How To JOURNAL TRADES Professionally — Transcript

Full transcript

1. 0:00all right guys welcome back to the
2. 0:01channel this is going to be a really
3. 0:02important and valuable video for you as
4. 0:04a trader and it's not widely spoken
5. 0:07about and it's probably one of the most
6. 0:09important things that you can do in your
7. 0:10trading business once you become
8. 0:12successful and consistently profitable
9. 0:15and you want to start doing this right
10. 0:17now and that is journaling and how to
11. 0:20really optimize your journaling in order
12. 0:22to optimize your edge to then
13. 0:24continuously become better and better as
14. 0:26a trader to keep refining your edge and
15. 0:28keep making money lots of traders they
16. 0:30do not treat their trading like a
17. 0:32business with any business the key is to
18. 0:35look at the numbers look at the profit
19. 0:36and loss look at where you're leaving
20. 0:39money on the table look at how you can
21. 0:40make more money
22. 0:42and i'm going to share with you a couple
23. 0:43of ways that you want might want to
24. 0:45think about when you're going about your
25. 0:47trading business and really optimizing
26. 0:49your p l so journaling now before i get
27. 0:53stuck into this i want you to know that
28. 0:55everything i'm about to share with you
29. 0:57isn't like what you must do and for some
30. 0:59of you a few of the little things i'm
31. 1:01going to start talking about might be
32. 1:03not new to you there might be things
33. 1:04that you're already doing so i'm going
34. 1:06to start by sharing some kind of basic
35. 1:08stuff and then i'm going to go into some
36. 1:09more advanced stuff and as i say there's
37. 1:11not many people talking about this so
38. 1:13definitely grab a pen and paper and uh
39. 1:16and let's get stuck in so the first
40. 1:18thing i want to talk about is how to
41. 1:20optimize your trading edge and really
42. 1:22this whole video is going to be based
43. 1:24around continuous development all right
44. 1:26so we're going to be talking about
45. 1:27continuous development in your trading
46. 1:29so you cannot just make money for the
47. 1:30next year but make money for years and
48. 1:33years to come and as i say this is not
49. 1:34kind of sexy it's not attractive
50. 1:37most educators out there trying to flog
51. 1:39you a course won't be talking about this
52. 1:41stuff and even when you buy the course
53. 1:42they won't be teaching you the stuff
54. 1:43they'll just be giving you the strategy
55. 1:45so that you go and
56. 1:47you know trade the strategy and then a
57. 1:48year down the line you figure out
58. 1:50actually this thing's broken
59. 1:52and then you go on to the next one and
60. 1:53the next one you waste lots and lots of
61. 1:55time but i'm going to be covering four
62. 1:57main components today
63. 1:59and that is journaling okay so treating
64. 2:02your trading like a business what to
65. 2:04record the frequency plus i'm going to
66. 2:06share with you some methods as well also
67. 2:08going to be sharing with you figure
68. 2:10focus which is analyzing the numbers
69. 2:12knowing your numbers and projections
70. 2:13what to focus on and what not to focus
71. 2:16on then we're going to be looking at
72. 2:17self review okay because it's one thing
73. 2:19to analyze the markets and review the
74. 2:21markets but you have to review yourself
75. 2:23as well so analyzing your maximum lost
76. 2:26trades
77. 2:27where you're taking bigger losers than
78. 2:29you should be in your trading plan
79. 2:31analyzing any errors in your execution
80. 2:33as a trader any missed entries which can
81. 2:35be very very common in retail trading
82. 2:37due to kind of people's lifestyle and
83. 2:40you know building plans are not suited
84. 2:42for consistent execution and then we're
85. 2:44going to be talking about something what
86. 2:45i've called aggression discretion and
87. 2:48that's basically how to build discretion
88. 2:51in your trading so you can organically
89. 2:53become more aggressive with confidence
90. 2:56rather than leveraging up shooting from
91. 2:58the hip um every trading opportunity
92. 3:01given uh or every trading opportunity
93. 3:03you're presented with so four
94. 3:05main topics and we're going to start
95. 3:07right now but before i kick off i want
96. 3:09to start with this quote by lord kelvin
97. 3:11and it is if you cannot measure it you
98. 3:14cannot master it and this is a great
99. 3:17quote right because what gets measured
100. 3:19gets improved and measuring your
101. 3:20performance in trading allows you
102. 3:23to objectively track your performance
103. 3:26stay focused and really just optimize
104. 3:28your output
105. 3:30so accurate trading records help you to
106. 3:33remain disciplined and also help you to
107. 3:36take responsibility for your trading
108. 3:38results
109. 3:39so journaling so any good business you
110. 3:42know recognizes that income and expenses
111. 3:45and managing that and understanding that
112. 3:48and having numbers on that is a way to
