At the end of your trading day, what do you do?
Most traders look up at the P&L number provided by their broker and decide how their day went.
If the number is green, then it was a good day and they traded well. Even if they were only slightly green, "green is better than red!" is proclaimed!
If the number is red, then it was a bad day and they traded poorly.
That's not at all how I approach the end of my trading day and certainly not how I look at my results.
My trading day ends after I enter each and every trade (win or lose) into my Personal Trade Tracker. I then allow my tracker to tell me how my day went. It doesn't matter if my broker's P&L is showing a red or green number. Red isn't always bad and green certainly isn't always good!
Too many Day Traders have no idea why they are struggling and don't use a Trade Tracker at all. I make the argument that until they start using one, they will continue to struggle because they don't understand WHY they are struggling. If you don't understand why you are struggling, how can you possibly make changes to improve? Are you just hoping that tomorrow gets better and suddenly you're trades will start working? Good luck...
Tracking your trades (with the right tool) will provide you with the insight you need to understand your trading. It will help you pinpoint your strengths and weaknesses. It will help you quickly identify problems.
Here are 20 basic questions every trader should be able to easily answer about their trading:
Are you trading the right stocks?
Are you trading the correct set-ups or just randomly jumping in?
Are you getting good fills?
What time of day are you making the most $$$?
What time of day are you losing the most $$$?
What specific set-ups are failing you?
What specific set-ups are your winners?
Are you using proper stops?
Are you using proper position sizing?
Are you just risking too much?
Are you just risking too little?
Are you trading too much?
Are you trading too little?
Are you scaling out properly?
Are you selling into shape or being too greedy?
Are you protecting your entries?
Are you selling too much too soon?
Are you holding some shares long enough?
Is you risk/reward (aka “R”) just off?
What emotional issues do you need to overcome?
When we start helping struggling Day Traders, most can only answer 1-3 of these questions. After tracking their first 50 trades, they can answer about 10-15 of them. After 100 trades, they can answer almost all of them in detail. The more trades they track, the more detailed the answers become. The more they track their trades, the better their trading becomes.
Wouldn't you like to know the answers to these questions about your trading? If you're struggling and not consistently profitable you MUST figure these answers out. How are you going to do that if you don't track your trades? Hope again?
I refer to filling out my tracker as giving myself a "daily performance review". The process of filling out my tracker is a detailed review of how I did that day. It's a detailed understanding of what I did right, so I can repeat more of that tomorrow and the next day... And it's a detailed understanding of what I did wrong, so I can immediately STOP these bad behaviors. Success is in the details. Success is in understanding the details.
Don't you want that type of understanding on a timely basis? Don't you want that type of understanding every day on every trade?
You've never get it by merely looking a your P&L and looking for RED or GREEN.
There are days when I'm nicely green but at the end of the day I remind myself (thanks to my tracker) that I traded poorly, broke some rules and I probably just got lucky. A green day doesn't mean I traded well.
Just like a RED day doesn't always mean I traded poorly. If I had a red day but I stuck to my process, my set-ups and all my trading rules, I still traded well that day. It was just "one of those days".
Dive into your trades. Analyze them. Answer those 20 questions.
Whether you use our tracker, someone else's, your own or just a piece of scratch paper, PLEASE JUST TRACK YOUR TRADES DAILY! Give yourself that daily performance review.
Need help or have a question? Reach out!