After Action Review
“There are only two ways to lose money in the market
1) Improper Analysis
2) improper implementation of correct analysis.
if you focus on just these two things, thats all youll ever need to trade.”
- Bill Williams
For many years now, ive asked what am i doing right or wrong. ive asked; was it a winning trade? why not? did i like the trade instinctively? why not? stuff like that. they were fine questions. but i dont think it ever took the mind where it needed to go. it didnt extract as much potential as it should have. with the help of Brett Steenbarger i believe ive fixed that.
this is essentially a culmination of many trades, many questions, and few answers.
Questions:
1. What was expected to happen?
(why did you take the trade in the first place)
2. How was i supposed to behave?
(What disciplines was i supposed to follow?)
3. What actually happened?
(were my expectations correct?)
4. How did i behave?
(did i act with discipline, consistency, follow the plan?)
5. Was there any discrepancy in what i was supposed to do and what i did? if so, why?
(where you admit you either acted correctly or as a fool,and what caused it)
6. Were my expectations wrong? or were my actions?
(where we decide if the analyst or the trader needs improvement…or if both were right)
7. If it was a losing trade, write, “it was a losing trade”. For winners, was the end profit greater than the initial risk taken? If not, does this styles accuracy make up for it? if not, then its probably time to drop that strategy, regardless of how well it backtests.
(did we put ourselves in the right position for success? With the odds in our favor)
8. What have I learned?
(where we combine all of these things to decide what our strengths and weaknesses are)
if what you expect never happens, then you have a problem with your EXPECTATIONS in the market place
if what you expect does in fact happen often, but you are not good at acting on it, then you have a CONFIDENCE problem.
If your expectations are proper, and your actions are proper, then your profits should be proper as well.
“On occasion you have to know what you’re doing before you can do it right.”
-
“The problem is you feel responsible for Goose, and you have a confidence problem. Up there we’ve gotta push it, thats our job.”
-Top Gun
