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Trader Q&A: Lee Bohl on Reviewing Trade Performance

Lee Bohl discusses the importance of evaluating performance

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I think a really good habit for new traders to learn is to evaluate their performance. Because if you don't review your performance, number one, you don't know how you're doing, and, number two, you won't see mistakes that you were making over and over. There was a very famous speculator in the 1920s and 1930s, and at the end of each year he would go to his bank manager and he would say, 'Lock me in a vault for three days,' at the end of each year, and then he would review all his trades in that three-day period and then they'd let him out. And he said that was the best thing he ever did to improve his performance. So I think even the best traders constantly see how they're doing, and what they can pick up is a couple of things: Number one, you know, what is their percentage of winning trades? Number two, how much did they win on each trade?

Also, you can pick up patterns: 'Do I always get out too early?' If so, then you might want to adjust how you set your stops. Or, you know, 'Am I taking too short a profit?' Maybe you would look about taking trailing stops, instead. Finally, 'Am I getting in too late in the moves I want to pick up?' And if you're using some sort of indicator system, you might want to shorten the look-back period of the indicators you're using to fight against that. So you can pick up patterns and you can learn from them.

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