Market Mechanics Ep 23: Journalling Your Trades — Transcript

Full transcript

1. 0:00The definition of gambling is trading
2. 0:03without journaling.
3. 0:05It's repeating the same mistakes with
4. 0:08more confidence. Einstein famously said,
5. 0:11"Insanity is doing the same things over
6. 0:13and over again and expecting different
7. 0:15results." It's the exact same concept in
8. 0:18here. If you trade the same way, you
9. 0:20repeat the same mistakes, you are going
10. 0:23to get the same results, which means
11. 0:25until you change, your trading results
12. 0:27will not change. Okay? So, I believe
13. 0:31that journaling is important not for
14. 0:34your present self. You don't journal for
15. 0:36today. You journal for your future
16. 0:38version of yourself. Right? The goal
17. 0:40here with journaling is to capture truth
18. 0:43while it's fresh, not after you
19. 0:45rationalize it. It's to capture truth so
20. 0:48that later you can introspect on truth
21. 0:50and you can think about how you can
22. 0:52improve your existing strategy to make
23. 0:54it even better, how you can improve
24. 0:56yourself, your technical edge, your
25. 0:57mental edge. And to me, like, journaling
26. 1:00is just how you separate luck from
27. 1:02skill. Because a green trade, a winning
28. 1:04trade, can be bad execution, right?
29. 1:07Could just be you got lucky and you won
30. 1:09the trade. And similarly, a red trade, a
31. 1:11losing trade,
32. 1:13could be a good trade because you
33. 1:15executed your trade plan flawlessly in
34. 1:17that trade. Which also means that if you
35. 1:20do not journal your trades, you will
36. 1:22never ever know the difference. It is
37. 1:24your duty to journal your trades not for
38. 1:27today, but for your future self. So, you
39. 1:29can look back, see the progress you've
40. 1:31made, and thank you for not wasting
41. 1:34years repeating the same mistakes. And
42. 1:36we all know that the secret to
43. 1:37profitability is to become more
44. 1:39disciplined, right? But what does it
45. 1:41that mean? To become more disciplined,
46. 1:43what it essentially means is that you
47. 1:45need to overcome the resistance that
48. 1:47stops you from doing the hard, boring,
49. 1:50repetitive tasks that are required to
50. 1:52succeed. Things like journaling,
51. 1:54reviewing, refining, following a trade
52. 1:57plan.
53. 1:58And the thing is you can do all of that
54. 2:00by increasing reps until you adapt,
55. 2:03or you can just reduce friction. And
56. 2:05that's what Edge Flow does. It lowers
57. 2:07the resistance to the boring, repetitive
58. 2:10tasks that actually make you profitable.
59. 2:13Okay, so let me show you how to actually
60. 2:15use the trading journal inside Edge Flow
61. 2:17to journal and review your trades.
62. 2:20So, after you have closed a position
63. 2:22itself, right? You can just go and
64. 2:24journal that trade by going to your
65. 2:26trading journal function in Edge Flow.
66. 2:29So, over here, this is where every
67. 2:32single trade that you have closed, every
68. 2:33single position that you have closed,
69. 2:35will appear over here, right? They get
70. 2:37auto imported immediately right after
71. 2:40you exit a trade. And
72. 2:42you can also add a manual trade entry if
73. 2:45you want to do so, right? Like this is
74. 2:47where you Let's say you take a trade
75. 2:49outside of this trading account and you
76. 2:50want to document it on your Edge Flow
77. 2:52account, you could just add a manual
78. 2:54trade and just fill in the details in
79. 2:56here, right? The details about the
80. 2:57trade. And then once you do so, the
81. 2:59manual trade will appear here, right?
82. 3:01Just to give you an example of a manual
83. 3:02trade.
84. 3:03Ta-da, right? Manual trade, as simple as
85. 3:06that. So, when it comes to journaling,
86. 3:08trust me, nobody likes journaling, all
87. 3:09right? Nobody likes journaling. The only
88. 3:12difference between professional traders
89. 3:14and amateur traders is that they do the
90. 3:16things that they don't like to do
91. 3:17anyways because they know that it helps
92. 3:18them in the long term, right? So,
93. 3:21my rule, my non-negotiable is I journal
94. 3:25right after I exit a trade.
95. 3:28Okay, you want to make this a habit
96. 3:29because that's the only way this thing
97. 3:31can feel fun. That's the only way you
98. 3:33can reduce the amount of willpower
99. 3:35needed to do this mundane task is to
100. 3:38make it a habit. So, journal right after
101. 3:42you exit a trade, right? For example, I
102. 3:43come in here, I trade trade trade trade.
