Trading Journals – 10 Minutes To Boost Chance Of Success

Posted in: Basic Trading Strategies, Trading Article

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When day traders hear the closing bell, it may be tempting to shut things down and then move on with the rest of your day.

But is this really the best thing to do or is there something you can do to improve your trading like logging in your trading journal?

When you are trading during market hours, it’s very easy to get caught up in the heat of the battle. This makes it difficult to learn from things going on around you.

  • Did you follow your trade plan?
  • Did you make the correct key level adjustments?
  • Did answering your phone 5 minutes after the open lead to a missed trade?

These are all scenarios that you need to analyze after the session to make sure you are performing at a top level.

 

Having A Detailed Trading Journal

At Netpicks, our goal is to help you become a successful trader and part of that is advising to keep a record of all your trades.  When we are done trading for the day, we leave time to analyze our trading performance for that day in our trading journal.

There are a few different steps to correctly keeping a trade journal that we feel has an impact on your successes and failures for the day.

You will want to keep a spreadsheet to record all of your trades during the trading session.  This way, over time you will have access to key statistics to help you improve your trading by reviewing past trades and knowing:

  • Winning percentage
  • Profit factor
  • Time of day performance
  • Max draw down

A great tool that we have added to the trading toolbox is the NetPicks Trade Analyzer.

This is a spreadsheet complete with every stat you could possibly be interested in plus equity curves and performance charts.  This tool allows you to input your trades on a daily basis and calculates your stats ongoing.

A quick look at your spreadsheet will act as a guide when making any changes to your trade plan or your entire trading system.

Any change that I make to my personal trade plan has to be backed up by statistics. I have to be able to show from my spreadsheet that the change is warranted.  Any successful trader will tell you that changes to a trading plan and trading system must only be done due to statistics and not a knee jerk reaction to your trading results.

 

Log Your Trades And Log Your Day

After we have inserted all of our trades for that session into our trading log,  we must also have a “trading diary” where we write up a quick summary of our performance that day.

I’m not talking about documenting your trades here.

I’m talking about jotting down a few quick notes about the day such as:

  • How did the market react to a specific news release during the middle of the session?
  • Was I prepared for the market conditions on this day?
  • Did I miss a trade right after the market opened because of a phone call?
  • Did I get blindsided by a news releases because I did not check what was coming out that day?

If any of these issues start to become a pattern, then it might be time to add a new rule to your trade plan.

You can even take this a step further by giving yourself a grade for the day. If you  have a string of bad grades, then perhaps you will take a day off. This is the only way to hold yourself accountable. There is no boss checking up on you throughout your trading day so you must have some mechanism in place to keep you tuned into the task at hand.

 

Trading Journals Can Be Indicative of Future Success

While some of this might sound basic and unnecessary, I can’t tell you how important it has become in my own trading. I have seen my trading become more consistent, which really takes the stress out of trading.

It only takes 10 minutes a day to go through this routine but it will make all the difference in the world.

If you are struggling to find consistency in your results then take a step back and make sure you are treating this like a business. Keeping a trade journal might just be the missing link to becoming the next great trader.

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