When it comes to journaling and recording trading performance, there are two types of formats a trader can choose from. Both have their pros and cons and in this article, we want to help you understand the differences so that you can find what is best for you.

#1 A written journal – a.k.a. The Diary

Most traders don’t keep a real journal, but what they have is a diary. Traders with a trading diary mostly use Word, Evernote or just a physical notepad to write down thoughts, feelings or ideas about their trades.

In its essence, the idea of a diary journal is good but the execution is usually less than optimal and there are no benefits from keeping a written journal if the notes just disappear in your drawer and you never look at the again.

In an article, published on Forbes.com, Dr. Brett Steenbarger wrote the following about trading journals:

“Medical patients report a decrease in their symptoms when they write about their stresses–and especially when their writing enables them to take a fresh perspective on those challenges. […]

Alternatively, when I have directed managers to keep solution-focused journals, describing what they did well, how they did things well, and how they could learn from their successes, the managers were: a) more likely to sustain journaling and b) more likely to find writing to be empowering and helpful.”

These findings imply that a written trading diary can help you deal with stress, emotional pain and other psychological problems more effectively.

If you want to make the diary journal work, then we recommend that you keep the notes about your trades short and precise – avoid lengthy texts because the likelihood that you’ll ever read them again is close to zero. Instead, write down bullet points with the most important lessons and things you want to remember. This makes for an easy and effective review process. Keep the list next to you when you’re trading where it can act as a daily reminder.

#2 The trading journal

This type of trading journal is an analytical journal which analyzes the real trading data and the trading performance – such as entries, exits, drawdowns, strategies, setups, quality of trades, trade management, discipline, risk, and all other aspects of a trader’s performance. It then provides practical tips on how to improve trading performance or find performance leaks.

Traders often (mis)believe that an Excel spreadsheet is a good platform for such an analytical trading journal. But unless you are well educated in performance analysis and statistics, self-made journals are nothing but data graveyards and traders quickly abandon their journaling practice because it’s boring and they don’t get any value out of it; almost every trader has started some kind of journaling routine before but quickly gave up after a few weeks.

A real analytical trading journal, such as Edgewonk, analyzes relationships between all performance metrics, it puts the data into meaningful context and then puts out practical tips. Edgewonk even goes one step further and with the customization opportunities and the ability to track emotional and process-oriented data points, the trader receives insights into his trading and practical tips that he can start using right away in his trading.

Here are the most important points that a real trading journal should fulfill:

• Customization and personalization

A trading journal must grow with a trader and a trading journal is something personal. Edgewonk offers countless personalization features so that you can create a completely individual journal, based on your needs. Whether you are a new trader who is just starting out, or you have been trading for decades, Edgewonk has countless features built-in that will help you in your current state.

• Practical tips

After you have entered your trading data, the journal must show you what is going well, where you have problems and how to correct those. In Edgewonk, you get tips around trade management, you can evaluate your level of discipline and it provides you with insights into every part of your trading (order placement, risk management, position sizing, alternative trading approaches and future performance, just to name a few).

• Effective review

The problem of diary journals or self-made spreadsheets is that they are input-focused and do not provide actionable tips. Edgewonk is like a real personal mentor and you can use the journal during your preparation, your post-trading analysis or for weekly/monthly review. All data points are meaningful and you receive practical tips about your trading that you can implement right away.  

How to keep a journal the right way

We might be a bit biased here, but we built Edgewonk for a reason and thousands of traders chose Edgewonk as their go-to journal because it’s the one stop shop for everything journal related.

The best thing about Edgewonk is that you can make it as simple or as complex as you want. If you’re starting out, focus on just the basics and let Edgewonk help you develop discipline. Once you progress and mature as a trader, you can use the other features to work on other aspects of your trading.

If you want to establish a journal routine but don’t know where to start, check out our trader development course where you get the Edgewonk journal and a step by step video guide on how to improve your trading, your routine and performance step by step.

Today we are releasing our September update and we’re excited to announce some great new additions and improvements.

Here is what is new:

• “Missed Trades” tab:

You can now journal trades that you did not take, missed or weren’t executed. You can compare your real trading performance to the potential performance of the missed trades and so get even deeper insights into your trading.

• We redesigned the Settings tab to improve the handling.
• We fixed and improved some of the broker imports to make your journaling more efficient.
• We improved the code and the overall software in the background to make Edgewonk faster, more stable and overall more enjoyable.

What we’re working on right now:

• The much sought after statement imports for IB and Oanda will come soon.
• An automatic import from your MT4 platform directly into Edgewonk.
• We will add more graphs and visual analytic features.

How to update:

1. If you have used the Windows installer, you will get the update automatically the next time Edgewonk is started through the desktop shortcut
2. If you used the universal installer, simply execute the Edgewonk-updater.jar or Edgewonk-autoupdater.jar and Edgewonk will notify you if there is a new update available.

Do you have the latest version?

Simply go to Settings and under Your License, you will see your Edgewonk version.

The latest version is: 2.0.23

We have just released a patchfix update with two changes:

• You can enter prices with more than 2 decimals in the Missed Trades feature
• You can directly enter new instruments and setups under Missed Trades

Thank you to everyone for the great feedback regarding our latest update. We’re glad that you like the additions and new features. We’ll continue improving Edgewonk to create the best journaling experience possible. 

Happy journaling. Your Edgewonk team

How to update:

1. If you have used the Windows installer, you will get the update automatically the next time Edgewonk is started through the desktop shortcut
2. If you used the universal installer, simply execute the Edgewonk-updater.jar or Edgewonk-autoupdater.jar and Edgewonk will notify you if there is a new update available.

Do you have the latest version?

Simply go to Settings and under Your License, you will see your Edgewonk version.

