Transcription
What I find so often with struggling traders is their frustration of not having any clear direction. They don't know what their main focus should be and they have no thoughts as to where the value of their time is best spent. They find themselves making the same mistake month after month, unsure whether they've even made any real progress. Sound familiar?
The real error they're making is they haven't taken the time to reflect on what the most important specific area is that they need to work on and they have no method of knowing whether they're achieving it. One of the essential parts of metalearning is having a clear direction for whatever goal you have your site set on. Implementing a daily report card was the best practice that helped take me from being a top 10 trader to then take the number one spot at Trillium.
So, what is a daily report card? The daily report card is a daily review process done with the goal of efficiently improving one's trading. This structured review pushes the trader to identify the most important aspect of their trading and it forces them to reflect and work consciously towards their progress each day. One foundational piece of metalearning is deliberate practice. You need to have an intention and purpose every single trading session. Tiger Woods is famously known for never swinging the golf club without reflecting on the shot taken. He was never mindlessly hitting balls at the range. Similarly, each trading session needs purpose and a direction.
A lot of traders in 2022 struggled to adjust their trading to the new market regime. The breakouts and momentum plays to the long side that were so effective in the prior years were no longer working. Those that were following the process of daily review and reflection were so much quicker to adapt and change their trading. Most importantly, the daily report card helps you track your accomplishments and visually see and feel the progress you're making. Provided free as part of this course is the template that I have used for many years for you to use or alter as needed. Let's dive into the logic behind it.
First off, I'm starting with the date and a simple grade of A through F. Feel free to do whatever system makes sense to you. Let's circle back to what I was discussing earlier. It's crucial to identify one goal you want to focus your sights on. I have so many people ask me if they can focus on multiple goals at once. I strongly urge from my own experience and the many people that I've trained to establish just one at a time. Keep in mind this goal should not be P&L or outcome focused. Think about what you are trying to improve in your trading process. Am I overtrading? Do I want to be more deliberate with my sizing? Am I not involved enough in certain setups? Or am I missing important clues on the level two? Figure out your goal and then break it down with solutions. If, for example, overtrading is your issue, you can create a goal that only allows you five trades each day. When you're going in and reviewing your daily report card at the end of the day, you grade yourself solely based on if you accomplished that one chosen goal for the day, not your P&L. The grade isn't based on whether you were green or red, made a lot of money, or made none. It is solely based on did I make progress today at my goal. That covers the goal aspect of the daily report card.
Below I have a small section of reminders or any aphorisms you want to make to yourself. These were things that I just felt were always good to read over pre-market and refresh my mind on. This can be anything like listening to the intraday chart or the level two game planning various situations or etc. Whatever is most applicable as a reminder to you and your trading.
The following section is equally as important as the goal, a breakdown of the day. I would grade myself based on each block of time starting from 9:30 to 11:00 a.m., 11:00 a.m. to noon, noon to 2, and finally 2 to 4:00 p.m. The beauty of this is that it allows you to catch snowballing bad habits before they spiral into larger, more drastic negative outcomes. The true beauty of the day being broken down into so many segments is that even if you fail in one, you can still win the day by doing much better in the subsequent blocks.
When I refer to temp, that relates to my morning temperature. This isn't the literal sense of my temperature being 97.1 degrees. It's based on how am I feeling mentally that morning. Am I focused? Did I sleep well? Do I feel good? And am I ready to attack the day? With sleep, I would track how well I slept using the Aura Ring. And so between all these factors, I would grade myself and decide how much I wanted to risk each day based on what we just discussed. Sleep is an entirely separate topic I will be drilling down into in a separate video. If I was tired, sick, stressed out, or even hung over. >> Holy >> In no way would I want to risk the same amount as if I was very well rested, feeling great, and on a positive streak.
At 11:00 a.m., I would reflect on what happened between 9:30 to 11:00 to catch any potential snowballs. What is my grade this morning? Was I sticking to the play of the day? Was I sizing properly? Was I focusing on the trades that were going in my favor? I'd add any relevant comments or notes I might have and do the same for the remaining segments throughout the day. At day's end, I would take the time to reflect on what I learned or improved upon. Again, the beauty of this structure is that this makes sure that every single day I was learning something. It doesn't matter how frustrated I was or how slow the day might have been. Even if there were zero opportunities, I would make sure to fill this portion out because there is always something to learn if you take the time to do it.
Changes I need to make from today. This aspect of the daily report card is a narrower view into what you did today that you can change tomorrow. Maybe I've started to overtrade. Maybe I'm being overaggressive because I've been on a hot streak. This is essentially where I would write down changes I needed to be cognizant of that I would want to correct for the next trading session along with some solutions and an overview for that day. Overview was really my miscellaneous section that could cover anything from what had distracted me, what are some of the market trends I'm seeing or more.
