Your Personal Trading Journal

Transcription

1 Your Personal Trading Journal This guide provides instructions for the setup and helps you getting started with your Edgewonk trading journal. It is recommended that you read it thoroughly to fully leverage the journal's capabilities. Please also make sure to check out our YouTube video tutorials as they explain everything covered in here in greater detail. We hope you enjoy journaling your trades and finding your trading edge. 1

2 Table of Contents 1. Introduction Orientation Features Your First Steps Definitions How To Add A Trade Trade Parameters Risk:Reward Ratio Results Analytics of Drawdown and Updraw Alternative Stop Loss and Take Profit Comments About The Trade Tiltmeter Add Notes Further Explanations Of Journal Concepts Grade Of Setup Drawdown And Updraw The Traffic Light Alternative Stop Loss & Take Profit Evaluation Overall Evaluation Pivot Tables Equity Curve The Simulator Risk Analytics Simulation Instruments & Setups Comments... 27

3 5.8 Trade Management Filters In The Pivot Table And Equity Curve Sheets Miscellaneous Saving Your Journal Updating Your Trading Journal

4 1. Introduction If you prefer to learn about how to use the journal via videos, please check out our Journal Video Series. 1.1 Installation After you have completed your purchase and downloaded the Edgewonk journal, you open the file with WinRAR or WinZip. Inside you will find two folders: Stocks and Forex. Click on the folder based on the instrument category you are trading. Inside there are 2 more folders, one for the 32 bit and one for the 64 bit version. Which one you need depends on your Excel version. You can check whether your Excel is 32 or 64 bits as follows: Excel 2010 Select the tab File from the top menu and then go down to Help. You can see your version of Excel under About Microsoft Excel. Excel 2013 Select the tab File from the top menu and then go to Account and About Excel. Your version of Excel appears in the top line of the popup window. Then drag the folder with the correct version onto your desktop. Inside the folder you find the actual Edgewonk journal and a file called Edgewonk save. Open the Edgewonk journal and you will be asked to generate an activation key online. Clicking the button will open your browser. Enter the address and your last name that you provided during the purchase and the system will then provide you with an activation key that only works for you. 4

5 1.2 Orientation When you open your Journal for the first time, it will look like the screenshot above. (1) Across all Tables, you will find the main navigation in the top left corner. It will take you to all main sheets. (2) Whenever you see a? -button, clicking on it will take you to the explanation of the specific field. (3) The tabs at the bottom are another way to navigate around the journal. (4) At the top you can always see your current balance and your current level of Tilt. 5

6 1.3 Features The screenshot above shows you the bottom tab which includes all sheets of the journal. We ll briefly explain what they are. If you read on, you will get a more detailed of each tab later in this manual. Journal: Overall Evaluation: Pivot Tables: Equity Curve: Simulator: Instruments & Setups: Comments: Trade Mgmt.: Definitions: Manual: The Journal-Tab is your main sheet where you note the data for each individual trade. This sheet will provide you with an evaluation of your total trading performance based on different statistics. This sheet provides you with a table-view where you can analyze all statistics and see how they interact. Visualize the return of individual setups and instruments and filter them by day, month or direction. The Simulator enables you to simulate how your account will grow based on your current performance. Here you will get more detailed statistics about how your different setups and individual instruments perform. In this sheet you can analyze your comments about trade management and emotions. The analytics that show you how you manage your trades. This is the sheet where you define the input and customize it individually to your own trading. This sheet provides you with detailed information about each individual cell in your journal. Whenever you click on the [?] button on any sheet, it will take you here. 6

7 2. Your First Steps 2.1 Definitions You should go to the tab Definitions after you have bought and activated your journal to customize the journal to your own trading. The words you use in the Definitions-Tab, will appear in the dropdown menus on the Journal- Tab. To see how setting up and using the definitions work, go to the Definitions-tab and insert the instruments you trade (1). Then you can go to the Journal-tab and select your instrument from the drop-down menu (2). You then can go on and set up all the empty cells and customize the journal completely to your trading strategy. 7

8 i) Trade Parameters a. Instrument: Insert the name of each instrument you trade in a new cell. b. Setup: For each different setup you trade, insert the specific name in a new cell. You can only enter your definitions in the green cells.! Once you have setup and used some of the defined parameters, don t change the values anymore. Changing the definitions after you have used them in your Journal-tab will lead to problems with the analytics functions. 8

9 ii) Commentary a. Entry Comments: You can insert comments about the way you take or managed your entries here. You can overwrite all the predefined comments. b. Exit Comments: Insert comments about how you managed your exits (take profits). c. Trade Management: Insert the comments you want to use for the comments on trade management. Positive/Negative: For each comment you enter, you have to define if the comment is positive or negative. We already pre-defined some comments for you, but you can easily overwrite the content with your own definitions. You can only enter your definitions in the lightgreen cells. The dark green cells are not editable.! 9