The latest version is: 2.0.24

With the latest Edgewonk, you can now also journal and analyze trades that you did not take or that you missed.

Why is this feature so important? Many traders miss trades or are hesitant when pulling the trigger and then often miss potentially good trading opportunities. This then leads to a lot of frustration and can be tough on a trader’s confidence.

When a trader is just starting out with a new system, he usually doesn’t fully trust the signals and the system yet. Thus, he will often pass on valid entry signals and then regret it afterward when he sees that price is approaching his target without him.

In Edgewonk, you can now enter those trades and later analyze them. With the new missed trades feature, you can compare your actual performance with the potential ‘missed trades performance’ and you can see exactly how much money you left on the table.

While seeing how much you could make can be challenging emotionally, it should serve as an eye-opener and help you build trust in your system at the same time. Once you see that your analysis is usually right, the missed trades feature gives you the confidence in your abilities to trust the signals and start taking more of those trades.

The missed trades feature is ideal when you are starting with a new system, when you struggle with trust and confidence, and when you want to keep track and test different setups. It takes out the guesswork and quantifies a lot of the questions and doubts many traders have and cannot answer – until now.

Missed Trades – Overview

The screenshot below shows the completely new missed trades tab in Edgewonk. Similarly to the regular journal area, you can see the missed trades in the center. The green button lets you enter new missed trades. And on the right, you get a breakdown of your performance statistics.

Missed Trades – Statistics

The statistics on the right compare the Real performance and the Missed performance. You can compare performance metrics, Winrate, R-Multiple, Reward:Risk Ratios and many more data points.

You can already see here how keeping track of missed trades and finally being able to get accurate data about those types of trades can be a great addition to your trading and journaling routine.

You can try edgewonk for free and get your free trial here: Edgewonk’s free trial

Checklist are used in different professions to standardize procedures and to minimize the potential for errors. When someone is doing the same task repeatedly, it’s easy to get sloppy or not give it the seriousness it deserves when you believe that you know how to do it anyway.

Trading is the ideal field for utilizing checklists because traders repeat the same things over and over again. Especially if you are a technical trader, you are usually trading the same patterns and following identical rules and signals for each trade.

A trading checklist usually lists all the signals or the criteria that you require before you can enter a trade. It’s also a good practice to start writing down the criteria and if you notice that you are not really clear about your rules and what defines a trade entry, then maybe you don’t know your system as well as you thought. Back to the drawing board!

Once you have a checklist ready, you use it in your everyday trading. You place the checklist next to you and when you are about to enter a trade, you go through the points one by one to check them off.

“I review my checklist. It’s a handwritten sheet laminated in plastic and taped to the right-hand corner of my desk where I can’t overlook it.” – Marty Schwartz

In the beginning, a checklist can, thus, help you become more aware of your trading and help you stay on track and not miss critical things. And when you are more experienced, a checklist can be helpful because it forces you to be aware of your actions and to eally think about the trade you are about to take.

Checklists in with Custom Statistics Edgewonk

In Edgewonk you can use the different journaling features to keep track of the quality of your trades and how well you respected the rules on your checklist. Such an approach will then help you further understand your trading, where you might need to work a little on your approach and what works well. And, you might even be able to see which signals work the best for you.

Here are a few approaches how you can track checklists and signals in Edgewonk:

1. General comments

If you don’t want to get into the details, you could just set up some entry comments and then tag your trades based on those. Entry comments could look like:

* I am using the term ‘signals’ interchangeably with the individual points on your checklist.

2. Custom Statistics

The Custom Statistics in Edgewonk is a powerful tagging mechanism and there are multiple ways how you could use the Custom Statistics here:

2.1 Numerical

If you just want to get an idea of how well you executed your trades then using a numerical custom Statistic might be the way to go:

You can see that this approach will give you great insights into your trading. However, there is an even better approach.

2.2 Criteria based

Instead of just saying how many criteria are present, you can name the actual criteria and then check them off. This might require a little testing in Edgewonk, especially if you trade multiple patterns with different criteria.

Let this just be an inspiration for your own trading and think how you could use this in your Edgewonk trading journal. But the possibilities and the insights you will get into your performance once you start exploring how well individual signals work are priceless.

You can use the Custom Statistic checklist filter in Edgewonk and in all the different analytic tabs and so really understand your trading, your patterns and the different signals as well.

Do you want to try Edgewonk? Get the free trial here: Edgewonk’s free trial

Do you like challenges and enjoy working hard for your success or are you one of those people who try to look for shortcuts and avoid solving hard problems? There are mainly two types of people when it comes to the attitude towards progress, improvement and success: growth and fixed mindset people.

Most people are not aware which group they belong to, but being self-aware of your personal mindset and attributes is essential for success – not only in trading but in life as well.

In this article, we will help you identify which group you belong to and how you can move forward and start improving. 

The fixed mindset trader

It is safe to assume that the majority of amateur traders have a fixed mindset which is often the reason for why they are not seeing the success they are after. A trader acting in a fixed mindset is often not even aware that he is limiting his chances of success and that his actions and thought processes make it almost impossible to achieve any level of consistency in trading.

Here are the obvious signs that you are a fixed mindset trader:

#1 You focus on P&L too much

Fixed mindset traders exclusively focus on their P&L and derive their self-worth from their current account balance. Focusing on the money alone will keep you from making progress because you are not objectively judging your trading decisions, but only care about the outcome of a trade which is a variable you have no control over.

In Edgewonk, you can hide your top account numbers by clicking on the green wallet icon. This way, your performance figures aren’t always looming above you. Also, we recommend hiding the account balance info in your trading platform.

