Let's talk about a tool that I
think is extremely important for
trading.
Let's talk about a trading
log, a trading journal.
Let's talk about what this is
and why you need to
have it.
See, I believe a trading
log is the most important
tool.
Besides having a charting software
and having a broker platform
because you do need a charting software
to know what you want
to buy or sell.
What stocks to buy,
when to enter,
and when to exit.
Now, as you know,
my favorite tool is the Power X
Analyzer.
If you're interested in learning on how
I trade,
go to mytradingroutine.com,
and this where I have a quick video for
you that shows you exactly the
indicators that I like to use.
It shows you exactly when I enter,
when I exit, and how I limit my risk.
The trading log....
Let me show you
what you need to do because the trading
log is the tool that has turned my
trading around,
and these days,
I do not use it only to improve
my trading,
but I also use it to improve the trading
of other traders in
a matter of minutes.
So, let me show you what it
is. I'm going to switch
to my screen right now
and show you a simple
Excel spreadsheet because that's the beautiful
thing. You can go as fancy
as you want but you can keep it simple.
Here are the important
things that you need to write down
every single day when
you did a trade.
First of all,
the entry date.
Then the symbol. What did you trade?
Did you go long
or short? Long means that you're betting
on a rising market.
Short means that you're betting on a falling
market.
How many shares
or contracts did you trade?
What was your entry price?
What was your exit date
and the exit price?
What was the gross profit
and loss?
What were the commissions,
and therefore, what was the net
profit and loss?
And then there are comments.
And you see, in the comments,
you should write anything that comes to mind.
For example,
you say,
"wasn't quite sure before
I entered the trade,
but once I did,
I was glad because it turned out to be a winning
trade" or you might say,
"I was in this trade for three days,
felt compelled to take profits,
and I'm glad that I didn't because
it turned out to be a good trade."
This is so important
because let me show you why.
When you don't know what
is working for you,
it is very difficult to improve
it.
Let me give you a personal example
and then I'll show you an example of one of my
students.
So, for me personally,
when I kept a trading log,
I started realizing
that I made money in the morning,
and I gave it back in the afternoon.
So, what's the easiest way for me
to improve my trading?
This is when I was still heavily day trading.
If I make money in the morning,
and I give it back in the afternoon,
what's the easiest way
to improve my trading?
Stop trading in the afternoon,
right? And that's what I do.
When I day trade,
I only trade for an hour
and a half. Sometimes only an hour
in the mornings.
I also realize that I
made money on Monday,
and Tuesday,
and Wednesday, and Thursday,
and I gave back money on Fridays.
What's the easiest way to improve
my trading?
Exactly.
Stop trading on Fridays.
Then I analyzed the markets
and I wanted to see...
This is again,
from a time when I was very,
very heavily day trading.
These days,
I swing trade stocks
and options more. It fits my lifestyle better
because I enjoy
just not sitting in front of the computer
so therefore, I personally prefer
swing trading stocks
and options. Anyhow.
When I was heavily day trading,
I realized I made money trading
the Dow. I made money trading the S&P.
I made money trading crude oil.
I made money trading gold.
And I lost money trading the euro currency.
Now,
in school,
how are we trained in school?
In school, if you're not good at
something,
what do you need to do?
Get a mentor. Get a teacher,
right? If you're not good at math,
you need to focus on math.
So, same here.
Having this crappy mindset...
Instead of focusing on the markets
that worked, I focused on the euro
currency,
and what happened?
I still lost money in the euro currency,
and since I was focused on it
so much,
I also lost money in the other markets.
Now, if you see that you're making money
in four markets,
and there's one market where you lose money,
what's the easiest way to turn your trading around?
Stop trading that market that
you're not good at,
right?
When you fill out this trading
log, you will be able to objectively
see what's happening.
Surprisingly, sometimes we get caught
in our mind,
and we think that we are really good trading
one market,
when we are not.
I want to switch back to the charts
here because what
I did for my students,
I took this to the next level.
So, you have seen the trading log
here. This is a standard trading log
that you can do.
