Hirschhorn: The Trader Journal

While trading looks fun and is often fun to do—you have to remember the reason you trade is to make money, not entertain yourself. And the way to make money is by focusing on your trading process and executing it consistently.

I’ve created a daily trading journal that my private clients are required to complete every day. It’s not a choice, it’s a commitment.

The purpose of the journal is to keep them objective in their decisions and hold them accountable on a daily basis. Just like top athletes videotape themselves to review performance and search for areas to improve, traders can use a trading journal for the same purpose.

To get you off to the right start for 2011, here are nine questions you should include in your own daily journal:

1. What is my game plan today? Is today a day to make money, limit losses, or do nothing?
2. What is my market thesis and is my current portfolio in line with it?
3. If I had no positions on right now, would I re-create this exact portfolio?
4. Are my current positions correctly sized?
5. Did I follow my game plan today?
6. What’s working (making money) and what’s not working (not making money)?
7. What did I do well today? What did I do poorly?
8. What will I do different next time?
9. On a scale of 1 (low) to 10 (high), what was my level of focus today?

Remember, great traders aren’t born, they’re made. And the way they become great is by focusing on their process and being accountable. The daily journal is a tool you can use to do just that.

Doug Hirschhorn is the chief executive officer of Edge Consulting, a firm specializing in “Peak Performance Coaching.” He holds a Ph.D. in Psychology with a specialization in sport psychology, and has offices in New York and South Florida. His client list includes elite athletes as well as many of the largest banks, hedge funds and financial institutions in the world. Doug is presently at work on his new book, Street Smarts (Putnam, 2010).

Have a question for Doug? You can reach him through his Web site, DrDoug.com

Disclaimer: Doug Hirschhorn's expertise is in the psychology of achieving peak performance. He is not a financial advisor and does not make trading or investment recommendations or provide trading or investment advice. He is an expert on the mental game. Although Doug Hirschhorn has a Ph.D. in Psychology with a specialization in sport psychology, he is not a licensed psychologist and does not provide therapeutic, clinical or counseling services.