#2 You don’t review your trades

Traders with a fixed mindset don’t journal and do not review their trades. They do not actively engage in any form of study and avoid putting in the effort. Instead, they are constantly looking for shortcuts and new get-rich-quick possibilities.

Do you have a journal and do you keep track of trades? Indeed, this can mean work and you need discipline but if you want to become a growth mindset trader, you have to start putting in the work.

#3 You are discouraged easily

If you frequently change your trading method or make changes to your trading strategy after one or two losing trades, you are acting with a fixed mindset. Fixed mindset traders are not in it for the long-term and they are discouraged easily when they don’t see instant results. They don’t treat trading like a business but like an activity where they expect an instant return.

#4 You blame others and your outside circumstances

Even after consistently losing for months and years, traders with a fixed mindset blame ‘irrational’ markets, unfair price manipulation and the ‘evil finance industry’. Denying the fact that you are responsible for your failure (and success) leads to nowhere and it keeps you from progressing. Only when you can accept that it’s your own inability which is causing you to lose money, you will be able to take the steps necessary to make a change.

Keeping an objective trading journal is the first step towards a better future. Of course, it will hurt once you start seeing that it wasn’t your trading strategy but YOU who caused all the losses, but only if you face your problems head first will you be able to turn it around.

The growth mindset trader

People with a growth mindset are the ones who stand out in any field and profession. Success without a growth mindset is not possible. The following points characterize the trader with a growth mindset and show his thought process as well.

#1 You put in the work – without questioning

A growth mindset person does not skip their ‘homework’ or finds excuses for why he can’t prepare his analysis and journal his trades. He just does what he is supposed to do because he understands that it doesn’t work without it.

There is no questioning or looking for shortcuts.

A growth mindset trader knows that it is about setting a schedule, showing up each day and sticking to it. It’s about focusing on building the right identity rather than worrying about getting the right result.

“Motivation and inspiration is for amateurs. The professionals just show up and get going”

#2 Complete resilience and commitment

Growth mindset people don’t look for shortcuts or for easy ways to get to where they want to be. They know that achieveing success is not going to be easy and that it will most likely require years of dedicated work. At the same time, they also understand that success is not an accident or requires luck – it’s planbar and predictable. Success is the end product of their consistency and their determination to achieve what they want for themselves.

#3 Dealing with challenges

A trader with a growth mindset knows that there will be rough times and many setbacks along the way. But he also understands that every challenge has a learning opportunity. Failure provides lessons and reveals our personal weaknesses. A growth mindset trader, therefore, does not try to avoid challenges and gets discouraged easily. Instead, he understands that by finding solutions for his problems, he will reach his goals much faster.

“You never fail until you stop trying.” – Albert Einstein

#4 Self-awareness and feedback

The growth mindset trader is totally self-aware and does not shy away from criticism because he knows that outside feedback is necessary to evolve.

Whereas most traders have a delusional picture of their trading abilities and sugarcoat their consistent failure, the growth mindset trader is aware of his weaknesses and mistakes. No one is born a great trader and trading successfully requires a unique mindset and set of skills. The growth mindset trader doesn’t accept his limitations but works relentlessly towards his goals.

Now what? If you’re looking to take your trading into your own hands and become serious about it, take a look at our trader development course. You’ll get the professional Edgewonk journal and access to our development course (click here for more info) where you’ll learn how to turn your trading around and give it the seriousness it deserves. 

We just released a new update for Edgewonk in mid-October and here is what is new:

• Redesign of the Home screen
• Fix bug with MT4 importer
• Improved IG importer for new formats
• Improved the Excel import feature
• Improved the stability of the Edgewonk database for more security

What we are working on:

• New importer for Interactive Broker
• Automated import for MT4
• New graphs for better evaluation
• Improve the scale in/out functionality

With that, we are wishing all our Edgewonk users happy journaling and we hope you like the new update. Thanks for the ongoing support and feedback. 

How to update:

1. If you have used the Windows installer, you will get the update automatically the next time Edgewonk is started through the desktop shortcut
2. If you used the universal installer, simply execute the Edgewonk-updater.jar or Edgewonk-autoupdater.jar and Edgewonk will notify you if there is a new update available.

Do you have the latest version?

Simply go to Settings and under Your License, you will see your Edgewonk version.

The latest version is: 2.0.25

In our quest for helping traders improve their performance, we often get asked how to achieve a higher winrate and stop losing trades. We feel that this is a very important question because it looks at the wrong aspects of profitable trading, yet it is asked by nearly every trader a one point.

The best traders don’t have the highest winrates. The best traders keep losses small and let winners run. Whereas the amateurs lose money even with a high winrate because they let their losses get out of hand.

Winrate lacks context

Looking at winrate by itself does not provide any meaningful information. Let’s say you have a winrate of 90% but if you let just one losing trade get out of hand, while you always cut the winners short, you will end up losing money.

What you should focus on instead

1. The size of your winners and losers

First of all, you should pay more attention to the relationship between the size of your winners and the losers.

Look for big differences or major outliers. Here are a few things in your Edgewonk trading journal which can help you with this.

The Home Tab

In your Edgewonk Home Tab you see the comparison between the average winner and the average loser. In the journal below you can see that the average loser is larger than the average winner. This is usually not a good sign. It does not automatically mean that the trading strategy is bad or that the trader is doing something wrong, but it shows that the trader has probably some room for improvement which can be a good thing.

Holding Time

The Holding Time sheet provides a quick and easily interpretable overview of your trading performance. Most importantly, you should look for big outliers and large clusters.

In the journal below you can see that the trader had a few large losses which also all had a very long holding time. It looks like the trader tried to hold on to losses for too long, hoping price would turn around.

