Hey this is Sasha Evdakov, Founder of tradersfly.com. Here to share with you some insights about trading, investing in the stock market. With some of your frequently asked questions, answered in video format.
Now, today's question is what is the best way to journal or keep track of your trades? What do you recommend?
First of, why journal your stock trades?
Journaling allows you to record your trades. That way you can see what you did right and wrong. But most importantly it allows you to improve your trading as long as that you review your journal.
What I've done is I've actually created a physical journal, it's called my trading journal and if you want to take a look, there's a new version and a green version on CreateSpace at those links and you can buy a physical journal that you can actually write in.
For me personally, I used to like writing into the journal initially when I was first getting started because the act of actually writing something will allow you to get it from your mind and digest it it more, allow you to look back more.
I was able to look back at my journal a lot more. I really created this journal to give you some insight about how to create your own journal and even if you don't buy the journal you can create your own and just do it on notebook paper.
I have to encourage you to first start out with a physical pen and paper, pencil and paper and start journaling that way because really the process of doing it, that way it allows you to digest things much more in a deeper fashion.
If you're little more digital, if you're a little more tech savvy, you could journal with something like Trello and I've created a video and click here this button. It will take you to a video where it explains how you can use Trello as a trading journal which I also have tried in the past.
As your trades become a little more complex I found that Trello was a little bit difficult after a while. If you're doing simple trading, Trello is fantastic. There's absolutely nothing wrong with Trello in using it as a trading journal which again you can see in this video where I explain and show you how you could use it for a stock trading journal, but as things got a little more complex or just looking things a little bit deeper, one of the things that I like recently is Evernote.
And using Evernote as a trading journal seems to work out really well for me right now. I still would recommend a pencil and paper or a notebook like I've mentioned earlier if you're just getting started because that act of writing things down in a physical notebook is incredibly powerful.
As you get better, you might want to use something more digital and as your trades become more completed. But if you're only managing a handful of trades here and there, pen and paper really work just fine.
For me personally now, I like using Evernote just because of the speed, the screenshots that I can capture and so forth.
In the past 10 years ago, I used to print things out and put them in my journal like charts and things like that. But now there's a lot more tools available and a lot more options.
Tips on Adding Journal Entries
As far as journal entries goes, when you input things within your trading journal, and really depending on your trading style. You can keep track of external factors like the numbers of wins, losses, net profits and so forth or you could track internal factors like emotions, feelings, your personal life events are also helpful.
And that is because if you look at your journal and if you see that you're having a lot of losses but maybe you have a lot of personal issues during that time like a loss of a love one or something like that or you're just feeling bad, then again you'll realize that, recognize that maybe in the future trade less when you have emotional things happening in your life.
Types of Sheets and Things to Write Down in Trading Journal
Taking a piece from my trading journal, the physical version, here are some types of sheets that you could make or some things that you could write down in your trading journal.
For example, here's your weekly or monthly chart breakdown that you could use, you could put down the day or date, the number of trades you have done for that day or date, number of wins, losses, some scratched trades which maybe you broke even on, your gross profit, some fees, net profit and your account total. That's one way that you could do something.
Another thing that you could look at is a score card and a score card kind of gives you a tally sheet, like a report card about your trades. And here again you could do it on a weekly basis scorecard, you could it in a monthly or even yearly basis.
Here, you could see your date, your win ration, wins to total trades percentage, commission ratio, largest winner, largest loser, average winner, average loser, pay off ratio which would be your average winner divided by your average loser, and then your total percentage of profits or losses.
Again, the score sheet is helpful more on a weekly basis or monthly basis or even yearly basis.
If you do it every day, I think it probably a little excessive, every week or every month probably monthly is a better approach if you're just getting started.
Writing Down Journal Entries
If you're just looking to write some things down, here's kind of week 1 of trades, you could do something simple like this where you can put a time and date, tick your entry, the stop, your shares, your gross, your fees, net profit and some notes. That's something that you could do in excel, you could even do it on your own piece of paper.
And here's kind of a combination of both of those things we've shown you earlier. Here, you have again kind of like an excel sheet that you could create or maybe the score card from that excel sheet and make them work together.
That's some insight for you about trading journals and some of my videos that might help you decide on which way to go with the trading journal.
I found that doing something more system that's a little more closest and that forces you to record things online in a certain way is a little bit more difficult to manage and use a trading journal.
And that's one of the reasons why I don't recommend any online tools as trading journals because as your trading evolves you want a system that also evolves.
With pen and paper it becomes very helpful and handy because you can of course write down whatever you want and mark errors, draw little signs and notes, whatever you want based on the journaling that you're doing.
With Trello and Evernote, again they're also very helpful because you could take screenshots and put them in and re-arrange things as well based on your needs. But for some of the online tools and systems, there are a little bit more closed and they force you to put in certain factors and sometimes if you don't put it in right the journaling just gets off. And it doesn't work as properly.
What to Remember
In the end you have to remember what the point or purpose of your journal is, and that is of course to continue to improve and get better.
Find the tool that you can constantly go back into and review or one that you're comfortable in reviewing your trades.