Article Making Trading Journals Work for You

T2W Bot

Staff member
1,500 117
In my last article, I covered some of the pitfalls of trading journals.  In this piece I?d like to cover some of the features of trading journals that I have found helpful in my work with new and experienced professional traders.  My goal as a trading psychologist is to do all that I can to accelerate traders? learning curves.  Sometimes this means helping traders with emotional problems, but just as often such problems are the result of trading difficulties and not their cause.  A journal, properly constructed, is a powerful tool for learning?and relearning?markets and cultivating exemplary trading behaviors.   Here are some of the principals that have guided my journal-based work with traders:

Make journals a part of the daily routine ? Even if you don?t trade on a particular day, it is valuable to review the day?s setups and behavior at key price levels.  Reviewing patterns on different time frames can also help traders internalize the context of the markets they are trading...

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steenbab

Junior member
13 2
Thanks for the opportunity to be part of the forum. For those interested in pursuing the topic further, there are articles on my free website (www.brettsteenbarger.com) re: trading journals. Also, the blog on my site has registration information for my free webinar with the Chicago Board of Trade on Wed. 9/28/05 after the NY market close. In that webinar, I will present some material relevant to trader metrics, as well as some original research. I'll be asking the web host to archive the presentation for folks unable to attend live -- Brett Steenbarger
 
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rdstagg

Active member
207 3
This is one of the best articles I have ever read - great!
 
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RUDEBOY

Experienced member
1,157 6
This article was straight out of a Christmas cracker! COME ON! Let me think of the situation! Derek's log. 24.05.02. Had an arguement today with my mistress. Didn't want to come onto the floor today, but had to. Big margin. The stomach ulcer is giving me jip again. I don't think i can carry on with this. I should be working with my mate Ste in advertising. I honestly just can't hack it anymore. Why am i doing it? After a loss day, would you want a realistic journal? Is life a smooth ride full of laughter and joy? DEAL WITH IT OR GET OUT. Sugar coating is for fairies. SINCERELY. RUDEBOY.
 

commanderco

Well-known member
363 7
I do not keep a journal, simply because I have decided not to.
I never kept one in my business, in my sport, at the gym, because I am not a journal kind of guy.
However, I do write a list for myself each night.
It is not written in the "do this, do that" style, but rather written in a style that ensures that I will be in a positive frame of mind after I have read it in the morning.
I trade the CME EC mainly, and I take several small bites at it each day, my limit is 40pts or 3 hours. Seldom am I there at the 3 hour mark.
I do not have losing days let alone losing weeks because of the way in which I trade.
Therefore I never put myself in the heroic stance of the"come back kid" I did all that when I was younger.
My attitude is "never take your eye off the ball" If your attention span is 3 hours then that is your trading day.
"Know thy self" is the best advise I can give to a new Trader and never ever do anything that will errode your confidence.
Let volume be your friend.
Find a way of trading a highly liquid ,point by point market and let the number of lots traded do the real work.
Which brings me back to journals .... its your life, you do what you want, but make certain it works in a positive manner.
 

SOCRATES

Veteren member
4,966 136
Journals do not assume personal responsibility or self governance of the highest order, they just provide excuses, except if they are used as checklists to correct areas of imperfection.[/color]
 
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Keystone

Junior member
16 2
RUDEBOY said:
This article was straight out of a Christmas cracker! COME ON! Let me think of the situation! Derek's log. 24.05.02. Had an arguement today with my mistress. Didn't want to come onto the floor today, but had to. Big margin. The stomach ulcer is giving me jip again. I don't think i can carry on with this. I should be working with my mate Ste in advertising. I honestly just can't hack it anymore. Why am i doing it? After a loss day, would you want a realistic journal? Is life a smooth ride full of laughter and joy? DEAL WITH IT OR GET OUT. Sugar coating is for fairies. SINCERELY. RUDEBOY.

Very funny, but have you read his article. I don’t think so as that type of journal is exactly what he IS saying is a complete waste of time.

One of the biggest faults in a traders evolution is that they do not analyse their actions. They bumble along from one thing to the next, lost in the woods, with no idea what they did today or what they must improve on for tomorrow. There is too much knowledge required when starting trading that is impossible to keep it all within ones head, never mind trying to analyse it all together with our decisions and actions. I can’t stand journals and it took me years before I realised that I must be completely honest with myself and the only way to do that was by having the discipline to write things down. Even then it took a while before I fully realised what format a useful trading journal should take and I wish I had this article to read back then as it would have saved me a great amount of time and frustration.

Digest this article and then adapt it to your own style of trading rules and then let it adapt organically as you develop. However Socrates is right when he says they should only be used as a checklist to correct areas of imperfection. We are most natural at deceiving ourselves therefore we must be find ways to disprove our results.