At the same time, his winners are mostly clustered at a very low holding time. Maybe the trader should look into holding his winning trades longer and cutting losses early. The Updraw and Drawdown are statistics in Edgewonk he should consult now.

The Traffic Lights

The Traffic Lights in Edgewonk are unique and they immediately show you whether the size of your losses is too large or if the winners are too small for your overall performance data.

Below you can see that the PCR (the traffic lights for his realized trades) is mostly red which means that he cut his losses too late and his winners too early.

The Trade Analytics

The Trade Analytics provide a very detailed breakdown of your trading performance. For our purposes, we suggest that you set the Ordering criteria on the left to Trade Outcome which will give you a comparison between winning and losing trades.

The table then provides a lot of meaningful data such as the size of your trade – do you size positions correctly or does a larger losing size show that you become emotional? The R-Multiple is an outcome metric and it shows how large your winners and losers are in comparison. And the RRR Planned shows how the initial outlook of your trade was. All those metrics can be very helpful, especially if you see major differences and huge outliers.

2. Your process

Edgewonk comes with a variety of features and metrics that allow you to analyze your process, your trading behavior and your overall discipline.

The Tiltmeter

The Tiltmeter at the top shows you how well you have respected your rules and whether you have repeatedly broken your rules.

Below we can see that although the trader has a high overall score (269), his recent trading performance shows negative values which means that he made bad trading decisions and broke his rules. This should serve as a warning and a heads up for the trader.

Trade Management

The Trade Management graphs if you are leaving money on the table or if you are mismanaging trades by analyzing how trades are executed and exited.

Below we can see that the green graph (the performance without management) is way above the red graph (the current performance) which means that the trader is cutting winners too early and letting losses run too long. This trader could, potentially, improve his performance by just not interfering with his trades. A passive management approach is often better for inexperienced or emotional traders and the Trade Management graph shows this nicely.

3. The variance

Finally, we can consult the Simulator in Edgewonk to get a feeling for variance. Variance means how much volatility you are likely to see in your trading performance. For example, if your losers are relatively large on average, compared to your winners, the variance will be high. But if your winners are larger than losers, the variance is usually lower.

Having a low variance is usually easier because it is less stressful and traders are not as likely to suffer from emotional trading problems.

Below you see 3 different simulations of an account development with Edgewonk. All parameters were kept constant and the only thing that we changed was the size of the average losing trade. You can see that the variance differs significantly and it shows that keeping losses small and winners large is the way to go.

So now it is up to you. Use your Edgewonk journal to analyze your trading, understand your performance much better and use those insights to improve your performance.

We have started a new review service and if you are an Edgewonk user, you can send us your journal and we review it: Edgewonk’s review service

In our last post we announced that we’re starting a new video series where we review your Edgewonk trading journals (click here for the rules and more info).

Today we’re starting with our first video and thank you again for all the submissions so far. We look forward to your journals!

To sum up the most important findings, we have compiled a list for you:

• The trader is going into the right direction. His equity graph is trending profitably towards the top right
• His focus should be on the process. His data shows that he loses most of his money when he is breaking rules
• His system seems to be profitable as we can see by looking at his well-executed trades based on positive comments/tags
• Some setups perform better than others. The trader should look closer into the underperforming setups
• His stop loss and take profit placement shows inconsistencies
• Stops seem to be too conservative and he is reducing his potential expectancy
• Take profit orders are either set too far away or the trader closes his trades too early
• The Trade Management tab shows that a passive management approach would perform better
• The Simulator confirms that the trader is likely to experience high account volatility. 

Improving performance step by step

The next step now is to start making small and targeted adjustments while observing the impacts of those changes.

Whenever you are making a change on your trading strategy or approach, it’s important that you do not change everything at once because it’s impossible to analyze the effectiveness. It’s better to do it step by step so that you can see how your changes impact your performance. 

The most dangerous trading mistake any trader can make is “system hopping” and we believe that it is the single biggest cause for failure in trading.

System hopping means that a trader keeps changing his trading method, his indicators, entry signals and strategy all the time. While looking around for new strategies is normal in the beginning, when a trader still hops around systems after months, his chances of reaching profitability in trading are slim to none.

Why do traders change systems?

Traders are always hoping to find the Holy Grail that will make them a lot of money without putting in a lot of work. But when does it ever work that way in life?

When traders do not understand the role of losses and falsely believe that a good trading strategy should only produce winners, traders are more likely to change systems.

Furthermore, a profitable trading strategy is not something that you just stumble over, but it has to be built step by step. And, most importantly, the weakest link in your trading strategy is always YOU. Once traders can objectively look at their trading, they will see that their trading method might be performing well but THEY are the reason for their losses.

Why changing a trading system means that you will be a failure forever

Each time, when you jump from one system to another you start from zero again and almost all previous progress is lost.

There is absolutely no chance for you to ever improve as a trader if you approach it from this angle. You are neither working on yourself nor are you learning about the so important details and tweaks to a strategy which in the end can make it profitable.

Becoming a profitable trader means overcoming the obstacles and pushing through the walls to make it to the next stage. You cannot just avoid the confrontation and the hard work and then hope to still arrive at your destination.

Nothing worth having comes easy.

You win two times, then lose three times, and move on to the next system. Have you ever seen a successful entrepreneur change his business model every week?

Persistence is key to anything we do in life. The only persistence most people have in trading is that they try a new system every few trades. If you want to keep trading like this I suggest you go to the casino and start shooting some dice; it’s way more fun at least.

How a trading journal helps you win with any trading strategy

If you are in it for the long haul though and you really want to create a long-term profitable trading business for yourself, you better start treating your trading with the seriousness it requires.

