Trading journal

Fall down seven times, get up eight.

I haven’t done any trading for a couple days. I’ve just been focusing on my diagram. I’m on my fourth version now.

It feels less redundant now. It still has a tiny bit of repetition, but for good reason. Overall, it’s reduced. I used to have 5 separate sections, but now it’s 4:

1- trading steps (how to assess what the price action conditions are)
2- entry/exit signals
3- consolidation
4- retracement vs reversals

This time I included fakeout candles. Those have been a real hurdle.

I realized something though.

Once I get a good groove with my trades, and I feel my diagram is somewhat complete (at least for a while), I’d like to stop studying so much. I’d like to do something else with my time.

I’m kinda tired of studying. Or perhaps, I’m tired of studying and not getting profits. But I’m learning a lot. I’m glad about that. I’d like to just focus on applying what I’ve learned for a little while.

Let’s see how this month goes.

I just finished trading. I have five positions open. There were several that I wanted to take, but felt forced based on my diagram.

I had to remind myself that just because something is happening in the chart, it doesn’t mean I have to be a part of it. I don’t have to try to catch every single move.

GBP/USD looks like it’s about to go bullish on D1, but there’s no real signal based on my strategy. I went back and forth about it 3 or 4 times. It’s tempting, but I had to pull myself away. It doesn’t feel good. But I told myself that I’m trying to catch the really obvious trades.

The so-so trades aren’t worth trading, for me.

Two particular trades that I failed to read correctly. Sure, after the fact, it’s easy to see what I should have done.

But this morning, I seriously had no idea what to do. I didn’t want to sit it out because I wanted to learn how to make a decision.

Or perhaps the best thing to do is to not trade at all if I have that feeling of uncertainty. That’s something worth thinking about.

Anyway, I realized that I overlooked a step that could have made a difference, and it’s my FIRST step: draw support and resistance lines.

I actually didn’t do it. I thought it wouldn’t be necessary, and I was thinking about other ways of trading it that might not make drawing S/R necessary.

But, I guess I was thinking about so many things, I forgot the most basic thing. I messed up.

Instead of sitting it out, I would like to learn what to do. I don’t want to force trades either. I want to look at a set up, make an assessment, and make a decision based on that assessment.

You know what? I was just thinking about a chart I studied and it had confusing signals. Just like my losses today.

In that backtest, my conclusion was to NOT trade it. Sometimes the best thing to do is not trade and just wait.

I’m gonna take some time this weekend to look at charts with contradictory signals

Regarding your fake-outs: here is my take on these situations:

Order flow determines price action movement. When faced with a trading situation, like S&D, and S&R zones Winning traders do not have to close their trades. Pros have the luxury of sitting quiet awaiting for an outcome, while losing traders need to close in case of losing more or get stopped out. Hence large spike candles.

So you get a temporary inbalance between buyers and sellers. In an uptrend when losers bail out, the price moves down until new buyers and existing pros who could add to their positions take the price action back up again.

The key is to aim to identify where losing traders S/L’s will be taken out and/or being ‘forced’ to close to protect their capital. And also whether the winners will be enticed to take profits

In a ranging market, you will see many attempts to test the highs or lows, and patience is the key. Wait for a trend to reveal itself. In the meantime scalp the waves, where you have a built in zonal S/L.

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I’m not happy about the losses yesterday, but I’m actually kinda grateful for them. I added them to my diagram, and I’ve seen those tricky price action movements in other charts.

So, lesson learned…and saved.

I also backed up my data on an external drive. So, my data is saved on a micro SD, AND on an external drive. I learned my lesson since my computer crashed before.

Also, backing up on an external is a good idea. There was a thunder storm the other day, and I was worried that somehow if lightning strikes, a power surge could wipeout my computer, and possibly even my SD card. So, it reminded me to back up my data.

I got to add a nice detail to my diagram. It’s about jumping in on retracements. I’ve gotten chewed up a lot on retracements.

I’m gonna try to take my time and follow my diagram more this week. Let’s go!!!

I really don’t want to talk about this. I’m not proud of it, but I have to come clean. I had a trade today, that I should have checked my diagram. But I didn’t.

Without consulting my diagram, I ASSUMED I knew what was in the diagram, and I didn’t look. I thought I knew the answer, but I didn’t. I was wrong.

I had a signal, and I treated it as a reversal. I checked my diagram, and it says that I should have traded it as the trend will continue. And I just checked…

I got stopped out. The trend continued, just as my diagram said. I put a sign on my wall in big letters to follow my diagram.

This is bad. But, I’m gonna keep going. Fall down 7 times, get up 8.

A snake can only shed it’s skin against sharp rocks. Let’s go!!!

