here's a "mixed salad" of my thoughts and experience.
First, sure you know the 80/20 % rule. For example, most probably 80% of your profit comes from 20% of your winning trades. Okay, you can improve your entries but see this. 80% of your loss comes from 20% of your losers. Now that's what needs attention, imho. Keep in mind that there is no perfect system so losses will be with you as long as you trade. But size matters..
Logging all of your trades is the best. You can find cyclical things like trades in the lunch time are losers or long trades on Wed, Thu on some instrument are the most profitable. What can you do? Avoid trading in the lunch time and focus on the best days of week. There is life outside and now you know when to sit at your computer.
For such analysis you need to have both winners and losers, trade times and instruments. And most importantly you must do the homework with it!
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Journal the good and the bad, and make yourself a trading robot. making yourself mechanical and following your plan works in the longer run in refining your trading plan through lesson's you've learnt, and cutting out making the same old mistakes through less qualitative/psychological based decision making. It also forces you to learn about the markets and different approaches to understand why what happened, did happen.
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After a few people have quit or temporarily stopped journaling on futures.io (formerly BMT) and after reading some of the journals, I'm trying to figure out the value of journaling here, meaning public journaling. I definitely see the value of journaling, but what is the value of doing it publicly?
The negatives are:
- too much distraction
- much more work to maintain than a private journal
- too much conflicting or outright bad advice
- some advice is so confusing, if makes you question your own sanity
- danger of following a guru
- some people report that the forum influences their trading decisions
- messes with one's psychology and trading is a mental game
- added pressure to reply to the comments you don't feel like replying
- puts pressure on to perform, even though it is anonymous, we all are human and hate looking "bad", for the lack of a better word
- how many successful traders are actually journaling publicly?
- may be it's not a coincidence that successful traders hate sharing their PnL?
- you end up comparing yourself with others, whether you want it or not, perhaps even subliminally. we are only human
The plusses are:
- keeps you accountable, but so would a private journal and your pnl, if you document your every trade and reasons behind it
- you get some good advice, but after a while, you got all the advice already, you know what you need to do - develop your own thing, test it and trade it
- may help you develop your method initially, so good for beginners, but at the same time may make you constantly change it instead of sticking with what you know
- if you have a particular issue you are trying to figure out, then may be posting a few charts to get somebody else's opinion is good, but what's the value of every day posting?
I'd like to hear what everybody else thinks. thanks!
Last edited by Anna K; September 17th, 2014 at 05:37 PM.
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The journal is whatever you make it, that's the main point. The time that exists between trades that need to be taken is far greater than the effort and time it takes to post a simple journal entry.
Most make it too complicated, thinking they need to find every emotional glitch or technical chart snag or discuss a dozen different ways of doing something. It's much simpler - say what you did, why you did it and what happened. It's for your benefit first and foremost, anything else is a bonus, and a handful of lines is plenty.
As regards looking good or looking bad, you have to get way past that in the real hot seat so I think you should discount that. We all screw up, usually in style at some point, and usually frequently in some phases of the journey. It's irrelevant and it will always happen.
As regards distractions, advice, gurus and all the other shizzle, the same applies, if you can't ignore them in a journal then there's no chance in the hot seat.
If you want to find a method, hone an edge and really make progress at this job I think it's hard to beat. I've kept two real slum dog chat holes of journals and I would have no chance of doing what I can do now if I hadn't kept them. Despite how casual they are I have always recorded a summary of all trades taken, always both winners and losers. I have also run three separate monthly evaluation exercises, in each case achieving terrific gains and then blowing them out, all in public. No better therapy exists. I am currently in the fourth, this time with more paint.
For me one of the most important aspects comes from one of my sports. The phrase 'having your card marked' has several meanings, some rather dark. I prefer the golf one - you don't play a game of golf and mark your own card, you swap cards and cross check for good reason - because real mistakes get made and because rose tinted spectacles appear out of nowhere. It's just too easy to say to ourselves 'I know what I should have/would have/must do/will do'. No, you have to say what you actually did do, only then is it real. And only then will change occur for the better.
Journalling is like sharing our cards, we can be confident that what we see is real and know where we are in the journey, no point pretending to ourselves otherwise.
Keep them short, light, honest, direct and simple. No great audience needed and no more detail needed, it either tells a good story and each chapter made a difference to our life or progress, or we weren't serious anyway.
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Yes, I know, but there are still plenty in real life. Get used to making your own judgements about how long the lines between the two different sets of arrows are, not picking the one the rest of the group says is the longest.
Best of living and trading to you.
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Let's look at it another way. If you are trying to be a tennis player, for example, do you post your mistakes online hoping that somebody will help you solve them?
No, you either hire a professional coach, or you study the game yourself by watching the masters and analyzing what you do differently, where you fail, what is your weakness, where do you make mistakes, and you practice.
Of course it's an extreme example, but still there is something to it.