Direct answer: what reviewing forex trades means
Reviewing your forex trades means comparing what you planned to do with what actually happened, using evidence you can record and verify after the fact. The goal is not to predict future results, but to identify whether your process (decision inputs, execution, and risk limits) behaved as intended.
Explanation: a practical review framework
Start by creating a simple trade record for each trade. Include:
- Context: the pair, date/time, and the key idea that justified taking the trade.
- Plan: intended entry condition, target/exit rule (even if discretionary), and the risk you meant to cap.
- Execution facts: actual entry price and time, exit price and time, and the position size.
Then run a comparison in two layers:
- Decision layer: Did the information you used at the time match your stated reason? Were you following your own rules for when to enter and exit?
- Execution and costs layer: Did spread, slippage, or delayed fills change the outcome versus what you assumed? Many “good ideas” fail because execution differs from planning.
Finally, separate what happened into measurable drivers: direction versus timing, and whether risk controls triggered as expected.
Example checks: questions to apply to each trade
Use short checks that produce clear “yes/no” answers:
- Did you record the trade immediately, with no rewriting of the reason afterward?
- Did the exit happen for the reason you wrote down (rule-based or discretionary)?
- Was your maximum loss (as planned) consistent with your actual position size and stop distance?
- If the trade lost, was the loss larger than your stated limit because execution differed, or because the rule was not followed?
These checks help you find patterns in process quality rather than only outcomes.
Limitations and risks: what you can and cannot conclude
You cannot infer future performance from a small set of past trades. Results are affected by market variability, randomness, and recording bias. Also, if you change your definitions after the fact (for example, redefining what “your rule” meant), your review becomes unreliable.
To keep the review verifiable, use stable definitions for terms like “planned risk,” “entry condition,” and “exit reason.” A review is evidence-based only when the inputs (your pre-trade plan) are recorded before outcomes are known.