How To Create a Trading Plan that Prints Money in 2024

Summary

The video emphasizes the importance of maintaining a trading journal for consistent profitability in trading. The speaker explains how journaling helps both psychologically and technically, by encouraging better trade decisions, cultivating awareness, and analyzing performance data. They share personal experiences, highlighting the value of refining trading strategies based on data insights, and discuss the improvements they've made through journaling, such as identifying patterns and holding winners longer. The video encourages simplicity, practice, and continuous improvement, offering a free template and one-on-one coaching to assist traders in developing their own profitable systems.

Takeaways

• 📊 Journaling trades is essential for consistent profitability, with psychological and technical benefits.
• 🧠 Psychological benefit: Journaling cultivates awareness, making traders more conscious of the decisions they make, leading to better adherence to the trading plan.
• 📈 Technical benefit: Reviewing trading data helps identify patterns in winners and losers, enabling traders to refine their strategies based on real results.
• 📊 Identifying errors such as analysis paralysis is crucial. Overthinking can lead to missed setups that fit the trading plan and edge.
• 🛠️ Refining a trading strategy involves analyzing data like entry time frames and types of trades (continuation or reversal) to improve win rates.
• 📈 Tracking specific variables like entry time frames can reveal patterns. For example, focusing on hourly time frame entries increased win rates to 73%.
• 💪 Journaling builds confidence by providing concrete evidence of past profitability and showing areas of improvement.
• 📉 Managing trades involves knowing when to hold and add to winners rather than closing early due to risk aversion.
• 🔄 Trading is a skill that requires a continuous cycle of practice, review, refinement, and improvement.
• 💼 Using tools like Notion can help organize trade journals by adding screenshots, tracking trade setups, and reviewing results in-depth.

Q & A

What is the main tool that the speaker attributes to consistent profitability in trading?

The main tool is a trading journal, which the speaker has been working on for two years. It helps track trades, analyze performance, and refine strategies, leading to consistent profitability.

What are the two main reasons for keeping a trading journal according to the speaker?

The two main reasons for keeping a trading journal are psychological and technical. Psychologically, journaling helps traders take better trades and cultivates awareness. Technically, it allows for data review and refinement of trading strategies.

How does journaling help from a psychological perspective?

Journaling helps traders take better trades as they are aware that they need to log their decisions. It also cultivates awareness of common errors, such as analysis paralysis, which can hinder a trader's success.

What technical benefits does a trading journal provide?

A trading journal allows traders to review their trades, understand why certain trades were profitable or unprofitable, and identify areas for improvement, such as maximizing winners or cutting losses earlier.

How does the speaker use trading data to improve their system?

The speaker uses trading data to analyze specific setups, time frames, and trade types. For example, by reviewing their success with continuation setups and hourly candle trades, they improved their win rate from 47% to 73%.

What are the main errors the speaker identified in their own trading?

The speaker identified that they often close trades early due to risk aversion, which stems from not wanting to give up profits. This led to missed opportunities and reduced profitability.

What is the speaker's strategy for refining their trading system?

The speaker's strategy is to collect data, refine the system based on insights from the data, and then continue practicing with the refined system. This iterative process is seen as essential to becoming consistently profitable.

What is the significance of the first 10 to 15 minutes of the hourly candle according to the speaker?

The speaker notes that their highest win rates come from trades made in the first 10 to 15 minutes of the hourly candle, particularly with continuation setups. This time period provides the best trading opportunities in their system.

Why does the speaker believe that overanalyzing trading data can be detrimental?

The speaker advises against overanalyzing trading data to avoid overfitting. Instead, they suggest looking for general insights that can lead to improvements without making the system overly complex.

How does the speaker use correlated pairs like Gold/USD and USD/JPY in their trading strategy?

The speaker uses correlated pairs, such as Gold/USD and USD/JPY, as confluences. If one pair shows a strong signal (e.g., USD/JPY being bearish), it can support their decision to take a trade in the opposite direction on the correlated pair (e.g., buying Gold).

Outlines

00:00

📈 The Importance of a Trading Journal

This paragraph emphasizes the need for maintaining a trading journal to become consistently profitable. The narrator explains that journaling helps traders by providing psychological benefits, such as promoting accountability and improving decision-making. Journaling also supports technical improvements by enabling traders to review and refine their strategies based on recorded data. Through the narrator's experience, it’s shown how tracking key errors and setting up data analysis can optimize performance. The speaker mentions that journaling has helped them identify and work on personal trading weaknesses, such as analysis paralysis and risk aversion, which led to closing trades prematurely. Finally, the importance of journaling is reiterated as it serves as concrete evidence of profitability and a tool for refining trading strategies over time.

