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AN INSIGHT
TO DAY TRADING

HOW TO DO TRADE REVIEWS


Trade reviews illustrate an important element in the development of a profitable trading approach. There are various performance measurement systems, tools and software available for day traders. An absolute sufficient and highly customisable one can be created through Excel allowing to exactly measure what needs to be measured with regards to the individual trading approach keeping it simple and straightforward.


Download free Excel Trade Review Sheet

Daily Review Sheet v1.21
.xlsx
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When developing a performance measurement framework, goals and parameters must be clearly defined in order to measure effectively. It needs to be clearly set what to accomplish before deciding what performance goals will be measured. Since the monetary result is just a side effect of applied rules, it is important to measure factors outside of financial objectives allowing to measure the actual metrics behind a trade.


In day trading there are various parameters that can be considered when doing trade reviews and measuring their parameters. Those can be separated hard data and soft data. In addition, screenshots of the trade must be taken to reconstruct the situation afterwards.


Hard Data

  • Market

  • Lot Size

  • Time Frame

  • Trade Direction

  • Context Direction

  • Time


Soft Data

  • Trade Explanation

  • Positive

  • Negative

  • Learned

  • Session notes


Screenshot

  • Big picture

  • Execution window

  • Relevant levels

  • Order fills visible







In order the receive an holistic picture of the actual performance, the collected data must be illustrated in a distinct way in order to identify strength and weaknesses as well as cause and effects.


Hard data can be put into relation with each other and analysed automatically; for example:


  • Trade Type VS Result

  • Market Session VS Result

  • Setup VS Result

  • Market VS Result VS Time Frame VS Setup




In contrast, soft data need to be interpreted and put into context manually which requires an eye for correlations in the notes being made during the trade and session reviews to find the origin of a certain result. For example, being tired or annoyed during trading led to a lack of focus wich led to negative results.


The analysis must be conducted diligently and with an open approach towards the own behaviour. One needs to be able accepting mistakes in order to identify problems and find solutions. Aim of the trade reviews and subsequent analysis is to find things that work and things that do not work. In the further process it is focused on what works and taken out what does not – eliminate what causes negative results, improve what causes positive results.