Trading Lessons I Learned the Hard Way, Part 15

08/21/2012 9:00 am EST

Focus: STRATEGIES

Ron Wagner

Principal Partner, RevolutionaryTrading.com

Ron Wagner of Revolutionary Trading discusses the lessons he learned from his early days of trading, and how his trading has evolved to become profitable.

Find the previous article here. Start at the beginning here.

I have talked about a great many elements that have helped me improve my results, but none turned out to be more valuable and helpful than tracking my trades. In fact, I would have to say that if it were not for the statistical analysis that I did on my own trades, I would not be typing about this right now.

It’s one thing to learn all the technical patterns and how to apply them in different market environments, but I didn’t know what I was doing really well—or really badly. At first, I just kept track of my results on yellow tablets, but soon enough I was using a simple Excel spreadsheet that I created. I didn’t do anything very elaborately when I first started tracking my results, as I was most interested in which pattern I had the best results with and at what time of the trading day.

During this process I learned a lot about myself as a trader. I learned how much time I needed to interpret the market direction and how many candles I needed to see for my patterns to set up.

I created a set of binders to keep my printed trade charts in, and I categorized my trades for easy reference. I dedicated myself to eliminating one bad habit or series of occurrences at a time, until I became extremely consistent. I found, like anything else worthwhile in life, trading required a routine and an ability to track results.

I found that my first approach to becoming a great trader in a rush didn’t work. I realized, after losing a bunch of money to the market, that I had to break it down and tackle one element of the equation at a time. It was not until I did this that I became consistent in my winning trades.

After I figured out how important it was to track my trades, the first thing I did was to construct a print page. My print page was much smaller than my trading page and I could fit multiple time frames on a single sheet of paper. At the end of each day, I would print out the trades I took, along with a copy of what the market had done. This way I could compare my trades against what the market had done.

I would circle my entries and exits and write notes on each page to serve as part of my journaling process. I still have, to this day, thousands of my printed trades in the basement. I spent a lot of time looking over my trades and could go back to them to backtest different strategies from my own records.

Over a relatively short period of time, I was able to really adjust the types of trades I took, and at what times during the day I took them. I never realized how important this was until I saw my results improving each time I studied my trades. I focused on improving something each week. Not a week would go by without me having some area of my trading to focus on.

I would usually review my trades either on Friday evening or Saturday. This way, I could take one full day away from charts so I was fresh and focused for trading on Mondays.

I have fond memories of spending hours of time finding ways to improve my trading, which really helped me become a much better and consistent trader.

Lessons learned:

  1. Construct a print page and print out each of your trades every day!
  2. Circle your entries and exits on each trade you print out!
  3. Categorize your trades by pattern, things you have done wrong, winners, and losers!
  4. Study your trades each week and compare them against what the market had done!
  5. Make small adjustments each week and only focus on one element at a time to improve on or if a bad habit to eliminate it.

Next, I will talk about a couple of adjustments I learned that were needed from my tracking that made a big difference in my results.

Ron Wagner can be found at Revolutionary Trading.

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