05:02

📝 Creating Effective Trading Entries

This paragraph focuses on different types of trading entries that the speaker uses and the tools, like Notion, that assist in tracking and visualizing them. It describes three main types of entries: Type One, a high-time-frame entry based on hourly candle patterns; Type Two, a continuation pattern leveraging breaker structures; and Type Three, a low-time-frame entry that monitors smaller movements to identify shifts in market character. The paragraph also discusses how the speaker has developed a deep understanding of these patterns through hands-on experience, stressing the need for implicit knowledge. The speaker then mentions their current approach, which involves journaling and refining their strategy with these insights to enhance decision-making.

10:03

💡 Using Journals for Data-Driven Decision-Making

The third paragraph delves into how the speaker uses data from their trading journal to develop a probability-based mindset. By tracking the performance of trades during specific time intervals within the hour, the speaker has identified that the best setups occur in the first 10-15 minutes of each hour. This data-driven approach enables the speaker to refine their strategies and understand when and why losses happen. The paragraph also provides an example of a 'good loss,' where the speaker takes a calculated risk based on their analysis. This mindset shift, from focusing on individual trade outcomes to understanding broader patterns and probabilities, is highlighted as crucial for long-term profitability.

Keywords

💡Trading Journal

A trading journal is a tool used by traders to record and track their trades. It allows traders to reflect on their decisions, review their performance, and identify areas for improvement. In the video, the speaker emphasizes the psychological and technical benefits of journaling, such as enhancing decision-making, tracking errors, and improving profitability.

💡Psychological Aspect

The psychological aspect of trading refers to the mental and emotional factors that affect a trader's decision-making. In the video, the speaker highlights how journaling helps traders become more aware of their decisions and avoid emotional mistakes, such as closing trades too early due to risk aversion.

💡Technical Aspect

The technical aspect involves analyzing the data from trades to identify patterns, optimize strategies, and improve performance. The speaker explains how reviewing the outcomes of trades through a journal helps traders refine their systems, understand why trades were successful or not, and make better decisions moving forward.

💡Refining System

Refining the system refers to the process of analyzing trading data to make adjustments and improve a trading strategy. The speaker discusses how tracking trades over time, analyzing patterns, and making changes based on data can help a trader increase profitability by refining their approach.

💡Continuation Setup

A continuation setup is a type of trade where the price continues in the direction of the prevailing trend. The speaker mentions how they identified that continuation setups had a higher win rate, leading them to refine their system to focus on this type of trade more frequently.

💡Risk Aversion

Risk aversion is the tendency to avoid risk, often leading to suboptimal decisions such as closing trades too early to secure profits. The speaker describes how they noticed that they closed trades early out of fear of losing, which impacted their profitability, and how journaling helped them recognize this pattern.

💡Data Analysis

Data analysis in trading involves reviewing past trades to identify trends, improve strategy, and make informed decisions. The speaker explains how they use their journal to analyze various aspects of their trades, such as the time of entry and type of setup, to refine their strategy and increase their win rate.

💡Implicit Knowledge

Implicit knowledge refers to the practical understanding gained through experience rather than theoretical learning. The speaker compares trading to learning to ride a bike, emphasizing that actual trading experience (implicit knowledge) is necessary for improvement, rather than just reading about strategies.

💡Win Rate

Win rate is the percentage of trades that result in a profit. In the video, the speaker talks about how tracking and analyzing their win rate for different setups, such as continuation and reversal trades, helps them adjust their strategy to improve overall performance.

💡Hourly Candle

The hourly candle refers to a specific timeframe used in charting, representing price movements within an hour. The speaker discusses how they noticed a higher win rate when entering trades in the first 10-15 minutes of the hourly candle, leading them to focus on that time period for better trade outcomes.

Highlights

A trading journal is essential for consistent profitability, serving both psychological and technical purposes.

Journaling trades encourages better decisions by aligning them with a pre-defined trading plan.

Keeping a journal cultivates awareness, enabling traders to track and review common errors, such as analysis paralysis.

Journaling builds confidence as it provides concrete evidence of profitability.

Analyzing data from trades allows traders to refine their strategies, identifying winning and losing trades.

Focusing on improving technical aspects like risk aversion can lead to more effective trades.

