How to build a winning Trading Plan & Journal in 7 steps.

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“I want to improve, but I don’t know how” was exactly what I said to my mentor 4 year ago.

Fast forward a few years later and I earned 1982% in a single year using the exact same strategy as every other time I had failed. 

When I look back, the most interesting part is not my profit, but how I was able to understand that my strategy wasn’t the problem – it was how I applied it was the problem. At first I didn’t even think that I could be the problem!

Today I want to show you how to build your very first trading plan with the Trading Consistently Journal in just a few minutes, using your existing strategy and trade your current market.

By the end you’ll have a rock solid trading plan and well on your way to either bringing in consistent returns.

1. Choose a trading strategy.

This might sound obvious, but in a world buzzing with millions of trading strategies its often difficult to choose which strategy you should follow. Most people are confused as to which to pick and consequently often are trading multiple strategies in one go in a very undisciplined manner.

While the Trading Consistently Journal can help you easily trade multiple strategies at the same time I don’t personally recommend you do this until you’ve mastered at least one.

Start with one single strategy – doesn’t matter which one – just pick one to follow. Make a decision and a commitment to follow that strategy with discipline for at least 100 trades. At this point it’s not necessary to find the most profitable trading strategy you can find to start with - it’s about mastering your emotions and discipline.

Once you master your emotions in trading – you’ll know the true profitability of any system you follow and therefore find a higher profitable system quicker.

I know many traders who don’t want to invest the time to trade only one strategy when they have ‘so many others to go through.

I did the same thing.

But think about this – how much time have you blown already trying to find this holy grail? If you spent just 1/10th of that understand one strategy properly and then invested a little more time understanding if it’s the strategy that’s the problem, or your lack of discipline, then you’d be far ahead of the game. Most traders around you are probably still jumping from one strategy to another until they keep failing and give up.

So go ahead - pick one.

2. Understand and clearly define what is the strategies’ entry and exit criteria

Pretty basic right? But missing this key step accounts for more blown accounts then any other in the world of retail traders.

It doesn’t matter if your a fundamental or technical trader – your strategy must have some sound basis of entering that trade and some routine that helps you determine if the trade is worthwhile or not. You need to get these ideas down into your Trading Consistently Journal when your editing your template.

You can always start with basic routine on your Journal template, follow it for a little while and then build on it later, so it doesn’t need to be perfect in the beginning. What’s important is that you start to define exactly what your going to be looking at.

For technical traders – they will need to define aspects like:

  • What indicators will you look at?
  • What technical analysis will you need to perform?
  • What is your trading routine like for each trade?

This will then form the ‘Pre-Entry Checklist’ which will look something like this:

  • Check Price is above 50 Moving Average
  • Check that ADX indicator is > 20
  • Check Trend is up.
  • Check for news releases before trade entry.

This checklist will form the foundation of how you determine what is a good trade.

For fundamental traders you will be defining more around routines:

  • What sources of information will I check before I come up with a hypothesis?
  • Where will I get those articles?
  • How much information am I willing to consume until I need to form a hypothesis to prevent over-analysis?

So your ‘Pre-entry checklist’ will look like:

  • Scan Bloomberg news sites
  • Read X blog for daily analysis and trend direction
  • Consume no more then 20 information articles/blog posts before deciding on direction.

Do exactly the same for your trade management and trade exit criteria. The more systematic you can get the better as it will reduce the emotional pressure that usually comes with having to make decisions in emotionally intense situations. More on that later.

3. Design your Journal template to your strategy

When your starting out with the Trading Consistently Journal – it’s best if you start by creating a journal from a template. It’s just so easy to edit it to your needs.

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Creating a new journal template

Simply go into each field and customise it to your need straight away -

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Edit a journal to your needs

Go through each section and fill in areas that is important for you. It’s not uncommon for this to take sometimes several hours to complete, especially if you haven’t ever sat down and really wrote down (or even thought through) your trading plan before. It may seem like a chore at first, however, I assure you that almost all losing traders will have not even reached remotely close where you are at right now, so celebrate your success and keep going!

If you feel the need to add in an additional field, just pick it up which field you want from the right and drop it in. It’s that easy.

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Create new fields in your journal


Remember – it doesn’t need to be perfect! You can start with a rough idea first and refine it as you keep trading. The important thing is to start somewhere, even if its a draft.

Once your done, remember to Save it.

4. Journal each trade in your strategy and record your results.

Now that you have at least a rough idea of your trading plan you can start to enter new trades into your journal.

Every time BEFORE you enter a trade you should open the Trading Consistently Journal and click on ‘Enter Trade.’ (you can bookmark the ‘Enter Trade’ screen too which will make it super fast to enter trades) This screen will show you your Journal template.

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How to enter a trade

Go through your trade plan template carefully. Make sure you have followed your checklist and ensure you’ve met your strategies entry criteria.

This will help ensure your disciplined and on track.

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Remeber to go through your pre-trade checklist to ensure your disciplined

Be sure to take screenshots of your charts with all the indicators that you use. Use awesome (and free) screen capture tools (we highly recommend Jing) to make it super fast to get into your Journal. You can also annotate your charts before you uploading!

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Using Jing to capture a image

Paste it directly into your Journal for uploading!

