Why A Journal

Before we move forward ask yourself these questions:

1. Do you feel anxious and stressed when you trade?
2. Are you working harder but still losing in the markets?
3. Do you feel wound up at the end of a trading day?
4. Does the market feel like a hostile place for you?
5. Are you failing to execute your trading signals?
6. Are you searching for a trading system?
7. Are you consistently losing?
8. Do you live in a land of hope?

Did you answer yes to any of these questions?

Don’t worry it is estimated 85-90% of all short-term stock & commodities traders lose money.

Simply put you will probably continue to lose thus repeating the same mistakes over and over again until you are wiped out fi-nancially, physically, and emotionally. That is when you worry!

First step is you must develop a "Trader's Mindset", and secondly you must keep that mindset!

To reiterate;
· 20% of your trading system is your trading method & money management · 80% is your trader psychology

Record your thoughts and emotions on a daily basis with a Daily Trading Journal to improve your trading. This is one of the easiest and simplest steps that can be undertaken and also one of the most important. Think of your day of trading as nothing more than an information gathering exercise. Imagine all that information and experience you collect as you trade. Everyday no matter what level you are at as a trader you learn something new. Without a journal you are throwing so much of it away and significantly without a journal you are in serious danger of repeating your mistakes. In this regard, keep-ing a journal is a money and risk management technique. By identifying possible trading problems, you can start to resolve them. And enhance your trading system.

What should you record in your journal?

 

1. Have a copy of your goals, and note your progress in achieving them. Do this daily and at week’s end and then for a macro perspective do it at month’s end
2. The anatomy of every trade. Write down, from the moment you started analyzing a stock to the moment after you sold it, how you felt at each key moment about every activity you undertook. For a scalper this may indeed a brace of trades as you are in a groove. For a basket scalper it alludes to the set ups you reacted on.
3. Evaluate & compare how you should have reacted, in light of what your trading rules book. For example, how did you feel as you approached your stop-loss? Write down what feels good and what feels uncomfortable about what you are doing. Remember your aim is to get into a zone, a groove or a flow.
4. Be alert to outside influences, news, market emotion, other traders - ask yourself do they help or hinder.
5. Notice a pattern, types of stocks, sectors, single positions, and multiple positions – what suits your personality? Are you letting things happen because something doesn’t suit you & you don’t speak up?

What do I get from the journal?

 

1. Discover yourself and your trading when you actually record your thoughts – this is a necessity to bring your trad-ing to the next higher level.
2. Learn the importance of tracking all your trades and learn how to interpret your performance to improve your trading results.
3. Learn how to view your trading from a macro to a micro level of performance and what information is really im-portant and what isn’t!
4. Know when you are in the flow, think of our emotions as more of an invaluable guidance system. When we're feel-ing good, the energy is flowing freely our emotions are telling us, 'that's right, you're in the flow, you're where you belong.' When we're feeling "negative" emotions such as fear, loathing, anger, etc we become self-destructive. It is like there is a little man inside you cutting you off from your power source and causal effect is you resist the well being that always surrounds you – it is simply whether you see it!
5. Nothing is more painful than to be cut off from your source, and negative emotion is the quickest, most reliable signal of being off-track. You need to know when this happens, what leads you that way off course and you have to believe that you "deserve" to succeed and that suffering is not in some way ‘character building,’ Yes it is but this stage in your trading you could do without that bit of character building!
6. Guess what when your emotions are in check trading the benefits are huge for your whole life! The positive en-ergies flow onto others around you and back to you – a perfect circle! “What goes around comes around” 7. Of course if that circle is broken it becomes a downward spiral and that is what we guard against and that is why we never stop keeping the journal.

Setting goals provides direction to the trader. To quote Tom Copeland "You've removed most of the roadblocks to success when you've learned the difference between motion and direction." Envisage a mouse on a treadmill here – don’t be the mouse. With a series of goals traders have something on which to focus and direct their energies. We can see the forest despite the trees! Focus in turn leads to more productive actions, and less wasted time and energy.