113. 3:50create a profitable business okay so
114. 3:52what i want to start by doing is giving
115. 3:54you some points of what i recommend when
116. 3:57journaling as you know journaling your
117. 3:59trades as a minimum and for some of you
118. 4:01this is going to be like teaching you
119. 4:02how to suck eggs and if you've got any
120. 4:03other ways you know or any other things
121. 4:06you'd like to track put them in the
122. 4:07comments but from my experience with
123. 4:09business owners let alone
124. 4:11in general let alone traders most people
125. 4:14don't do this stuff so i'm going to
126. 4:15start with the real basics so here goes
127. 4:17first thing you want to note down when
128. 4:19you're journaling your trade is the
129. 4:21market traded okay or the symbol or the
130. 4:23pair or whatever it might be the second
131. 4:25thing is the trade size okay so the
132. 4:28amount of capital traded in other words
133. 4:30the next thing is the direction so what
134. 4:32direction long or short is the trade
135. 4:35likely to
136. 4:36likely to go in
137. 4:37what price you got in at
138. 4:39uh what price you got out at obviously
139. 4:41the time and the date of both entry and
140. 4:44exit and that's very important when
141. 4:45you're looking back over your trades and
142. 4:47analyzing your system's performance it's
143. 4:49very good to be able to go straight to
144. 4:51the date and the time so save wasting
145. 4:54time the next thing is the time frame so
146. 4:56what time frame would you trade it was
147. 4:57the trade taken on was it 30 minute 50
148. 4:59minute 60 minute four hour one day you
149. 5:02know five minute whatever
150. 5:04what was the profit and loss so what the
151. 5:06p l was
152. 5:07what the account size was before and
153. 5:10after the trade
154. 5:12and then the setup what was the reason
155. 5:14for entry was it a flag was it a
156. 5:15breakout and retest was it a double top
157. 5:18etc etc
158. 5:20and then finally how did you manage the
159. 5:22trade okay so was it a trailing stop was
160. 5:24it a lower time frame management trade
161. 5:26was it a profit target
162. 5:28limit order etc and then finally any
163. 5:31other notes that you might have so
164. 5:33that's kind of a minimum and when i say
165. 5:35notes i'm talking about
166. 5:37you know any other notes that you feel
167. 5:39personally are important to note down on
168. 5:41the story of that trade that's an
169. 5:44absolute minimum and compulsory that i
170. 5:46recommend that you journal after every
171. 5:49single trade or every single trading day
172. 5:52at worst
173. 5:53now what i want to do is take you a step
174. 5:57further and consider some additional
175. 5:58filters when trading
176. 6:00and this is really what's going to build
177. 6:02your discretion as a trader so the first
178. 6:04one is preferred analysis
179. 6:06okay and you might have
180. 6:08to explain what preferred analysis is
181. 6:10you might have a certain candlestick
182. 6:12formation that you look at or you prefer
183. 6:14or you might use multi-time frame
184. 6:16analysis and look at higher quality
185. 6:19trades that way okay you might have an
186. 6:21indicator set up like a macd or an rsi
187. 6:24or some divergence or you might use
188. 6:26pivot levels or fibonacci or whatever it
189. 6:28might be but whatever you prefer to add
190. 6:30into your analysis
191. 6:32take a note of that in your journal
192. 6:35the next one is the number of tests so
193. 6:37so qualitative analysis is the quality
194. 6:40of the setup into not quantity so the
195. 6:43quality of the setup you might have a
196. 6:45number of tests of prior major structure
197. 6:48resistance and support levels
198. 6:50you might have a greater reward to risk
199. 6:52in terms of three to one instead of a
200. 6:531.5 to 1 or something like that
201. 6:56or you know maybe the risk reward level
202. 6:58to the next major support or resistance
203. 7:00level in other words how much room
204. 7:02you've got to grow or move in the trade
205. 7:05that might play into your quali
206. 7:08qualitative analysis
207. 7:10the next one is untriggered entry orders
208. 7:13okay
209. 7:14so orders that were set but didn't get
210. 7:17filled or slipped orders this is why i
211. 7:19love to have a broker with fixed spreads
212. 7:21because this very very rarely happens to
213. 7:24me i can't remember the last time this
214. 7:26happened to me
215. 7:27but i get traders complain about it all
216. 7:29the time which is why i use the broker
217. 7:31that i use
218. 7:32so untriggered entry orders the next one
219. 7:35is emotions really important when you
220. 7:37write your emotions from a third person
221. 7:39perspective after the trade's played out
222. 7:41you see things from a different way so
223. 7:44scale of one to ten how much were you
224. 7:47fearful of entering a trade from one to
225. 7:49ten or how much were you chasing the
226. 7:51trade from one to ten how much did you
227. 7:53desperately wanna get into the trade uh
