5 things to look for in your Edgewonk journal before you start your day.
What does your general trading routine look like? After talking to hundreds of traders we noticed that the vast majority just fires up their trading platform and then starts hunting for signals and trades. Did you know that your past trading results, even if you are not consciously aware of them, still impact your trading decisions – even days later? Starting your trading day like a professional to avoid common problems can easily be done by anybody. The following 5 points should serve as your pre-trading checklist to help you get in the pro trader mindset.
Before you start your trading, go back to your Edgewonk trading journal and revisit your last 10/15 trades and pay close attention to the following 5 points:
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The outcome. Over-confidence, ego problems and being afraid.
Are you from a series of losers or winners? A recent losing streak often causes confidence issues or it can lead to excessive risk taking to make up for losses faster. A recent winning streak, on the other hand, can lead to sloppy trading and too much confidence.
It is essential to know where you currently are with your trading so that you can avoid pitfalls and emotionally caused trading mistakes.
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Trading mistakes and mindset. Not all wins are good and not all losses are bad.
Not all winning trades are good and not all losers are bad; it is important to understand how you make your trading decisions. Therefore, take a look at your Tiltmeter; is your current Tiltmeter showing a red or a green bar? And is it rising or declining? A red and rising Tiltmeter signals undisciplined trading and it warns you to keep calm.
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Trade management I – PCP / PCR
The reward:risk traffic lights analyze the expectancy of your trades. A green light signals that your trades were large enough and provided a positive expectancy. Well done! A red light indicates that the reward:risk was too small and that you should avoid such trades or aim for a larger reward:risk ratio if possible.
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Trade management II – R-multiple
The R-multiple column in the Edgewonk trading journal section provides information about your trade management. Especially if you see R-multiple numbers of less than -1, it should set your alarm bells ringing because it means that you widened your stop loss and lost more money than originally planned.
You can also check your Trade Management tab in Edgewonk and see if the potential and actual performance converge or diverge. A potential performance that is significantly higher than the actual performance signals problems in your trade management. [click to read more]
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Over trading?
Finally, check and see how many trades you have taken this week already. Over-trading (taking too many trades) is a main reason for losses that could have been avoided. If you see that you have taken unusually many trades while your Tiltmeter is red and rising, you might be better off taking a break to regroup.
Keep it simple
We urge you to keep the pre-trading checklist simple. It is important to have a routine that you can easily and efficiently repeat every day.
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