Let us ask you a question: Do you still remember your last 10 trades? No?! How about your last 5 trades? Still nothing?! Do you at least remember all the trades you took this week?
When talking to other traders, we are often surprised about how sloppy and hasty most people approach their trading. Imagine you are a football coach and you don’t remember your last 5 games, or a business man who doesn’t know the sales and growth numbers of the last month.
It does not matter in which business you are, if you have no way of keeping track of your past performance, making improvements is impossible.
Why are you keeping track of trades?
It’s only worth putting in the time and effort of tracking trades
if the insights and tips you get provide actionable tips. – Edgewonk
Before we get into the “how”, let’s talk about the “why” first. Ask yourself why you are keeping track of your past trades, and what are your objectives and goals. Even if a trader decides to start journaling his trades, he often does it for the wrong reasons. Journaling for the sake of journaling and because you can read everywhere that keeping a trading journal is a must, is not going to help you become a better trader.
You need a clear goal in mind and then structure your journaling routine around those goals. Do you want to work on your mindset and develop more discipline? Do you want to find out what is costing you the most money and how to overcome those mistakes? Do you want to analyze your stop and profit placement and improve the way you set your orders? Do you want to optimize your trade management or your position sizing and risk management?
All those questions lead to very different journaling approaches and each trader usually has individual and very different goals when it comes to working on his trading game. Thus, the first step is to be aware of what you want to improve.
Further reading: Streamlining your trade entry process to save time and improve very specific areas
3 ways of keeping track of your trades
We are now showing you the 3 only ways that are available when it comes to keeping track of your trades and why choosing the wrong approach usually leads to frustration and no improvements.
1) Remembering your trades
This is probably the most commonly followed “approach”, but if we come back to our initial question “Do you remember your last 10 trades and how much do you remember about them?”, it becomes obvious very fast that not keeping a physical journal is the surest way to losing money in trading.
A trader who has no way of keeping track of his trades is assured to stay behind because improving and making money then becomes the result of pure luck.
2) The paper-stack journal
Once a new trader decides to journal his trades, he will usually start scribbling down notes on paper. This “paper-stack” journal is a major improvement compared to not tracking your trades at all, but it still is far from perfect.
As we have seen by asking “what is the goal of keeping a journal?”, loose notes will rarely provide an answer to your very specific problems. A paper journal does not allow you to have a professional and detailed review process. It can’t tell you whether you are setting your stop loss too far away and potentially could increase your R-multiple. It can’t analyze which trade management mistake is costing you the most money. It won’t tell you whether your take profit orders can be placed farther away to increase the size of your winners. It won’t tell you whether your position sizing is the factor that is keeping you from profitable trading. And so on.
Although writing something down is better than not keeping track of your trading at all, it usually does not justify the time and effort you put into it.
3) A trading journal with performance analytics
You are right, we are referring to our Edgewonk trading journal here. We have built Edgewonk with years of trading experience and with the feedback from hundreds of customers and other traders. And we only have only one goal in mind: helping traders make specific and measurable improvements.
Every function and field in Edgewonk is there for a purpose, and regardless of your current level of expertise or your goals, you will find different features and functions that will help you get better. After answering the question “what do you want to improve and why are you journaling your trades?”, Edgewonk shows you exactly which data is needed to provide actionable tips about what to change:
Further reading: How to make measurable improvements fast
Edgewonk does not make you track more data than what is actually needed to make the improvements you want to achieve. And the implemented algorithms analyze your trading data in the most efficient way. Keeping a trading journal then is not a tedious chore, but a routine you engage in because you know it will transform your trading.
Additional tip: Before you start your trading day, take a brief look at your journal and review your past 5 – 10 trades. Take notice of what they have in common and try if you can see some repeated mistakes that you need to be aware of. This should not take longer than 5 minutes, but a quick reminder before you start your trading day often works miracles.