228. 7:56on a scale of one to ten your confidence
229. 7:59or your reluctancy to take in the trade
230. 8:01can be measured and you can start seeing
231. 8:03some patterns that way remember you
232. 8:05wanna track your emotions as much as
233. 8:07possible when it comes to trading and
234. 8:08you wanna measure your fear and greed as
235. 8:11a trader
236. 8:12the next thing is evidence so screenshot
237. 8:15a video or screenshot or create a video
238. 8:18of the trade you can link it to a
239. 8:20database of images and put it in your
240. 8:23journal i use an app called notion
241. 8:25nowadays and it works really well with
242. 8:27my google sheets where i create all of
243. 8:29my
244. 8:30journal my trade journal maybe i'll do a
245. 8:33template if you're interested in a
246. 8:34journaling template let me know in the
247. 8:36comments right now and i'll consider
248. 8:38creating one for you guys and sharing my
249. 8:40one with you guys as well but
250. 8:43really really works really well
251. 8:45you can use loom uh to video your screen
252. 8:47of your trades and talk yourself through
253. 8:49your trades talking yourself through
254. 8:50your trades is a very very powerful
255. 8:52exercise as well and then when you
256. 8:54re-watch it back you can see exactly
257. 8:56what you were thinking at the time but
258. 8:58definitely as a minimum screenshot the
259. 8:59trade and put it in the journal so that
260. 9:01you can quickly access a shot of the
261. 9:04trade
262. 9:05the next thing is accumulating
263. 9:07performance so i suggest you keep a
264. 9:09record of like the last 10 or 20 trades
265. 9:13each time to check performance
266. 9:15over the kind of most recent trades and
267. 9:17have a way of checking your latest
268. 9:20performance over a latest period of time
269. 9:22and i'll go over this in a little bit
270. 9:23more detail in just a bit
271. 9:26the next thing you want to have is a
272. 9:27grading system so have a a plus a b plus
273. 9:31b c d or a class
274. 9:34setup criteria and score them okay and
275. 9:37then from those records
276. 9:39data can really be analyzed properly if
277. 9:41you're doing it that way
278. 9:43it gives you the ability to access your
279. 9:45trading business properly and see the
280. 9:47best performing
281. 9:49strategies the best performing
282. 9:50instruments the average profit per trade
283. 9:53average trade duration
284. 9:55the win loss ratio account equity curve
285. 9:58and of course lots lots more i get asked
286. 10:00all the time about how to you know seek
287. 10:03out the the highest probability setups
288. 10:05having a grading system and grading your
289. 10:08trades based on the qualitative analysis
290. 10:10and your
291. 10:11preferred analysis and all the rest of
292. 10:12it is going to allow you to create that
293. 10:14grading system and then maybe you only
294. 10:16take the a plus setups or the b plus
295. 10:18setups we created a system called the
296. 10:21cts system which is a combined technical
297. 10:23scoring system which is designed exactly
298. 10:25for that to allow you to build your own
299. 10:27system and in my opinion that's the only
300. 10:30way you're going to be a profitable
301. 10:31trader anyway
302. 10:32so that's that let's talk about
303. 10:34frequency because now people
304. 10:36always ask you know how often should i
305. 10:38journal
306. 10:40and i would say this if you're manually
307. 10:43journaling okay which i kind of
308. 10:45recommend you do
309. 10:47you want to record as you trade as close
310. 10:49to when you trade as possible take notes
311. 10:51of any relevant data by literally
312. 10:54copying it straight into your journal as
313. 10:56it's happening as you're in the trade
314. 10:58and if an entry triggers you might start
315. 11:01recording the data for that trade as
316. 11:03it's triggered you know and that's
317. 11:04probably the best way that you're going
318. 11:05to be able to do it if you adjust your
319. 11:07profit target or your stop loss mid
320. 11:09trade
321. 11:10you you it's wise to to log that
322. 11:13immediately and journal that immediately
323. 11:15and then when the trade closes you can
324. 11:17now complete the journal entry of that
325. 11:20trade
326. 11:21um
327. 11:22if you're automated if you're using
328. 11:23automated journaling
329. 11:25i would say access and review your
330. 11:27journal a minimum
331. 11:29of once a week but ideally after every
332. 11:32trade closes even then
333. 11:34i'm a big fan of being very connected to
334. 11:36the numbers and feeling connected to
335. 11:38your trading plan
336. 11:40so doing it after every trade
337. 11:42uh is the best way if you if you can you
338. 11:45know if you can only do it at the end of
339. 11:46each trading day then great but if
340. 11:49you're if you can only check it at the
341. 11:50end of the trading day you want to
342. 11:52consider trading higher time frames only
343. 11:54anyway
344. 11:55the next thing's about knowing your
345. 11:56numbers okay so a lot of traders think
