One of the things that traders learn on their journey to becoming a profitable trader is that they need to put some structure in their trading. They can’t just trade willy-nilly and expect to become profitable. Not only do they need to understand the markets but also their own trading. One of the tools for doing that is the trade log. However, most of developing traders are reluctant to go through this exercise. They think it’s too much work, it takes too long or may not be worthwhile in the end.
This is something I have struggled with as well. I would make the usual excuses of it being too much work, taking too long etc. I tried keeping a trade log many times but I would do it sporadically and then just give up. Then I started thinking about the real reason I didn’t want to log my trades. I found that it wasn’t the amount of work it took that was keeping me from consistently keeping a trading log but my fears that were getting in the way. I was actually afraid to log my trades.
I realized that I was jumping into trades too quickly, making up setups that didn’t exist, taking trades when I knew I should sit on my hands instead. Sometimes these trades would work out, other times they didn’t. When they did work out, I didn’t really know why they did. Sure, I had some idea of why they worked; I took the trade, didn’t I. However, I didn’t truly understand. When the trades didn’t work out, I would get really emotional about the money I had lost and the erratic behavior of the markets. Having to log my trades forced me to look in the mirror. And the person in the mirror was not the one I wanted to look at. I knew I had made the mistakes. I just didn’t want to admit them because then I would have to take responsibility for them. It’s much easier to blame the markets than to be the reason for your own losing trades. Also, I didn’t want to re-live the emotional experience of losing my trades and my money the second time around. It was too painful to lose the first time around so I didn’t have the energy or the willingness to go through it again.
One of the ways I am getting around this is by looking at the markets in the morning (my daily analysis) and then coming back and looking at them at the end of the day and jotting down a few thoughts about the market moves. I do this even when I am not trading. It allows me to look at the market unemotionally. The task of doing it daily also builds good habits and new neural pathways in your brain that help you ingrain the market knowledge at a subconscious level to create competency. The same concept that allows you to drive your car, keep your eye on the road and eat at the same time.
Talk to me; leave a comment below and tell me what stops you from keeping a trading log consistently? And what are you doing about it?