A traders journal - Just One Lap

One of the very first things that we are taught when we start trading, is to keep a journal of our trades. The reasoning is simple enough: keep a record of the trades you took, why you took them, their outcome and whatever you may have learned from the trade. Keeping this record allows us to go back and look at it to see where our strengths and weaknesses are.

With this information, we can then form a strategy that will enable us to focus on playing to our strengths and help us avoid our weaknesses. In truth, this is something that I have not been doing for a very long time now.

Until recently that is.

The past couple of weeks have been brutal. So in response, and in an attempt to better understand where I have been going wrong, I have started to journal my emotional state – and a few other things – three to four times a day. Basically what I am doing is writing down how I feel at three or four intervals, as well as recording a few data points at those times.

So the basic idea is this:

Before 08:30, I write down:

How I feel going into the day (i.e. emotional state)
Various indicators and/ or levels at which things are trading (currencies, commodities, bonds)
My game plan for the day
Stocks I intend on trading (including why and how)
Things I need to work on during the day (i.e. cut losers quickly, or stay in trending trades)
News, events and stocks in play

Between 10:30 and 11:00, I write down:

How I feel after the morning session (i.e. emotional state), and what happened to make me feel that way
Profit and loss on the various stocks that I have traded during the morning session (indicating which positions are still open)
Notes on each of those stocks (what I did right or wrong)
What my game plan is for the rest of the day
Identify things I did right and things I did wrong
News, events and stocks in play (might have changed since the start of the day)

Between 14:00 and 14:30, I write down:

How I feel after the mid-day session (i.e. emotional state), and what happened to make me feel that way
Profit and loss on the various stocks that I have traded in the two sessions up to now (indicating which positions are still open)
Notes on each of those stocks (what I did right or wrong)
What my game plan is for the rest of the day
Identify things I did right and things I did wrong
News, events and stocks in play (might have changed as the day goes on)

One of the things I am working on is not to trade during this session as the market is too thin and there are usually not any real moves happening during this time.

After 17:00, I write down:

How I feel after the end of the trading day (i.e. emotional state), and what happened to make me feel that way
Profit and loss on the various stocks that I have traded throughout the entire day
Including notes on each of those stocks (what I did right and wrong)
Lessons learned on the day and what I want to focus on improving tomorrow
Various indicators and/or levels at which things are trading (currencies, commodities, bonds)

So my focus here is not really as much on keeping a record of each individual trade, as there are sometimes many trades in a day, but rather to focus on the emotional state in which I find myself and the overarching impact that has on how I trade.

The idea is to identify when I am tilting (i.e. trading emotionally and taking reckless risks) and stopping it before it becomes dangerous for my pocket book. It also serves to get to know the market better by keeping track of the main indicators and news events, or drivers of the market overall.

It’s only been a few days so it’s a little early to tell, but I believe that this will be super beneficial to me. So, let’s see how it goes.

Happy Trading!

Petri Redelinghuys