346. 11:59that they need to be ten to one traders
347. 12:02or they need to be right 100 of the time
348. 12:03and it's just rubbish i've spent a lot
349. 12:05of time on respected and profitable and
350. 12:08wildly respected and successful prop
351. 12:10firms in london in new york in italy and
352. 12:14honestly i've been around some
353. 12:15phenomenal traders
354. 12:17and whilst everyone thinks you've got to
355. 12:18be right 100 of the time or have this
356. 12:20enormous strike rate or you've got to
357. 12:23have this 10 to 1 risk reward on every
358. 12:25trade it's just not true in actual fact
359. 12:29the sweet spot you can be a 50 50 trader
360. 12:31and be right 50 of the time in fact you
361. 12:33can be right 30 of the time and still be
362. 12:36very very profitable so this little
363. 12:38diagram here i love this little diagram
364. 12:40here because it indicates in this little
365. 12:42triangle in the middle is roughly where
366. 12:43you want to aim for okay so looking at
367. 12:46this diagram if you're 50 right and
368. 12:48you've got a one-to-one reward to risk
369. 12:50on every trade then you're going to
370. 12:51break even you're not going to be
371. 12:52profitable whereas if you're a 50 trader
372. 12:55but you're a one point you know 1.2
373. 12:58to one or one point uh three to one or
374. 13:01whatever you're going to be profitable
375. 13:03you don't you can make a wildly
376. 13:05profitable system by just being right
377. 13:07half of the time
378. 13:09same as if you're only right 33 of the
379. 13:11time but you've got a two to one reward
380. 13:13to risk you're gonna break even whereas
381. 13:15if you just dip into the um
382. 13:18you know
383. 13:19three to three to one you're going to be
384. 13:21wildly profitable but the point is you
385. 13:23want to aim for somewhere in this little
386. 13:25white triangle that's shown on the
387. 13:26screen here and there's a little table
388. 13:28on the left hand side that you might
389. 13:29want to screenshot that kind of gives
390. 13:30you a guide on where you want to aim for
391. 13:33depending on your system so knowing your
392. 13:34numbers and your projections what to
393. 13:36focus on and what not to focus on
394. 13:39let's go in a little bit more detail
395. 13:40here now
396. 13:42don't focus on account balance right now
397. 13:45most rookies focus on their account
398. 13:47balance it is wise to ignore small
399. 13:50fluctuations in your account balance you
400. 13:51know it might feel very
401. 13:53uncomfortable to ignore your balance at
402. 13:55first but it will dramatically improve
403. 13:57the consistency in your trading i
404. 13:59promise you the issue of concentrating
405. 14:02on your account balance is that it
406. 14:04shifts your priority towards making
407. 14:06money instead of um you know sticking to
408. 14:09a strategy and not losing too much on
409. 14:11any one trade and any professional
410. 14:13trader will tell you the the key focus
411. 14:15should be not losing money you know when
412. 14:18i say not losing money i don't mean not
413. 14:19taking a losing trade i mean over time
414. 14:21you know not taking excess loss sticking
415. 14:24to your rules and your trading plan
416. 14:26should always be your guide and making
417. 14:28money
418. 14:29should purely be a side effect of
419. 14:32following your sound trading plan
420. 14:34flawlessly
421. 14:35and
422. 14:36depending on your level of attachment
423. 14:38and emotion i know people that have you
424. 14:40know put post-it notes across their
425. 14:42screen on their p l or hidden the
426. 14:44balance from their platform and that's
427. 14:46very wise you know and it's not just in
428. 14:48losing drawdowns it can also
429. 14:51help balance emotions when you're going
430. 14:53for a hot streak and a winning streak
431. 14:54when you're having a big winning day i
432. 14:56remember in on april the 3rd 2020
433. 14:592020 i had my biggest trading day ever
434. 15:02and it's still his to this date i did
435. 15:03133 000
436. 15:05in just over 18 hours it was six trades
437. 15:08and that you know that can cause your
438. 15:10emotions to uh to go out of kyoto as
439. 15:13well so you want to make sure you're not
440. 15:15focused on your account balance too much
441. 15:18and if you are then try and build a
442. 15:20habit to not
443. 15:22the next thing is don't focus too much
444. 15:24on profit and loss
445. 15:25now naturally you want to see profits as
446. 15:27a trader right but without putting
447. 15:30that kind of figure into perspective by
448. 15:32using percentage growth which you should
449. 15:34do
450. 15:35it can either lead to kind of an undue
451. 15:37disappointment or an undue euphoria one
452. 15:41trader that we was working with recently
453. 15:42he told me that it made seventeen
454. 15:44hundred dollars profit in his first four
455. 15:48uh months of trading and this
456. 15:50represented about 98 dollars per week
457. 15:53and he was actually disappointed and
