Additional Documentation
Table of Contents
Additional Documentation
In addition to our Trading Plan and our Procedures Manual, we make use of the following documents:
- Trading Journal Spreadsheet
- Trading Log
- Motivation Journal
- Lessons Learnt Journal
- Market Structure Journal
- Trades Journal
For all of these documents, make use of online storage if you prefer. However I find a paper-based system is best for all except the Trading Journal Spreadsheet. This is simply due to the fact that you’re more likely to refer to an easily accessible paper-based journal. Your call though!
Trading Journal Spreadsheet
This is a spreadsheet, used for recording and analyzing your trade statistics. It’s an essential tool for analyzing your win percentage and win/loss size ratio, for all the subsets of trade data. We spoke about the need for this spreadsheet in article 73 in stats section.
The Trading Journal Spreadsheet which I currently use will be listed on my YSTC Resources Page, under the heading of Business Management:
https://www.ystc.in/resources.
Trading Log
The trading log is the primary document I use on a daily basis for recording anything and everything which occurs pre-session, during session and post-session.
I’ve trialed different logs in the past – one for trading data; one for psych notes. I’ve found it’s too hard to switch back and forth during the session. I now put everything in one.
I use an A4 size lecture pad, which can then be inserted in a ring binder for archiving, once full.
Trading Log
Data is entered under headings of Date, Prep, Notes, Trading Session Review, Performance Review and Next Section, as guided by the procedures manual.
In the margin alongside any Notes or Review text, I place a short code to allow me to quickly identify the nature of this text. Codes are as follows:
- AN = analysis
- TR = trading
- MK = market structure observation
- LL = lesson learnt
- PERS = personal / psych observation
- ? = anything else of potential or unknown significance which needs to be considered during the post-session review
This coding of the trading log entries is not essential, but it makes it easier to find all data related to one topic, amongst the whole session’s log entries. For example, if I wanted to review any personal performance or psych observations, I just look for the PERS codes.
The prep section contains any pre-session information, such as date, market, session times, position sizes, key news events etc.
The notes section then contains anything I want to record during the session – key analysis observations such as slowing momentum or expected setups; trade entry parameters such as the entry, stop and target prices; psych observations such as your feelings the time of entry. And naturally, anything I feel should be reviewed post-session and anything which I feel is suitable for inclusion in our market structure, lessons learnt journals.
One final point… I find it beneficial for analysis and trade notes to preface each note with the current time, in case you wish to cross reference the notes with a chart.
Motivation Journal
The motivation journal was discussed in detail in article 75.
Lessons Learnt Journal
The lessons learnt journal is a loose-leaf folder containing the following sections:
- Market Structure
- Price Action
- Setups
- Trade Entry
- Trade Management / Exit
- Psychology
- Business Management
- Learning to Trade
- Miscellaneous
You may prefer to use a spreadsheet or some other form of online document. I have tried that for quite a while; however I found that I was not referring to it very often for study purposes. A paper-based system is preferable simply due to it being easily accessible.
Within each section I simply record ANY significant observation or lesson from the categories. This primarily occurs during the post-session review, but can also occur at any other time such as upon discovering a key lesson while reading a trading book.
Interestingly, you’ll find that as you develop in your knowledge and skills, you’ll review your lessons learnt journal and discover items that no longer have relevance to the way you trade or to your beliefs about the markets. When that occurs I simply cross them out. No problems!
Market Structure Journal
I previously wrote about the market structure journal in a free eBook release, entitled, “The Greatest Trading Book – Ever!” There was a copy available on the download page for this eBooks series.
You can also find it at the YSTC eBooks’ page: https://www.ystc.in/ebooks
The market structure journal is an incredibly valuable tool for building your intuitive ability to identify the nature of the current market and identify structural changes in real-time.
The best format in my opinion is a folder, allowing loose sheets to be inserted after each trading session.
Print charts for the trading timeframe, and use a pen to document any key structural features on the printed price action.
You may prefer to just file each session sequentially, or you may wish to file them in sections, according to market environment:
- Trending / Volatile
- Trending / Non-volatile
- Ranging / Volatile
- Ranging / Non-volatile
- Combination
Trades Journal
This is a loose-leaf folder containing printouts of trades.
I did try keeping them electronically for quite a while (saved as a .jpg), but found I was never referring to them. Paper takes up a lot of room, but at least they are easily accessible for review and ongoing learning purposes.
Importantly, there is no need to keep printouts of every trade (unless you wish to). I prefer to only keep those which I feel offer some learning potential – those particularly well managed, and those which were poorly managed.
I prefer to keep this as a separate journal. Sometimes I’m just in the mood to look at some trades!
You may wish to keep them filed sequentially by date, or separate them into sections based upon the setup. I’ve found I prefer the first. Trial both and find what works best for you.
If you prefer to cut down on the number of separate journals, you have some other options:
- If your trading log is a loose-leaf folder, insert your trade printouts following each session’s trade log entries.
- If your lessons learnt folder is a loose-leaf folder, insert your trade printouts in a Trades section.