103. 3:45Today I lost $2,000. Cool. Press this
104. 3:47button right here, view in journal,
105. 3:49straightaway go and journal the trade
106. 3:51itself, right? Like once again, when you
107. 3:53build it into a habit, now you are doing
108. 3:55it every single day.
109. 3:56Okay? So, if you can't do it immediately
110. 3:58because like let's say you are still
111. 4:00trading, you know, you still want to
112. 4:02continue trading, then what you want to
113. 4:03do is to do it at the end of the trading
114. 4:05session, at the end of the trading day.
115. 4:08But,
116. 4:09you must get it done no matter what
117. 4:11within the same day, okay? Because this
118. 4:13is where your emotions are still fresh.
119. 4:16You just got off the trade, you kind of
120. 4:19understand the trade idea, and you can
121. 4:21like really just document the reality of
122. 4:23the trade itself.
123. 4:25It is different if you journal right now
124. 4:27compared to if you journal the trade a
125. 4:29few days later, right? So,
126. 4:31try to do it as soon as humanly
127. 4:33possible, and just do more reps, right?
128. 4:35Because the more reps you do, the more
129. 4:36automatic it becomes, and the more
130. 4:38easier it is for you to journal in the
131. 4:39future.
132. 4:41And to me, what I like to do is to once
133. 4:43again, like I said, reduce the friction
134. 4:44that is needed to journal, right? So, I
135. 4:46like to get into a flow state. And I get
136. 4:48into a flow state by putting
137. 4:50my headphones on,
138. 4:52and also having like a green tea right
139. 4:54by my side,
140. 4:56and just start like chipping away,
141. 4:57right? Just listening to some
142. 4:58productivity beats, you know what I'm
143. 4:59saying? And then like I just coming in
144. 5:01here and just start journaling, right?
145. 5:03So, this is where
146. 5:05like I said, if you do it fast, it takes
147. 5:07only 5 minutes, and it can save you
148. 5:08thousands of dollars by preventing
149. 5:10repeated mistakes. So, after you're done
150. 5:12trading for the day, first thing you
151. 5:13want to do is to go to the trading
152. 5:15journal, and I click the day that you're
153. 5:16on, and glance at the daily stats first,
154. 5:19right? It just give you quick context at
155. 5:21a high level. And this is where you can
156. 5:23see your P&L for all the closed
157. 5:24positions of the day, how many trades
158. 5:26you have taken, what is your win rate
159. 5:28like, did you follow your trading plan,
160. 5:30did you violate any guardrails? If so,
161. 5:32it'll be documented right here. Did you
162. 5:34complete the pre-market routine, and how
163. 5:36many straight trades you have already
164. 5:38journaled so far, right? So, if you come
165. 5:39here, you will notice there's like this
166. 5:41gray dot
167. 5:42beside each trade itself. What it pretty
168. 5:45much means is that the journal is
169. 5:47missing, right? That means you haven't
170. 5:49started journaling the trade itself. So,
171. 5:50once you start journaling the trade, it
172. 5:52will look something like this. You can
173. 5:53see the the greater just disappeared,
174. 5:54right? So, this kind of indicate, okay,
175. 5:57have you journal for the day or not,
176. 5:58right? If you're able to journal all the
177. 5:59trades that you've taken, then this
178. 6:01thing will turn into complete. Now,
179. 6:02let's begin the journaling process,
180. 6:04right? So, let's click on this trade
181. 6:06itself. And what you want to do is to
182. 6:08scan from left to right. Okay? Because
183. 6:10the left side, what we have over here is
184. 6:12all your trading data, which is once
185. 6:14again automatically imported from your
186. 6:17trading broker. This is where I can see
187. 6:19on P&L, what instrument do you trade,
188. 6:22what was the direction, what lot size do
189. 6:23you use, what date was this on, like
190. 6:26what session was this trade in, what was
191. 6:29the trade duration, right? Whether it's
192. 6:315 minute, 1 hour, 45 minutes, and what
193. 6:34is the entry price, and what is the take
194. 6:37profit, stop loss, so on and so forth.
195. 6:39And what is your risk and reward in
196. 6:41terms of R multiple, and what was the
197. 6:43fees that cost you in this trade itself.
198. 6:46Okay? So, on the left-hand side, just
199. 6:48review the trading data, see whether
200. 6:50it's correct or not, and then on the
201. 6:52right-hand side, this is where you have
202. 6:55the space, you have the time to actually
203. 6:57introspect on the trade idea itself.