A professional trading journal can help you in many ways to take the first steps towards sustainability:

1. The decision to invest into a tool that is not a flashy indicator or robot, but actually something that brings you closer to success if you put in the work, shows that you finally started taking responsibility towards yourself and your trading.
2. “I know I should be keeping a journal but it’s so much work” is what losing traders say. Man up, do what you know is right and you will move closer towards your goals.
3. If you put in the work, analyze and fine-tune your strategy in order to gain an edge in the markets, your trading journal will become the most valuable tool to you in your trading. It will be your treasure chest. It will become more and more valuable over time. If you hop to a new system, your treasure chest will become useless though. All the work you ever put in, gone. A trading journal will increase the connectedness to your system immensely, thus reducing the urge for system hopping drastically.
4. A professional trading journal will back you up with the confidence of numbers. You know that you have probabilities and statistics on your side, even during rough times because you have it black on white. You know where your edge is because your trading journal tells you where it comes from. No trading journal, no confidence. This leads to fear and ultimately hope, the worst drug in trading.
5. After starting to use a trading journal you will notice that most of the flaws and problems in trading that hold you back from making money actually come from within yourself. You are your own worst enemy. No system in the world will ever solve this. Once you recognize this, you will either be scared and give up (which is still better than hopeful system hopping), or start working hard to become better.
6. A trading journal can help you adopt any strategy that fits to your personality. A common reason why traders can’t sync with a strategy is because it doesn’t fit their personality. This is unfortunate because there are many great systems out there for free. But sometimes certain metrics of the strategy, e.g. a very low RRR, just don’t match with your personality, but everything else does. You really want to trade it because the strategy fits your lifestyle, but you can’t make it work because of the psychological incompatibility. With a professional trading journal you can tweak a strategy in such a way that it fits to your personality, and still compound on the experience of the user that created the system in the first place.

Conclusion: A trading journal is often the missing piece for a trader

A professional trading journal can do a lot for you. It can change your whole trading if you use it properly.

It is one big piece in the puzzle and it provides you with a lot of the missing information when trying to make educated, profitable guesses – which trading is all about really.

So the next time you think about hopping to a new system because you took a few losers in a row – think about starting to tweak the system first. Systematically, not randomly changing indicator values. That way you will come a lot closer to discovering your edge and it empowers you to become the trader you need to be.

This week, we are reviewing an Edgewonk journal from a trader with a profitable trading strategy and a good track record. However, there are a few things that we need to address and some flaws in his trading that keep him from reaching his full potential. 

If you want us to review your journal, make sure to take a look here: Edgewonk’s free review service

A few observations based on the trader’s performance: 

• He has long periods of good trading performance but a short period of losses can wipe out a significant portion of his winners
• He should learn to cope with losses more effectively to smoothen his equity graph 
• He has a few significant outliers in his losses. He needs to address cutting those losses early on to protect his performance
• His winners are relatively small, compared to his losers. He can look into letting winners run longer or cutting losses earlier
• For that, he can utilize the Updraw or also the Alternative Strategies in Edgewonk
• His missed trades are performing well. He should look into why he is missing out trades

Overall, the trader has a great performance but to improve his returns and achieve a smoother account growth, he needs to look into the few issues pointed out above. 

Hello and welcome to the latest Edgewonk update,

with the latest update in 2017, we have packed this new version with new features and improvements so that you can start into the new year in the best possible way. 

Here is a list with the features that we have included:

• Crypto compatibility – Edgewonk now supports journaling of crypto-currency trading
• 4 screenshots can now be attached per trade
• Tag trades as “Break Even” – first stage of break even functionality
• You can re-order Custom Statistics and Trade Comments now
• And-Or filter logic – You can decide if you want to filter using “and” or “or” filter logic in the Custom Statistics
• PDF Export (under Settings > Export > the new “Export Trading Journal Spreadsheet” will download your current Home Tab.
• The statement importer for “IG Markets” does now work for all IG statements
• Enter decimals using , or . 
• Improvements of other importers

What we are working on

The features below are our priority right now and we have been working on them for a while but we’re expecting those features to be released in our February update:

• New importer for Interactive Broker
• Automated import for MT4
• New graphs for better evaluation
• Improve the scale in/out functionality

With that, we are wishing all our Edgewonk users happy journaling and we hope you like the new update. Thanks for the ongoing support and feedback. 

How to update:

1. If you have used the Windows installer, you will get the update automatically the next time Edgewonk is started through the desktop shortcut.
2. If you used the universal installer, simply execute the Edgewonk-updater.jar or Edgewonk-autoupdater.jar and Edgewonk will notify you if there is a new update available.

Do you have the latest version?

Simply go to Settings and under Your License, you will see your Edgewonk version.

The latest version is: 2.0.26

The time between the years, when markets are quieter and everyone is in holiday mood, is the perfect time to prepare yourself for the next trading year and get ready for a fresh start. 

“I wish I had been more committed this year and taken trading more seriously. I did not reach my last year’s New Year resolutions and made little progress” is a phrase that many people will say during this time of the year.

Don’t let another year pass by without taking the actions you know will bring you closer to success. We show you how to make the next 365 days count, so that on December 31st 2018 you can look back satisfied and with improved trading results.

Step 1: Find weaknesses and strengths in your trading

Numbers don’t lie and that’s why we consult the Edgewonk metrics first. But we go much deeper than just looking at your return data and see which direction your equity graph points to.

Here are 5 important metrics from your Edgewonk trading journal and how to interpret them to get new insights about your performance and behavior:

Average Gain, average loss and expectancy

The average gain and average loss already tell you a lot. In your Trade Analytics, add the ordering criteria for Outcome and look at the column “Avg. Gain” for winners and losing trades separately.

Here, we first look for major deviations. You can also add another ordering layer for setups and/or instruments to get even better insights. If your metrics are all over the place and you cannot see any consistency, it might signal problems with your position sizing and risk management.