Data analysis showed a 57% win rate for continuation setups, improving profitability by 12%.

Using hourly candle biases, the trader increased the win rate to 73% with a 16% gain.

Refining the system through journaling and testing led to a win rate jump to 72%, with a 9.62% profit.

Trading should be approached like any other skill, where feedback and refinement are key to improvement.

Implicit knowledge, gained through experience, is more valuable in trading than theoretical knowledge.

Journaling allows for more detailed analysis, such as reviewing entry points and managing trades.

Probability-based trading focuses on overall probabilities rather than the outcome of individual trades.

Daily reviews help improve trading psychology and keep track of performance over time.

The trader's refined system focuses on simple and reliable setups, particularly in the first 10-15 minutes of the hourly candle.

Transcripts

if you want to be consistently

profitable you have to be doing this one

thing so this is the one tool that I've

kind of been working on for the past two

years that's led me to be consistently

profitable get six figure funded why do

you need a trading journal well there's

two main reasons here one is

psychological and one is

technical firstly psychological when

you're journaling your trades you're

more likely to take better trades that

fit your plan as you subconsciously know

that you have to journal that trade

journaling also inherently cultivates

awareness and that's a big part of

trading being aware of the decisions

you're making dayto day as well and this

also allows you to track and review the

most common errors that you're making so

for me it's mainly analysis paralysis as

I'm more discretionary in my trading I

tend to overthink and miss the setup

that is part of my plan and profitable

Edge so I have my work ones here and

also one big thing I've been working on

recently is holding and adding to

Winners because inherently as humans we

want to close trades early get certainty

in an uncertain market and so this is

something I've identified and I've been

working

on having a journal like this also gives

you confidence because it's concrete

evidence of your profitability

okay for the technical aspect of your

trading

data this allows you to review look at

trades on why there might have been

losses why they might have been winners

and maybe you can maximize those winners

and maybe cut those losses a bit earlier

or avoid them so this is my journal for

the later half of

2023 and you see that I kind of

identified some things to be working on

with my own trading so these are all the

trades I've taken in the in the last

quarter of 20123 it was mainly forward

testing um I have my entry time frames

if it was a continuation SL

reversal and my types of

entries and wins losses risk multiple

and percentage

wise so I had around 50% R rate and

pretty much break even

um and identified I closed early quite a

few times St plus too tight closed early

and that's mainly from risk aversion not

wanting to give up

profits so if we actually have a look at

this data and then say

hey um

sub I felt like when I was trading that

when I was taking continuations I was

winning more than I was losing so let's

just add that into our data analysis and

have a look at

that so if I go to setup

continuation yep okay 57% win right now

from 47% and I'm now up

12% so that's how you can refine your

system using trading data to improve

your

technicals and I also whilst I was

trading during this

quarter um I was looking at when I was

taking entries off the start of the

hourly candle with the hourly bias I was

winning more trades than I was losing so

if I look at my entry time frame add in

the

hourly and that win rate jumps up to

73% and what

16% so that's how you refine your

system use your

data I I don't understand how you

wouldn't be profitable if you just did

this collected data refined traded that

new refined system collected more data

trading is just like any other skill

skill it's

practice you get a response or feedback

from that you refine and then you

practice again that's how you become

great at any skill so training is no

different to any other skill um don't

over complicate it keep it simple and

refined so I've

been for testing uh this month December

uh with this new refine system as you

can kind of see

some of these variables have changed

continuation reversal has changed from

low time frame continuation to high time

frame continuation SL reversal and you

can see straight away that my win rate

has jumped up to

72% and this is without without any

refinement yet I'm already sitting

sitting at 9.62% as

well um so this is the sort of this is

the benefit that having a journal and

being able to refine your approach to

trading gives you this will make you

consistently profitable if you stick to

it that's kind of the hard part and the

great thing about notion is well is that

you can create pages with screens shots

around your

entries so this is my type one entry

this is mainly like a 15 30 1 hourly

candle type of

Entry uh type

two this is pretty much always just a

continuation we have a structure here

and then we have a close below this

breaker structure new candle opens in

the first 15 minutes of that candle if

we pull back to the previous breaker

structure I'm looking to take a trade

type three this is more of a lower time

frame type of Entry 5 minute 1 minute

I'm looking for

a so a higher

high higher

low a higher a high and then a breaker

structure and we come back to test this