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Paste image into journal

Put all your thoughts and ideas on why this is a good trade right in there.

Once you’ve done that then execute your trade on your trading platform.

After that, go back to your Journal and make sure your following your Journal’s guidelines on how you will manage that trade.

Finally upon the trade completion ensure you log the outcome of that trade and especially a reflection on the trade outcome. At this point the most frequent response I get is -

“but this process takes too long..” / “I’m a high frequency trader..” / “I need something faster..”

No problem.

Use our awesome video journalling feature. We integrate perfectly with Jing’s video capture so you can vividly capture your trade in seconds with nothing more then your voice.

But for new traders I HIGHLY recommend you slow down at least for the first 100 trades. Why? So you can solidify your trading discipline first.

We’re all living in this world of instant gratification. You need to slow down your trading, even if its for 1 week and you’ll really see whats going on.

That means you’ll need to take LESS trades initially but be very mindful when your taking them. Understand your errors. Once you’ve done this for awhile and improved then you might go back to trading your regular amount. This is important. Seriously.

5. Find areas your struggling with.

When trading day after day its hard to understand which areas you are struggling with overall, especially when it comes to your psychology. It’s also hard to track that from spreadsheets which only offer you basic trading statistics but no statistics on your psychology and level of discipline. What you need is a way to track repeating patterns in your psychology – to know how often your making the same mistake.

So we’ve created the ability for you to tag your trades. You can track and tag anything you want, not just your psychology, and report on how often that tag occurs. Helping you to find repeating patterns in your trading. Some examples of where this could be helpful -

  • Tag trades to see how often you’ve committed the same mistake – ie. exiting too early.
  • Tag trades to see how profitable new tweaks to your existing strategy are
  • Tag trades to track potential correlations (for example – you can create a tag to see if a market moved 50 pips or more after a specific news release and at the end of the month report how often that occurred to see if there is a correlation)
  • Tag trades for which you have made minute changes and see which is more profitable (for example – you can track which trades you moved the Stop Loss to Break Even and then run a report to see if it was more profitable to move to break even or to leave it alone)

Tagging opens up a new world to help you understand new patterns in your trading that goes beyond only technical analysis that was never really possible before.

6. How to prevent mistakes from happening in the future

Once you’ve journaled a few trades you’ll find that you’ve inevitably made a few preventable mistakes. Don’t be upset at yourself – this is fantastic! Now your growing as a trader. Half the battle is understanding what your doing wrong and taking responsibility.

But the good news is you can now prevent that issue from happening ever again by adding a new rule to your ‘Pre-Entry Checklist’. For example – if you just had a loss on your account and you realise its because you forgot to check for news events prior to executing your trade you can simply go and edit your journal template and add in a new value for ‘Pre-Entry Checklist’ called ‘Check for news releases.’

Now every time you view your Journal checklist you’ll have a ‘Check for news releases’ section which will remind to you quickly review for any upcoming high impact news events!

7. Reframe your thoughts

The more you’ll journal your trades you’ll inevitably notice that your repeating some of the same behavioural patterns, the commons ones are namely -

  • Confusion when entering a trade
  • Taking too long to exit a trade
  • Constantly watching the screen to see how your trade progresses
  • Feeling nervous when in a trade
  • Trading ‘too often’
  • Avoid taking trades even when your setup is ‘perfect’

These are just to name a few. I’ve struggled with several of the above. The good news is that there is a way to bypass many of these setbacks with cognitive reframing techniques. These will be discussed in future posts in greater detail. One way to counteract them is with powerful self-affirmations. While I didn’t initially believe these myself, I’ve learned to trust that these techniques work and even found some scientific proof.

Rinse and repeat

Just keep on Journaling and repeating the above process. The more you do, the better you’ll get. The more emotionally stable you’ll become.

A good habit to have is to invest 30 minutes a week reviewing your last week’s trades either on a weekend or at the beginning of the week and making comments on where to improve.

Eventually you’ll start to master aspects of your trading and you’ll be able to streamline your journal more and more. You’ll definitely notice that it’ll be easier to enter a calmer, centered and relaxed stated when trading.

So where to start? Login to the Trading Consistently Journal and start filling in your trading plan right now.

Sow Behl

Sow is a 6 year trading veteran primarily trading FX and equity markets making 1982% return in 2014. After spending years and countless failures trying to find the elusive holy grail lead him to discover elements of what truly makes successful trader. Sow founded the Trading Consistently Journal as a mission to help all traders understand and improve their trading psychology, discipline and consistency. Learn more.

2 Comments

  1. Sow,

    New to trading. I’m getting hung up on terminology (maybe the first thing you need to get straight when you are starting something new). I came to this site from http://www.swingtradesystems.com/ and it says that a sub-category of a Trading Plan is a Trading Strategy, with a Trading System the entire way you go about trading. Your article seems to confirm this. What do you think? I need to work all this out before I get serious. You know, to keep it all consistent in my mind so it doesn’t get too complex. Thx.

    Reply
    • Hey John,
      Thanks, Swingtradesystems.com is a great resource! It perfectly aligns with what we are also trying to educate our customers on.
      Correct, a trading plan is the high level overview of your goals whereas a strategy is your precise set of rules your going to follow to align with that plan. You can define both your plan and strategy using the TC journal.

      Reply

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