How many times have you read a book or a post telling you to keep a trading log. But you don't. Or it isn't consistent or some other excuse.The reason I believe that most traders don't keep a log (remember most traders don't make money either) is because it requires discipline.
And it requires that you confront your trading - warts and all.I've posted a copy of today's trading log for the ER2 and YM. You'll notice that there are 2 trades that shouldn't have been taken at all! Also you'll note I calculate my average winner, average loser, and my winning %. That tells me my expectancy.
Also all my profits and losses are denominated in R values (that's risk values) not ticks or dollars. This keeps me honest.
If I risk 20 ticks to make a 2 tick trade then I don't get "rewarded" for that. However if I make a 20 tick trade with a risk of only 2 ticks then I do. By the way thanks to ForexGen for the inspiration for the grading system you see on this trading log. The idea is that for each of my trading components: 1) signal, 2) mechanics, 3) Position Sizing, 4) Trade Management, 5) and Exit mechanics I get a grade - just like school. Depending on how I handle each of those components. So at the end of the day I can quickly evaluate where my weak points were. Read more…
Today I had trouble identifying valid signals. It was tough - we were in a trending market most of the morning (and this is a methodology that looks to fade breakouts). Good luck with your trading and I hope this inspires you to keep a trading log or improve your existing trading log.
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