20160131 Trading Journal entry

To say that i’m unsatisfied with my trading week would be an understatement. While i didn’t lose money, i didn’t make any either. In fact, i didn’t place a single trade despite the numerous opportunities offered by the market this week. Some i had identified in advance but didn’t capitalize on, some i didn’t see at the time, only after the fact, mostly because i was doing something else at the same time. A study of my diary shows that i can only blame myself and not, say social media, which is both a blessing and a curse (more on that later). I’m clearly going through the phases of a developing trader. And since it’s been a while since i’ve written on this blog, i’d like to take this opportunity to show where i’m at.

  • What one thing did I do best this week and how did I do it?

Hmmm. Risk control? I mean, i didn’t chase the market, i didn’t blindly follow another trader advice or anything like that. I’m very protective of my capital. Maybe even too much, as we’ll see later.
Another thing i did well was waking up bright and early, which wasn’t always the case. I’ve changed my evening routine, dinner time, bedtime, and it is much easier for me to wake up in time and be ready. Among the things i had to do is putting my phone with the alarm in the bathroom so i don’t spend time using it before going to sleep or staying in bed catching on the news in the morning. Instead i have to get up to stop the alarm. And since i’m in the bathroom i may as well take my shower right there and then.
I also want to mention that instead of reading on my phone before going to sleep or watching a movie, i made a conscious effort to read a book. I’ve just finished Trading in the Zone by Mark Douglas. I’m glad i made this conscious effort. I include this in the “working on my edge” category. I’ve pretty much caught up on the material i identified as relevant for my edge, i’ve even started going through some of it again. There is no doubt i have a much better understanding of what exactly i’m looking for than i thought i did some months ago. But our edge is not analysis only. It is probably even more our own behavior. And by dedicating time to learning and studying how i behave, i believe i’m in the right direction of “working on my edge”. The next book on the list is Trading Psychology 2.0 by Dr. Brett Steenbarger (buy it on Amazon). My 2nd favorite Christmas present after the 3 beautiful 27″ screens.

frenchdna trading desk

  • What one thing did I do worst this week and what led me to do it?

It’s interesting to note here how similar my answer is compared to what i wrote a few months ago :
a) Too much news reading, Twitter – distractions. Not plain entertainment like movies, facebook or sports, just not really relevant articles that will help me in the future. Having the Tweetdeck window opened 100% of the time certainly doesn’t help. Everytime i see a new tweet i feel the urge to read it and click the link. I have a thirst for knowledge, i crave it, thus i disperse my attention into several meaningless things.
This week i have found that i didn’t take at least one setup as identified by my edge because someone else trading pretty much the same edge and whom i consider a better trader than me was doing the opposite on a correlated instrument. That’s something that wouldn’t have influenced me if i had Tweetdeck closed during the trading hours. While social media led me to some great traders/coaches, helping me accelerate my learning curve, it can also be a curse. Indeed, I have also missed some setups because i was just distracted by something else. The common element here is Twitter. While i’ve drastically reduced the number of people i follow and tried to organize Tweetdeck lists in a way to prioritize relevant information, i’m coming to the conclusion that it’s doing more harm to my trading than good.

Another thing that wasn’t optimal this week was my homework. I knew monday would not be the best environment for my edge, that i’d have to let the market unfold for a while and i therefore didn’t really do my week-end homework, sat back and engaged in downloading windows 10 for a future update. That messed up with my computer big time. Nothing like losing your computer at the beginning of the trading week. Thankfully i’m a geek and IT service myself so that was fixed by the beginning of the afternoon. Except that in the process i missed at least one opportunity, a small one granted, given the environment, but an opportunity nonetheless. Had i done my homework properly i could’ve at least prepared for the potential setup.
Something similar happened on friday. I read this brochure the day before by Futex, a prop firm in London. In page 10 you can find a typical training day, which starts at 06:30 GMT with pre-market preparation. I usually do my market analysis after NY close (11:00pm GMT+1 for me) and this can be a problem at times, making me go to bed too late and frustrating for my girlfriend waiting for me. Since waking up early is not a problem for me anymore i decided i’d do my analysis on friday morning. But what happened is that i missed the most beautiful setup of the week that i was waiting for, because i take the time to note everything down in my notepad/diary and by the time i finished the move for the best entry already happened (early though, around 06h15 GMT). And that leads me to the next point.

