Fostering a Growth Mindset in Trading Through Journaling
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In one of my latest posts, I outlined 5 steps to developing a growth mindset in trading. Now, I want to present a different but complementary approach—a more structured and tool-focused method: having a well-organized trading journal.
Here are strategies to develop a growth mindset specifically for trading via Notion trading journals:
Embrace the Learning Process
Yes, it is fine to track your P&L, but it is even more beneficial to focus on what you’re learning from each trade, not just the profit or loss. So, how can we learn from a trade?
In another post, I outlined the key components of an effective trading journal. It's crucial to handle the pre-trade, during-trade, and post-trade phases effectively. Apart from the aspects covered in the post, it is beneficial to use a tool that can store various media types to record and track the details of both successful and unsuccessful trades. This might include video chart analysis, dictated thoughts, or pasting charts to depict step-by-step thinking processes.
Using these media tools makes the process engaging and allows for a comprehensive review of your original thinking during the trading phase. By embracing this learning process, you can gain valuable insights and continually improve your trading strategy and execution.
Reframe Losses
Instead of thinking, "I lost money," reframe your mindset to, "I gained valuable market insight." To elaborate on these insights in your journal, you can create a separate tab named "Review." In this tab, include:
Exit Reason: "Stopped out"
Retrospective: "Price sweep before reversal"
Error: Too tight SL
Review Notes: "Market exhibited higher volatility due to economic news. Consider widening stops during high-impact events."
By doing this, you can track the numbers and rates of each tag, providing insights into your recurring errors. This detailed analysis helps you identify patterns and areas for improvement, turning losses into learning opportunities and enhancing your overall trading strategy.
Set Learning Goals
Alongside profit targets, set goals for understanding new market dynamics or mastering new analysis techniques. Use a dedicated page in your journal to track each day's performance. On this page, you can write:
What You Did Best: Highlight your successes and effective strategies.
Obstacles Faced: Note any challenges or difficulties encountered.
What You Learned: Record the lessons gained from the day's trading activities.
Goals for the Next Day: Set specific objectives to further improve your setups and edge.
By consistently tracking these aspects, you can continually refine your trading strategies and enhance your market understanding.
Cultivate Resilience
Develop strategies to bounce back from losing streaks, focusing on long-term growth.
Critical Mass: A meaningful level of data is essential. Aim for at least 100 trades to start seeing patterns emerge.
Patience is Key: Building this dataset takes time. Record every trade meticulously, regardless of outcome.
Embracing Losses: Remember, losses are not just setbacks—they're valuable data points. Both wins and losses contribute to your analytics. Remember the wisdom of Mendel of Kotsk: "There is nothing as whole, or as perfect, as a broken heart." Losing is part of the game. Each attempt increases your resilience.
Notion's Enhanced Capabilities: Recent updates to Notion's formula system have significantly improved its statistical analysis features. With Notion, you can now calculate: Simple P&L (Profit and Loss), R multiples (Risk multiples), Standard Deviation, System Quality Number (SQN), Holding times, Min, max, averages, and sums of all those metrics.
Leverage tools like Mark Minervini's Result Based Assumption Forecast (RBAF) to simulate potential losses. This helps in, preparing psychologically for various loss scenarios, understanding the impact of drawdowns on your overall portfolio, developing more robust risk management strategies.
Seek Feedback
Regularly review your trades with more experienced traders or mentors. Consider using features like Notion sites to share your journal with mentors or a small trading group, fostering collaborative learning and friendly competition.
Seeking external perspectives and collaborating with peers can provide invaluable insights and accelerate your growth in trading. Modern tools like Notion have revolutionized how traders can share, analyze, and receive feedback on their trading journals. Regularly reviewing your trades with experienced traders or mentors can offer fresh perspectives and identify blind spots in your strategy. As mentioned in a recent article, Notion is particularly well-suited for "reviewing from another eye.”
Leveraging Notion for Collaborative Trading Journals: With the recently announced Notion Sites feature, you can now transform your trading journal into a publicly accessible website. This opens up new possibilities for sharing and receiving feedback: Mentors can easily access and review your trading history, you can showcase your trading journey to potential collaborators or investors, peers can follow your progress and offer insights. Imagine how this could revolutionize the way your mentor provides feedback on your journaling process and trading decisions. They can now: comment directly on specific trades, track your progress over time, suggest improvements to your journaling methodology.
Conclusion
Developing a growth mindset in trading is an ongoing process that requires consistent effort to challenge your assumptions, learn from every market interaction, and view your trading journey as a path of continuous improvement. Central to this process is the use of a comprehensive trading journal.
Remember, the most successful traders aren't those who never make mistakes, but those who learn and grow from every experience in the market. A well-structured trading journal is your most powerful tool in this journey of continuous improvement.
Are you ready to take your trading to the next level with a growth mindset? Start by investing in a high-quality trading journal template designed to foster self-reflection, learning, and improvement. With the right tools and mindset, you're well on your way to becoming the trader you aspire to be.
