Between 2009 and 2012, most retail traders tracked by the AMF in Forex and CFDs lost money. Today, ESMA still requires CFD providers to remind clients that retail accounts lose money. The strategy is not always the problem. What is most often missing is an honest look at what you actually did. A journal you fill in but never review is useless. The Friday review turns it into a method.

Record what your platform leaves out

Your platform keeps everything: entry and exit prices, position size, fees, and time. But it ignores the essential question: why did you click? Only you can write that down.

  • The setup, under a short name that never changes: “London open breakout,” “mean reversion.” Without consistent labels, sorting is impossible.
  • The initial stop and the risk in euros. This is your 1R, the unit used to measure everything else. If you move the stop during the trade, 1R does not change.
  • Whether you followed the plan: yes or no. Never “more or less.”
  • The context: an economic release within the hour, a directionless market, or a trade taken immediately after a loss.
  • Your state of mind: tired, irritated, euphoric. One word is enough.
  • Two screenshots, one at entry and one at exit.

Fill in the sheet while the trade is fresh, within minutes of closing it. By evening, your memory has already rewritten the story. If you are starting from scratch, the free trading journal template, in Excel and PDF includes these columns.

Four figures are enough

Thirty indicators drown out the signal. To start, four are enough. Express them in R rather than euros: trades taken with different levels of risk will then carry the same weight.

  • Win rate: the share of winning trades. On its own, it tells you almost nothing. A trader who wins one trade out of three can be profitable; another who wins seven out of ten can go broke.
  • Average win and average loss, in R. Their ratio shows whether your winners pay for your losers.
  • Expectancy: win rate multiplied by average win, minus the loss rate multiplied by average loss. This is what each trade returns, on average. If it is positive, your method has an edge. If it is negative, every additional trade makes you poorer.
  • Maximum drawdown: the largest account decline from a peak. It tells you what you will have to absorb, financially and psychologically. In a prop firm, it determines whether the account survives, long before performance does.

Like ratios? Add the profit factor: gross profits divided by gross losses. Above 1, the method makes money.

Beware of small samples. A handful of trades proves nothing, either way. Wait for several dozen trades per setup before drawing conclusions.

Hand holding a pen above an annotated sheet of paper on a wooden table bathed in late-day light

The Friday evening ritual

Why Friday? Markets are closed, the week is still fresh, and the weekend gives you time to process it. Block out 45 minutes, always at the same time, with your phone turned face down.

Research on learning supports this pause. In an experiment conducted by Giada Di Stefano, a professor at HEC Paris, with Harvard researchers, employees who spent the last 15 minutes of their training day writing down what they had learned achieved scores 23% higher on the final test. They were not traders, but the mechanism is the same: you improve by putting what you experienced into words.

Five steps, in order

  1. Complete any missing trade records. A trade without a setup or initial stop distorts all your statistics.
  2. Calculate your four figures and compare them with those from the last three months. One isolated week means nothing; the gap from your average does.
  3. Sort. By setup, time slot, instrument, and above all by whether you followed the plan. This is almost always where the surprise is waiting.
  4. Review your three worst trades and your best one, screenshots included. For each, ask one question: was the decision sound, regardless of the outcome?
  5. Write one rule for the following week. Just one. Three resolutions will not survive until Tuesday.

A winning trade taken outside the plan is more dangerous than a losing trade taken within the plan: it teaches you the wrong lesson.

Here is a review based on one month of data.

The verdict is clear. Both setups are doing their job. The impulsive trades, however, erase more than a third of the profits. Remove them and expectancy doubles. No new indicator or strategy was needed: sorting the trades was enough.

From figures to rules

A good rule can be checked at a glance after the fact. “Be more disciplined” is not one. “No new position after two losses in the same session” is. Write rules in the form “if… then…” and always start with a quantified finding from your journal.

  • Are your trades taken just before a major release losing on average? Ban entries during that window and identify these events every Monday in the economic calendar.
  • Do your results deteriorate late in the session? Set a platform shutdown time.
  • Is your drawdown deepening? Cut your risk in half until the account reaches a new high.
  • Are you overtrading on days without a signal? Cap the number of trades per day.

This last habit is well documented. By studying US households, Brad Barber and Terrance Odean showed that overconfidence explains both the high volume of trading and the poor performance of retail investors. A trade cap targets this tendency directly.

Record the date each rule takes effect in your journal. Compare before and after over a sufficiently large sample, not based on an impression.

Review pitfalls

First pitfall: changing methods every week. A losing streak does not invalidate a setup; it is part of its normal behavior. Change a rule only when the accumulated data demands it.

Second pitfall: reviewing only losses. Your out-of-plan winners deserve the same scrutiny, because they are the ones that reinforce bad habits.

Third pitfall: editing records after the fact. If you change a trade’s setup on Friday to place it in a flattering category, your statistics become fiction.

Tools reduce the workload without replacing the work. An automated journal such as Edgyx imports your trades and calculates these statistics, while its Ora coach flags deviations from your rules. But you are the one who must decide whether a rule should change.

In brief

  • Record the setup, initial stop, adherence to the plan, and your state of mind while the trade is fresh.
  • Measure in R: win rate, average win and loss, expectancy, and maximum drawdown.
  • Every Friday, sort your trades by setup and by whether you followed the plan.
  • Leave each review with one rule that is easy to verify.
  • Judge the quality of the decision, never the result alone.