Keep a TRADER's NOTEBOOK


I have kept a record of EVERY trade I made for 10 years and still have many of them.
I had read somewhere, perhaps during my course with Ken Roberts, that this was very important and should be done as a responsible action during any trading involvement.

I found it is also a VERY GOOD idea to put personal notes on them and even attach another piece of paper to them if need be. Such items to include would be:

(1) personal HEALTH at the time

(2) family problems or high points immediate to the time of the trade

(3) NEWS stories at the time that might have had an impact on YOUR decision or the sector you were trading

(4) ANY outside influence that may have had an impact on your decision such as expenses you may have been facing

(5) Notes if you were concerned about tax impacts.

These notes are SOOooo valuable after many trades and you are looking back trying to discover a pattern to your correct or incorrect decisions.
Everybody that I have worked with sees this same communication and ends up with a very nice Trading Notebook.

This is usually an extension of their PAPER TRADING NOTEBOOK created during their trading learning period of at least a year.


Sometimes it will be very personal and you will typically not show these notes to anybody.
They will be your most personal inner thoughts that perhaps only you would understand, in the manner in which they were written.


Sometimes they will be nothing more than a casual note to yourself regarding the weather and your comments about a great vacation you just had or something simple and delightful that one of your children just shared with you prior to your decision to place a trade.

Don't "try" to lay down a legacy of meaningful notes as that is not what drives your thought process.

It will be your most guttural response on paper that will serve you best later.

Nothing neat or fancy that would cause you to format your thinking as to follow rules and lines on a piece of paper.


Just a quick scribble and expression of what is occurring at that moment with the REAL you. Not the one that everybody sees, but the YOU that lives within your mind and does not have to comply to civilized thought and expression.

Strangely enough, I would find that I often wrote the word "yellow or blue" in reference to color as I tend to think in "colors" and I would often find the number "24" doodled along with winning trades.

Sometimes when I would be REALLY upset with myself, (often actually), I would type a letter to myself as I can type just about as fast I would be thinking and certainly MUCH faster than I could write or even scribble.

NEVER concern yourself with spelling or proper grammar as this will stop your "natural" flow of thought and feeling.

When I put together a string of SEVENTEEN LOSING commodity trades, I almost quit as I could NOT figure how even the odds of doing something over and over again would create such a consistent losing streak ?!!?!?

Surely you would have to win at least once in as many attempts as this.
But not one,  provided a point at which there was a possible exit that would have resulted in a break even, let alone a profit.

EVERY one of them went against me right from the time I placed the order.

It didn't matter if I was long or short. The trade ALWAYS went the opposite direction.

It was so consistent that I even thought that I might place the trade, but refuse the confirmation and reverse the order from long to short or from short to long.
I did this once ............ and lost again.

The length of time this occurred over, was the better part of a year and it ate just about every penny I had in our trading account.

I wanted to quit as I was not use to feeling like a failure.   It is not part of my nature to allow myself to be a quitter.  It is okay for me to lose, as somebody has to win; and as there are others in this world in which we trade, that we must share our victories with.  If the others were never allowed to win, then they too would quit, and there would not be anybody else to win from (think about it).

I had already justified to myself that when I would lose that it was the cost of tuition and I could deal with that.

This is certainly a reasonable thought process and accurate ... to a point, but not to this extent.

My wife asked to look at my trading notes - diary of thoughts prior, during and after the trades.
I told her, "sure, but I couldn't imagine how she would find anything I wasn't aware of since I was the one that wrote the darn notes!"

She looked at the FIRST THREE PAGES and looked up at me in a most puzzled fashion.

She started flipping forward and back at random. Not sequentially, just at random.

She asked me if I was kidding her or if I was serious about not seeing a pattern to my trading?

I hadn't ........ but she could. And after she pointed it out to me, it was SOOO obvious that to this day as I sit here typing, it causes me to tear profusely !! Honestly !

I was, and still am, so overwhelmed that something that I could express in a couple of sketchy notes, scribbled while in the same frame of mind, and never imagined to be of any worth at any future time, would so clearly represent the problem, when viewed from a non-involved prospective.


But there it was. So quickly scratched on paper in a less than orderly fashion across the charts of each trade and in the margins of each ledger sheet and trade confirmation paper; but so neatly and precisely laid before me as though they were animal tracks pressed deep into the hard dried mud of time past.

It was VERY easy to see where and why the traveler had gone!

It was, and still is, SOOooo profound that you would think it was a pre-designed text by which a message was meant to be conveyed !

And how it effective it was.

I immediately STOPPED trading until I could deal with the outside source that was impacting my mental decisions and personality.

I was another NINE MONTHS before I could once again even think about trying to trust myself, to make a clear and proper decision, and follow my own decisions without being influenced in the same manner by any, or at least the same, outside source.

If you trade and do NOT keep a notebook of your thoughts while you:
(1) LOOK for a buy
(2) MAKE the buy
(3) HOLD the security
(4) ANTICIPATE the sell
(5) EXECUTE the sell
(6) and thoughts AFTER the sell as you look back to see if you were correct in your decision ...
then you will NEVER become consistent or be able to fully trust your decisions.

YOU actually are your best friend and know the most about what makes you tick and how you think.
However, the only way that you or a close friend will be able to look back over your notes and help you draw out the real basis of why you did what you did will only happen if those notes are available and 100% core honesty represented in what ever fashion your inner self chooses to express it at the time.

To this date, I still do not understand what the two colors or number 24 mean in my notes, but from time to time I find them after the fact and I do not seem to truly be aware of writing them at the time.

I may never know what they mean, but then again the time may come when it jumps out and hits me square between the eyes and again I will sit staring, amazed at the page before me.

The page, that came from within my very self, that had the answer the whole time.

The page of answers that I would not have to review and benefit from, had I not taken that precise moment in time to record, in a quick and humble fashion, at perhaps a moment when I was furious with myself and did not want to bother to write.

SOOoooo important and critical to your trading makeup are these notes, that you really should not become involved with the markets in any manner if you do not make an effort to create these and form a habit of doing so over the course of time.

You may find, as have I, that this practice will even serve you well in other areas of life that you may find yourself struggling with.

Not a daily diary mind you, but simply a scratch pad of notes at tumultuous moments or major decision making times.

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