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Day Trading - The most valuable mentor - your trading journal.

By Brandon Frederickson

So many times I will call a person that tells me they have been having a hard time and one of the first questions I ask them, "What have you been trading?" If they can't tell me that, it's hard to move forward. It's hard for me and it's hard for them. Keep a journal of all the trades you take. Include the time you got in, out, the prices, why you took the trade, what was going on in the market, how did the stock act, what did you do well, what could you have done better, etc.. It seems like a lot but once you get into it, it's really very easy and just becomes second nature. Read this a few times a month and just look at what you are doing and have been doing. It will really key you in on your weak areas. It let's you know what you need to work on and, just as importantly, it will let you know what you are good at. So, keep a journal.

My trading journal has been my most valuable mentor throughout my career as a trader. In it I record each transaction I make, the logic behind that transaction and the outcome. Over the years keeping a journal has allowed me to isolate my weaknesses and work to minimize them, and to identify my strengths and work to maximize those. When all is said and done, the only way to become a profitable trader is to know your strengths and weaknesses and then put yourself in a situation that allows you to make the most of your strengths, and reduces the effect of your weakness.

Trading Journal Outline

I get a ton of questions on how to set up a trade journal, what features to include, etc. The following is a very simple outline of one that I use. I hope you find it as helpful as I do!

Please make sure you fill in every field. The more information you provide, the more it will help you when reviewing your logs.

DATE:
SYMBOL:
SECTOR (if known):
BUY/SHORT (circle one)
TYPE OF SETUP:
ANALYZING THE POSITION:
PROS:

CONS:

CURRENT MARKET CONDITIONS:

EXPECTATIONS:
PRICE TARGET: REASON FOR PRICE TARGET:

ANTICIPATED RISK TO REWARD:
ANTICIPATED RISK LEVEL (rate 1 to 10 with 10 being high risk and 1 low risk): ENTRY TIME(S):
ENTRY PRICE(S):
REASON FOR ENTRY AT THAT PARTICULAR TIME AND PRICE:

STOP PRICE AND WHY IT'S SET AT THAT PRICE (also note when the stop was adjusted and why):

EXIT TIME(S):
EXIT PRICE(S):
REASON FOR EXIT:

OUTCOME OF TRADE:
EXPECTATIONS MET? YES/NO (circle one)
TRADE ANALYSIS (Include thoughts on the trade such as what could have been improved, what you felt you did correctly, areas you may need to work on, etc.):

ATTACH A SEPARATE PRINT OUT OF ALL RELEVANT CHARTS FOR THIS TRADE. INCLUDE CHARTS FOR THE OVERALL MARKET WHEN APPROPRIATE. HAVING A VISUAL REFERENCE IS AS IMPORTANT AS A WRITTEN ONE.


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