“It’s not enough to simply measure things – you have to measure what matters” – Waren Buffett as quoted by Tim Ferriss.
Financial markets are highly complex and constantly undergoing changes. Add to that the fragile nature of human emotions and how easy we tend to make impulsive decisions and you quickly get a feeling for all the variables that could possibly impact your trading performance. Looking at all the variables and the potential variables, it’s very easy to get lost when looking at the task ahead: finding out what is causing you to lose money and how to change that.
At Edgewonk we know that feeling and the helplessness many traders experience. That’s why we have designed our trading journal in a way that allows you to only focus on what is really important so that you can make progress in your trading fast. Here are 4 tips when tracking trading data.
What should you focus on when tracking data in your trading journal?
1. You have to be goal-oriented with your journaling
In the Edgewonk trading journal, everything we track is directly related to one stat: Your performance – account balance or %-return. For example, the Trade Management function allows you analyze your potential performance, compare it to your actual performance and then find scenarios where you are leaving money on the table; or, the Tiltmeter shows you exactly how disciplined you are and how much breaking your rules is costing you.
With the Edgewonk Custom Statistics you can track basically anything you want, but we always encourage our users to focus on the big problem areas that really can make a difference and not get lost in the details. Thus, always track stats that undeniably cause your performance to improve or diminish.
2. It has to be actionable
Most conventional journals or self-made spreadsheets are somewhat of a “data graveyard” where traders collect their trading data, but then don’t have a process or a way of interpreting the data to get actionable tips on how to improve trading performance.
In Edgewonk, we only ask you to enter trading data that can really make a BIG difference in your trading. The underlying algorithms and calculations only have one goal: finding your performance leaks AND showing you how to change your trading to improve your trading performance.
It’s only worth spending the time keeping a trading journal, if it helps you become a better trader. Other than that, you are just wasting precious time.
3. It has to be easily understandable
Crunching numbers should be easy. You have to see at one glance what they tell you. If every time you look at your metric you first have to think about its implications, there is definitely an easier way to measure what you want to measure. Think about Occam’s Razor.
You also may want to discuss your results with other people – if so, you shouldn’t have to explain your metrics because they should be self-explaining.
We understand that looking at the Edgewonk trading journal can be overwhelming at first, but it really is not that bad. And if you still feel a little lost, you can join our 12 week journaling and trader development course where we take you by the hand and help you become an Edgewonk and journaling pro.
4. Avoid time-wasting
Edgewonk comes with a lot of metrics and things that you could track, but you don’t need all of them at the same time. What you should be doing instead is focusing on 1 or 2 areas of your trading at a time and aim at making improvements there first.
Thus, you should always identify your greatest problem area first, track the related metrics in your Edgewonk journal and then consult the right features to get actionable tips. And after you have improved your trading in that area, you pick a new one and start all over again. This approach will allow you to reduce the time it takes to enter trades into your Edgewonk journal, while keeping the data as relevant as possible.
Conclusion: Make The Most Of Your Effort By Tracking The Right Things
Perfectionism rarely pays off; blind perfectionism never pays off.
In a business like trading which depends on thousands of variables, it is easy to get caught up in a slaughterhouse of numbers which then usually leads traders to give up on their journaling altogether. Only track what matters, keep your data relevant, look for actionable results and enjoy the process! We know that journaling can be tedious and boring at times, but when you keep the end goal in mind, it makes the journey much more enjoyable. And if you don’t want to go this journey alone, take a look at our 12 week course where we have helped hundreds of traders.