10 iii) Alternative Stop Loss & Take Profit Strategies With the Edgewonk journal you can test different Stop Loss and Take Profit Strategies while you keep trading your regular trading strategies. You can read more about how the alternative strategy testing works here. a. Stop Loss 1 / 2: The names of the alternative Stop Loss Strategies. b. Take Profit 1 / 2: The names of the alternative Take Profit Strategies. The values you enter here are just a reminder for you which strategies you are testing. They will not appear in the drop-down menus like the other definitions. iv) Starting Account Balance 10 Just insert your current account balance here. That s it.

11 3. How To Add A Trade When you take a trade, you have to go to the Journal-tab and fill out the cells for that specific trade. In some cells you have to type in a number, in some you have to choose a value from the drop down menu and in some Excel will perform a calculation for you. It s pretty easy after you have done it once so let s do this together. There are 3 possibilities what you can do with the cells in the journal-tab: choose a value from a top down menu, insert a number manually or let Excel do the calculations on protected cells. Drop Down Menu When you select a cell and you see the arrow you can click on it and a dropdown menu opens. The text you see in the drop down menu is defined by the definitions you set up in the definitions-tab. Insert a Number When you see a cell that says pips or $, you can insert a number. Don t Touch When you try to enter a number in some cells, you ll see a pop-up like this one. Those cells are protected because Excel will do the calculations for you. 11

12 3.1 Trade Parameters a. Date: Excel will insert the current date automatically. You can overwrite the entry, though. b. Instrument: Choose the instrument of the specific trade. c. Setup: What kind of setup is the trade? d. Grade of Setup: Select the quality of the setup. (Read more about Grade Of Setup) e. Buy/Sell: Is it a buy or a sell trade? In the Stock-version, you will also see the field Entry Price. Here you type in the price you bought/sold the stock at. 3.2 Risk:Reward Ratio The journal differs between planned and realized Risk:Reward ratio. Usually you enter a trade with a stop loss and a take profit order, but during the holding time of the trade, you move stop loss and take profit orders around. By keeping track of the Risk:Reward ratio at the beginning and the end of the trade, you ll be able to analyze your trading performance completely new. 12

13 Risk & Reward Planned This is the part that you fill out when you first enter the trade. a. Take Profit (Pips): The distance between your entry and your take profit order in pips. b. Stop Loss (Pips): The distance between your entry and your stop loss order. c. The Traffic Light: Based on your current winrate, the journal will perform a profitability check. (The traffic lights will start appearing after 30 trades) Read more here In the Stock-version, instead of entering pips, you have to use the actual price where you set your stop loss and take profit order at. Risk & Reward Realized This part you fill out after you have closed your trade. a. Take Profit (Pips): If your trade is a winner, enter the distance between your entry and your take profit order in pips AFTER you closed the trade. b. Stop Loss (Pips): If your trade is a loser, enter the distance between your entry and your stop loss order AFTER you closed the trade. c. The Traffic Light: Based on your current winrate, the journal will perform a profitability check. (The traffic lights will start appearing after 30 trades) Read more here In the Stock-version, instead of entering pips, you have to enter the price where you exited the trade. By definition, the journal will copy the original planned Risk:Reward data into the realized cells. This means that you will only have to change the realized Risk:Reward cells if you change take profit or stop loss order. 13

14 3.3 Results a. Outcome: Was the trade a winning, losing or break even trade. b. Original TP Hit: If you hadn t touched your trade after you put it on, would it have been a winner and went to your original take profit order? c. Gain/Loss ($): How much did you win or lose on this trade in terms of money. d. Account Size: Excel will calculate your new account size after you closed the trade. 3.4 Analytics of Drawdown and Updraw In this section you note how far price went against you before turning into profits, or how far price went into profits before turning into a losing trade. These two statistics will show you very quickly if you set your stop loss orders too far or your take profits too close. Read more about how to measure drawdown and updraw. a. Max Drawdown (Pips): How far did the price go against you before turning into profits in terms of pips. If your trade was a loser, Excel will automatically insert the full size of your stop. b. Updraw (Pips): How far did the price go into profit before it turned against you in terms of pips. If your trade was a winner, Excel will automatically insert the full size of your take profit distance. 14

15 In the Stock-version, instead of entering pips, you have to enter the highest and lowest price that you could observe during the duration of your trade. 3.5 Alternative Stop Loss and Take Profit While you execute your trades as usual, you can test different stop loss and take profit strategies. Do you wonder whether a 20 pip fixed stop loss, or maybe a trailing stop works better, or would your trading performance be better if you d set your take profit orders farther away? These figures let you test hypotheses. Read more about how to use alternative stop loss and take profit a. Stop Loss 1 / 2: The outcome of the trade for the alternative stop loss strategy 1/2. b. Take Profit 1 / 2: The outcome of the trade for the alternative take profit strategy 1/ Comments About The Trade 15 a. Entry Comment: How did you manage your entry. b. Exit Comment: How did you manage your exit. c. Trade Management: How did you manage your trade while it was on. d. Emotion 1/2: Record your emotions before, during or after the trade.

