Nick Goold
One of the best ways to improve your trading is to learn from your actual trades. While learning trading theory is essential, some trading lessons require understanding actual trading. Therefore, each trader will have a different path to success through learning from their experience.
Of course, it is helpful to go to seminars to gather information and read books about trading to gain basic knowledge. However, like sports, trading skills are acquired by actually trading. In actual trading, you will usually be trading alone. When you are trading alone, you may feel confused because you have to make various decisions, such as whether your trade is good or bad, whether you should continue to hold a position or close it, and so on.
As you gain practice in actual trading, you will gradually understand the key to success and better understand the markets you trade. You will only achieve the knowledge required through trading rather than reading a book.
You will need more than simply trading to improve your performance. You also need to write down your plan before you trade, save your chart analysis, and review your trades. By keeping a record of your performance, you can learn from your mistakes and know what to do to improve.
Trading without a plan is like gambling. Unfortunately, many traders avoid writing a trading plan. A trading plan is a list of rules for entry and exit. At first, you may want clarification about your trading rules but get into the habit of writing at least something down. Over time you will be able to write an improved trading plan.
Examples of rules
- Which indicators to display and how to use them?
- How will you identify trends?
- What to do when an economic indicator is about to be released?
- What is the position size when trading?
- How many pips target and stop loss?
The first time you write a trading plan, it may take a long time, but after a few times, you will get used to it, and it will become easy.
The problem with many traders is they fail to review their trades and learn how to improve. So keep a record of all your trades, not only winning trades but also losing trades, and be sure to save the charts with the entry and exit points.
Reflecting on your trades is the best way to become a successful trader. So whether your trades generated profits or losses, analyze every trade.
How to learn from your trades
- Did you follow your trade plan?
- Did you enter too early or too late?
- Did you close too early or too late?
- Did you trade longer than planned?
- Did you trade on impulse?
- Did you understand why the market moved?
Many traders can not answer these questions. Successful traders, on the other hand, can answer these questions quickly because they have carefully analyzed and planned their trades.
When trading, it is easy to get the urge to enter and feel like you are learning something by trading. It is easy to watch the market for hours, but devote at least five minutes each day to planning and reviewing your trades. Learn from every trade you make, and your trading results will improve.
