Trading Journals that Work

I chanced upon this interesting article by Brett N. Steenbarger regarding trading journals.

My belief is that trading is a system , it is a process , just like a manufacturing or factory system. The trading system consists of various components , each of which are interlinked and they are interdependent , just like a car assembly line. My past experience in factory operations tells me that in order for a system to run efficiently and effectively , we need a checklist or a audit system to ensure all compliances are met. Most businesses are adopting the ISO standards for auditing purposes. Because of the Enron scandal , more stringent system like SOX ( Sarbanes Oxley Compliance ) is been implemented in many businesses.

Likewise in trading , I see the need to have a “self check”. As we know trading is a lonely journey. We need to self impose this check. No one is going to audit what we did right or did wrong. Keeping or writing a trade journal deligently is one of the way to ensure we keep records and system in place. When we made money we need to understand why and how we succeeded in doing that , so that it can be repeated or replicated. When we make a loss we likewise need to understand the root cause and come out with corrective actions , so that we will not repeat the same mistakes again. Keeping a trade journal is one of the best way I learnt all my lessons , good-bad-ugly , during my trading journey …