Trading journal

The concepts discussed here have been examined by sports and trading psychologists, and they will help your trading career tremendously. It can’t be emphasized enough how important it is to log data on what you are doing. While every trader knows this, not many understand how to keep a journal the right way.

• The two main reasons to keep a journal are:
  • You can go back and see exactly what you were doing when you were performing well and learn from it. This helps you build on your strengths and identify your own best practices.
  • You can also review what you were doing when you were at your worst, as this can become a goal to work on next time.
• Good market oriented journal is your way of capturing what was happening in the market and also how you traded it (what specifically did you do). Basically market patterns and patterns of your behavior. How market sets up and what you did right and what you need to correct – exposure to these by reviewing creates a learning loop that sustains your process as a trader.
• You don’t just log your PnL, you document the process with the idea that each review gives you goals that you work on next day, next week. Concrete behaviors that you want either keep doing right or change based on what you have done today – that connects yesterday’s trade with today’s trade and today’s trade with tomorrow’s trade creating the a learning loop that allows you to make improvements each day. Success doesn’t come by one big step but rather by huge amount of small steps of improving yourself.
  • To enhance learning loop you can add one more connection between past, present and future by questioning yourself how you did achieve your goals that you set last time. That will give you feedback on how well did you execute planned corrections.
• Good market oriented journal also captures what you was thinking in addition to what the market was doing and what you were doing. You will start notice patterns of how you think as well as how you act – these two things are what you should focus on for your goal setting.
  • Focus your daily and weekly goals on process not on PnL, but you should have your longer term PnL goals too (BTW it could be negative because -$500/month -> -200/month is a positive dynamics)
• A lot of researches about performance in athletics and another fields conclude that it’s not practice makes perfect, it’s perfect practice makes perfect – just to practice is not enough. It’s how you structure your practice that makes all the difference, you have to structure your practice in focused, targeted way, so you are working on the specific skills and building yourself in the specific areas with concrete goals. You have to structure your practice to see as many market patterns as possible, watching as much tape as possible, previewing your trading, reviewing your trading, so each day becomes a concentrated learning experience.
• You should keep the journal in the form that suits you, it can be even audio form. Most of traders do:
  • record their screens and mic (to log and review the tape, how did you act and what you was thinking, you can use OBS)
  • keep the journal (morning prep plans, notes, screenshots, ideas, you can use LibreOffice / Google slides / MS PowerPoint / Evernote)
  • log the trades they made into the spreadsheet (entry price, exits, trade type, date, time, other conditions, you can use TraderVue / LibreOffice / Google sheets / MS Excel)
• Be honest but don’t beat up on yourself in your journal too much, otherwise you risk destroying the motivation which is crucial to sustain such hard work.

Remember, markets are always changing so traders who succeed are the ones who double down on working on themselves and working on markets when trades get tough.

gl hf