Trading journal

Precis of PDF: “When Trading Journals Don’t Work”

5 frequent shortcomings with journals:

  1. lacks specifics. So instead of just saying “I overtraded”, identify why you overtraded, how you will avoid overtrading in future, and what steps you will take to return to discipline.
  2. emphasises problems, not solutions. Steenbarger said that the best time to keep a journal is when you’re making money, rather than be fixated on losing money. Your goal should be to replicate successful trading patterns, not simply analyse problematic ones.
  3. too much talk about the trader, not enough about the markets. Instead, you should try to identify favourable patterns in the market, rather than focus on your mental states.
  4. it’s reactive, not proactive.
  5. lacks metrics

Trading journals that work:

  1. make them part of the daily routine, even if you don’t trade on a particular day
  2. incorporate specifics
  3. review entries with a valued colleague
  4. use journals to review positive trading performance, as well as problems. Traders can learn as much from what they do right as what they do wrong
  5. include material both about the markets, and the trader

It’s about pattern recognition, which is about repetition – seeing enough variants that you become sensitive to essential and inessential features


About mcturra2000

Computer programmer living in Scotland.
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