A trade does not end when you close out your position. You must analyze it and learn from it. Many traders throw their confirmation slips into a folder and go looking for the next trade. They miss an essential part of growing to become a professional trader– review and self-analysis.
Have you identified a good trade? Which indicators were useful and which did not work? How good was your entry? Was the initial stop too far or too close? Why and by how much? Did you move your stop to a breakeven level too early or too late? Were your protect-profit stops too loose or too tight? Did you recognize the signals to exit a trade?
What should you have done diffeently? What did you feel at the various stages of the trade? This analysis is an antidote against emotional trading.
Ask yourself these and other questions and learn from your experiences. A cool, intelligent analysis does you more good than gloating about profits or wallowing in regrets.
– Alexander Elder, Trading for a Living