Motivation

To start ask yourself “where do I want to be?” and “what motivates me?” Write these down in your journal. Motivation and goals go hand in hand. Motivation is the engine, and goals are the destination. You must look at what motivation is necessary to get me through the tough times? Be honest with yourself at some level trad-ers are attracted to this game because of the money you can earn. But, I have found that money alone is an insufficient motive. All good traders I know LOVE the game for itself. The fact that we get paid for it is merely a bonus. This love for the game is incorporated into the vision we want to achieve as a result of our trading and that vision is the oomph that gets us through the tough times. It goes without saying that for successful traders, trading is fun!

Motivation cannot exist without goals, and goals cannot exist without motivation. Each loses meaning without the other.

Only then do we consider how we are going to get there. Setting goals also decreases anxieties, because we have a better idea of where we want to be. As we start achieving our goals, we develop self-trust, self-confidence and a positive attitude. All es-sential traits for trading success, you see how important your daily journal is in both gauging and attaining your goals.

In order to generate trading goals:

1. Think first about the motivations you listed in your journal. As Neal says in the Tricks of the Floor Trader, "you can-not master the market until you master yourself"
2. Think about what you need to do to achieve your ultimate aim
3. Consider what is stopping you achieving your aims.
4. What price will you have to pay to achieve these goals?
5. Are you willing to pay that price?

In order to be effective, trading goals need to be specific. They have to be measurable otherwise you are courting disaster. Be-gin with money management; given 90% of traders fail this is crucial.

Why do they fail? Most traders do not respect money!
Why do traders always talk in gross numbers?
Why do many traders struggle to buy a 99 cent Big Mac yet be oblivious to losing hundreds and thousands of dollars?

Most traders over-look the psychological and money management disciplines and seem fixated by the trading methodology. They count their chickens before they hatch so to speak! Why – because it is easy to do and that is the way society shapes us – everything is a punt, the horses, the lotto, Las Vegas, the stock market mania and you can even go as far as marriages and families nowadays. Everything is a video game! You can’t turn off the screen and start again – this is real! Think “Survivor” NOT “Who wants to be a Millionaire?”

You see what you are up against – stick to your journal & your goals belligerently and stick with your trading mates. There is a huge difference between a trader and a gambler – you don’t want to be at a meeting greeting one another with “ High I am turbo and I am a trader” “My addictions are…………”

Good stuff. And your right.

20% system...80% mind.

20/80 rule...applies to everything in life. 80% of profits come from 20% work.

only 20% of a trading day offers proper trading volume. And only 20% of that will be grouped together. the rest is spred out. Thats 5% of a trading day that will have the best time to trade. And only 20% of traders will trade durring this time, and 20% of them will succeed.

80% of your time should be planning
20% of your time should be looking looking and 20% of that will be trading.

So how to find that 20% of 20%?

well 4.8 hrs is 20% of 24 hrs. and 20% of 4.8 is 1.152

So what time of day has the most volume?....end of london, beginning of NY. 5am est to 10 am est. 1.1 hrs out of that time will be prime. 20% of 1.1hrs will be the window of oppertunity.

Here is an artical that can help find that window.

While your waiting planning, ect...durring the 80% you should be working on mentality. Getting your mind right for the 20% of time you'll be looking/trading

I figured this might go good in this thread.

Dave

Insightful posts turbo, are you gonna start one here?

Actually I disagree on one point: I think trading is 100% pyschology. After all you can make a coin-flip system profitable with the correct money management and trader psychology.

As for myself, my charts are my journal - my technical drawings of support and resistance and entry and exit points is all I need really. I outsource the actual book-keeping to the broker reports. However I think for most keeping an actual written journal is probably the right thing to do for the reasons you mentioned.

Excellent thread. If someone is making the same mistakes all the time, journal can help. This thread should be sticky in beginner's section.

Thanks turbokaos.

if 80-90% of traders lose, then 80-90% of people needs to see a therapist

This is probally a true statment too... lol

Here you go mate, took me a little while to get is started...lol
http://www.forexfactory.com/forexfor...ad.php?t=11949