Each trader has their own brand of crazy and we need to see it all cause we can’t improve what we don’t see. The main purpose of a trading journal is to become more conscious of ourselves, markets and of us trading markets. There are many ways to structure it but keep it as simple as possible, personal to your needs and let it evolve as you do. You mainly want to use the trading journal to have a place to be accountable and make observations of your trading. What you find will help you to create any needed disciplines or make any adjustments in what or how you trade.
In the end, we are working towards mastery of our trading craft which requires working towards mastery of ourselves. A trade journal is a tool that helps us take responsibility for everything we think, feel and do when it comes to trading. If you have some resistance to it, just do what you can and ease your way into it. The writing by itself will begin to loosen some things up. In the video, I will give some ideas about how to structure your journal.
Shane Blankenship
Shane Blankenship
Foundations of Trading Part 4: Trade Planning
We make a trade plan, execute, then evaluate to see what we can learn about price and ourselves. Making and documenting a trade plan helps us to clarify what it is were doing and thinking at the time of a trade, it makes us more accountable. A trade plan can also serve the purpose of holding us steady after we are in the trade and subject to more emotional reaction.
A trade plan is a personal thing that needs to be adapted to you and your trading. Its best to keep it simple. My trade plan just asks a few simple questions and then I take a snapshot of the chart.
- Why am I entering?
- Why am I placing my stop there?
- Why am I moving my stop?
- Why am I exiting?
Its a simple question that asks why are you doing what you are doing? Don’t just be technical about this, also answer the questions as honestly as you can. If you entered a market cause you were impulsive or because the moon was blue or whatever.. write that down. If you are placing your stop real close cause you are scared of risk, write that down. If you jump out early cause you cant take take it anymore write that down. Don’t be embarrassed you have plenty of company including me now and then but you can be one of the few who actually takes an honest look and learns. Here is a recent trade plan of mine that did not get filled.
Shane Blankenship
