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MrPaul

Trading Journal Checklist

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Trading Journal Checklist

 

Almost every trader I know who has been doing this for awhile has learned the importance of keeping a trading journal. While all traders approach it differently, the key is to have some way to measure, track, and stay focused on improving your performance.

 

In his column "The Write Stuff" at Trader Monthly, Doug Hirschhorn recommends that trader adopt a 15-point template to making the most of our trading journal and I think you'll find these points helpful as a starting point:

 

1. Establish your trading rules for the day. For example, if you've been struggling lately, you might establish a rule that you'll take 50% off your winners on the first hint of a pullback.

 

2. Identify the major world events that are currently in play.

 

3. Figure out which economic numbers are in play today.

 

4. Create a motto for the day. Keep it brief and positive.

 

5. Develop your morning game plan (be sure to do so before the open).

 

6. Evaluate your morning game plan (how did things really play out? How did you react? Did you stick to or stray from your game plan, and why?)

 

7. Prepare an afternoon game plan (create it over lunch, say, before the afternoon session begins).

 

8. Evaluate your afternoon game plan. A quick retooling of strategy could pay off in the second half.

 

9. Ask yourself: What did I do well today? What could I have done better? Use this step to dig deep and engage in some genuinely tough self-analysis.

 

10. List all your trades that appear to be working and all those that aren't.

 

11. Call the market -- is it range-bound? Trending? Which sectors are in play?

 

12. Determine for yourself: On a scale of 1 (low) to 10 (high), your level of focus and concentration for the day.

 

13. Your daily question: Am I a better trader today than I was yesterday? If so, why? In other words, what exactly have I learned? A day without learning is a wasted day in a trader's career.

 

14. Which trades should I pay attention to tomorrow?

 

15. My goal for tomorrow is?

 

Without any doubt, the kind of checklist Doug has developed is focused on the short-term trader and I think these are good starting points. I also think that having a journal is appropriate and useful even for those of you with much longer time-frames. For example, if you're more an intermediate to long-term investor, you'll need to extend the time frames on just about every one of these checklist items. For example, instead of developing a daily game plan, you'll want to create a monthly or quarterly plan instead and so on.

 

The point is that if you integrate and customize some of these checklist items into your daily routine I think that you'll certainly have a much better understanding of how you're really performing and be in the position to improve that performance. It takes time and effort at the beginning to get a trading journal, but you'll find after awhile that it will become habit and you'll actually enjoy the work you put into it.

 

 

source: The Kirk Report : Trading Journal Checklist

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It's great stuff but I think it's a bit too complicated. John Carter's covers keeping a journal and it seems to fit what I see as a more useful and approacable concept to deal with. Taking in the economics numbers and world events don't much sense to me. Just my personal opinion.

 

I keep a journal and requires nothing but charts and notes in those charts. Says everything I need to know. Adding news and world events would only mess up the mind by taking into account chaotic and over-emotional reactions of traders, not the stuff we want to take into trading, I think.

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It's great stuff but I think it's a bit too complicated. John Carter's covers keeping a journal and it seems to fit what I see as a more useful and approacable concept to deal with. Taking in the economics numbers and world events don't much sense to me. Just my personal opinion.

 

I keep a journal and requires nothing but charts and notes in those charts. Says everything I need to know. Adding news and world events would only mess up the mind by taking into account chaotic and over-emotional reactions of traders, not the stuff we want to take into trading, I think.

 

Yeah I agree torero,

 

The checklist above doesn't relate much to day trading as it does longer holding periods. Perhaps a style where you could get caught in a devastation gap or something. I always like getting a feel for sentiment if I'm going to be in a trade for longer than a day.

 

I liked Carter's journaling methods as well.

 

:)

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Here's my quick checklist:

 

1. Build a trading plan

2. List the price levels I will be looking at

3. Identify my level of focus and concentration (I find this key to trading and I would usually stop or take it easy when my focus is off)

4. Identify the overall trend and market condition

5. Check what economic numbers are coming out

6. Look for overnight support or resistance

7. Look for volume on the SSF's

8. Trade

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while we're on the subject, I'll put my checklist and journal:

 

1) check the daily, weekly and monthly charts for important resistance/support, pattern and trendline levels and determine if they are bullish or bearish. Determine at what level above is bullish and at what level below is bearish

2) Check the intraday chart (60 min and 3000 tick in my case) for same as above.

3) Mark the nearest S/R and trendlines to current prices

4) Check for measured targets and compare them to S/R and trendline level.

5) Write down all the above numbers into trading plan

6) Trade only from those levels. When levels are near, I watch price action for clues if the prices respect levels or not (higher highs/low and lower highs/low from bounce or price piercing the levels).

7) Write down reasons and emotions felt before and during trade

8) Position manage the trade (i.e move stops, draw new TLs are market reveals itself).

9) Exit at target or unless market reveals the tendency in opposite direction

10) repeat step 5 with new levels written.

 

I review the journals later and see where I did wrong and did right. After a while, I recognize flaw in the entry/exit or analsys almost immediately and readjust the chart and refocus and reread my rules and trading plan to remind myself to be ready for the next trade.

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Great list, creating that framework helps me sort through the chaos of the market.

 

At the end of the day I ask myself these questions...

- Did I follow my rules?

- Did I take all the valid setups?

- Did I hold to my targets?

 

You can never had too much data, so I always record everything and love excel for all of that analysis.

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