How about fall down 1 time and get up 8? :slight_smile:

It is uncanny how it often goes that we define a method that tells us what is worth doing … and yet, when it comes to making the trade, something else within us concludes the opposite - even though we design that method ourselves using the same logic process.

I sympathise!!

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It’s funny you said that. I came back online because I was just thinking the same thing.
I wanted to write about WHY I do this over and over.

I have a hard time slowing down and thinking when my emotions are running. At the moment of the trade, my brain is running and it sometimes doesn’t even cross my mind to check my diagram. I just assume I already memorized it.

And that’s certainly not the case. That’s the reason why I have the diagram–to remove the thinking.

Sometimes, I don’t know which diagram to look at. Suddenly, all details become significant.

It’s already been pointed out here that I seem to not trust my diagram. Perhaps, I just have to keep getting it wrong over and over until my brain learns what to do.

I have to make every mistake until I have enough painful experiences telling me what to do and what NOT to do.

Do it wrong until I do it right. Perhaps this is my way…

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Aah but this is not the case! Your diagram does not remove the thinking - it is your own creation and represents your own rationalisation of a particular type of set-up - but without the emotion and blinkers that suddenly appear at the time of actually entering a position.

One possibility might be to apply a rigid time-lock on your trade entries. I have sometimes done this, too. It depends on your targetting but I doubt if your trade would suffer much if you said that you set a 30 mins time “lock” before actually entering a position. In many cases you might even gain from a better entry! Either way it would train you to wait, think and check your diagram before commiting to the trade. After a while what might seem cumbersome actually becomes a habit! :wink:

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You must be in my head!!!

I was just thinking that!! Well, I was thinking of doing something to distract my brain…like pushups. But the rush of testosterone might be bad and make me more aggressive. No bueno at trading time.

But yeah, I need to refocus before the trade!! You’re right!

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Hitting the charts again. I missed an opportunity for a big bull swing in GBP/AUD. But, I’m taking notes and adding to my diagram, but being mindful not to contradict myself.

I’m adding screenshots of unexpected price action samples.

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Gotta vent. I had a frustrating trade this morning. I had two signals in the same setup, and I didn’t know which one to follow.

Of course I chose wrong. Now, I see which one I should have followed. My diagram gave instructions, and the instructions were right. But the problem was that I saw another signal, and didn’t know what to do.

If I have two signals, which one do I follow? I added a small detail to my diagram to follow which signal in case two signals occur again. Actually, there wasn’t much to add. It’s just a direction I have to follow. I put the directions in a bold font.

I also tried straddling, but the straddle’s SL was too tight, and I got stopped out in both directions. None of my backtests have straddles, by the way. I’ve backtested over 100 charts, and not one of them required a straddle.

I did the opposite of what the most obvious option was. I thought is was a fakeout candle, but I have notes about when a fakeout candle is a fakeout.

It wasn’t a fakeout.

It’s quite frustrating. I’m almost starting to get tired of sabotaging myself. I think I’m being smart, and I’m doing the opposite of what I should do.

Being decisive in the moment is very difficult.

I had a thought yesterday that in the moment of placing a trade, I should follow my journal, but I often have doubt.

I have doubt because my brain believes that there is another option I should follow. I think I have to eliminate the doubt by exhausting it: make all the errors I can think of until I no longer doubt my strategy.

This may seem counterintuitive to others, but I think this is how my brain works…it’s a process.

Ok, this is a first. I just witnessed my first ¨oh well¨ trade. Meaning that I had a sell signal, I took it, and I lost.

After that, a second signal happened and price went bullish. But this particular signal is normally a fakeout candle and I should take it. However, the surrounding price action wasn’t right.

Normally, I’d go adjusting my diagram to include such a signal, but I’m not going to do that this time. I didn’t do anything wrong this time.

It’s actually a loss that I’m gonna just chalk it up to a random loss. No need to adjust my diagram.

I just realized something about myself thru this loss I just had in CAD/CHF.

When I see the chart and something’s brewing…a set up…

At first glace, my brain makes an assessment, and I instantly get attached to it. It’s my first interpretation. Just like if you see a stray dog in the street.

My brain WANTS to believe that my first interpretation is correct, and if my diagram says something contradictory, my logical thought process has trouble processing why the diagram is saying something contradictory.

My brain WANTS to believe what it’s seeing in the chart is correct. This is where the doubt develops when I read my diagram in the midst of placing a trade.

This is why I was saying I have to unlearn my logical thinking process, because even though I want to think it’s logical, it’s wrong. The logic is (90%) in my diagram. I guess the last (10%) is for my personal discretion.

A trading journal is essential not only for new traders but also for experienced traders. It will assist you in developing strategies and becoming proficient in trading.

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It really does help me work through my thoughts. It’s helpful to have a place to document the emotional part. However, I also analyze my trades thru my trade history in my account.

Do you keep a journal as well?