5 Things You Need to Keep Track of
As much as you think you’ll remember the details of your trading setup, you probably won’t.
Record these things to make the most of every entry …
Obviously, you should record the date of your trade.
Not only can this help you track what you were doing when, but you can go back and look at the stock’s chart on that date if needed in the future. Once again, never assume you’ll remember!
2. Time Frame
Don’t just mark the date, but time-stamp your entry, too. In the world of day trading, minutes matter. It can make a big difference if you traded in the morning hours versus mid or late day. The same setup that spells success in the morning could be a massive mid-day flop.
3. Price In
This is where your trading journal begins to work in tandem with your trading plan. When you make a trading plan, you plot key tactics like your entry point, exit point, and what you hope to gain from the trade. This can help you stick to the plan and, ideally, helps keep emotion out of things.
In your trading journal, be sure to make note of the price at which you enter a trade. This is invaluable information that can help you in the future.
4. Price Out
Don’t just mark down the price at which you entered the trade. Take note of the price out, too. Your exit is just as important as your entrance. Tallying this data can help you analyze if you’re staying in your positions for the right amount of time.
Be sure to note any difficulties in getting out of your positions, too, as it might affect how much you risk next time.
5. The Amount You’re Risking
Before you make a trade, you should always determine the amount of money that you’re going to invest. Keep note that on one level this should be an amount you are comfortable losing.
How much should you risk on a trade? My opinion is that you should always take a more cautious position, and never risk more than you could comfortably lose.
You don’t want to add the stress of potentially blowing up your account to a trade because this might make you act or react in irrational, emotionally driven ways.
Example of a Trading Journal Spreadsheet
Here’s a sample of what a trading journal spreadsheet might look like from a prior post on this blog:
While your journal doesn’t necessarily have to follow this exact format, this is an example of some information that you might want to log and how you could organize it. By keeping track, you can easily refer to it at a later date for accurate information.
Trading is something that you learn little by little, and you continue to learn as you go on in your career. No matter how long you’ve been trading, there’s always something to learn by logging this information.
Top Trading Journal Software
What’s the top trading journal software? That depends on your platform and personal style. But here are some thoughts …
The StocksToTrade platform has a handy trading journal feature that you can use to monitor stocks and keep track of your trades.
Additionally, on the StocksToTrade site, you’ll see a great post on resources for apps that can help you keep track of a trading journal. It has notes about which ones might suit different recording styles.
Tips for a Successful Trading Journal
Want more tips to help you maximize your trading journal’s success potential? Good, because I have a few more for you …
1. Identify Patterns That Lead to Your Losses
Making mistakes is inevitable as a trader. Even I don’t win all of the time. My success rate is about 70%, as you can easily see if you look me up online because I’m a massive believer in full transparency.
I never hope for a 100 percent win rate. I know that’s pretty much unattainable because while I can control my research, I can’t control what the market will do.
You can’t control how much you win, but you can help control how much you lose by cutting losses quickly.
You can also learn from your losses. Once you’ve kept a trading journal for a while, you can begin to look at your losses and evaluate what’s happening.
Chances are, you’ll see patterns emerge. It might be the time of day you’re trading, the sector in which you’re trading, or it might be a flaw in your setup. If you notice consistencies in your losing trades, this should act as a sign that it’s time to change something.
2. Identify Patterns That Lead to Your Winners
Don’t just focus on the things you’re doing wrong — look at what’s going right, too.
You can — and should — also chart patterns in your own trades to help you analyze what’s working and what’s making you the most money.
I call myself a glorified history teacher, because much of my success trading stocks is based on being able to identify patterns. But stock charts aren’t the only revealing resource.
Once you begin to amass data in your trading journal, you can begin to evaluate what’s playing into your success. For example: Are you having great success with shorting supernovas? This is a strong sign that this is the type of setup you should begin to zero in on and refine.
3. Master Your Skills With Professional Assistance
Combining a trading journal with trading classes is a fusion that can improve your success.
The data is only as good as what you do with it. When you take the time to learn the mechanics of the market, you can begin to learn key setups, which can help you have the basis for trades that you can log in your trading journal.
Nice flow, right?
Obviously, the more prepared you are to execute trades, the more successful your results can potentially be. You can further refine based on what you log in your trading journal. It can truly help power you from a newbie to an accomplished trader.
The Bottom Line
A trading journal isn’t simply a means of tracking your trades. On a larger scale, it’s an easy way to monitor the progress you’re making toward your goals, and can help serve as your guide as you develop a trading style.
Trading journals help test the success of trading strategies over time, and can evaluate risk versus reward on a longer term.
Ultimately, a trading journal is an important investment in your continuous education in self-discovery as an evolving trader. If you aren’t journaling, get started.
— Tim Sykes
Editor, Penny Stock Millionaires