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Maintaining Trading Logs
A Step by Step Guide 

Whether you are a beginner or have been in markets for quite some time now this detailed guide will help you maintain a trading log and improvise it as you evolve as a trader over the years

Many have compared trading with dieting and chalked out similarities between poker and trading. I won’t reiterate the importance of being aware of the truths of your trading and where you stand in this entire journey. I’ve divided this guide into 3 parts :

INPUT

This is the date which you would be logging for each trade

CALCULATED OUTPUT

These are derived metrics which will be auto-calculated via the formulas/logic defined by you

QUALITATIVE METRICS

These are subjective observations and signals which will help you hone your skills as a trader

Now you may beautify the log or maintain just an excel or a google sheet like me. It doesn’t matter as long as what you log is true and you are aware of where you stand. Once this is done, the trading log should also clearly show the improvement when you follow the plan and RED flags when you don’t

1. Input

  1. Capital

  2. Brokerage

  3. Scrip Name

  4. Quantity

  5. Buy Date

  6. Buy Price

  7. Buy Amount (Quantity*Buy Price)

  8. Sell Date

  9. Sell Price

  10. Sell Amount(Quantity*Sell Price)

  11. Profit/Loss Amount (Sell Amount - Buy Amount with brokerage considered)

  12. Initial Stop Price

  13. Return on Trade

  14. Risk on Capital

  15. Allocation (Buy Amount/Capital)

2. Calculated Output (The Maths)

  1. Impact on portfolio (Return on capital)

  2. R multiple for each trade (Return on Trade / Risk on Trade)

  3. Wins (Number of trades where R was positive)

  4. Losses (Number of trades where R was negative)

  5. Avg gain on PF (Avg of Return on Capital for winners)

  6. Avg loss on PF (Avg of Return on Capital for Lossers)

  7. Avg R:R (Avg Gain/Avg Loss)

  8. Open risk

  9. % increment on Portfolio

  10. % amount invested

3. Qualitative Metrics

  1. Setup quality

  2. Comments (What was the emotion and thought process when the trade was going on , key moments)

Quick Tips for Updating the Trading Log

  1. For positions where you are booking partially , you can separate entries so that you can analyze it separately and at the same time be aware of your number of trades and exposure

  2. You may include elements like Buy time to understand what entry time suits you

  3. You may include the days you hold a position to understand the avg hold period of your winners/losers

  4. You may maintain your log monthly so that you can see Month on Month performance

Improvise As You Grow...

The trading log if maintained with absolute discipline can be used for:

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Observations

  • By analyzing these observations, traders can identify strengths and weaknesses in their trading strategies, make adjustments, and improve their performance over time :

  • Performance trends over time

  • Patterns in winning and losing trades basis kind of setups , entries

  • Average gain and loss on the portfolio which would help you stay in tune with the market

  • Average risk-reward ratio which will help you determine the stops% that work for you and how well you are able to ride/sell

 

Mistake Book (The Book Of Truths)

  • The entire game is to avoid making mistakes and improve the bottom live. keep doing what is working and avoid what isn;t is the name of the game

  • Mistake books help us reinforce the fact that trading is much more than setups. Once you start maintaining a mistake book you take ownership and udnerstand the importance of mindest in this business

 

The File

  • Over 100-200 trades you would definitely have some great winners. Like mistakes , great trades also need to be maintained so that we can go through our own records and burn some patterns in our memories

  • I have tried to include just some basic pointers which I have myself started with and later on adapted to some more techniques

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Final Word Of Advice

If you are reading till here...give yourself a pat on your back. This is the only guide which will bring a turnaround in your trading and eventually your returns.

Keep learning and keep growing...!!

Wish to Level Up Your Game?

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