I wanted to share some thoughts about an "old timers" tip to maintaining consistency, minimizing losing streaks, tracking your position sizing, reinforcing the keys to your trading system, to keep track of your emotional state, to acknowledge both your good and your bad habits, and above all - to minimize the repetition of mistakes. And that tip is to keep a personal trading journal. It was a faithful dogma for huge pit locals like Chip Kenyon, David Ellis, and Bill Noyes - and it is just as relevant today. I know it sounds hokey, but if you do it correctly and you are brutally honest with yourself - it will translate directly to your net account balance in short order. I provide my clients with a few different spreadsheet templates that tracks paper, sim, and live trading performance - and the standard stuff is included such as P&L MtoM, max draw downs, profit targets, stop-loss levels, win vs loss %, and a "notes" section. But as of late I have been encouraging clients to be much more detailed and reflective in their notes. I personally keep a spiral notebook for a journal ( old habit ), but using the notes section on your iphone or ipad or even an app like Evernote is just fine as well as long as you review your past journal entries. We all have human frailties, and I would argue that they key to wealth is the five inches between your ears. If you could avoid repeating just five mistakes over the course of a year - that could easily amount to several thousand dollars ( or much more ) credit to your net equity. Think about how rapidly you could reinforce a good trading system if you could note the times you were too anxious and took a trade too soon without proper confirmation. Think about how many times you ignored your original stop-loss level. The big key to making this work is to be brutally reflective and honest about yourself. If your trading system sucks, admitting it to yourself through this process of routine self-examination could lead to capital preservation. It's hokey and it's old fashioned, but make no mistake it truly is quite effective.
The single best thing I ever did for my weight lifting was starting to use a training log/journal. There are many similarities.