Tip: Apply different to the Trade Analytics and find those areas of your trading where you perform worst or where you can spot the largest deviations from the norm. This approach will often also provide new insights into how to create new comments, tags or custom statistics to look deeper into your performance.

You can also watch one of our latest review videos where we analyzed an Edgewonk journal from one of our users: click to watch 

The trading emotions – the Tiltmeter

The Tiltmeter visualizes your discipline and your (in)ability to follow your rules. First, take a look at your equity graph and evaluate the green bars you can see in the background – they are the visualization of your Tiltmeter. Ideally, the Tiltmeter should be low; a decreasing Tiltmeter signals that your discipline has improved over time; or, can you see that your equity curve goes down while the Tiltmeter is rising? All those clues can help you find negative trading patterns.

Apply different filters to the equity graph to see how the Tiltmeter changes. Identify those areas where your Tiltmeter is at its highest level and find out when you are performing worst. The filters for entries, exits and trade management come in handy here and they can help you identify your greatest problem areas which you need to work on. Or maybe you find out what works best and then do more of that.

Trading behavior – Trade Management

The Trade Management tab in Edgewonk analyzes your trading behavior, how you execute your trades and (mis)manage your trades in general. Often, traders see that their green potential Trade Management graph is above their red actual performance graph which signals problems in your trade management.

When the green line is above the red line, your potential performance is greater than your actual performance which means that you close trades early or let losers run too long. Let your trades run without interfering with them and you can potentially increase your performance.

Achieving stable account growth – The Edgewonk Simulator

The Simulator takes your current trading performance and simulates the outcome of 500 trades based on your current trading metrics. The Simulator provides insights about your potential account growth, volatility and drawdowns.

Apply different filters to the Simulator and see which types of trades have the greatest volatility (where the swings in the graphs are the largest or where the individual graphs differ the most). Then, either avoid those riskier trades or work on their performance to smooth out your equity curve and to achieve a better growth.

Step 2: Be honest with yourself. A reality check

Honesty and self-awareness are two of the main attributes of professional traders and high performers. Only if you are honest with yourself, you can identify challenges and work on what is holding you back. Here are 4 questions that will help you grow as a trader:

Do you journal regularly?

How disciplined are you when it comes to journaling trades? Do you often skip your journaling sessions or do it half-heartedly?

Ask yourself: how much does trading mean to you? How much do you really want to become a professional trader? It takes 2 minutes to enter a trade into Edgewonk. Is it worth spending 2 minutes per trade to turn your trading around? Don’t let another year pass and then tell yourself “I wish I had taken 30 minutes each week to journal all my trades. I would be a much better trader by now.”

Are you still a system-hopper?

When was the last time you have changed your trading method and your whole approach? How often have you change it in 2016 alone? The professionals know that no system will work right from the start. Pick one system, learn as much as you can about it, consult your Edgewonk journal to find weaknesses and ways to improve it, and then make it work.

Do you listen to your rules?

How disciplined are you? Do you make the same mistakes over and over again? Do you learn from past setbacks or do you keep making the same things?

Most traders don’t learn from their mistakes and they are always operating in the amateur mindset. They break their entry rules, enter trades based on guessing, widen their stop loss, add to losers, take too much risk, change systems every month and gamble with their trading account. They don’t have a trading routine, do not keep a trading plan, don’t perform a pre-market analysis, don’t journal and do not review their past trades.

I always say you could publish rules in a newspaper and no one would follow them. The key is consistency and discipline. – Richard Dennis

Apply some self-awareness and be honest with yourself. Does this describe your approach to trading? We are not here to bring you down; we want to raise awareness about the common problems that keep traders from reaching their full potential. Use the end of the year to evaluate your approach and become clear what you really want.

Did you make progress in 2017?

Most traders try to sugarcoat their trading which keeps them from moving forward. Did you make progress in 2017 or are you just telling it to yourself? Are you continuously losing money? Are you applying the level of professionalism that you need in order to turn this into a trading career? Or are you gambling and hoping to somehow make this work?

We know that the answers to those questions can be painful, but there is no other way to grow and improve. You don’t want to arrive at December, 31^st 2018 and still wonder why you are only losing money and not making any.

Step 3: The right goals and moving forward

Now comes the part where you decide, based on how you answered all previous points, how to make 2017 YOUR year. Here is our top 5 list that will help you reach your goals faster and empower you to make significant progress in 2018.

“This one step – choosing a goal and sticking to it – changes everything.” – Scott Reed

1. Be methodical about your trading

What are the things you have learned about your trading by consulting the Edgewonk metrics? What are your greatest problems and what is costing you the most money? Now, make a list of your 5 biggest performance killers and put it next to your trading desk where you can see them. The change in your trading performance will be significant.

2. Create a trading routine

The reason why most traders still look like amateurs and beginners, even after years of trading, is because they do not follow a routine and are in reactionary mode. We have talked about the power of following a routine before and you should create your own for the year 2018. Or enroll in our trader development course where we show you how to do it.

3. Get to know your system

This is an important point. STOP SYSTEM HOPPING. Your goal for 2018 should be to become the expert in your chosen trading strategy. What is your trading methodology? Are you a trend-follower, do you look for breakouts, do you fade trends or do you trade based on fundamentals? Whatever it is, pick the ONE THING you want to be good at and make it work. The progress you will see if you are really committed and focus on just one thing will be huge.

“Be like a postage stamp— stick to one thing until you get there.” – Gary Keller

The Tiltmeter challenge

In our trader development program, the Tiltmeter challenge is the first challenge because we know about the importance and the impact it will have on a trader’s performance. Whatever you do, always try to keep your Tiltmeter as low as possible. Focus on making the best trades possible, detached from the outcome and the money will follow.