16 3.7 Tiltmeter Based on several metrics Excel will automatically calculate your current level of tilt and visualize how much your previous trades might affect your current state of mind. If you see your Tiltmeter rising, you should be aware of possible negative effects on your trading decisions. 3.8 Add Notes In the last column of your journal you can add individual notes about the trade. Those notes will not be used for evaluation or analytics purposes. They are your personal notes about the trade. 16

17 4. Further Explanations Of Journal Concepts 4.1 Grade Of Setup Not all setups and trades have the same quality and therefore, winrate. You can thus take your trading to the next level if you implement an approach to differ between qualities of setups. There are 3 steps to use the Grade Of Setup function of the journal: (1) Write down all the entry criteria for the perfect trade. This would be the A-Setup. (2) Which entry criteria are not mandatory and could be left out to still have a profitable trade = B-Setup (3) Which are the minimum required entry criteria for a profitable trade = C-Setup 17

18 4.2 Drawdown And Updraw These two statistics will let you analyze whether you set your stop loss orders or your take profit order too far away. i) Drawdown The screenshot above shows a sell-trade with a stop of 40 pips. After the entry, price went up for 25 pips (drawdown) before turning. In your journal you would write 25 in the column Max Drawdown (pips). If your trade was a winning trade, you don t have to insert anything in the cell Updraw (pips). In the Stock-version, instead of entering pips, you have to enter the highest and lowest price that price went to during the duration of your trade. 18

19 ii) Updraw If you enter a sell-trade with a 100 pips take profit order and price moves 30 pips in your favor before turning and heading for your stop loss, you insert 30 in the cell Max Updraw (pips). At the same time, Excel will take the full distance of your stop loss and insert it into the cell Max Drawdown (Pips) if you select that your trade was a losing trade. In the Stock-version, instead of entering pips, you have to enter the highest and lowest price that price went to during the duration of your trade. 19

20 4.3 The Traffic Light The Traffic Light in the journal tab visualizes whether your entered Risk:Reward ratio and your current winrate match. Excel will automatically compare the required winrate, calculated through your Risk:Reward ratio and your current winrate of your overall trades. If the required winrate is less than your current winrate, it will show you a green light, if your Risk:Reward is too low and, therefore, the required winrate higher than your current winrate, Excel will show you a red light. 20

21 4.4 Alternative Stop Loss & Take Profit Every trader wonders whether a different way of managing stop loss orders or a different take profit strategy will perform better. Whereas before you had to open a demo account and try different ideas tediously, making use of the alternative stop loss and take profit function in your journal can save you a lot of time and work. How it works: 1. For easier review, write down the different strategies you want to test in the definitions tab. 2. While you take your trades as usual, you can keep track of how your different trading strategies would have performed in the journal tab

22 To see how the different strategies perform, you can see the results in the Eval- Comments tab. Although this is just a rough estimation about how different strategies would perform, it can be a first indication if you should invest further time and effort to test different strategies. 5. Evaluation Your Journal offers 5 tabs with different evaluations and analytic outputs for a variety of key figures. We ll explore them in the following section tab by tab. 5.1 Overall Evaluation This tab takes all the trades you plugged into your journal and provides you with a detailed output about your overall trading performance. On the right side, you will find all the statistical figures and on the left you can see the graphs that visualize your trading performance. 22

23 5.2 Pivot Tables The Evaluations-Table tab provides you with fully interactive analytics for individual instruments and setups. To smoothly navigate through the table and use it to its full capacity, we ll explain the most important features You can choose to filter by trade direction, type of setup and/or instrument (more on the filters here) 4. The clear-filter button resets all the filters for the specific filter. 5. The open and close buttons indicate where you can click to open further breakdowns of analytics. 6. A red shaded cell indicates that the setup for the specific instrument/setup/grade is unprofitable up until now. 7. Hit the refresh button and your journal refreshes the table automatically. 8. The bars in the updraw/drawdown columns visually show you how far price moves against or for you and you can quickly get a feeling whether a possibility to increase your edge exists.! Whenever you add a new trade in the journal tab, you have to refresh the table to see the most current statistics. 23

