When the same signal loses five trades in a row, many traders start wondering whether the strategy is dead and rush to replace it. Before you delete your indicators, you need to figure out one thing: are you losing because the strategy itself has stopped working, or because you did not follow your own rules? If you mix these two up, you may throw away a profitable strategy and keep holding onto a losing one. That is one of the most dangerous mistakes a beginner can make.
A leading global cryptocurrency platform,suitable for both beginners and experienced traders.
New user benefit: 20% off trading fees upon registration!！
Today I will show you how to open your trading log and separate these two problems in three steps.
Step 1: Separate single trade results from execution scores
[What to do]: Give every trade two scores. One score shows whether you made money, and the other shows whether you followed your plan.
[How to do it]: Open your trading log and add a new column next to each trade called "Execution Score."
The scoring standard is simple:
A grade: You followed the plan completely for entry, stop loss, take profit, and position size.
B grade: You followed most of the plan, but had one small deviation, such as taking profit a little early.
C grade or lower: You did not set a stop loss, chased the market, added to the position impulsively, or closed the trade manually based on feeling.
Important warning: Never judge execution quality by whether a single trade made money. Some people buy randomly, make a profit, and think they are geniuses. Others execute a plan perfectly, get stopped out, and then doubt their own operation. The second situation is far more dangerous than the first.
Step 2: Group by signal type and calculate the real win rate
[What to do]: If you trade breakouts, pullbacks, moving average crossovers, or other patterns, calculate them separately.
[How to do it]: Add a "Signal Tag" column in your log, such as "Breakout," "Pullback," or "News," and then group the statistics.
Case A: Strategy error — You find that for a certain tag, such as "Breakout," all trades have A grade execution scores, but the long-term total result is still negative. This means the signal itself is not suitable for the current market.
Case B: Execution error — You find that for a certain tag, such as "Moving Average Crossover," A grade execution trades are profitable, but C grade execution trades are losing. The problem is with you, not the strategy.
[Completion standard]: Find the "A grade execution profit-loss ratio" and the "total profit-loss ratio" for each signal tag. If the former is profitable and the latter is losing, it directly proves that your own execution is the problem.
Step 3: Use a deviation record table to lock in your bad habits
[What to do]: Create a separate table to record the specific actions where you deviated from the plan and the excuses you made at that moment.
[How to do it]: After every trade closes, if you find that you did not follow the plan, write down two things:
Deviation action: Did you close early? Did you move the stop loss? Did you add to the position impulsively?
Excuse at the time: Write down your inner monologue, such as "I felt it was going to drop" or "I just wanted to get out first."
Many people write things like "I was a little sleepy," "I got a phone call," or "I had FOMO." Writing these excuses once or twice is not a big deal, but if the same excuse appears more than three times, such as "I got scared when I saw profit pulling back," it means this is your execution weakness. For the next week, every time you face that situation, you must repeat your stop loss and take profit prices before placing the order. Otherwise, do not trade.
FAQ
Q: My log does not have an "Execution Score" column. How can I add it now? A: You can only try to fill it in from memory, but the accuracy will be lower. Starting today, score yourself within five minutes after closing a trade. If you wait more than one hour, your memory will become distorted.
Q: I lost five trades in a row on the same signal, and even A grade execution trades are losing. Should I abandon it? A: First check the total sample size of that signal. If there are only five samples, there is no statistical meaning. If you have more than thirty samples and A grade execution still has a negative expectation, then consider optimizing or abandoning the signal.
A leading global cryptocurrency platform,suitable for both beginners and experienced traders.
New user benefit: 20% off trading fees upon registration!！
Next action
Tonight, review your log from the past month. Filter out the "A grade execution trades" under each signal tag and calculate their results separately. If A grade execution is profitable, do not switch strategies. Next week, force yourself to take only A grade execution trades, even if some of them lose.