204. 7:00Okay? Introspect on the trade that have
205. 7:02just been closed. So, when you start
206. 7:03journaling, the first thing you want to
207. 7:04do is to actually add your chart
208. 7:07screenshots, right? So, you have context
209. 7:09over the trade itself. So, on the
210. 7:11trading panel itself, you can just come
211. 7:12in here and just press download image.
212. 7:15And then once you download image, you
213. 7:16can just come back here to the journal,
214. 7:18and then you can just upload the image
215. 7:20just by dragging and dropping into any
216. 7:22one of these boxes right here. But you
217. 7:23basically just want to upload a chart
218. 7:25screenshot for the higher time frame, on
219. 7:28medium time frame, and a lower time
220. 7:29frame. The higher time frame, this give
221. 7:32you context as to like why this trend
222. 7:34direction, you know, what was your
223. 7:36initial bias, what was the structure
224. 7:38like, what was the key levels. And then
225. 7:40the medium time frame could answer the
226. 7:42next question, why this location, why
227. 7:45the higher and lower display the month
228. 7:46zone or flip zone,
229. 7:48like where was the available liquidity?
230. 7:50And then the lower time frame, this is
231. 7:51where I can see your entry trigger,
232. 7:52right? What was the entry confirmation
233. 7:54that triggered that appeared in the
234. 7:56market that causes you to enter for the
235. 7:58trade itself. Okay? So, the reason why
236. 8:01we actually put these chart screenshots
237. 8:02in here for you is so that we can
238. 8:04refresh your memory, right? To just
239. 8:06remind you of what happened a few hours
240. 8:09ago, a few minutes ago when you were in
241. 8:11the position itself. And once you
242. 8:13visually see the trade that you just
243. 8:15exited, you can revisit your thought
244. 8:18process accurately instead of rewriting
245. 8:20history, right? Because we all know how
246. 8:24inaccurate memory is, right? So, it's
247. 8:25important that you actually do this. And
248. 8:28here's a tip for you, right? If you
249. 8:29press this focus mode over here, what
250. 8:32you essentially go is literally focus
251. 8:34mode where we literally hide all like
252. 8:36all the other details like this and
253. 8:37this. So, all you have can do is to just
254. 8:40like journal, right? Journal manually
255. 8:42while reviewing the chart screenshots
256. 8:44here, right? So, this is a cool little
257. 8:45tip that you can try out if you want.
258. 8:47But anyways, this is where I can start
259. 8:48tagging your trades, right? So, once
260. 8:50again, go from top to bottom, right? Did
261. 8:52you follow a trading plan? Yes or no?
262. 8:54You can just check off this box right
263. 8:55here and then go and tag which plan did
264. 8:58you actually follow based on your edge,
265. 9:00right? So, by default, you will always
266. 9:02be the plan that trading plan, the edge
267. 9:05that you have set as active in the edge
268. 9:07feature itself, right? But yeah, you can
269. 9:09go and select whatever trading plan that
270. 9:10you have followed in this case and then
271. 9:12type in the entry confluences, right?
272. 9:14So, how this works is that it's
273. 9:15essentially tags, right? It's It's like
274. 9:17a tag system. So, just list down your
275. 9:20entry confluences, right? So, let's say
276. 9:22in this case, we got a market shift,
277. 9:24okay? Just type in, press enter, and it
278. 9:27will be tagged right here. And then
279. 9:29it'll be saved over here as a drop down
280. 9:32so that you can tag it in the future.
281. 9:33Yeah, so you type in your entry
282. 9:35confluences over here, I'll pick the two
283. 9:37to five [snorts] confluences that
284. 9:39actually cause you to take the trade
285. 9:40itself. You don't have to over tag,
286. 9:42right? You don't have to pick 10 things
287. 9:43because you're just going to be lying to
288. 9:45yourself. Just like really just enter
289. 9:48the the entry confluences right there.
290. 9:50And then next up you got the trade
291. 9:51management, right? This is where you can
292. 9:53once again write down how you manage the
293. 9:56open position, right? Did you hold it
294. 9:59all the way to your take profit? Or like
295. 10:02did you take partial profits? If so,
296. 10:04where did you place your partial profit
297. 10:06at? If you move your stop loss, how did
298. 10:08you move your stop loss or and so forth?
299. 10:10And then once done, you can go and
300. 10:11reflect on the trade itself and think
301. 10:13about what were the mistakes that were
302. 10:14committed on this trade. Whether that's
303. 10:16a win or a loss, there will always be
304. 10:17some form of mistake. There will always
305. 10:19be more room for like improvement,
306. 10:21right? So, if there's a mistake, just go
307. 10:23and tag it right here, right? Maybe I
308. 10:25did not wait for price to mitigate my
309. 10:29point of interest, right? Whatever
310. 10:30mistake that you have, just put it in.
