Inside Trade | Introspecting “When Trading Journals Don't Work”

I saw an article by Brett Steenbarger in the InstaForex facebook early this morning and he pointed out in details some problems in keeping a trading journal. In my previous article, I had tackled how keeping a trading journal would really be an asset for traders especially for those who are new to  trading but I didn't thought that the power of such would not be harnessed fully without putting the author's heart in it. Mr. Steenbarger had laid down  the common mistakes into 5 segments in which I would also like to provide my personal opinion on the matter.


The journal lacks specifics. The “how”, “why”, and the “what steps” are most likely not discussed on a  common journal entry but no one can deny how essential it is. These things are the usual guides in analyzing the performance of the day. The presence of which are imperative because it could contain specific information needed for problem solving and further analysis on what went wrong or how can your current performance could be improved.


The journal emphasizes problems, not solutions. Most of the time, traders only record the problems encountered  during the day and not the things that they had or might had done in order to acquire a profitable trade. If our capability allows us to replicate our profitable trade during the previous day then it would save us the trouble of dealing with the problem since it is already prevented in the first place.


The journal talks too much about the trader and not enough about the markets. Journals are tools for learning; it is meant to guide the traders with the use of their experience on previous trades not to guide the trader through self-realization. We must always keep in mind that the journal's objective is to record what happened during the trade and not on the trader.


The journal is reactive, not proactive. We provide entries daily but doesn't use it as a guide, so what's the point? One of the primary purpose of the journal is to help us prepare for the trade the next day. Anticipation of problems that needs to be addressed could put a trader in an advantage since it solutions could be prepared beforehand.


The journal lacks metrics. Evaluation of the traders performance cannot be fully executed without recording the parameters. The win:loss ratio, average holding period per trade, etc. are some of the data that could help a trader to asses what's really going on.


It all boils down on how motivated a trader is and how much he/she wanted to harness the caravan of knowledge in from of him/her. The desire is the main key in harnessing the journal's true potential and if a trader perceives that he/she couldn't maintain this desire, then I suggest better not waste thy time and effort since it would just be put in vain.