Last week was far from being my best trading week. That's why I'm doing a trading performance review…
I was confident and ready at the beginning of the week, but things didn't go slightly as I expected.
When I look at the results in terms of returns, it wasn't that bad. I finished the week fairly flat on both of my trading accounts (swing & day trading).
However, I was amazed by the opportunities I missed throughout the week.
Because of that, I thought it'd be good to guide you through my Trading Performance Review Process (i.e. what I do each week to ensure I stay on track).
Trading Performance Review
A very important task of my trading discipline consists of reviewing my past trading week performance and figure out what went well and what didn't.
I do want to stay solution-oriented, meaning that I also need to figure out how to be better in the future. This article will be summarizing the trading performance review process I went through this past week.
1. What Went Well This Week?
Prior to the trading week, I took the time to create a plan for the week. I identified what I was expecting to trade during the week.
In addition, I scheduled my trading time in advance and stuck to that schedule. Although I consider those things habits by now, I do want to highlight them here because you should be doing those too.
Here are some other things that went well:
- Consistent morning routine
- Knew my Trading Plays in advance
- Prepared for my trading day the day before
- Was present while trading and respected my plan (remained out of most bad trades)
- Tracked my trades in my journal
2. What Didn't Go Well This Week?
Now, you may wonder how can the week not go well when I respected my plan, right?
Well, let's talk about it.
That's the 3rd part of my trading performance review.
At about 3 occasions, I identified great trading opportunities on various timeframes. I needed to wait for the candle to close on those time frames before entering my trades. It turns out that I got distracted and forgot to place the trades.
Like this one:
I also noticed being more impatient than usual to close my trades. I felt I needed to take profit early or move my stop loss and it turned out not being true most of the time. I'm not so impatient usually.
Lastly, I traded for longer than usual (that's the reason why I didn't record any video last week). I felt like I didn't have enough time for everything.
3. How Can I Be Better Next Week?
When I thought about why things didn't go so well last week, the answer was pretty evident. It all comes down to sleep.
While I tend to sleep for an acceptable amount of time (7.5 hour/day), my average amount of sleep this past week was around 4.5 hours a night. That's a huge 3 hours of sleep I wasn't giving my body to recover.
I hear you…
Some people don't sleep much and are still successful, but if you want to be at your peak, you need adequate sleep.
“I studied, I met with medical doctors, scientists, and I’m here to tell you that the way to a more productive, more inspired, more joyful life is: getting enough sleep.” – Arianna Huffington
That's how I intend to be better next week.
How Sleep ? (Immensely) Affects Your Trading
Sleep isn't a sexy topic. Whenever someone says “you need to sleep 7-9 hours every night”, you can ear people in the background mumbling: “Yeah, we know that…”
I won't get into the scientific details here.
All you need is this quote:“Sleep deprivation is the new smoking” - @ariannahuff Click To Tweet
A fellow trader and I tried a few things when it comes to sleep and trading.
Whenever we host our monthly Montreal Traders Meetup, we're almost guaranteed not to sleep much that night.
It turns out that trading with a low amount of sleep the night before is a challenge. It shows us whether we've put all the things in place to eliminate human errors in our trading (checklists, breaks, low levels of interpretation, etc.).
Nevertheless, when we got a fairly low amount of sleep, we were both much more likely to not respect our plan. It just seems easier to take bad setups when you're on low sleep. Mistakes (like the ones I discussed previously) became definitely more frequent.
I personally noticed feeling much calmer with an adequate amount of sleep and acted much less out of discomfort…and of course you know how important it is to know how to deal with discomfort, right?
Moreover, I seriously had to force myself to fill-in my trading journal, which I finished only a few minutes ago.
The takeaway is the following:
You can learn ways to understand trading psychology or search for how to be disciplined, but unless you're trading on an adequate amount of sleep, you won't even want to apply what you learn about.
I've shared with you the questions I ask myself each week as part of trading performance review and I also highlighted the importance of one crucial aspect of your life: sleep,
Have you ever traded on low sleep? How was it? What measures have you put in place to ensure you get enough sleep these days?