24 5.3 Equity Curve Similar to the Evaluations Table, the Equity Curve provides you with an interactive visualization of your trading performance in the form of equity curves. To filter by specific instruments / setups / month / day you can select different filter-buttons. Read more on how the filter works! Whenever you add a new trade in the journal tab, you have to refresh the graph to see the most current statistics. 24

25 5.4 The Simulator The Simulator takes your current trading performance and projects the growth of your account 500 trades into the future. The Edgewonk journal randomly simulates the outcome of 500 trades based on the performance statistics that are being calculated from your past trades. You can use the filter buttons to filter for the specific return of instruments / setups / months / days and so on, and simulate the performance of 500 trades based on the specific trading statistics. 5.5 Risk Analytics Simulation At the bottom of the Simulation-tab, you can manually type in different trading performance metrics and simulate the performance of the course of 500 trades. 25

26 5.6 Instruments & Setups This tab lets you analyze the performance of individual instruments and setups. i) Instruments The top part of the sheet provides you with a detailed analysis of the performance of individual instruments. 1) To change the instruments you want to analyze, click the arrow right next to the current instrument name and choose the instrument you want to analyze from the drop down menu. The output provides you with more detailed statistics than the overall-performance-tab, and also specifically for the instrument you want to analyze. All the output data is also visually translated into graphs you can see next to the statistics. 2) On the graph part you can also open a drop-down menu that lets you switch between different graphs and output metrics. ii) Setups The setup evaluation works exactly the same way as the instrument-analytics. Choose the setup you want to analyze from the dropdown menu and Excel will show you all the performance statistics for the specific setup. On the right site you can also select different graphs by opening the drop-down menu. 26

27 5.7 Comments The Comments-Evaluation tab provides you with a complete analysis of the comments you assigned to your trades with regards to entries, exits, trade management and emotions. 27

28 5.8 Trade Management In the Trade-Mgmt. tab Edgewonk evaluates the performance differences based on trade management decisions. The dotted line graph is plotted using the trade metric R. R is equal to the Risk:Reward ratio, just expressed differently. A trade with 3:1 Risk:Reward ratio has 3R. A losing trade would mean -1R. The red dotted line shows your actual performance. It adds all your R-figures. The green dotted line calculates your potential performance if you would not have touched your trade after it was placed. The blue dotted line shows you much R you gained/lost by active trade management, compared to using the set-and-forget approach. The bar graph below shows the updraw and drawdowns of your trades. The updraw/drawdon graph illustrates how your stop loss/take profit placement developed over time and can help you in optimizing your order placement. 28

29 You can use the red buttons at the top and the left to filter for specific setups, emotions or instruments. 5.9 Filters In The Pivot Table And Equity Curve Sheets Both, the Pivot Table Evaluations and the Equity Curve Analytics use interactive filters to analyze your trading performance in depth. Here we provide you with a short overview how to use the filters most effectively. The two images above show you two standard filters. With the help of filters you can individually analyze instruments, types of setups, trade directions, trading performance by year, month or weekday or you can combine different filters to see the effects of different trading parameters on your trading performance. Selecting Filters When you first open the evaluations tab, all the filters selected and all the fields will be blue shaded as seen on the most left. You can click on single filters to select individual filters. If you click on a filter, the selected button is shaded blue and the other, unselected filters will be white (second image). When pressing the CRTL button on your keyboard, you can select multiple filters the selected one will all turn blue. To remove the selection, you can either press the top right icon or press ALT + C and all filters will be shaded blue again. 29

30 6. Miscellaneous 6.1 Saving Your Journal Save your Edgewonk trading journal like a regular Excel file with the blue save-disk button in the top left. A popup opens and you are asked where you want to save it. Choose the file saving_journal and save your data there. Next time you open your Edgewonk journal you will be asked to choose a file to load from. Choose the option Last Save and you can pick up where you left off. Choosing the option Original Workbook will open a blank Edgewonk journal. If you have stored various files, you may choose Choose Save to select the file individually. 6.2 Updating Your Trading Journal If you have bought an Edgewonk Trading Journal, you will receive free updates automatically. Every time we release a new version, we send existing customers the newest Edgewonk Trading Journal. To be able to use the newest version with all your past trades, you have to first export all the data from your current journal and then import it into the new version. We show you step by step how this can be done. 30

31 Step 1: Export your old data Go to the Manual-tab and there you can find the Export and Import buttons. After you pressed the Export button a pop-up window opens that asks you if you want to export the data. Press yes and all your trades will be stored in a new Excel file in the main directory of your Edgewonk folder. Step 2: Import your trades into the new version Now you open the new version of your Edgewonk trading journal and you will see an empty trading journal. Go over to the Manual-tab again and press the Import button this time. A new pop-up window opens and asks you if you really want to import your data.! If you import the data into the current Excel file, all your previous entries will be replaced with the imported data. 31