Identifying Emotional Patterns

Trading isn’t just about technical skills—it’s also about emotional control. Trade review helps reveal how your emotional state influences decision-making quality.

Human memory is selective—we tend to remember bright, profitable trades and forget a string of small losses. Without documentation, it’s impossible to objectively assess whether your strategy is truly profitable or you’re just remembering lucky moments.

The illusion of control effect: traders often attribute successful trades to skill and losing trades to bad luck or external circumstances. Systematic review breaks this illusion and reveals the truth—what actions led to profit, and which led to loss.

Identifying weak points: Only through analysis can you discover that you consistently enter too early, trade poorly at certain times of day, or react emotionally to specific market situations. These patterns are invisible without documentation.

Common emotional patterns:

• Increasing position size after a series of winning trades (euphoria)

• Impulsive entries after a loss (revenge trading)

• Premature closing of profitable positions (fear of giving back profits)

• Holding onto losing positions too long (hope for reversal)

• Completely stopping trading after a major loss (paralyzing fear)

Only by recording your emotional state during each trade can you see these patterns and begin to correct them.