in mind when conducting a trade review is to always appreciate the information you had at the time.
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​What did the chart look like on the hard right at that moment?
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​It’s easy enough to look back at a played-out chart and pick the best hindsight trades, but that’s useless.
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The objective should be to review with a focus on improvement.
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If you can get incrementally better by taking trades, then you can amplify that improvement by conducting a review of those trades.
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​If you’re not already doing it, I really recommend putting together a process.
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It won’t take long until you start to notice the difference…