458. 15:55frustrated because he had been following
459. 15:57all the rules right following all the
460. 15:59rules
461. 16:00but the thing is he only started with a
462. 16:02four thousand dollar account so
463. 16:04essentially it made close to ten percent
464. 16:06per month on that account which was
465. 16:09phenomenal okay
466. 16:10if you can make two percent three
467. 16:12percent four percent five percent six
468. 16:14percent per month on a five thousand
469. 16:16dollar account then you can make two
470. 16:18three four five percent six percent on a
471. 16:20seven figure account which brings me to
472. 16:22the next point
473. 16:23which is think in terms of percentage
474. 16:26returns
475. 16:27all right think in terms of percentage
476. 16:29returns think in terms of
477. 16:31monthly and annual percentage returns
478. 16:34not monetary value if you focus on
479. 16:36monetary value you're gonna come unstuck
480. 16:39understand that the skill required to
481. 16:41generate four percent or three percent
482. 16:44return on a fifty grand or even a five
483. 16:46grand account is virtually identical to
484. 16:49the skill required to generate a four
485. 16:50percent or five percent monthly return
486. 16:52on a 500 grand account or a million
487. 16:54dollar account all right so understand
488. 16:57compound interest and work in terms of
489. 16:59percentages that's going to balance your
490. 17:01emotions and it's going to make you much
491. 17:02more professional
492. 17:04then we want to go into self-review so
493. 17:06let's talk about self-review and this is
494. 17:08really about becoming more efficient
495. 17:09more effective in everything including
496. 17:12your trading executions your mindset
497. 17:14your emotions your profits your
498. 17:18really your overall performance in your
499. 17:19trading
500. 17:20okay and having emotional
501. 17:23issues is definitely a lack of
502. 17:25efficiency all right and it's usually
503. 17:27skipped and ignored by most struggling
504. 17:29traders they don't blame themself they
505. 17:32try and find the next shiny thing but if
506. 17:34you're wondering what the difference is
507. 17:36by the way between efficiency and
508. 17:38effectiveness the way i was taught from
509. 17:40a guy called peter drucker you might
510. 17:42have heard of him is efficiency is doing
511. 17:45the thing right and effectiveness is
512. 17:47doing the right thing so in this
513. 17:49particular section i want to cover three
514. 17:51things
515. 17:53excessive loss right you want to be
516. 17:56journaling when you've taken excessive
517. 17:58loss incorrect trade size or position
518. 18:00size where you've carried too much risk
519. 18:03on the trade so for example if you've
520. 18:05got a risk management system
521. 18:07or strategy that means you can only risk
522. 18:09point five percent or one percent on any
523. 18:12one trade
524. 18:13then
525. 18:14you know what you do is you go through
526. 18:16all the trades that have lost more than
527. 18:18your maximum allowable which in this
528. 18:20case in this example is one percent all
529. 18:22right
530. 18:23and you can see that i've said trade one
531. 18:26in my journal and trade seven in my
532. 18:28journal lost two point five percent and
533. 18:30one point five percent so that's above
534. 18:32my one percent maximum on those two
535. 18:34trades so then what you do is you add up
536. 18:36all of the total losses
537. 18:38from those trades should you have
538. 18:39executed the trade flawlessly all right
539. 18:42which would have been two percent if you
540. 18:43had executed flawlessly the maximum loss
541. 18:46would have been two percent across these
542. 18:47two trades
543. 18:48all right and then you subtract the
544. 18:51ideal
545. 18:52from the error okay so four minus two
546. 18:56equals two right so we've got a four
547. 18:58percent loss rather than a two percent
548. 19:00loss which means
549. 19:01we're out of kilter out of flawlessness
550. 19:04by two percent
551. 19:06so you've lost two percent
552. 19:09as a result of incorrect position sizing
553. 19:11or not managing your risk properly all
554. 19:13right write that figure down in a
555. 19:15section of your trade journal and and
556. 19:17title that column lost from my fault and
557. 19:21you want to have that column there going
558. 19:23forward as well
559. 19:24the next thing is execution error so
560. 19:27first of all we're looking at where
561. 19:28we've lost more on trades than we should
562. 19:31have the next thing is where you go
563. 19:32through each trade that you entered into
564. 19:34your journal and ensure there were
565. 19:36legitimate entries based on your trading
566. 19:38plan
567. 19:39make sense so this is you literally open
568. 19:41up your trading journal you take a look
569. 19:43at your first recorded trade bring up
570. 19:44the chart for that market that it was
571. 19:46taken on and then take a note of the
572. 19:48date and the time that you entered the
573. 19:50trade and the strategy and you know your
