Looking back means looking at what happened before.
When you have closed the transaction, it is tempting to call friends, dance, and have a drink, but it is important to review how your transaction was conducted, whether it was profit or loss.
You have to review the whole process and find out what is right and what is wrong. You can ask yourself the following questions:
How is the trading performance?
Is the position size compatible with the risk return? Still too big? Or too small?
Can you enter the market at a better level?
What tools might you use to improve the timing of your entry?
Are you patient enough, or are you hurriedly thinking that you will never have another chance?
Are your benefits realistic or unrealistic?
Does the market agree with your profitability level? Didn’t it, or just reached the level you want?
Does the market agree with your stop loss setting? Didn’t it, or just reached the level you want?
What news and events make the market go this way?
There are answers to improve your position size and order settings.
How did you manage after you started trading?
After the transaction starts, can you actively monitor the market? If yes, how did you do it? If not, why not? The answer will reveal how much time and energy you can spend on trading.
Are you always adjusting your trading plan during trading?
Are you profitable?
Did you close the transaction as planned, or was the market out of your expectations?
Based on your answers, you will know the role your emotions play in trading and the degree to which you can follow the principles as a trader. Even if you want to confide your thoughts and vent your emotions to your friends, you’d better keep them here. You may bore them to death. They don’t want to hear you complain.
What improvements can you make? What steps will you take to improve?
This is your chance to improve yourself. Don’t just write vague remorse words, such as “I want to extend profit”, or “I want to stop losses faster”, or “I want to stick to the principles.” These are useless nonsense.
Find out the specific steps you can take. How do you extend profit? Will you study how to choose better profit targets? Do you know how to not panic when you notice a decrease in revenue?
During the review process, there was no right or wrong answer. Be honest with yourself. Be specific. Otherwise, as a trader, you will not be promoted.
Have you executed the transaction according to the trading plan?
Don’t be dissatisfied with this question.
If you fail to execute the transaction as planned, either you cannot exercise self-discipline well, or there is a problem with your trading plan. In either case, you have problems to solve.