Fine tuning the trading wheels
What topics are covered in this chapter?
A simple trading journal sheet is prepared for evaluation purposes. The important items are actual losses versus permissible losses and actual gains versus realised gains. This chapter discusses:
- periodic post-mortem evaluation of trades
- comparison of realised and unrealised losses and gains.
What are the objectives?
The purpose of the trade evaluation is:
- to trace common patterns in the trades
- to evaluate the actual realised return against the projected profit and the actual realised losses against the permissible risk.
If followed with discipline, the actual realised losses should be the stop loss levels or the permissible risk.
The final step is ...