A few months ago i also wrote this:
c) Too perfectionist. Looking for the best possible risk:reward ratio thus missing trades. All my life i’ve refused to give my 100% because i feared not to be good enough to the standards i envisioned. In short it’s always been “The best or nothing. No compromise”. This is something i’ve got to work on.
What happened friday was that i wasn’t completely prepared when i needed to be, although as i’ve mentioned this particular move happened roughly 30-60 minutes earlier than usual, which i’ve found is an indication of its coming strength. “They” don’t want too many people to enjoy the ride so “they” make it happen before everyone is ready. Price don’t spend much time around the best entry they say. I agree! But i had the chance to join. Not at THE best entry, but at an entry. I didn’t take it, even though the risk to reward ratio was still decent. That’s really something i need to get confortable with.

  • What specifically will I do next week to continue doing what I did best?

I will control my risk as i’ve always done, I will keep my evening routine to be ready by the morning, I will keep working on my edge, both on analysis and study of my own behavior, with an emphasis on the latter.
Specifically:
– i will keep trading the minimum size. Until i’m consistent there is no point in paying more for my tuition. And at least i’m working with live funds.
– i will keep eating dinner between 6 and 7pm GMT+1 (which is very unusual for us in France, we’re more used to eating dinner around 8-9pm), no movie after 9pm, market round up around 10, bed with a book after that.
– during the day, outside the trading hours i will keep going through the material identified as relevant to my edge. Going over some of it several time has proven invaluable so far, i will thus keep going over the rest. I will keep describing as best as i can my behavior during the day for thorough analysis in the post session review i conduct every day. I shall eventually run out of mistake to make.

  • What specifically will I do next week to improve what I did worst?

– Close Tweetdeck during trading hours.
– I’ll do my homework in the evening and prepare even if i feel the next day could not be my favorite environment.
– What i also wrote a few months ago below. I really need to find a workaround for that. It’s probably a matter of beliefs, not aligned with my desire.
c) Perfectionism. I will aim for profitability, not perfection. Specifically i will accept getting AN entry, not THE best entry. This will impact the risk to reward ratio but as long as its relation with the winrate gives a positive expectancy i will act and enter the trade. I think i will try beforehand to write down what is the best entry and what is the last acceptable price to get in, using the “if… then…” formula in my evening homework. “If i miss the best entry, then as long as price is above/below X level i will enter the trade”.

  • How well did I achieve my “continue my best” goal last week and what do I need to do this week to continue/improve upon that progress?

My latest journal entry was offline, in my notepad. I aimed at maintaining my risk control and improving my edge, which i did. What i need to do this week has been covered above.

  • How well did I achieve my “improve my worst” goal last week and what do I need to do this week to continue/improve upon that progress?

The goal here was to improve overall discipline, with an emphasis on being sharp and ready in the morning. I’ve been slacking with this improvement journal template and the last entry is from early december. I’m glad to say here that this has been fixed for a while now. Worth mentioning that one thing that helped was making a definitive choice on what i wanted the most. I used to party a lot, and i’ve realized i had trouble recovering for friday nights out. It influenced my whole week-end, and my lack of preparation for monday. Cutting out the partying meant seeing less a few “friends”. I barely keep in touch now but i don’t regret my choice.
I also wrote down “Write down emotions, even if only bored, during the day. Also write down levels for easy session review.”. This is still a work in progress. I am clearly shifting gears. “Mind, Money and Method”. I’m switching from method/edge improvement to mind/psychology. I will therefore make a conscious effort to describe my behavior as best as possible while the day unfolds to spot weakness.
I aslo want to mention i’ve started meditating, usually when i’m trying to fall asleep, which helps me focusing for long periods of time during the day, something that was a problem before. I still can’t spend the full day 100% focused on the charts but there clearly is improvement in this area.

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20160131 Trading Journal entry

3 thoughts on “20160131 Trading Journal entry

  1. Jon says:

    Great blog. Hope the following helps: Spoke to another trader who has read Trading in the Zone and he said to me “in ur head just say to urself “trading is about making money, nothing else”. , not about being right . and what is your edge – success only comes when u realise what is ur edge

    Cable on Friday was a good example – i missed the breaker entry (perfect entry) but took a hidden ote entry lower down as it was coming up to test asian range. The funny thing is that’s what ICT also pointed out this weekend, So always an opportunity to get in.

    I use stop orders more now to get into position with predefined areas for stop to take me out when its obvious i’m wrong.

    Hope you continue your trading journey too

    a bientot

    Liked by 1 person

  2. Hi, I can relate to everything in your journal. Social media is very much a double edge sword, I try to keep my checking it during the day to a minimum. I also got Brett new book for xmas. It will interesting to hear what you think. bon chance mon amie

    Liked by 1 person

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