What’s Your Best Trade Ever?

Some of my favourite words of wisdom came from my Dad many years ago, and they're rather simple, in fact: "Always celebrate your successes." You see, traders can be our own harshest critics from time to time, and in doing so, we're quick to beat ourselves up for mistakes, yet we take for granted our successes, never bothering to recognize and celebrate what may be our best trade ever. Do you know what trade is yours? Go ahead and take a moment to reflect on it…

Now, this exercise isn't about living in the past, but rather about seeing what we've done very well before that we can (hopefully) build upon going forward. So starting with how you might identify your best trade ever, let's examine and dissect what's served us well before, and put those ideas to good use as we pursue additional knowledge and positive outcomes now and in the future. 

3 Ways You Might Identify Your Best Trade Ever

You'd think that in discussing our best trade ever, I would, at some point, share with you my own, but I must confess, I don't exactly have one that sticks out. Rather, I think back on individual components of many past trades, thinking if only I could blend them all together into one, it might be close to "perfect," even though we know perfection isn't attainable in trading. Regular followers will likely already know that metrics like win/loss and P&L aren't my favourite measures for gauging trading success. For newer traders or those without many trades under their belts, however, if you think of your most profitable one as your best trade ever, it's certainly understandable.

In addition to the most obvious way to identify your best trade ever, though—financial outcome, of course—below are two other criteria that I think of even more fondly when judging trades myself:

By the quality of the process

Consider the individual components of your trading process, things like pattern recognition, risk management, execution, and trade management, and if ever you rate your plan compliance in even one of those areas as being near flawless, then, by that measure, you have the makings for your best trade ever.

By the effectiveness of your thinking

Are there any trades for which you felt your thought process was especially on point? Maybe you were thinking mindfully throughout, or you identified and overcame fears, emotion, or a harmful thought pattern(s)? Even if that particular trade didn't wind up being your best trade ever, that kind of effective thinking could sure lead to it in the future. And, for that reason, that's a highly memorable trade that, in a way, might be your best ever from a mental standpoint.

And How You Can Learn to Top It Someday

Certainly, a lot of factors have to line up in order to have your best trade ever. And while some of it is the market's doing, plenty of it is all about how you reacted. So with that, gaining a deeper understanding of all that happened to produce your best trade ever is crucial in knowing what market forces fell in your favour, and what you did well in your own right to make the trade work. From there, hopefully, you can try to seek out those factors and repeat the plan components that led to your success.

Here's how to dissect your best trade ever…using your trade journal, of course:

Assess the day, time, and market conditions

When and how did the markets give rise to such a viable trading opportunity? Was it a trend or a reversal, or maybe even price action confined within a range-bound market? What currency pair were you trading? All these factors may help point to when you trade your best, and what market or even specific currency pair matches your trading style.

Document the chart pattern

What pattern were you trading, and which technical indicators or measures, if any, did you use to find it? Where was support/resistance located, and was it short term (like a trend line), or longer term (like a multi-year or all-time high or low)? This information may be helpful in identifying your go-to chart pattern, or at least what a strong trading signal looks like within the confines of your trading method.

Examine the application of risk

Where did you decide to place your stop and initial target, and what was the logic behind it? What was the reward/risk profile on the trade, and how did you select your position size? From there, did you enter end of day or intraday? These decisions all played an important role in how you accessed the market for your best trade ever, and (hopefully) how well and thoroughly you protected your financial interests in the process.

Trade management

Where did you first decide to exit or take profits on the position, and why? Did you fight the temptation to exit before then? Ultimately, did you exit at the proper time and do all you could to protect the downside while still letting profits run? So much of what makes for your best trade ever will be intangibles like these, which allow you to make the most of each position that does work in your favour.