574. 19:52triggered entry and all the rest of it
575. 19:54and then you compare it to the relevant
576. 19:56chart and see if it was in fact a real
577. 19:58entry use your strategy checklist again
578. 20:01outside of you know from a third person
579. 20:03you're no longer in the trade and
580. 20:05confirm or reject the trade
581. 20:07and this is the part where
582. 20:09you know reviewing the tape process you
583. 20:11might have heard that spoken about
584. 20:12before but this is what it is reviewing
585. 20:14the tape and it might sound pointless to
586. 20:16some of you and it might sound time
587. 20:18consuming but it might actually blow you
588. 20:21away with how many trades that you
589. 20:23entered that you didn't that didn't
590. 20:24actually meet your trading strategy
591. 20:26requirements so the magic of looking
592. 20:28back over your trades in hindsight is
593. 20:31you now have less emotional connection
594. 20:34to the charts and you don't have any
595. 20:36emotional connection to the strategies
596. 20:38and that means you can actually see
597. 20:39things differently now believe it or not
598. 20:42so do that and then if the trade in
599. 20:44hindsight was valid give it a tick if
600. 20:47the trade in hindsight was invalid give
601. 20:50it a cross and for invalid entries that
602. 20:52you lost money on sum up the total add
603. 20:55it to your lost from my fault tally and
604. 20:57if the entry was invalid but you made
605. 21:00money sum up your total percentage and
606. 21:02add them to a gained from my fault
607. 21:06tally okay because
608. 21:08you can have invalid trades that make
609. 21:10money as well as lose money and that's
610. 21:12not something to celebrate because you
611. 21:14broke your trade plan rules you failed
612. 21:16to trade your plan flawlessly which
613. 21:18means that's an error it's a it's an
614. 21:21error and the purpose of self-reviewing
615. 21:22is to calculate exactly how much you're
616. 21:24making and losing
617. 21:27compared to how the pure strategy should
618. 21:29be performing
619. 21:30make sense
620. 21:32so
621. 21:33with a strategy you want to lower your
622. 21:35expectations if anything not raise them
623. 21:37so make sure that you find
624. 21:38both sides and then lastly on this if
625. 21:41all the trades were valid okay check to
626. 21:44see if they were managed correctly and
627. 21:45if they were managed correctly calculate
628. 21:47the
629. 21:48amount lost to incorrect management and
630. 21:50add that to the tally and then the same
631. 21:51for the gains as well
632. 21:53then we want to talk about missed
633. 21:54entries okay so some of the most costly
634. 21:57trading mistakes don't come from what
635. 21:59you do but what you don't do and with
636. 22:02many other traders i've worked with the
637. 22:04reason their results differ when they go
638. 22:06live as opposed to what they tested is
639. 22:08usually down to a mistrade
640. 22:10and missing trades might cost you three
641. 22:13four five six percent on missed profits
642. 22:16depending on the kind of move that you
643. 22:18miss out on and missing trades is very
644. 22:20very common particularly in newer retail
645. 22:23traders so this is again where you open
646. 22:25up your charts
647. 22:26at the start of the first market you
648. 22:28trade in your plan
649. 22:29analyze the last week or 10 days or
650. 22:31month basically the period that you're
651. 22:33conducting the review on which i i
652. 22:36recommend you do in batches okay maybe
653. 22:38it's every month
654. 22:39check any setups that occurred
655. 22:42and then go back to your journal and
656. 22:43make sure that you took
657. 22:45that trade and if you did then great
658. 22:48move on to the next pair and the next
659. 22:49pair and the next pair until you go
660. 22:51through your entire portfolio
661. 22:53of markets if you find that you missed
662. 22:55some trades
663. 22:57again write down the gains and fall and
664. 23:00losses
665. 23:01uh
666. 23:02sorry gains from fall and losses from
667. 23:03fall and don't forget the losses
668. 23:05remember remember that
669. 23:07so then now you have a comprehensive
670. 23:10list of all the gains and all the losses
671. 23:12from faults in separate columns of your
672. 23:14trade journal makes sense
673. 23:16the next thing you want to do to
674. 23:17actually get better as a trader and
675. 23:19actually use this
676. 23:20is to analyze the data so what you want
677. 23:23to do is add up all of the gains from
678. 23:25fall and subtract the total gains from
679. 23:27losses and this will give you something
680. 23:28called a net performance discrepancy and
681. 23:31this shows the degree of human error in
682. 23:34your trading performance make sense if
683. 23:37your result is minus two percent you've
684. 23:40essentially realized a two percent loss
685. 23:42on your account which is entirely
686. 23:45attributable to human error your human
687. 23:48error performance discrepancy of minus
