It's all in the title really. In the process of developing my own suite of tools to support my trading (day trading on indices, sort of discretionary style (not entirely)), I have designed a Trading Log app that keeps track of the key elements for each trade (date, time, direction, pos size, MAE/MFE, trading notes/comments, u name it) and displays the data in tabular form, with the possibility to rank the data (by selecting a table column). Now, after dozens or hundreds of trades, just watching a table full of thousands of numbers won't cut it in terms of helping me determine what's good and what suc*s in my trading results. What type of data and/or statistics on yr trade results and/or graphs do you currently use to review and visualize yr trading performance? What are the 3 most important factors to you, the 3 that really allowed you to improve your trading results over time? E.g: seasonality (my trading is poor on monday's, wonder why ^^), volatility of results, comments on emotions felt while in position, being wrong all the time , etc...
In like fashion, the three most important items in a trading journal are "notes, notes and notes." The rest of the data you choose to include are just the inputs to your decision. Your notes should record your decision. Why you entered a trade, why you exited and possibly why you decided to do nothing. I only trade perhaps a dozen times per month. However, I make a decision every day on what action I take and why. Even when I do nothing, I may note some concerns and areas to monitor. I use an Excel spreadsheet with the market data and some additional decision support calculations included. The market data is connected live to the ThinkOrSwim platform so it is continuously and automatically updated. Each day is a moment in time that I save as a pdf. Once a month or so I play back that series of pdfs like a movie watching my decisions play out and seeking understanding when trades respond out of expectations. I also use this "movie" for the classes I teach so that the students can experience the thought processes, see what worked, and most importantly, see what did not work and why.
Thanx for the detailed answer HowardCohodas. I do agree that keeping notes of why you took a specific trade at a specific moment in time is important, and reviewing them on a regular basis can improve one's trading skills. That's why I have a reserved a "Notes/Comments" field in my trade log files. I might in fact consider adding a "Decided not to trade" type of (non)trade in my tools capabilities, thanx for the suggestion. Definitely happens, more often than not (lack of confidence more than anything else). As for playing back previously executed trades, I do have a "replay" capability already built-in (well, that I coded) and I agree that it's a powerful tool. In fact I also have the possibility to review trades "executed" in back-testing runs, a functionality which I believe is non existent in commercial software (not that I know them all ^^). Beyond all this, I was also wondering what type of number crunching, well stats really, people were doing on their executed trades, in an attempt to maybe identify specific weaknesses that can be corrected (in my example above, reduce position or stop trading on monday's alltogether! ^^), or things of the sort...
I trade credit spreads. The spreadsheet contains the data necessary to make a decision based on my rule set. I have not recorded trades I decided not to enter. However, for every open trade, a daily decision is required. I'll record attempts that failed, the reasons why I did not complete and iron condor and rolling executions for example. Here is a snapshot I posted in another thread.
Allright, this is what I'd call a "vanilla" trade log/journal - though I'm not familiar with credit spreads trading and might therefore be missing a gem here or there. You're showing a bunch of trades, but what if you'd have to review *hundreds* of trades? Would you still be staring at this spreadsheet? (well, try to imagine having hundred's of similar rows in that sheet!) Wouldn't you instead want to have additional information to synthetize all that data in a few keys elements (overall p_l, profit factor, sharpe ratio, longs vs shorts, ...) and maybe some graphs (equity curve, drawdowns, daily/weekly/monthly returns, volatility of returns, etc...). Well I guess you don't since I already asked. Let's see if others here do.
I'm a minimalist kind of guy. I don't record trades that I did not enter. I'm not usually emotional when selecting a position. I just follow my rules. If I fudged on the rules, it's apparent in the specifications section. I would likely make a note of it, but I haven't entered a trade outside my rule set yet. This spreadsheet contains the universe of information used in my decision process. Other methods may use additional information such as gamma and vega. This spreadsheet is limited to the management of my iron condors. Each trade is its own p/l and is managed accordingly. When I want to review my successes and failures, I do it by looking at each trade individually over time using the "movie" process. Here I use a simple PHP program to create the "movie." Account performance analysis, including some of the measures you mentioned are on a different spreadsheet. This is an analysis of the strategy, not the analysis of any individual trade. You may also notice that I do not provide position size in my trade management spreadsheet. This is intentional, because it removes the size of the amount at risk and focuses on percentages of performance. I will manage a position of two options on each leg with the same discipline as a position of 25 options per leg. One caution. If your decision support data set and your rule set is so complicated that it uses more columns than can conveniently fit on a sheet of paper in landscape, I question its efficacy. The old adage, "KISS," is an adage for good reason.
The 3 most important items to keep track of in yr trading log... 1) Why you entered the trade 2) Why you exited the trade 3) Max drawdown An expanded version would include... 1) Entry and exit, date and time 2) Max unrealized reward With the top 3 items, you could determine notional value of trade risk. With the expanded version you could determine some important statistical risk. If reason for entering a trade is "to make profit" a journal is a waste of time. If reason for exiting a trade is equally generalized, a journal is a waste of time.
HowardCohodas, when you said " Even when I do nothing, I may note some concerns and areas to monitor ", I thought you meant that you do record "non-trades" in yr trading log. Oh well... you know, that's the kind of reasoning which my "intuitition" tells me is legitimate and logical. And "right", in essence. Somehow however, I tend to be drawn to adding more and more data to my reports and analysis, more and more functionalities to my trading tools, and it's a conscious effort I have to make to do things differently, in a simpler way... still working on it I guess.
tiddlywinks, what you call "drawdown" and "unrealized reward" (I think you mean on a per trade basis) is what I refer to as "MAE" and "MFE", which stand for Max Adverse Excursion and Max Favorable Excursion (in which case it's measured in pts/pips, not ⬠or $). Interesting piece of information, also in terms of backtesting and trying to get the best out of a system. Look for eg "Campaign Trading - John Sweeney" for more on MAE/MFE and how they can be effectively used to improve trading results. Anyway, I really thought people in general were computing, analyzing, and visualizing way more "stuff" to keep track of their trading performance over time as a means to try and improve their trading. Looks like I'm wrong so far, though hopefully we'll get a larger sample of responses on this thread over time.
When reviewing trades I look at the following: Did I follow my plan? I rate myself on a scale 1 to 5. Which strategy/set-up worked best? Based on actual average $ per trade. Rate set up by win/loss/breakeven percentages