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There's already tons of stuff written on the subject journals here on the forum and Google so there's only two things I can add which might be of value, this is what I've included on my blog.
A quick search on the topic of trading journals in Google shows the internet is saturated with huge numbers of available articles. There is little value in me pointing out how important they are. If you have some trading experience you should already know this. If you’re a beginner then remember the importance having this discipline cannot be overstated.
There are really only two things I can add to the journal discussion which might be of use. The first is that including your emotions can be very effective. By recording how you felt before, during and after can significantly help you take an objective look at yourself and how you act to the various pressures you encounter when trading.
If you find yourself writing the same things when perhaps exiting the position, you should be cognisant that something needs to change. For example, if you consistently write that the reason you exited the trade was because you were worried that the position would go further against you and eventually hit your stop then the clear message should be let the stop be hit. See note at the end of the article on this point.
The other thing I can add is that hand writing your journal ensures it as effective as can be. I’ll freely admit that until recently I was using Microsoft One Note to type and take screen shots of the chart. I thought that by doing so I was doing what I needed to but the reality was that I being lazy. Taking screen shots and cutting and pasting is the lazy man’s way of recording his trades.
Handwriting your observations and actually drawing the chart with the setup you see with different coloured pens takes more time but is far more effective and allows your brain to note and remember what you’re actually seeing. I’ve included a copy of a couple of the journal of a very good trader I know called Ash, it can be downloaded here Ash’s Journal. Many thanks to him for his permission to reproduce it here. He includes a scoring system for his trades which I think is a great idea and I’ll look to include something similar in my own.
So as a summary, the key points to keep in mind are:
1)Keep a journal
This might be obvious given the title of this article but disciplining yourself to actually do it on each and every trade is tough but provides a sound basis on which to develop other great disciplines in trading.
2)Reasoning
Include the reasons behind you entering the position and why you exited it add obviously the date and time. Certain trends will emerge e.g. you might find that you trade better Tuesdays to Thursdays and/or that you’re most profitable time is in the first hour of the open. Common sense would tell you therefore to focus on these days and times.
3)Emotions
While not every trader does it, I try to include my emotions and it’s may be worth you doing so. It’s helped me enormously in being able to take a step back from myself and ask the difficult questions of myself that I need to.
4)Hand write
Until I met my trading mentor I was cutting and pasting screen shots and typing my journal. He taught me the importance of hand writing and now looking back it significantly increased the effectiveness of the journal.
5)Review
Reviewing your journal doesn’t need to be done every day but aim to look back every few days. If you see a pattern emerging in the charts, your emotions and any other observation, note that as well. Over time your journal becomes priceless, it’s your education taken learnt in the hardest school of all.
Good trading all, eminifuturestrading.com
There are only two reasons why you should exit the trade the first is that your stop was hit or secondly the reasons for entering the position are now negated. If you’re closing the trade since worried your stop might be hit, you need work on placing better stops and/or improving your money management.
A quick search on the topic of trading journals in Google shows the internet is saturated with huge numbers of available articles. There is little value in me pointing out how important they are. If you have some trading experience you should already know this. If you’re a beginner then remember the importance having this discipline cannot be overstated.
There are really only two things I can add to the journal discussion which might be of use. The first is that including your emotions can be very effective. By recording how you felt before, during and after can significantly help you take an objective look at yourself and how you act to the various pressures you encounter when trading.
If you find yourself writing the same things when perhaps exiting the position, you should be cognisant that something needs to change. For example, if you consistently write that the reason you exited the trade was because you were worried that the position would go further against you and eventually hit your stop then the clear message should be let the stop be hit. See note at the end of the article on this point.
The other thing I can add is that hand writing your journal ensures it as effective as can be. I’ll freely admit that until recently I was using Microsoft One Note to type and take screen shots of the chart. I thought that by doing so I was doing what I needed to but the reality was that I being lazy. Taking screen shots and cutting and pasting is the lazy man’s way of recording his trades.
Handwriting your observations and actually drawing the chart with the setup you see with different coloured pens takes more time but is far more effective and allows your brain to note and remember what you’re actually seeing. I’ve included a copy of a couple of the journal of a very good trader I know called Ash, it can be downloaded here Ash’s Journal. Many thanks to him for his permission to reproduce it here. He includes a scoring system for his trades which I think is a great idea and I’ll look to include something similar in my own.
So as a summary, the key points to keep in mind are:
1)Keep a journal
This might be obvious given the title of this article but disciplining yourself to actually do it on each and every trade is tough but provides a sound basis on which to develop other great disciplines in trading.
2)Reasoning
Include the reasons behind you entering the position and why you exited it add obviously the date and time. Certain trends will emerge e.g. you might find that you trade better Tuesdays to Thursdays and/or that you’re most profitable time is in the first hour of the open. Common sense would tell you therefore to focus on these days and times.
3)Emotions
While not every trader does it, I try to include my emotions and it’s may be worth you doing so. It’s helped me enormously in being able to take a step back from myself and ask the difficult questions of myself that I need to.
4)Hand write
Until I met my trading mentor I was cutting and pasting screen shots and typing my journal. He taught me the importance of hand writing and now looking back it significantly increased the effectiveness of the journal.
5)Review
Reviewing your journal doesn’t need to be done every day but aim to look back every few days. If you see a pattern emerging in the charts, your emotions and any other observation, note that as well. Over time your journal becomes priceless, it’s your education taken learnt in the hardest school of all.
Good trading all, eminifuturestrading.com
There are only two reasons why you should exit the trade the first is that your stop was hit or secondly the reasons for entering the position are now negated. If you’re closing the trade since worried your stop might be hit, you need work on placing better stops and/or improving your money management.