688. 23:50two percent means that your account is
689. 23:52minus two percent to what it should be
690. 23:55should you have traded your trade plan
691. 23:57and your strategies flawlessly so in
692. 23:59order to calculate your strategy's true
693. 24:01performance for that period in question
694. 24:04you would need to add two percent to the
695. 24:06realized return and likewise if your
696. 24:08final result is a plus two percent
697. 24:10you've essentially gotten lucky you know
698. 24:12had you been trading your strategy
699. 24:14flawlessly your account balance would be
700. 24:16two percent lower than what it is during
701. 24:18this review
702. 24:20and again that's not something to be
703. 24:21celebrated now sometimes you'll arise at
704. 24:24a situation where your total gains from
705. 24:26fall are equal to your total losses from
706. 24:29fault and what that can do is that can
707. 24:32produce a net performance discrepancy of
708. 24:34zero and that could give you kind of a
709. 24:36false sense of security that you're
710. 24:38actually trading quite well
711. 24:40so
712. 24:41zero net performance discrepancy is an
713. 24:43indication that your total profit and
714. 24:45loss
715. 24:46is equal to that of your strategy true
716. 24:49performance however to calculate the
717. 24:51total magnitude of your own personal
718. 24:54errors we lean more towards gross
719. 24:58performance discrepancy so gross
720. 25:00performance discrepancy can be
721. 25:02calculated by adding up every individual
722. 25:05fault from the steps above so that's to
723. 25:07add up uh you know the accumulative
724. 25:09total of maximum loss invalid entry gain
725. 25:12in valid entry loss management gain
726. 25:14management loss missed entry gain missed
727. 25:16entry loss and then gross discrepancy
728. 25:18performance cannot have a negative
729. 25:21answer they all get positive numbers
730. 25:23towards them so in this case they've all
731. 25:25got positive percentages and the gross
732. 25:27performance discrepancy is 4.7
733. 25:30so the error in my trading is tuned to
734. 25:344.7 percent when i want it to be zero
735. 25:37your only goal as a trader is to
736. 25:39approximate a zero percent gross
737. 25:42performance discrepancy that means
738. 25:44you're trading your trade plan
739. 25:45flawlessly every single month and if you
740. 25:48have a system that's been tested in the
741. 25:49past
742. 25:50um and proven to have a positive
743. 25:52expectancy and be profitable then you're
744. 25:54going to be profitable going forward and
745. 25:56it's a great way to continue refining
746. 25:58your edge as well so you don't
747. 26:00experience you know death by a thousand
748. 26:02cuts later on down the line all right
749. 26:04and then lastly i want to talk about
750. 26:06aggression discretion because this is a
751. 26:07great way for you guys to be able to
752. 26:11organically become more aggressive as a
753. 26:13trader because we all want to become a
754. 26:14little bit more aggressive we all want
755. 26:16to gain confidence in our trading and be
756. 26:18able to
757. 26:19be more aggressive on our entries and
758. 26:21target taking and everything
759. 26:23so this is what i recommend you do
760. 26:25every single day i recommend that you
761. 26:27perform a prediction okay so first
762. 26:30things first you look at the market and
763. 26:32you take a note of the markets that you
764. 26:34trade and the first thing you want to do
765. 26:36is just come up with a prediction
766. 26:38of whether it's likely to go long or
767. 26:40short that's all you want to do a daily
768. 26:42prediction of will it go long will it go
769. 26:45short the next thing you can do is at
770. 26:48the end of the trading day you can tick
771. 26:50whether you were correct or not so you
772. 26:52start tallying how um
773. 26:55how correct you were over your portfolio
774. 26:58of a directional prediction
775. 27:00the next thing you can do
776. 27:02is mark down
777. 27:04whether your entry criteria was met for
778. 27:06your trading system okay and you can put
779. 27:08a tick or a cross next to them at the
780. 27:10end of each day
781. 27:12then what the p l was okay so you can
782. 27:14notice from this example the p l i was
783. 27:16only up four percent this week when in
784. 27:18actual fact my entry criteria was one
785. 27:21two three four five six but i only
786. 27:24managed to take four trades why might
787. 27:26that be correlation risk if you check
788. 27:29the list you'll see that i was already
789. 27:31in a certain pair and i have a
790. 27:32correlation risk on other pairs so i
791. 27:34couldn't enter the second trade in that
792. 27:37pair to play out so i could actually
793. 27:38only take four
794. 27:40so you can start to see how we can start
795. 27:42becoming more aggressive if we're
796. 27:43tracking this stuff and then finally i'm
797. 27:46looking at
798. 27:47target type 1 target type 2 and target
799. 27:49type 3 actually just two target types in
800. 27:52this example but basically what i would