I have chosen to write this as I have found Mr Steenbarger’s articles on his website very interesting and I have been able to adapt his wise words to helping my own style of trading.

Keystone.
 
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barjon

Legendary member
10,705 1,809
I know we all like a bit of happy banter on the boards, but it is important that comments in relation to Knowledge Lab articles keep strictly to topic since they form part of an ongoing archive. I am therefore embarking on some pretty heavy housekeeping and I hope participitants will excuse me for apparent heavy-handedness. Thanks

jon
 

SOCRATES

Veteren member
4,966 136
In my post number 8 , above I point out how it is that journals can be used constructively if they are used as checklists to correct areas of imperfection. For this to work, the individual must have a very high level of self awareness and trading proficiency already and be able to self criticise effectively.

Not everyone has a very high level of self awareness and a very high level of trading proficiency.

The implication rests that the individual is responsible for the imperfection imposed upon him. But the tragedy is that the individual, who may be doing his best, is not aware of the underlying reason for his malfunction, for reasons beyond his remit.

I am curious to know how it is that imperfections are dealt with and solved by psychologists when they are appointed to render support to people who have very severe problems as a consequence of being victims in this regard.
 

frugi

1
1,827 126
The implication rests that the individual is responsible for the imperfection imposed upon him. But the tragedy is that the individual, who may be doing his best, is not aware of the underlying reason for his malfunction, for reasons beyond his remit.

I am curious to know how it is that imperfections are dealt with and solved by psychologists when they are appointed to render support to people who have very severe problems as a consequence of being victims in this regard.

Indeed the subconscious often seems to harbour imperfections that are self-destructive, while allowing (even forcing?) us to consciously rationalise them or simply be all but unaware of their existence. Though this self-preservation mechanism may have served us well in the past, it would now seem to lack the relevant filters to cope with the novelty of mankind's parabolic progress.

I believe that skilled NLP (neuro-linguistic programming) practitioners are able literally to effect a physical change in chemistry and neural navigation in certain parts of the brain, in order to remove, for instance, destructive neurotic behaviour (such as not taking losses, smoking, alcoholism, x- or y-phobia etc.) and that this change is branded so deep in the hardware that after treatment the need to consciously avoid these urges is completely removed. This seems entirely credible - though amazing - to me, albeit the little we know of the relationship between the conscious reality of our thoughts and the distrubingly mechanical chemical/energy background that creates and allows them. I've no idea how it's done, but I'd not deny the possibilty; I'm no fan of pseudoscience either. Subjects who have failed to respond to any number of other "treatments", such as hypnotism, self-questioning, willpower etc. are often amazed by the results of NLP, so I'm told. Not that I've tried it myself, but am seriously considering it, if only out of curiosity.
 

badtrader

Established member
526 6
NLP falls under the broadest heading of popular psychology, and perhaps most closely relates to congnitive psychology., NLP began quite outside the academic mainstream, and it remains largely divorced from mainstream academic psychology to this day, even though many NLP practitioners do have traditional credentials in psychology and psychiatry. NLP is not so much about discovering what is true as it is about discovering what is useful, what works in a given situation. But beyond mere utility, NLP aims for efficiency and elegance
 

SOCRATES

Veteren member
4,966 136
Frugi and badtrader, I am very well aware of NLP, thank you. But it is not exactly what I had in mind. This is because when many traders fail, the cause of the failure is attributed to psychological problems. This puts the onus on the victim. I would be interested to hear from the horse's mouth, how it is that resident psychologists go about turning hopeless traders into good ones and better ones into stars, and the reasons why they believe that what they can say is capable of solving the problem.
 

commanderco

Well-known member
363 7
"clear thinking" that oh so elusive little beast. It is the only thing that separates a profitable Trader from a Contributor.

Some people have it to a greater or lesser degree and have the capacity to hone and polish it.
This does not necessarily make them popular with their peers and so it is a skill that is better left to shine rather than be paraded.

Other people will never clear their minds sufficently to trade profitably and should leave the markets alone. But this is something that they must experience for themselves ... and there will be a reason (excuse) why they have stopped trading and it will not be their fault.

Mostly, in my experience a Trader who is gunshy and therefore feels that they have reached some sort of psychological barrier, has insufficent faith in their trading system and methods.
And with good reason.
Their trading system and methods are rubbish and doomed to make them a Contributor.
Forget trend, forget time frames, forget over optimisation. It is an absence of "clear thinking" that will be their ruin.

In answer to the question "Can you make a profitable Trader out of a steady Contributor"
NO. ...Not today, not tomorrow, not anytime, not ever!
But there is a good living to be made in convincing people that you can.
 
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