Easiest 50k. So 50k might not be the right number for you, but for me I really wanted to identify what was the one trade that day that I would have really made a nice mark on. To clarify, I'm not saying the biggest trade of that day. Sure, there might be huge opportunities, but this section was really focused on the easiest money for me and directly linked to my playbook. So often people get seduced by where the biggest money was, but that oftentimes is a mistake. Many fail to think about the concept that return on investment might be way more favorable in the really easy layup trades, which often get overlooked.
The last section was where I would list the tickers I traded. This is where I'd write up any important trade of the day. The level of detail would be determined by how important and large the play was. Of course, if it was a slower day, I would exclude this section to save myself time. I followed this template for many years throughout my trading career, and it only helped accelerate my development, consistency, and adaptability.
When completing the daily report card, it's important to always keep these big picture questions in mind based on the whole trading day. What is the most important thing for you to carry forward? Is there some critical lesson you learned? Or is there some critical lesson you need to avoid? Whatever it might be, what can you take away from today and carry into tomorrow?
Now, let me share with you some advanced tactics for these. I cannot recommend enough to developing traders, experienced traders, and everyone in between to find a trading pod to share your daily report cards with each day and vice versa. This small idea multiplies learning for all parties involved. I think that one of the biggest things that helped me get to the top was using this practice. I was constantly sharing my daily report card with two other top traders every single day for years. Not only would I send them mine, but then I'd be able to read theirs immediately. I am able to get into the brains of two other top guys and see things like what were their best trades, what are they learning, what are they improving on, what trends are they spotting, what habits are they implementing, and what solutions did they come up with? Then I can take that and apply it to my own trading. For the same effort, you're getting three times the benefit and learning three times as fast.
If you discover an issue within your trading, always include solution-based reflections. If you come to the conclusion that you're overtrading and you simply identify this problem, but don't propose any solutions, you've done an important step, but you're missing half the battle. You need to figure out what you're going to do to fix this problem over the next few trading days. As silly as it may sound, I highly recommend using your daily report card to celebrate your wins. Regarding habits, BJ Fog of Stanford says that the most important thing to cement them is to celebrate them. Whether it's a dumb little hurrah or a pat on the back, schedule this into your routine and make it a win. Back in his writing days, Jerry Seinfeld used to say, "Don't break the chain." Consistency is everything in this practice. So many traders find success when doing this, but abandon all common practices once they find that success. Don't abandon what got you here in the first place and make it your own. This is what worked for me, but that doesn't mean it's going to work for everyone. Figure out what tweaks you can make. Share it with someone and let's all help each other get better.
One of the frequently asked questions I get regarding the daily report card is when do you change the goals? Do you move on once you've mastered that goal? This is a really great question because it's quite valid. I would say that I change my daily report card goal when it is no longer the highest return on investment goal for me. For example, if my issue is overtrading and that is currently my highest focus, that doesn't mean that if I ever have an extra trade or lose willpower that I shouldn't move on, right? If I've reduced my overtrading to an amount where it no longer is the most beneficial thing towards my trading progress and I should pivot to sizing or something else, then that's what I need to do. Make the call and recognize that perfection is the enemy of a lot of progress and I've gone far enough with this goal, that it's not worth my highest level of attention anymore.
Circling back to another frequently asked question, are you sure I shouldn't have multiple goals at once? Many people try this and explaining the psychology behind this is way beyond my intelligence. But the research backs up the fact that people do much better with one goal at a time. If you do one goal at a time, maybe each goal takes you between three and four weeks before you move on. If I were to try and do three goals at once, four or five months later, you've done none of them to the point that you would have otherwise. Keep in mind, some goals can be incredibly difficult to reprogram, especially under the pressure of real-time trading, which can be very fast-paced. Some goals might take a lot more reps and a lot more time than others, anywhere from weeks to many months. I've had some goals for three or four months at a time. That's just what it is.
What if it's slow and you've barely traded? Do you still fill out your daily report card? Big resounding yes. I would argue these are actually the most important days because these tend to be when most people slip by and don't make any progress. If you are productive and find something new to improve upon, that is considered a win for a slow day. It is not an exaggeration when I say I completed my daily report card for years. Yet so many up-and-coming traders I see can't sustain the habit. I refused to leave the office until mine was done. That doesn't mean every day was a great one, but I kept the habit alive and it led to massive growth in my trading. Remember, every single day, do not break the chain.