How to Review Your Trades and Find What Is Actually Costing You Money.

Start with the information available before the entry.

Pull up a completed chart and almost every move looks explainable. The reversal looks obvious. The breakout looks clean. The failed entry looks avoidable.

You did not have that completed chart when you placed the trade.

Save a screenshot before or immediately after your entry. Record the conditions that actually existed:

• Where was price relative to the prior day’s high and low?
• Was the session expanding directionally or rotating inside a range?
• Which liquidity level was involved?
• What specific event triggered your entry?
• Where would the trade idea become invalid?
• How much room remained before the next opposing level?

This distinction keeps your trading records honest.

Grade execution separately from profit.

Every trade has two results: a financial result and an execution result.

Following rules does not automatically make a strategy profitable. The rules themselves still need evaluation.

Separating these categories helps you answer two different questions:

When you combine planned trades, impulse entries, oversized positions, and recovery attempts into one performance number, both questions become harder to answer.

CME Group’s risk management education emphasizes establishing loss parameters and following them. In your review, record whether you respected those parameters regardless of the outcome.

Reference: CME Group’s explanation of loss parameters.

Measure results relative to the risk you took.

Dollar profit alone can distort your assessment.

A $500 gain from a trade with $250 of initial planned risk represents a different result from a $500 gain on a trade with $1,000 of initial planned risk.

Using risk units helps make that difference visible.

If that amount is $250:

• A $500 profit equals +2R.
• A $125 profit equals +0.5R.
• A $250 loss equals −1R.
• A $375 loss equals −1.5R.

Keep the original denominator. If you widen the stop after entering, do not redefine 1R to make the loss look smaller.

Record net results after commissions and fees. Actual fills already reflect slippage, so avoid deducting the same slippage twice.

Planned risk also is not a guaranteed maximum loss. Actual execution can produce a larger loss.

R helps you compare execution across different position sizes. Keep dollar results alongside it because your account still experiences actual dollars gained and lost.

Calculate expectancy using realized results.

Win rate cannot tell you whether your trading is profitable by itself.

For a sample without breakeven trades:

Consider a hypothetical 100 trades with 40 winners averaging +2R and 60 losers averaging −1R.

These figures are before any costs not already included. The win rate stayed at 40%. Reducing the average winner changed the sample from profitable to unprofitable.

This is why your review should track actual average wins and losses. A planned 3R target tells you little if your realized winners average 0.7R.

For a straightforward calculation that includes breakeven trades, add every trade’s net R result and divide by the total number of trades.

Find where performance changes.

An overall average can conceal substantial differences.

You might perform well with one setup during the morning and poorly with another during the afternoon. Combining them can make the entire approach look mediocre.

Organize your trades using a few categories chosen in advance:

Suppose your next review shows that planned entries produced +8R while entries without a valid trigger produced −6R.

Your immediate research question becomes clear: What led you to take the trades without a trigger, and how can you prevent those entries?

But be careful with small samples. Three profitable afternoon trades do not establish an afternoon edge.

Creating dozens of categories after seeing the results also makes it easier to discover patterns that appeared by chance. Treat those patterns as ideas to test on later trades.

Study what happened while you held the position.

Two useful measurements are maximum favorable excursion and maximum adverse excursion.

Suppose a hypothetical trade reached +1.8R, moved against you by no more than 0.4R before reaching that point, and eventually closed at −1R.

One example cannot tell you whether the exit rules need changing.

If that sequence appears repeatedly across comparable trades, however, it gives you something specific to investigate. You could test whether a different management rule improves overall results after accounting for the winners it cuts short.

The objective is not to capture every favorable point. It is to evaluate whether a rule improves the full distribution of outcomes.

Also separate movement during the trade from movement after your exit. A market rallying an hour after you closed does not automatically mean your exit was wrong.

Turn vague criticism into an observable correction.

“I need more discipline” provides no instruction for the next session.

A useful review names the exact behavior.

Specific observations make improvement measurable.

A corrective rule might be:

You can then review whether you followed that rule. You can also test whether the rule addresses the problem you identified.

Change one meaningful variable at a time.

If you change your entry, stop placement, target, session, and position size simultaneously, any improvement becomes difficult to explain.

Choose a specific question.

For example: “Do entries taken after my defined confirmation perform better than entries taken before it?”

Write down what qualifies as confirmation before collecting the next sample. Keep the other relevant rules stable enough to make the comparison useful.

If you develop a rule from historical trades, evaluate it on later data or in simulation before treating it as established. A rule can fit the trades you already saw and still perform poorly on new ones.

There is no universal number of trades that proves a strategy works. Confidence depends on the variability of the results, the consistency of the rules, and the conditions represented in the sample.

Finish each review with one action you can verify.

A practical weekly review should answer five questions:

Your answer might be that you need more data before changing anything. That is a valid conclusion.

It might be that your losses were controlled, but your setup performed poorly in the conditions you traded. That deserves strategy research.

It might be that your planned trades were acceptable, but unplanned entries accounted for most of the damage. That deserves an execution correction.

Trader development becomes more productive when you can distinguish those situations.

At Elite Traders Inc., this is the standard I want traders to build toward: being able to explain their decisions, measure their results, and make corrections supported by evidence.