I took it to the next level.
I asked my programming team
to actually program all
this into a database.
Now, here, you see the trades of
Tom.
And Tom
and I started working together.
It has been a while. In 2017.
Tom is a day trader
and he's trading stocks
and options.
And so, for the first two months,
I want to zoom in here a little bit so that you see
it. He started trading,
working with me,
and he did pretty well.
He started with a $10,000,
and if we scroll all the
way to the bottom, you'll see he was very
diligent about putting the
trades in,
and here you see,
after two months
he was up $3,492.
Almost $3,500.
Not bad at all,
right? On a $10,000 account?
If you can achieve this within a couple
of months, I mean,
would you like that?
Obviously.
And then I got on the phone
with Tom and I said,
"Hey Tom.
I looked at all your trades
and wanted to see what's going on.
So, out of curiosity,
what is your favorite market to trade?"
And Tom said,
as far as I remember,
he said, "Oh hands down,
the bonds."
So, he was trading several markets
and one of them being the bonds.
I said, hey,
this is so odd because when I
look at your trading log,
this is when I see that...
Look at this.
Tom made money trading
crude oil.
He made money trading the S&P.
He made money trading options
and he lost money trading bonds.
So, if you see this,
what do you think would be the easiest way
for Tom to improve his trading?
Stop trading bonds,
right? Exactly.
Exactly.
If Tom wouldn't trade bonds,
instead of making $3,500,
he would have made $4,300
in only two months.
See, this is what a trading log can
do for you.
Objectively show you
of what is working for you.
So, what else could you look at when you're looking at
a trading log?
Well, when I work
with students, what I like to look at,
because based on my experience,
I know that there might be certain days
when you are better than others.
For me personally,
it's Fridays.
Fridays is not a good day for me.
I don't know why but I have made
so many trades that I'm looking at my trading
log. And for me,
I make money Monday,
Tuesday, Wednesday,
Thursday, and Fridays are typically
underperforming for me.
So,
let's take a look at Tom's
log and see how he is doing.
Here are the days.
As you can see,
Tom is making money over
these two months that he has been logging
the trades,
over these two months made money on Tuesdays,
Wednesdays,
Thursdays,
Fridays,
and lost money on Monday.
What's the easiest way for Tom
to improve his trading?
Stop trading on Mondays,
right?
Another thing that I like to look at,
especially when you're day trading,
and I don't know, for you,
you might be swing trading
or day trading.
I want to take a look at the hours,
and I want to see are there certain hours
when you are better in trading
than not?
And you look at this, for Tom,
between 9
and 10, and this eastern time,
Tom made most of the money.
After this, not a whole lot.
So, what would you recommend to Tom if
you were his trading coach?
Stop trading after the first hour,
right? It's not getting any better.
Can you see how powerful
a trading log can be?
A trading log shows you
objectively what's
working for you
and what is not.
Don't trust your mind.
Don't trust what you think.
I mean,
when it comes to trading,
I trade what I see,
not what I think,
and you should do the same
with a trading log.
It's extremely important for me.
I want to see,
am I doing better in my long
trades where I'm betting on a rising market,
or my short trades I want
to see am I doing better in my stock trades
than my option trades?
And this is what a trading log
can do for you.
By all means,
you've got to keep
a trading log.
This is like your trading journal,
and especially when you have the comments section,
in the comment section,
you can fill out what's working
for you
and what's not.
And as you can see, when I work
with my private students,
when looking at the trading log,
very easily I can help them
in a matter of minutes
to turn their trading around.
Are you keeping a trading log?
Let me know in the comments if you do
keep a trading log.
If not,
let me just bring up the excel spreadsheet
here. Very easily, you could just
fire up Excel,
or Google Sheets,
or whatever you have. Or Numbers,
if you have a Mac.
Put in these columns
and then make sure that you analyze
your trades.
Trust me,
this is the number one thing
that has turned my trading around
and therefore, I highly recommend it to
everybody. In fact,
when we work together,
it is mandatory for you.
You have to fill out the trading
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