- August 15, 2016
- Posted by: Dean Hyde
- Category: Trade Management
“By compiling detailed daily diaries of his market observations for over a decade, Cook was able to develop a slew of original, high-reliability trading strategies” – Jack Schwager, discussing insights from Mark Cook
If you ask underperforming traders (as I often do) how many of the pros they think would keep detailed records, the reply you are bound to get is “all of them”.
Then, you ask, does this underperforming trader keep detailed records of their own? Uh, well… no. In that epiphany, it becomes clear to them just how important it is to keep a journal.
Starting to keep good records is a little scary at first, because it means you’re totally accountable in black and white. It almost completely removes our bias towards blaming poor results on bad luck.
But it’s also equally exhilarating. If you have a great idea and capture the data, you can look back in the future and see exactly why it worked. That’s progress no matter how you look at it.
Keeping good records is a metaphor for being grounded. It can be ‘boring’, but it’ll be responsible for most of your successes in trading.
With enough information, you can begin to map your whole trading experience: do you trade better mid-week, or later on? How do you fare in different market types? The possibilities for analysis and progression are almost endless.
Does it matter what my diary looks like?
Function before form: whether it’s a computerised system or an old notebook, the main thing is just to make sure you keep track of all the relevant information in a thorough and consistent way.
This will be more difficult if you do it manually, but perhaps the simple act of scrawling down your trades is soothing. Whatever the case, there are a multitude of automatic solutions on the web if you’d like to have a Google search for the best one(s).
Keep track of these things:
- Strategy Name:
- Market Type:
- Market Type 1 timeframe higher:
- Set-ups in play:
- Entry Type:
- Stop-loss Type:
- Dollar Risk (R Multiple):
- Fundamental or technical Catalyst:
- Link to chart:
- Reason for the trade:
- Trade management plan:
Note well: discipline required ahead
The sooner you start keeping a record of all your trades, the sooner you will start collecting the type of information and feedback necessary to progress your trading journey. It can be a hard step to take, for any number of reasons, but in the end you will be glad you did.