Be realistic about your expectations

Most traders have unrealistic expectations and dreams when it comes to trading and their own journey which then leads to even worse results and a lot of frustration.

If you can’t make money in trading right now, wouldn’t it be great if you could start becoming a break-even trader in 2017 and be more disciplined about your trading? You don’t need to turn everything around within the next 12 months and once you realize that you are in it for the long game, you can approach trading from a more laid back position. Just focus on making small steps and little improvements within the next few months. Little by little you will get there…

Having wrong expectations and then not seeing the results creates a negative feedback loop.

Now it is up to you. Knowing what to do is typically the easy part – but actually doing it is what separates the professionals from the amateurs. How much do you want to become a better trader? And what are you willing to do for it?

We hope our guide helped you see the things clearer and that you now know how to approach your trading to turn the next 12 months into a period of success, growth and a lot of fun trading the markets.

Your Edgewonk Team

This week, we have received a journal from a trade who is barely breaking even with his trading system.

When reviewing his journal, we found a few areas that could make a huge impact in his way of trading.

At the same time, the way he used his Custom Statistics to track very specific aspects of his trading will help him when tweaking his system and shows how effective the Custom Statistics can be.

Here are the main key take-away points from this specific review:

• Grading trades is a great practice. It also forces you to really think about the different signals/criteria you use. And you will be able to understand the effectiveness of the triggers 
• Utilize the Alternative Strategies to explore ways of dealing with trade management or cutting losing trades
• Avoid trades with a red PCP traffic light as they are negative expectancy trades
• Work on setups with a low expectancy because they lead to higher variance and stress
• Custom Statistics that focus on trade quality and chart quality can be very helpful. This trader uses the Custom Statistics “Clean / Unclean Chart”, “Minor / Major Level”
• Bottom-Up means focusing on the basics first and laying a good foundation. We did not even look at the more advanced features in Edgewonk because this trader should work on his foundation first. Improving his foundation has the biggest impact on his performance and it’s usually the easiest to improve. Do not get lost in the nitty gritty when the obvious problems shpuld be fixed first.

If you want us to review your journal, take a look here: Edgewonk’s review service

Welcome to 2018!

We just released a quick update with a few fixes. The new version of Edgewonk is now 2.0.27 and you can check your version number under Settings > Your License.

This time, we mostly made a few changes, improvements and worked on things in the background:

• The 2018 year filter is now available
• You can change between monthly and weekly running statistics in the Home tab
• The currency symbols are now working again for all journals and platforms
• Break Even trades are not included in the winrate anymore
• Decimals are now displayed correctly for all markets
• Various fixes and improvements

Interactive brokers support

With the next update, we are adding an import for Interactive Brokers statements but we still need your help and it would be great if you could send us your statements for testing purposes. Send them to info@edgewonk.com but please do not send options statements.

The statement we need can be obtained as follow:

IB account website > Reports > Activity > Third-Party Downloads > Choose period > TradeLog format

You can copy and paste the report and then send it to us for internal testing purposes.

Journal Review

We also started reviewing our users’ journals with our new free review service. If you want us to take a look at your journal and show you how to utilize the Edgewonk features the right way, send us your journal. 

How to update:

1. If you have used the Windows installer, you will get the update automatically the next time Edgewonk is started through the desktop shortcut.
2. If you used the universal installer, simply execute the Edgewonk-updater.jar or Edgewonk-autoupdater.jar and Edgewonk will notify you if there is a new update available.

Do you have the latest version?

Simply go to Settings and under Your License, you will see your Edgewonk version.

The latest version is: 2.0.27

Today, we reviewed another journal from one of our users and made some interesting observations. First, let’s explore how to input trade data to get the insights about how to let winners run or cut losers. 

Do you want us to review your journal? Take a look here: Edgewonk’s free journal review

Highest Price / Lowest Price

Here you input price data about how high and low price moved during the trade. 

Generally, you would follow price until price has either reached the take profit or the stop loss and then input the data into Edgewonk.

In this journal review the trader did not follow the price long enough and he entered his highest/lowest price data only until he closed the trade, even if he closed the trade before the price reached his stop/target.

Updraw / Drawdown

Entering highest/lowest values into your edgewonk journal will activate the Updraw/Dradown. Those metrics show how close price came towards your take profit and stop loss.

In this review, we saw an Updraw of 75% for his winners. His initial Reward:Risk ratio was 2.8, he cut his winners on average at a Reward:Risk of 1.2 which is well below the 75%. 

We can so see that he could potentially improve his performance significantly if he’d give his trades more time to play out.

In this week’s review, we will understand how to improve an already profitable system and what to be aware. 

What really stood out in this journal is the impact of variance and being able to find specific components of a trader’s performance that are responsible for a significant amount of variance can be worth a lot. 

Finding such specific areas in one’s trading is only possible through journaling when your trading journal allows you to break down individual components of your trading strategy. 

What is variance?

We briefly want to address what variance means and how it manifests in trading performance. 

Basically, variance means the fluctuations in your account development. If you see that your equity graph shows wide swings, deep drawdowns, followed by steep climbs, then we usually speak of a trading performance with a lot of variances. 

Variance can be caused by a low winrate, coupled with a small reward:risk ratio, disproportionately large losses, large position sizing and high risk can also attribute to variance. 

In Edgewonk, you can simulate potential future account growth based on your current performance. The Simulator in Edgewonk shows multiple potential outcomes and the further apart the individual lines are, the more variance a system has. When the different lines are close together, then the system has less variance.

Below we compare a low and high variance performance. You can clearly see how the left screenshot shows a simulation where the lines are far apart, compared to the low variance simulation on the right.

