Final Words. What’s Next? Your Journey As A TraderFree Preview
Welcome to the last lesson of your Edgewonk journaling and trading course. Now we will look back on how far you have come and provide some tips on how to go on from here.
Review past performance and identify your weakest areas
First, we want you to take a look at what you have accomplished so far and where you still need improvement. But, it’s very important that you are completely honest with yourself about where you are standing right now.
Emotions and discipline. We started this course by asking you to always keep the Tiltmeter as green as possible; a green Tiltmeter indicates that you are following your rules, not repeating mistakes time and time again and generally have a good attitude. So, how does your Tiltmeter look like and how did it develop over the course? If you are still seeing a lot of red bars in your Tiltmeter, it is time to pause and reflect. Going forward you have to work on your discipline if that’s the case.
Your equity curve. Despite a green Tiltmeter, it may be possible that you are still losing money. Thus, check your equity curve and see how your account balance has developed over time. If you can already see a positive development, great! You can now start working on increasing the growth of your account. If your equity graph is still pointing down and approaching the bottom right corner, you have to be completely honest with yourself: do you still make trading mistakes, violate rules, enter trades too early, or without any clear reason? Do you let losses get out of hand? Do you cut your winners short too often? Is your risk too big or do you keep adding to losing trades? You have to be totally honest with yourself and face your problems. Only, and ONLY then will improvement be possible.
Drilling deeper. Now it’s time to take a closer look at your performance and the Performance tables always provide a clear and honest picture. We recommend using the date or “last trade” filter to get a better understanding of your development over time. Here are a few tips and what to look for in the Performance tables:
- Do you see deviations in your average position size? This could be an indication that your position sizing approach is not consistent
- If you have very low or very high Updraw and/or Drawdown values, we recommend taking a look at your stop loss and take profit placement
- Is the planned reward:risk ratio significantly different from your final R-multiple? You should also perform a check on your reward:risk traffic lights to spot inconsistencies
- Use the Custom Statistic filters to see if you can spot common denominators among your winning and losing trades
- Use the filters for entry, exit, and trade management comments to compare the performance based on the comments you have assigned to your trades and how often certain comments had been assigned. Which is your worst performing comment? Try to find your greatest weakness and come up with ways to overcome that
- Also, analyze the differences between specific setups. If you can identify setups and combinations of setups and strategies which are over-indexing or under-performing significantly, improving performance is straight forward: do more of what works and less of what doesn’t.
- Trade decisions. Now, go to the Trade Management tab and see what the graphs are telling you. Is the potential performance still higher than your actual performance? Are the graphs coming closer together? What’s the overall development? If you still have problems with trade management, go back to the previous lesson about trade management to read about the importance of trade exits.
After this lesson, you are on your own but don’t worry, we are giving you a few tips and ideas how you can create your own path as a trader by using Edgewonk most effectively.
Bottom-up. Remember what we told you in the beginning? Always start with the biggest and most impactful problem before focusing on the nitty-gritty. If you still have problems following your entry rules and lack discipline and patience, start here and don’t look for shortcuts or alternatives.
One step at a time. Don’t over-complicate things and don’t spread your focus. Always identify the most important and costly challenge in your trading and then start working on it. Success as a trader will not come overnight, but if you make one step at a time, you will get there.
Rinse and repeat. There is no magic trick when it comes to trader development. You have to identify your problems and what is costing you money. Then you have to make a plan for how you are going to tackle your problems and then start implementing that plan. Adjust along the way to make sure you stay on track and after you have overcome one obstacle, pick the next one.
Enjoy the process
Finally, we want to wish you all the best with your future journey and we hope that our course has helped you understand yourself as a trader and your trading performance a little bit better. You can go back through all the different lessons if you want to deepen your understanding or refresh your knowledge.
All the best on your journey and we look forward to hearing from you again
Rolf and Moritz
Co-founders of the Edgewonk trading journal