The period between Christmas and the New Year gives me the chance to review my own trading performance for the year, and allows me to investigate more closely any errors that I have made, or potential improvements to my system.
Already I have made some observations on my own performance, together with some ideas that I need to investigate further. Based on my findings so far, I am quietly confident of improving my returns in 2011. My own issues have been as follows:
- An occasional hesitancy on opening, or a complete rejection, of potential trades;
- An occasional tendency to enter sub-optimal positions;
- Poor execution on entering some positions;
- Missing entry points on potential trades already indentified;
- A lack of clarity on determining the intial stop placement on a position (I have posted here about this before).
One of the reasons I started this blog, and the trades log with it, was to create a faithful, historical record that is in the public domain. I stand or fall by my trading decisions, and if any errors are made, they are displayed for all to see (no exclusion of poor or unsuccessful trades here!). This 'warts and all' approach has helped my own trading, but as you can see, there is clear room for improvment.
The thing about trading is that, no matter how good a trader you are, you can always find things to improve, be it in your overall philosophy, your specific entry and exit rules, your execution of those rules and/or your risk/money management tactics, and I would recommend any trader to undertake a periodic review of their performance, whatever their basic approach. You may be surprised what you find.