Reviewing trades

A journal you never read is just a diary. The value comes from reviewing it: looking back over a batch of trades to find what keeps repeating. This lesson gives you a simple weekly routine you can run in about half an hour.

Why weekly

Reviewing right after each trade has its place (you fill in the journal then). But judging your process trade by trade is a trap. Lesson 6 explained that small samples mislead: the Nobel committee’s background on Kahneman’s work describes how people over-read short runs of results. A week of trades is a bigger sample, and reviewing on a quiet day, away from the live session, lets you look at it calmly.

Pick a fixed time, such as the weekend, and treat it like an appointment.

Decisions versus outcomes

Before you start, separate two things that feel the same but are not:

The dangerous box is “broke a rule, made money.” It teaches you that breaking rules works. The box people beat themselves up over, “followed the rules, lost money,” is often a perfectly good trade: losses are part of any process. Lesson 7 described self-attribution bias, from a research summary prepared for the SEC; this grid is one way to stop it from grading your trades for you.

The weekly routine

Step 1: Gather the week

Open your journal and screenshots for every trade of the week, including sim trades if you are still practicing.

Step 2: Count the basics

• Number of trades
• Number of trades where every rule was followed
• Net result in dollars (you will add proper measurements in Lesson 10)

Step 3: Sort every trade into the grid

Put each trade into one of the four boxes above. Count how many are in each.

Step 4: Study the rule breaks

For every trade where a rule was broken, write down:

• Which rule?
• What was happening just before? (A loss? Boredom? A fast market?)
• What did you feel? (Use your emotion notes.)

Step 5: Look for patterns

This is the point of the whole review. Some common questions:

• Time of day. Do your rule breaks cluster at a certain part of the session?
• After results. Do you trade worse right after a loss (Lesson 3) or after a big win (Lesson 7)?
• Emotions. Do your worst trades follow a certain feeling, such as “bored” or “rushed”?
• Unplanned trades. How did trades that were not on your list do compared with planned ones?
• Size. Did size ever creep above your plan?

One week will not show much. Patterns become clear when you compare several weeks side by side.

Step 6: Pick one change

Choose one thing to work on next week, written as a specific rule or habit. For example: “After two losses in a row, I take a break before the next trade.” Then, next week, check whether you did it.

Change one thing at a time. If you change five things at once and results shift, you will not know which change did it.

Step 7: Write a short summary

Two or three sentences in your journal: what went well, what went wrong, and the one change. Over months, these summaries become a record of how your trading has grown.

Reviewing the plan itself

The weekly review is where you are allowed to question your rules, calmly and with evidence, never in the middle of a trade (Lesson 5). If a rule keeps getting broken, ask why. Maybe it is unclear, or maybe it does not fit how you trade. Change it here, in writing, and then follow the new version.

Key ideas

• Review weekly: a bigger sample, judged calmly away from the live session.
• Separate decisions (did you follow the rules?) from outcomes (did it make money?).
• The most dangerous trade is the rule-breaking winner.
• Look for patterns in time of day, results before the trade, emotions, unplanned trades, and size.
• Make one change at a time, and write a short summary each week.