Learning from Each Trade You Make Day Trading Futures
As an amateur or professional trader engaged in day trading futures markets, you should always keep a trading journal filled with entries on every trade you make, along with the market conditions and all information associated with each event. The journal you use can be from an unassuming paper notebook to a sophisticated online trading journal capable of capturing all your trades in real-time for running tests at a late date. It should be filled with all the trades you make, and the ones you considered but never actually performed.
Tracking Day Trading Futures Market Conditions
By documenting the conditions of the overall market leading up and during your trading session in your trading journal you can list the entry price, exit price, and market state at the time of the trade. This activity helps when creating or validating your trading system. This data can then be used for deeper analysis of your trades, once you have exited and closed out your position in the market.
Update Your Trading Journal With Your Thoughts
Every professional trader realizes that their emotions, fears and thoughts play a significant role in the decision-making process. While discipline and patience are the backbone of a professional trader, it often takes years to develop the skill to separate their emotions from the trade. Writing down all of your feelings, thoughts, fears and beliefs about each trade along with how you felt with the results will help in your analytical process when day trading futures.
Review Your Futures Trades
By performing an extensive review at all of your day trading sessions you can learn to compare all the good and bad between every trade. You will learn extensively from both your losses and your profits. By analyzing the things you did right against what you did wrong will allow you to correct your setup and exits in the future.
When day trading futures, search for patterns in market conditions along with the way you felt when you are involved in a trade. You will find patterns in how you determined the movement of the market during the trade, and if you were correct or not. By spending time to accurately predict the movement using market conditions and a discipline businesslike mindset, you can use the information to increase your advantage of gaining more profitable trades while reducing the risks of investing your hard-earned capital.
Upon reflection of looking over your notebook filled with entries, you will likely gain a better understanding of when to walk away from a trade. Additionally, it will help formulate thoughts around your future trades, expand your planning schemes and help in the execution of your transactions. Additionally, you will learn how to effectively read markets better, and gain profits for your efforts day trading futures.
For more from Erich, visit the Indicator Warehouse for additional futures resources and NinjaTrader Indicators.