Stop System Hunting. Turn Your Trading Strategy Into A Winning One
“Why do I need a trading journal when I just need to find a better trading strategy to become a winning trader?” Or, “what is the use of a trading journal if my method is not working?” These are common questions we get asked a lot. After working with hundreds of traders, we found that there is a huge difference between losing and winning traders and it is usually very obvious too.
Whereas the traders who are struggling and have inconsistent trading results always look for “better systems” or more accurate entry signals, the traders who make money consistently try to improve the one trading strategy they already have. The winning traders didn’t just stumble over a winning trading strategy, but they found ways to turn their strategy into a winning one. How?
Your trading strategy and your trading journal go hand in hand
Obviously, a trading strategy is necessary to trade. A strategy tells you what to do, when to do it and it also defines the risk parameters. However, trading without a trading journal is like driving a racecar and crashing in the same curve again and again and again without trying to find reasons. Were you too fast, did you take the curve in a too steep angle, did you drive with the wrong tires? If you don’t observe what went wrong and try to find ways to overcome your problems, you will keep crashing.
A professional trading journal is the component of your trading that shows you what is not working. It reveals your greatest and most costly mistakes and it provides actionable tips how to lose less and how to win more.
How a trading journal helps improve your trading strategy:
1- It identifies your greatest mistakes and calculates how much money you are leaving on the table by repeating mistakes. It also shows you when you are most likely to make a mistake so that you can be aware of those situations and avoid them.
2 – A trading journal analyzes how you place stop loss and take profit orders. If you are setting your stops too far away, you are reducing the ratio between winners and losers. If you set your stops too close, stop hunting and retracements can take you out. Take profit targets which are too far away result in a lower winrate and targets that are too close cut your winners short. A trading journal analyzes your order placement automatically, it takes out the guesswork and you don’t have to do any of the boring math yourself.
3 – Once in a trade, most trading strategies do not provide detailed and actionable tips on what to do with your trade. The Edgewonk trading journal analyzes your trade management behavior and then shows you how to engage with your trades to maximize your profits.
4 – An important part of a trading strategy is risk management and position sizing. Our trading journal not only analyzes whether your positions are too small or too big, but it also provides insights about how different position sizing strategies impact your account volatility.
And the list goes on… Traders who trade without a trading journal are just hoping to somehow, accidentally find a trading strategy that works. The traders with a trading journal, on the other hand, make their own luck and set themselves up for trading success.
Break the cycle and discover your edge
Now it is up to you. Most traders first have to go through the so-called system-hopping phase until they realize that successful trading is more than finding the ‘right system’.