The whole market struggled today with only the Dow who made a slight convincing move.

And the rest (Nasdaq, S&P, Russell) were all traded in a range that looks like they all came from heavy drinking holiday binge.

The market might be in a tight consolidation moves in the coming days or maybe weeks.

The only opportunity are the short time frame traders take advantage of.

How To Start Keeping A Journal

At some point you have probably already read somewhere about the importance of keeping a trading journal. In other words, taking time each and every day to write down and store your thoughts, observations and actions concerning the market and your trading activities.

This exercise is done not only to keep those stored for future reference, but also as a self-evaluation tool to track your development. Given the complexity of the market, it is impossible for most us to recall simply from memory what we’ve learned, how we’ve acted in certain situations, and more importantly the best tactics to employ in specific market conditions and situations. In fact, the more and longer you trade, this task become even more challenging. A big part of trading successfully is learning how to use and take advantage of your past experiences and remembering lessons learned.

If you ask most successful traders they will tell you that keeping a journal can be helpful. However, the reality is that most traders don’t keep one. For example, when interviewing traders that have applied for my
mentorship group, I often ask them to send me copies of a journal entries for various time periods so I can see what they’re keeping track of every day and how organized they are in doing so. Would it surprise you that most cannot provide those samples? And, those who do, the journal looks like it was recently made up. In sum, this easily separates out the jokers from those who truly are doing what it really takes to achieve long-lasting success in the markets.

So, why don’t traders keep good journals or not at all? In my view, part of it is certainly time. We are all busy enough working our own strategies and keeping focused conditions and trades that adding yet another daily task is tough things for us to do. Another big part I think has to do with the basic fact that some of us just don’t develop the habit. Most of us have routines and if you don’t add journaling to it at some point, there there will never be enough time in the day to do it!

Looking back, I was very fortunate. Early on in my career before agreeing to mentor me, my first mentor asked me to start keep a trading journal for an entire month. He didn’t tell me what to put in there, just simply to “write down in a paragraph every day what you learn each day.” Simple and straightforward and every day since 1994 I have been doing exactly that!

This also raises the third issue I see – most traders don’t really know or understand really what a trading journal should include and so they don’t even begin. Since most successful traders won’t openly share their methods with strangers, you won’t find many helpful samples out there to work with as a starting point. Moreover, if you ask a 100 traders what things to include in a journal, you’ll get 100 different responses. Since everyone trades differently and operates in different time frames, your journal must reflect that as well.

So, if you are one of the traders that understand why it could be important to keep a journal OR you are at least willing to try it for a period of time to start the habit to see for yourself if it can be helpful, here are five tips to help get you started:


Make The Commitment: To help start and maintain the habit, make the commitment that for every day for at least one entire quarter with no exceptions you will write a journal entry. It needs to be daily at first to start the habit so you’ll need to update it on weekend as well. To avoid running out of time daily to do it, make the journal entry the very first thing you do every day before anything else. I would also encourage you to set a reward (i.e. a carrot) you really want (i.e. golf outing, new gadget, etc.) as long as you keep that daily commitment for an entire quarter.
Start Slowly: Put and stick to a ten minute time limit on all journal entries. Yep, actually set a timer on the time you spend. Many think they must spend 30 minutes or even hours journaling out everything which is why they never have the time and quickly abandon their commitment to try it. In addition, long journal entries will not make the process helpful as you’ll be just as reluctant to review them later on. After all, who has the time to reread a bunch of long-winded rambling garbage? No me, that’s for sure and I doubt you have the time either. So, in just a few sentences, you should be able to write out everything you need to keep for that day. Be concise, clear, and only put in items you think are worth remembering. Before you write every journal entry, think first of how you might later use these notes to develop an edge. This will help you know what to include and what to leave out.
Be Organized From The Start: Create an organized, logical structure from the start. Making random comments in a journal without any overall structure is not going to be useful. You want to be able to review these journaling entries after some time has passed so organize it in a manner that makes sense to you with this in mind. From the day one, you need to figure out what each journal entry should include and how plan to organize your daily thoughts. I’d recommend using a bullet format at first to make sure you’re concise and to the point as well. Concise, clear entries are much better than long-winded journaling notes that you won’t have time to read/filter later on.
Make It Fun: If you don’t actually enjoy the process of keeping a journal chances are good you will stop doing it. Fortunately, there are lots of online services now like Evernote and others that help make journaling fun, easy to do from anywhere on just about any device, not very time consuming and also secure. At first, I would not recommend that you do a open blog, post notes on twitter, etc. for all to see and comment upon. This is only just for you and no one else!
Share It: If you have a trusted mentor or trading buddy or just someone you respect who trades successfully, you need to share your journal with him (or her) and ask for feedback and suggestions on making it better and things to include based on their experience. While most successful traders are reluctant to share their own journals, you will still find many are willing to provide feedback on your journal and offer helpful suggestions. Seek out that help after some time passes and you have already established a consistent journaling routine.