311. 10:32If you don't have any mistakes, you are
312. 10:33flawless, then yeah, you can just uh
313. 10:35just like leave it clean. Okay, but like
314. 10:38I said, you just want to make sure that
315. 10:39you are brutally honest, right? Because
316. 10:41this is where you will be able to make
317. 10:42the most amount of progress when you
318. 10:44actually just stare at your inadequacy
319. 10:47and just think about solutions to
320. 10:49overcome your shortcomings. And then
321. 10:51over here, this is where you can take
322. 10:52your emotion, right? So, about the
323. 10:55emotion,
324. 10:56in the trading panel, we have a feature,
325. 10:58right? So,
326. 11:00example, right after you enter for a
327. 11:01trade over here,
328. 11:04what happens is that there will be this
329. 11:05emotion pop-up model right here that
330. 11:07appears right after you trade just to
331. 11:09ask us ask you what emotion drove this
332. 11:11entry, right? So, let's say calm. And
333. 11:14then this is your entry emotion, right?
334. 11:17This entry emotion will be tagged into
335. 11:18your trading journal. And then once you
336. 11:20close the position itself, there will
337. 11:22also be another model just like this
338. 11:23asking you how do you feel after you got
339. 11:25out of the trade, right? And this
340. 11:27emotion here will be tagged into your
341. 11:30exit emotion, right? So, whatever
342. 11:32emotion that you have selected while
343. 11:33you're trading, like I said, it will
344. 11:35automatically be imported in here. Okay?
345. 11:39So, yeah, let's say in this case, since
346. 11:40I didn't, you know, in select my emotion
347. 11:43while I was in the in this position
348. 11:44itself, I'm just going to manually
349. 11:46choose it right now in retrospect,
350. 11:48right? So, I can put calm, disappointed,
351. 11:50whatever it is. Just put the emotion
352. 11:52there. Okay? So, once that's done, this
353. 11:54is the fun part, and that is reflecting
354. 11:57on the trade itself. So, when it comes
355. 12:00to reflecting the trade, you can either
356. 12:02type out your reflection manually just
357. 12:04like this, or you can record like a
358. 12:06little voice thing, which will then
359. 12:08transcribe what you are saying into
360. 12:10text. So, this way you don't even have
361. 12:12like do the journal itself, right? Let
362. 12:14me just show you how this work.
363. 12:17Okay, you can see like it literally just
364. 12:19transcribed what I just said. Okay, so
365. 12:21today I entered for a trade on EUR/USD,
366. 12:25and I actually made the mistake of being
367. 12:29too impatient. I rushed into the trade
368. 12:32without following my trade plan.
369. 12:34Okay, you can see just an example right
370. 12:36there. What happens is that it
371. 12:36transcribed what I said into text,
372. 12:39right? So, this way if on some days
373. 12:41where you don't feel like manually
374. 12:42typing stuff, because you just encounter
375. 12:43a bunch of losses, you can just speak to
376. 12:45it like a freaking human, and then it
377. 12:48will transcribe what you have said to
378. 12:50it. All right, so when it comes to
379. 12:51reflection, there are two ways that I
380. 12:54actually reflect based on my trading
381. 12:57results.
382. 12:58When I'm green, when I make money, this
383. 13:01is where I'm asking myself, okay, did I
384. 13:04actually follow my trade plan, or did I
385. 13:06get lucky?
386. 13:07And if I did follow my trade plan, which
387. 13:10part of the process was clean, right?
388. 13:12Like what worked? Okay, like is it
389. 13:14because the point of interest was marked
390. 13:16up properly? Is it because
391. 13:17um my bias was correct?
392. 13:20And then I also ask myself, did I leave
393. 13:22money on the table, or did I manage the
394. 13:24position well? Right, and this is where
395. 13:26I really just go and look at my how I
396. 13:28managed the trade. Right, did I cut the
397. 13:30profits early because I was scared that
398. 13:32price is going to reverse?
399. 13:34Did I take partial profit? Did I move my
400. 13:36stop loss way too soon?
401. 13:38And then last but not least, I ask
402. 13:40myself, how can I repeat this win again
403. 13:42next time? Okay, like what are the
404. 13:45things that I can do more of in the
405. 13:46future so that I can repeat a win just
406. 13:49like this.
407. 13:50That's the scenario if I win, if I'm
408. 13:52green, if I make money. Cool. Very fun.
409. 13:55Right, it's fun to journal when you're
410. 13:56making money. The other scenario is when
411. 13:58I lose money, when I'm red.
412. 14:01The first question I ask myself after I
413. 14:03lost a trade is, was it a good loss or a
414. 14:06bad loss?