801. 27:54have gained by taking target type 1 and
802. 27:57what i would have gained if i took
803. 27:59target type 2 for all of the trades that
804. 28:02met entry criteria okay not just the
805. 28:04trades i was in but every trade that met
806. 28:06my entry criteria and then what you get
807. 28:09is an aggression basically a strike rate
808. 28:12so you know i had a four percent strike
809. 28:14rate but i actually would have had a six
810. 28:17percent if i'd taken target one and
811. 28:19eight point two nine percent if i'd
812. 28:21taken target two
813. 28:23if all trades were taken that met the
814. 28:25entry criteria and then finally you get
815. 28:27this aggression increase okay so i know
816. 28:30that i can become more aggressive to the
817. 28:33tune of one point five percent on target
818. 28:35one or two point zero eight percent on
819. 28:38target two just over two percent now
820. 28:41what that allows me to do is to kind of
821. 28:43maybe i wouldn't go up one point five
822. 28:46percent or two percent straight away i
823. 28:48just want to tweak it slightly you know
824. 28:49maybe half a percent so maybe instead of
825. 28:52um six trades i don't take four but i
826. 28:54take
827. 28:55five or take four and a half you know
828. 28:58and you can really start to
829. 29:00build aggression discretion into your
830. 29:03trading that will allow you to become
831. 29:04more aggressive as a trader but without
832. 29:07jeopardizing the whole system so
833. 29:10hopefully that makes sense that's just
834. 29:11one example we teach lots and lots of
835. 29:13these examples another example is just
836. 29:15literally you know
837. 29:17um how many times you were correct over
838. 29:19how many entries you took even that on
839. 29:21its own is a great way of starting to
840. 29:24build discretion in your journaling you
841. 29:26can start seeing actually you know every
842. 29:28week i'm right 10 times but i only get
843. 29:31involved in my entries
844. 29:33four times or five times and then you
845. 29:35can start to drill in and look at how
846. 29:37you can become more aggressive in your
847. 29:38entries and be right you know what are
848. 29:40the patterns there that make you right
849. 29:42but not allow you to get in does that
850. 29:44make sense and once you've got a system
851. 29:46you just tweak your rules and you add
852. 29:48that to your rules so
853. 29:50hopefully you got value from that you
854. 29:52know if you if you do anything else or
855. 29:54you know i've got lots and lots of other
856. 29:56ways and i could talk about this stuff
857. 29:57for a whole week if you're interested in
858. 29:59that maybe i'll do a training on that
859. 30:01but hopefully you got some nuggets and
860. 30:03value there and some ideas so that you
861. 30:05can go away but if anything i just hope
862. 30:06this video makes you treat your trading
863. 30:08more professionally so that you realize
864. 30:10that actually it's only you that's going
865. 30:12to make your system professional and
866. 30:14profitable no one else cares you know
867. 30:16really no one else cares it's only down
868. 30:18to you so stop dilly-dallying around
869. 30:20going around in circles and start
870. 30:22treating your trading like a business if
871. 30:24you want to find any links on how you
872. 30:26can work with me or learn more on this
873. 30:27stuff it'll be in the description
874. 30:30let me know in the comments what you
875. 30:31would add to your journaling or what you
876. 30:33use for journaling because lots of you
877. 30:35use automated systems and things like
878. 30:37that and on that note i would say
879. 30:39if you can't be bothered to automate it
880. 30:41to manually journal your trades
881. 30:44don't bother with an automated system
882. 30:46because if you can't be bothered to put
883. 30:48in the kind of blood sweat and tears
884. 30:49into your journaling and get connected
885. 30:51to the numbers you really got a low
886. 30:53probability of succeeding using
887. 30:55automated system however if you want
888. 30:57more kind of higher level data analytics
889. 31:00and you've been manually journaling for
890. 31:01a while now and you want to take it to
891. 31:03that next level then absolutely but you
892. 31:05still want to keep your
893. 31:06eyes on that journaling software and as
894. 31:09i say you want to be tracking that thing
895. 31:10at the end at least at the end of every
896. 31:12trading day if not week but ideally
897. 31:15after every single trade so don't forget
898. 31:18to subscribe to the channel if you want
899. 31:19to hear more valuable videos like this
900. 31:21i'm going to do another one on managing
901. 31:22money attracting investors and how to
902. 31:25manage money how to set that whole
903. 31:27system up so if you want that you better
904. 31:28subscribe and hit the notification bell
905. 31:30for when that goes live and until next
906. 31:32time guys have a great rest of your day
907. 31:34and week and i'll see you then
908. 31:44[Music]