A journal is like a mirror you can use to see your self. But the journal is only as good as what you write in it. One rewarding choice is to write feelings and thoughts during trading.
Record the reason why you entered or exited a trade and how you felt at the moment. Keep it simple so that it doesn’t interfere with your trade execution and be sure to review your entries at regular intervals.
I personally review my trades and journal entries on Saturdays. I look at my trading stats and revisit every trade to see where I could do better. I look at how many winning and losing trades I had, but most importantly what the largest loser and winner were. I then look up my journal entries for the trades and days and often find relationships between trading success and feelings or thoughts in the journal.
For example, a few weeks ago I was having many winning trades and my profits were rising. But in the subsequent weeks the performance began to drag and losses were adding up. Here is what I wrote in the journal that helped me get back on track:
“ARO bounced right off support on an unexpected and unfounded plunge. Should have planned formally for this “What if” as I hesitated when my alert was triggered off support. Not the best entry but still a good R/R.
I exited the trade early as I was looking at the 5 min chart and saw it moving down towards my stop. But I should have let the trade work after entry. It wouldn’t have hit my stop. So far is moving up and holding above where I sold it. I was afraid that my loss would be double of what it usually is and now I am contemplating re-entering the trade as I am afraid of missing the trade. It is always FEAR that screws up my trade”
“I am forcing trades again. Yesterday I was able to be patient and wait for the pull back or Let it go if it didn’t happen. Today I forced the TNA trade as I perceived the market running up away from me and my entry point was wrong. I got stopped out where I should have bought and I bought where I should have sold.”
There were many similar entries. The key word was FEAR. But it was fear of losing gains or missing trades and not fear of losing money. Once I recognized it, it became my goal to overcome that fear. So at the top of every journal page for the week I wrote the following as a reminder:
“DON’T BE AFRAID OF MISSING THE TRADE. THERE ARE PLENTY OTHER. DON’T CLOSE EARLY OUT OF FEAR OF MISSING GAINS. LET IT WORK OUT.”
Please feel free to share your experiences or comments.