Using a good trading journal will make you richer.
I know, it’s a bold claim, but it’s just impossible to be successful at trading without keeping good records.
It’s as simple as that.
Sure, you might win for a while, but when things go off track (which they inevitably do, as market conditions change), you’ll be left trying to second guess, what’s gone wrong, and what you can do to fix it.
With accurate records, you can quickly spot when your performance is dipping, and you can find a solution. Plus, with a good journal, it won’t feel like hard work.
It’ll save you time, heartache, and – most importantly – can stop you getting wiped out.
So what does the perfect trade journal do?
There are some out there that’ll make you beautiful charts … produce acres of data … and that’s great if you have a team of analysts to go through it. But for most of us, we want a quick picture of how much we’re winning … how much we’re losing … what our win rate and what the all-important expectancy number is.
The new Trader’s Bulletin trading journal spreadsheet does all this for you.
You just enter the basic details of your trade (date, entry price, exit price etc), and the leg work is done for you.
And if you’re not yet convinced that you need this. Here are 5 good reasons that the Trader’s Bulletin trading journal can make you richer …
1. See exactly which trades have produced the best returns, and which aren’t pulling their weight. That way, you’ll know where you should be focusing your attention.
2. Keep tabs on your overall performance with the at-a-glance win rate and expectancy figures, so you can react quickly when needed.
3. The stake calculator automatically tells you what your stake should be, based on your fund size and stop loss distance, so you should never find yourself overexposed.
4. By tracking your average win size and average loss size, you’ll build a better picture of your risk-reward profile than just basing this on your stop distance and profit target (which isn’t where you always actually get out of a trade).
5. Win rates can fluctuate, but over time, you can expect to see your settle within a range, and you can work towards improving this figure by picking out the trades less likely to succeed, and cutting those out of your strategy.
6. Record your thoughts and observations in the comments section. This is a good place to experiment with ideas for improvements … trades you weren’t sure about from the outset … you can test how good your intuition is.
7. You can now add your own columns to test alternative entry & exit criteria to see if they’ll make you more money. Careful testing is crucial before making any changes to your trading rules.
8. You can set up a spreadsheet for testing any new strategies and systems to see if they’re up to scratch before you risk any money on them.
9. When you’re going through a rough patch, with a cluster of losing trades, and you’re doubting your strategy – it can be really helpful to look through your trading journal to see how much your performance has actually dipped (it’s often not as bad as you think it is), and where the problem is – is it your win rate that’s fallen off, or the size of your winners?
10. Having a concrete trading journal to look through will force you to address problem areas of your trading. Most of us are pretty accomplished at kidding ourselves … at papering over the cracks in our trading … forgetting about the bad bits! With the details of every single trade laid bare in front of you – you’re forced to address the problems. It might take a few deep breaths at first, but there’s a sense of relief that comes from tackling these things head on.
And – course – you can also pat yourself on the back for the things that are going well!