How to journal with value

Collecting useful data is crucial for your success in trading

Every trader needs to journal his/hers trades. If you don’t, then sooner or later, you will have to.

Types of journaling

I personally do technical and psychological journal, but some people do journal even more, like sleep, stress level, exercise and even food.

Technical

It means keep track of “How well have I executed the plan according to the trade book. (or the plan if you want)”

Psychological

It means “How were my emotions affecting my trading today”. It can be overall or trade by trade.

Reasons for journaling

I need to see how I am performing on my trading process. Not on my financial results only. Many new traders think it is about the profits graph sloping up, but it’s not.

My journaling is able to answer the following questions:

• Do I have an edge on any particular setup if I execute it correctly as per my rules?

• What are the most often mistakes I make? Technical or emotional/

• What are the most costly mistakes I make? Technical and emotional.

• Do I repeat the same mistakes or do less of those mistakes over the time?

• Am I improving in doing the mistake less over the last year/3months/30days?

• Do I perform better sooner or later on the day?

• Is my exit strategy the best one for me in terms of profits?

• Do I get stopped before the intended move happens?

• Are my rules still working in the current market, or do I need to adapt?

The reason for that is that it allows me to keep my confidence level at a point where I can take trades without fear. If my trading is supported by quality statistics and I know that if I take 20 trades I shall be profitable, or if I know that usually only 1 out of 4 attempts work but at the end it works well for my final profits, I don’t freak out having a loss or two and my mind is fresh for another trade.

If I come up with a new theory about any new trading rules, the journal shall allow me to look back and see if the theory is working on my past trades. For example, if I am feeling I am losing on the trades taken on the 1st minute of a 5-minute cycle, I just look into the journal and mark the trades taken on 9:31 9:36 9:41 and so on. Then I make a view on the stats and can create a rule out of the data shown.

Quality of journaling

In any type of journaling, the more data you collect, the better position you will have later on. But beware, it’s not about writing down the ideas in the journal and never be able to look at the data because every day is in a separate .txt file on your disk.

I believe that quality journaling needs to have the following attributes

• Be able to show me statistics and trend on my performance

• Be able to show me easily the past, so I can quickly review any new theory.

Journaling tools

Excel or any other spreadsheet tool.

It’s the first tool that comes to your mind. It can be powerful, but can also be very time-consuming and requires quite some knowledge. If you use it daily, you might think it’s your obvious choice, but let me explain, why I don’t believe it is the good tool to use for technical journaling.

Here is an example of my (poor) journaling in 2018. I did not know any better at that time.

It is showing a lot of data indeed, but most of it is useless data as I cannot report on the notes and most of the data collected is not dependent on my trading, so logically it cannot help me to become a better trader. If I were successful from the day 1 with this type of journaling, I would probably stick with it and evolving it by adding more and more data, but it was inevitable that the poor journaling would become part of my failure.

The main problem of spreadsheet journaling is that when you start, you don’t know what data you will need. You might get some well known spreadsheet for free from any on-line resource or even buy one that you can use of course, but still you would need to understand what the author intended with it and chances are that it will not suite you much and if you come to any trouble, you are on your own to resolve it.

Professional journaling software

Over the years I have seen many tools that shall make the job done. I have seen startups with some good ideas, I have seen well known and popular tools and even dedicated software running on your own PC. They all had one thing in common. They were selling you useless statistics that can be easily marketed. So you better watch out. If they have nothing to offer, they will try to sell you the statistics on stock ticker, P&L, win/loss ratio. The reason for that might be the fact that the features are pushed to the products by programmers and not by traders.

If you see the following pictures on the vendor’s first web page, I would recommend you to look elsewhere. There must be some better and useful tools around that don’t try to sell you the statistics on what tickers you had profit 3 months ago when the stock had some news, and it was the only day it was tradable on that year.

Also, I believe that you don’t need a tool that tells you that today you have lost or won, as you know that from your trading platform already. Some of the tools might be more oriented for investors, where holding time statistics can make some sense, but if you trade the market open it’s obvious that you will have the most winners and also the most losers in the first few minutes as it is the most usual time of your trades. The point is that such statistics will not help you to improve because if you will trade later, chances are, that it will be the same stats, just time-shifted.

How I journal with value.

