I read that successful traders keep a detailed journal of their trades each day. They make daily, weekly and monthly reviews to find their weaknesses and strengths. This is one area where I need to devote my time on.
Right now my journal usually consist of a brief entry of a few sentences. I would write stuff like, I was impatient today and traded impulsively, or I started out with losses and they got worse because I forced trades so I can make my money back. I want to improve my trading at a faster pace and this kind of info in my journal is inadequate. I need more in depth analysis.
Today I got a idea. My trading software has a trade analyzer feature which creates a break down of my trades each day. It includes the shares traded, stocks traded, pnl, # winning trades, # losing trades etc. I have been collecting the data dating back to 2006 but haven't really done anything with them. I am such a lazy trader. You might have seen this format before if you follow Dehtrader's blog. I think we use the same broker.
Here is an analysis of Thursday's trading. The day I got hit for a $700 loss. I did not get any big hits. The little losses were the ones that killed me. I had a terrible win rate of 18%. I traded 9600 shares and lost $375 during the midday chop period.
I am going to input the data into excel and do some analysis. It is a tedious task but I think I can get a good understanding of my some of my weaknesses. I am still gathering ideas on how to analyze my stats.
- I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.