sort of level here so it's pretty much

just a it's pretty simple we have a it's

almost kind of like a head and shoulders

pattern I wouldn't really say that it's

more just like a breaker structure and

then a change of character or a

liquidity grab and then a reconstruct

you could say this is AMD you have

accumulation manipulation distribution

it's kind of all all the same thing

really um this is just stuff that I've

seen after lots of experience in the

markets um the one thing I realized is

that you actually want to learn trading

you have to F focus on getting implicit

knowledge which is knowledge by

doing um it's kind of like writing a

bike you can read all your the books you

want about riding a bike and you have a

lot of explicit knowledge but until

you've actually ridden that bike and

gotten that implicit knowledge you'll

still be pretty shited it so trade

Journal Review refine improve and then

it's just the same

cycle um so these are the two pairs I am

trading my research um I like these two

pairs they are pretty heavily

correlated um gold against the US dollar

and us against the Yen so when I'm

looking at sells on gold I'm looking at

buys on ugj

and let's say UJ is looking really

bearish and I'm not sure about a Buy on

gold I can use that bearish UJ as a

Confluence to buy on gold I'll also

break down a beginning with notion as

well is that you actually get to go into

more detail with your journaling as I

have all these variables here but I can

also take

screenshots of the different time frames

and look into more detail about how that

trade played out how it set set up and

how I managed and exited that trade so

this was a gold cell that I took um at

just below just before Asia open um this

was a type one with a type three so type

three one minute um we have a

pushup we have a high low a high high

breaker structure and then we have

change of character you come back to

this previous level here I enter stop

above targeting around two to three

risk and

then so on the 1

hour um this was a type one so we have

the hourly candle close at preview

structure in the first 10 minutes 15

minutes of the candle we push

up um as you can see I took the trade on

the first first minute of the hourly

candle which as you can say first 10

minutes new hourly this wasn't really a

continuation you could say this was a a

reversal but this is more for testing at

the moment so type one with type three

at new open of hourly candle I partial

50% at previous low and then 50% right

down here as well and you can see that

UJ was very bullish at the time as well

so more Confluence into that trade I

would say this is like a A+ type of

setup right here so 2.1% so and I also

um do daily reviews it depends I'm not

sure if I'm going to keep on doing them

this is more for when I was more

scalping high frequency trading but this

is more kind of for your psychology and

how you traded that day so if I go to my

last day here I think this on a funding

Pips prop

account um as you can see this was

another gold cell this is how I kind of

cultivate more of a probability based

mindset as you need to just be focusing

on the probabilities and not the outcome

of each individual trade and this is

some more information that I've kind of

analyzed from my previous trades around

when in the hour is the best time to

trade for me and as we've previously had

a look at it's the first 10 to 15

minutes of the hourly that I'm really

looking for a trade so first 50 minutes

of the hour 60% win rate it kind of just

goes down from there first 5 minutes 56%

run rate 5 to 9 Minutes 75% and 10 to 14

kind of drops

off U the one thing to do though is not

to overanalyze

uh your your data and try to

overfit information you're kind of just

looking for General sort of information

that um you should be aware of to maybe

look

at places where you can improve so I'm

kind of mainly just looking for hourly

continuations in the first 10 minutes as

those are the simple easiest and most of

the time the best setups that I take but

you could still have the best set up and

take a loss on that so this is a good

loss that I

took um last week so where this is a

hourly

continuation I took this on a type one

hourly so we had a previous hourly

close entry there one minute type three

so we had a recu structure change of

character

I entered on this pullback in the

first 10 minutes of the hourly

candle and then this was a loss uh right

here went straight took us out at a

minus one that's fine this allows you to

like be okay with losses cuz this is a

good loss I'm fine of taking this loss

and maybe I can look at the timing of

this trade this was 12:00 p.m.

um this sort of time normally after

Tokyo

open it doesn't normally have the best

setups so maybe I can look at just not

trading after the open as you can see

both 12:00 p.m. we had a loss and a

small loss so maybe that's something

I'll look at changing but this

information just allows you to actually

improve your system with actually with

actual data to back it up okay so this

is is just yeah breakdown of how I use

my trading dashboard journal and how

this actually made me profitable over

the long run this is the one thing I did

um and I'm going to be dropping a free

template to my trading journal in the

description so if you want to have a

look at that see if that will help you I

fully recommend using notion as there's

a lot of things you can change to fit

your current strategy um and I hope this

helped so we found it help

I'm glad and I am offering one-on-one

coaching at the moment which is also in

the description