I journal right after my trading is done, so that I can remember what was happening and what were the emotions driving me to a bad trade or trade mismanagement.

I use Tradersync for the reasons that it allows me to do the stats and which is able to answer the questions mentioned at the beginning of this post.

I export the trades from the trading platform to a file and import it by drag and drop on the import web page. There are more possibilities on how to import the trades and this is what is convenient for me.

This process takes me less than 2 minutes.

Firstly, you shall have a list of rules for entering and managing the trade so that you have something to compare to and report any discrepancies to the journal as a trading mistake.

After I import the trades, I go to the trades view and select “today” as the date and the portfolio where I have imported the trades in the previous step. I am presented with the 3 trades made today.

After clicking on the row of the trade i am presented with the trade details

All I do is I add the SETUP, the MISTAKE, TAG and drag and drop the screenshot of the trade to the image area…

…and go for the next one. This process takes less than 10 minutes every day. The mistake can be anything I type down as a mistake, and the next time it can be selected from the menu or typed again.

For trades where I think I made no mistake, I type NONE, so I can run reports on that later.

Now back to the beginning. How do I answer all those questions?

Do i have an edge on any particular setup if I execute it correctly as per my rules?

Looking at the 3BAR PLAY setup, it looks I have no edge. And this is what you will find out with any other trade reporting tool too, as it is the very basic statistics.

Well that looks quite bad although it is already visible that for few weeks the things are improving for the running P&L. I can run the report for the last 30 days to see more details.

That looks better. So how come that I improved it? The answer lies in the next question, but before that I want to see the true potential of this setup, how I perform if I do no mistakes and follow the plan perfectly?

The following report shows that theoretical edge for my own trading on this setup.

That means that it’s a working setup, and I am able to execute it well. So the next questions follow.

What are the most often mistakes I make? Technical or emotional.
What are the most costly mistakes i make? Technical and emotional.

I recognize emotional mistakes from the technical ones just by simply putting a special character in front of the mistake name. So I use 1- as a prefix for emotional mistakes.(see below)

I run the mistakes report and order it by the number of trades (occurrences) or order it by the Return $ which shows me how costly those mistakes are.

So here I am. Knowing that I need to focus on the entries in 3rd 5 min candle and on the entries against moving averages.

Now, how do I know if I am getting better on any mistake I focus on?

Am i improving in doing the mistake less over the last year/3months/30days?

I run a mistakes report on the specific mistake for the specific setup and see it instantly.

There was obviously something wrong with the trading of this setup in November and an effective fix came in December where I did that mistake on this setup only once. To be absolutely exact it would require to count percentages of occurrences out of the number of trades taken but if I trade only 1 or 2 setups, the trend is easily visible.

Do I perform better sooner or later on the day?

For this to answer there are some predefined timing reports available which are not sufficient for my trading, so I have created custom tags for the specific times I am interested in. I assign those tags to the trades when writing the technical journal so i can run later reports on them.
For example, this 4PC ORB setup shows that it works for me between 9:35-9:45

better than it works between 9:00-9:35

so a simple “do not trade for the first 5 minutes this setup” can improve my results.

Is my exit strategy the best one for me in terms of profits?
Do I get stopped before the intended move happens?

This I can see instantly on the chart when doing the daily journaling. The predefined risk and reward is added automatically, and I can edit it as necessary.

I can run report only on loosing trades and go one by one and see if my stop was just a “stop and go” and my idea was completely wrong. Then I can custom tag it with a “Stop and go” tag and look at the data later on when i collect enough trades.

Are my rules still working in the current market or do i need to adapt?

With regular review every week and month I can see if the setup still works without mistakes. If there is a drop in success rate then the setup needs to be reviewed and new rules need to be established. It took me whole October till end of November to find out what was wrong with my trades and by finding out the common property of the losers i finally spotted it and fixed since December.

In this case it was as simple as not taking the gapping stock for the breakout/breakdown in the direction of the gap.

So that is the process how i use Tradersync to improve my technical aspects of trading. There are multiple additional and useful features i will cover in the next topics.

To be fair I need to say that I am using spread sheet for journaling my mental performance as me and my mental coach (@wesleylorenzo) have not found a better tool yet to share that information between the two of us. It is also changing quite often so the spread sheet seems to do the job well for that purpose. I am still looking for ways how to move it to Tradersync or something similar.