When I first began trading, I read somewhere that it was wise to keep a trading journal. So I did. Diligently, I would record my trades, the losses and the wins. It really wasn’t helping me become a better trader though. Eventually, I read the book, Tools and Tactics for the Master Day Trader. The light bulb went on, and I fully understood how to keep a proper trading journal.

To keep a trading journal, your first step is to record the details of the trade. You should include the date, symbol, entry and exit prices, slippage, commission, and most importantly, why you entered the trade.

The second step is to evaluate your trades. Record any mistakes that you may have made. Was it a proper entry? Did you sell too early? Did you panic sell? Then group those errors so that you can track them.

Finding the area where you’re making your most mistakes is step three. When I started doing this, I found that my biggest mistake was consistently taking trades without proper entries. Can you guess what the next step is?

Eliminating the mistake that you’re committing the most, is next on the agenda. Step four may take some time, but you want to fully discard this error from your trading.

Step five is to continue down the list until all your errors are eliminated.

You see, by correcting your mistakes, it leaves you with only winners. And we like winners! How do you treat your losing trades? Do you ignore them? Why not try discarding them with a trading journal. My guess is that if you’re disciplined about doing this, you won’t have to worry about finding winning trades.  They’ll come naturally.

In my last post, I bought some gold stocks. I’ve also traded other stocks today, but I’d like to point out something about mid-day trading. After the first hour and a half, you start to get into the time of day when trading action, and market patterns sometimes aren’t reliable, or too be believed. Mid-day trading antics is a good description. The XAU action in the 5-min chart is an example. I’m not really paying attention to this ugly drop here mid-day. What matters is how trading evolves during the last hour and 45 minutes.

I’ll borrow Michelle B’s description of market action during specific times of the day for emphasis here;

‘1) 9:30 AM ET to 10:45 is a time of high volume, where usually a trend happens after a breakout in the opening range or consolidation.
2) 10:45 AM ET to Noon ET is when, following whatever trend that happened after the open, price will often consolidate during this time period on low to moderate volume.
3) Noon to 1:30 PM ET is when slow and steady trend continuing or reversals can happen on low to moderate volume.
4) 1:30 PM ET is when abrupt and pronounced continuation of trending or reversal on high volume can happen.
5) 2 PM ET (better known as POT) is also when abrupt and pronounced continuation of trending or reversal on high volume can happen.
6) 3 PM ET is yet again a possible time for either a high-volumed, abrupt, and pronounced continuation of trending or reversal happening.
7) 3:30 PM ET, yup, you guessed it, this particularly tricky time can trigger a very abrupt trend continuation or reversal on high volume.’

This mid-day antics trading can be emotionally nervewracking if you’re staring at your screen constantly. A snippet of Maoxians dummy trading advice is a prudent way to avoid getting emotionally involved. Maoxian often advises you stop trading after entering a stock or at lunch time. Heck, get a bite to eat, or do some exercise even. Remember, I’m not talking about a total disregard for stops here. You must follow those, but know what time of day is the best trading for you.

next day edit… see the result