The problems and dangers of variance

Even an already profitable systems can have a lot of variances and reducing variance should be a priority for traders when looking for improvements.

Losing streaks or long periods of sideways account development can be frustrating and it can easily lead to bad and sloppy trading behavior. Even though a trader was able to overcome previous periods of mixed trading results, it does not mean that it will always be the case. This is why trying to look for ways to minimize variance is so important. 

Edgewonk finds variance drivers

As this week’s review showed, there are different ways how Edgewonk can help you identify areas of your trading that cause variance. 

Here are a few tips how to use Edgewonk:

• Compare trades with a small and large RRR
• Find out of greater risk and higher position size causes more variance
• Do you have individual setups that are underperforming?
• Utilize a “Grade” custom statistic and find out if different qualities of trades perform differently
• Analyze negative trade entry, exit, and management comments and see which bad behavior is contributing most to your losses
• You can either use the simulator to check for the potential future variance or also look for large losses in the “Sum Gains” column in your trade analytics.

Do you want us to review your journal next time? Take a look at our free review service

With one of our latest updates, you can now also track break-even trades in your journal. 

Being able to distinguish between winning, losing and break-even trades can be very helpful because it allows you to get new insights into your trading behavior. 

Break-even trades and psychology

Besides being able to differentiate between the different outcomes of your trades, it can be even more interesting to understand how your break-even trades are created.

Although break-even trades can be a part of one’s trading strategy (moving the stop loss to break even after price moved a certain amount in your favor) emotional decision-making can also be an issue.

Especially when traders are in a losing position, many just hope that the price will return to their point of break-even to get out. This clearly shows emotional trading and is mostly not the optimal approach.

Or, traders who have been into profit will easily get scared out by just a small move back into the entry and then close trades prematurely.

Thus, we recommend you add a Custom Statistic to your Edgewonk journal to analyze your break-even trades further. The Custom Statistic can look like the following: 

Especially when you combine your analysis with the Trade Management function in Edgewonk you can easily find out if you potentially leave money on the table by managing your trades emotionally. 

Break-even trades in Edgewonk

During the trade input, you can tick the box for a break-even trade. This way, you fully control which trades will be viewed as break even. As we will see below, there is also another use case for this function.

Once you have entered your trades, you can use the outcome filter in the top menu and analyze all your break-even trades across the various Edgewonk tabs.

You can either view the break-even trades by themselves or also combine the outcome filter with the other filters to get even deeper insights into your trading performance. 

And you can also use the “Trade Outcome” layer in the Trade Analytics tab to compare winners, losers and break even trades side by side. 

Break-even and winrate

The break-even trades are not taken into consideration in the winrate in your edgewonk journal. 

Thus, some users reported that they started marking their trades with multiple entries and exits as break-even trades. This way, if you use multiple rows for your trades where you scale in/out, you can exclude them from the winrate calculations. 

We frequently receive emails from Edgewonk users who seek advice about their journaling routine after they have been inconsistent with entering trades or have even missed days and sometimes weeks.

Now the question is: do you have to go back and re-enter all the trades since you left off, do you pick up now and do you have to start a new journal completely?

There are a few points I’d like to discuss in this context which will also make the purpose of a journal and a journaling routine clearer.

The diet comparison

Journaling can be somewhat compared to a diet and after weeks of strictly following your diet plan, the day where you eventually binge eat and cheat on your diet has come. What now? Do you beat yourself up, tell yourself that you can’t do anything right and you go back to eating burgers and donuts every day and completely abandon your diet? Of course not! You acknowledge that such a slip isn’t the end of the world, that no one is 100% perfect and that you have to forgive yourself. Then, you go back to your diet and you pick up where you left off. The last thing you want is that one cheat meal (or even a few) will lead to a complete diet break and all your effort was lost. Because in a few months, you will be back to square one and when you are then once again unhappy and unsatisfied with yourself, you remember why you started the diet back then. And all the effort and time lost was for nothing.

The same is true for a temporary break in your journaling routine. It’s OK and we have all been there, but you can’t let a few days (or even weeks) of missed trades stop you from completely abandoning your journal. What is the alternative? You randomly take trades, you don’t review and analyze them and then you do not work on yourself and your trading!? That does not sound like a good plan and not like something a professional trader would do.

Remind yourself why you picked up the journaling routine in the first place. Were you unsatisfied with your trading results and you didn’t see the progress you were after? Did you want to take trading seriously again and become a more organized and structured trader? Great, then stop complaining and get back to work because what is the alternative?

How much of your skipped data do you need to enter now?

Now the second question is, how much of the un-journaled trades do you have to enter?

For many people, journaling isn’t their preferred free time activity and sometimes it does feel like work. Although we try our best to make Edgewonk as fun and as engaging as possible, we are aware that some traders have to convince themselves to journal their trades.

If you are such a trader and you skipped days of journaling, you also probably procrastinate because it now seems like even more work when you think that you have to enter dozens of old trades. 

You should never let it get to a point where journaling is an activity you dread and attach negative thoughts with. Journaling is probably one of the most important things a trader can do for his development and there is no replacement for it.

The goal for you should be to gain momentum again. Don’t worry about the past data too much and just pick up now. Make a dummy deposit in Edgewonk to reflect your account balance and then start journaling from now on again. 

You can instantly eliminate all the negative thoughts you had about skipping trades and journaling can again become an activity you enjoy and don’t fear anymore. 

Don’t overthink it

I hope this article motivates you to pick up your journaling routine if you have been slacking. Understand that it’s normal and that you are not alone, but also recognize that there is no alternative and if you want to become a better trader, you must start doing the things you know are necessary, even if you don’t always feel like doing them.