415. 14:07Because a good loss is one in which
416. 14:12I follow my plan and I still lose.
417. 14:14That's part of trading, right? That's
418. 14:16just variance, right? That's just, you
419. 14:18know, the the probabilistic nature of
420. 14:21trading. You can't escape good losses.
421. 14:24But if it's a bad loss, that's alarming
422. 14:26because a bad loss is a loss that I
423. 14:28incurred as a result of neglecting my
424. 14:31trading plan.
425. 14:33Once again, that's alarming, right?
426. 14:34Because that just says that I haven't
427. 14:37been disciplined on this trade itself.
428. 14:38Let me go and investigate what went
429. 14:40wrong. Like, did I let emotions cloud my
430. 14:42judgment? Okay, if that's the case, I
431. 14:44can go and look what was my emotion at
432. 14:46entry? What was my emotion at exit? And
433. 14:48then based on that, I can develop a
434. 14:50hypothesis, right? Okay, saying that
435. 14:52because I was
436. 14:54angry when I was entering the trade, it
437. 14:56caused me to actually neglect my trade
438. 14:59plan, and now I'm just trading the
439. 15:01market because I want to get back the
440. 15:02money that I've lost. And that resulted
441. 15:05in this loss.
442. 15:06So, the next time around when I actually
443. 15:08feel this exact same emotion,
444. 15:10maybe I should calm myself down. Maybe I
445. 15:12should, you know, meditate before I
446. 15:14actually get back into the market. I
447. 15:15also ask myself, okay, what caused the
448. 15:18the loss itself, right? Like, did I not
449. 15:20follow my trade plan? Was it timing? Was
450. 15:22it anticipation? Was it emotion?
451. 15:24Whatever it is, identify the root cause
452. 15:27and try to fix it next time round.
453. 15:30Okay, what got real can prevent this
454. 15:33exact mistake? What rule change do I
455. 15:35need to do to make to like combat this
456. 15:38mistake in the future, right? To prevent
457. 15:40myself from repeating the same mistake
458. 15:41again.
459. 15:42Okay? So, yeah. Basically, just remember
460. 15:45that a good trade is not necessarily a
461. 15:48profitable one. A good trade is one in
462. 15:51which you executed according to your
463. 15:53trading plan.
464. 15:54Especially when you didn't feel like it.
465. 15:57So, just because you make money doesn't
466. 15:58mean it's good. Just because you lost
467. 16:00money doesn't mean it's bad.
468. 16:01Execution is what we are grading here.
469. 16:03We don't define our performance,
470. 16:07our self-worth by our P&L. No, we define
471. 16:12it by our ability to execute the trading
472. 16:15system.
473. 16:17By our desire to becoming a skilled
474. 16:19trader. So, once you're done with
475. 16:20everything, right? Let's say put a bunch
476. 16:22of journal in here.
477. 16:25There's no save button because it's auto
478. 16:26save. You can see right here. It's auto
479. 16:28save, right? So, you can just leave the
480. 16:29journal itself. Or, if you want, you can
481. 16:31just continue journaling the next trade
482. 16:33by pressing this button right here. And
483. 16:35then boom, you're going to the next
484. 16:36trade. And then this is where you can
485. 16:37like journal like the the previous
486. 16:39trade, the next trade, so on and so
487. 16:40forth. Yeah. So, that's what you can
488. 16:42potentially do in here.
489. 16:45And then this allows you to just journal
490. 16:47trades back to back without ever leaving
491. 16:49the page itself. And also, there's this
492. 16:51function that allows you to share a
493. 16:52trade right here, right? You can use
494. 16:54this for feedback. You can use this for
495. 16:56accountability. You can share it with
496. 16:57your coach, share it with your trading
497. 17:00partner, you can share it with your
498. 17:01community. Make sure that you only share
499. 17:02it after you have journaled it, though,
500. 17:04so that the context is much more
501. 17:05complete. But yeah, that's the whole
502. 17:07point of the trading journal. Remember,
503. 17:09you're not doing this to feel
504. 17:10productive. You are doing this to get
505. 17:13dangerous. Every trade you journal
506. 17:15becomes feedback. Every mistake you make
507. 17:18becomes a pattern, and every pattern you
508. 17:20fix becomes profit over time. So, do not
509. 17:24be that trader who keeps paying the
510. 17:26market tuition for the same lesson again
511. 17:28and again.
512. 17:30Close the loop after every session.
513. 17:33Break the cycle. Break the vicious cycle
514. 17:36of unprofitability.
515. 17:37And your future self is going to thank
516. 17:39you for it.