Like most things, the most difficult thing is just to get started to develop the habit in your daily routine. These five recommendations should help get you past that point. If you make and stick with your commitment to maintain a trading journal, in time you will gain a powerful tool in your trading weaponry. Through the years, many of my best trades have come following reviewing my notes of prior situations and setups that I am facing once again. In many ways, that has proven to be a valuable edge for me and, if you do the same, in time you will discover this as well.

Once you do and you find out that the process isn’t as awful or as difficult as you currently might think or fear, then it is time to actually improve your journal and focus so that it really will help you. At first, it is ok just to do what it takes simply to develop the habit. After that, I would highly recommend reading the following trading journal suggestions from my friend Dr. Brett N. Steenbarger. He offers some terrific ideas on what a trading journal should and should not include to help you make the most of this exercise!

From Kirk Report

A choppy (boring?) market trading day with not much opportunity to make a decent setup.

Guess the participants are gauging each others throat looking first who's going to swallow the unpredictable market thrust.

And from there, they're going to take the market rewards.

Are You Setting Yourself Up For Failure?

by: Bill Zimmer

Friday, March 9th, 2012 at 9:39 am

I’m quite sure many of you have been confused and frustrated by the markets in recent times. During these times we need to avoid the big pipe dream, the pure hope, the thinking we have to make money today. Many if not all of you have a plan, a goal in mind on where you wish your trading to take you. Be careful how you define your goal. Perhaps your goal is to make $100,000 this year in the markets and that’s wonderful, however if you break it down into too finite a goal you will defeat yourself. Breaking down the $100,000 into roughly 250 trading days per year equals $400 per day or $2,000 per week, approximately $8,333 per month. Sounds great and easy, doesn’t it? However, there is a flaw in this thinking?

Setting a goal based on earnings every day (or week or month) and you will feel compelled to trade. What if the markets don’t move very much? What if everything is quiet waiting for a piece of news? It may be better to stay out of the market completely rather than fail at what could be a low probability trade. Another problem – what if you fail to make your $400 today due to a lack of opportunity (let’s not even consider a losing day). Now the next day you will feel compelled to attempt to make $800 to make up for your no profit day, then $1200 and so on. Your stress level will be elevated and you may well begin a never-ending cycle of frustration and disappointment.

Setting a more appropriate goal will probably relieve the frustration. It’s great to have a rough idea of how much money you want to make, but setting a specific dollar amount that you must achieve on any given day (week or month) is very often a hindrance. If you are new to trading and the most you have made is $15,000 in a year, then setting a goal of $100,000 is probably very unrealistic. You are setting yourself up for failure? Perhaps, an increase of 20% is more appropriate. Because if you fail to reach your goal, you’ll feel frustration and disappointment, and may start trading based on your emotions, the death Nell of many a good trader.

Professional’s know how to patiently wait for the opportunities to come to them. They don’t impose their will on the market. And that’s what traders are doing when they set a performance goal in terms of a specific dollar value over a specific period of time. Winning traders patiently wait for market conditions where they know they can excel. They understand that the same quiet market will handsomely reward them if they are patient. It’s also useful to remember that all that really matters is performance across a series of trades. Many traders can lose 60% of the time, then happen upon a winner of many thousands that offsets previous losses accrued across a series of trades.

When you are setting goals, it’s vital that you keep them in perspective. Set goals that are equal to your skill level. As your skill level improves then reset your goal. Shooting for goals that are beyond your skills will frustrate you more than motivate you.

And please remember that you can’t impose your will on the market. You don’t know what market conditions will be until you see what they are. And if optimal conditions aren’t there, you can’t do much about it. You must accept what the market is willing to give you, which may mean patiently waiting for conditions to change. By doing so, you may not profit every single day, but over the long run, you’ll be a consistently profitable trader.

The market made an initial surge in the open but bow down early noon till the close.

Lack of bullish conviction from the participants.

Probably it's Friday, a profit taking day.

Two trades are probable here, buying in the open and close it around 11:00 am. ET.

And the second is to short the market after the first long trade and cover it in the close.

Simple trade setup but it's not easy, don't you think so?

I guess it is, but proper concentration and using multiple time frames will help to catch the trade.

The market finish high today and it formed a saucer pan? pattern.

Looks like it might fail two hours before the close but went up vertically afterwards.

Nice setup if you were able to enter at 12880 level and close it at 12930.

The market is back on track again after dropping 200 points plus last last Tuesday.

The market gap up in the open then drops after an hour or so to make room for the profiteers.

It is forming a (little) cup with a handle as of this posting in the futures market.

Buying at the consolidation is the most appropriate to enter as far as I can see.