Recollections of individual trades can be hazy sometimes so keeping trading records up to date is necessary. Some traders may tend to favor remembering winning trades, where as others may remember only the losing trades. The only way to get to the heart of the matter is to look at the numbers– the results of our trades over a specific time period, such as a month. A trading record doesn`t lie, but we still have to interpret it properly to glean any useful lessons from it. We find that depending on our trading style, it`s best to approach analyzing our trading record from two different angles, each with a common denominator– average wins and average losses.
Long-term and medium-term traders: Tend to have fewer overall trades because they`re more likely to be looking at the market from a more strategic perspective, picking trade opportunities more selectively.
Short-term traders: Tend to have a larger number of trades due to their short-term trading style. Measuring results on a per-day basis and tallying up daily profit and loss is more advantageous to short-term traders.
Bottom line, #wetradefx (Currency Traders Club), we focus on what we`re doing right, but also figure out what we`re doing wrong. Refine our analysis of our trading results by breaking them down to smaller categories, such as day of the week and currency pair or even trade size. Are our losing days or trades concentrated on certain days of the week, such as Fridays or Monday? For example, in our own experience, trading on the last day of a month was a losing positions. Are we losing trades concentrated in certain currency pairs? Does the position size of each trade have any relationship to wins and loses? Are we winning more on large trades, for example, or are we giving up larger losses on smaller trade sizes?