How To Create a Trading Plan that Prints Money in 2024
Summary
TLDRThe 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
📈 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.
📝 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.
💡 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.
Mindmap
Keywords
💡Trading Journal
💡Psychological Aspect
💡Technical Aspect
💡Refining System
💡Continuation Setup
💡Risk Aversion
💡Data Analysis
💡Implicit Knowledge
💡Win Rate
💡Hourly Candle
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
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