How to keep track of day trades
To be successful in trading, keeping track of your day trades is a must. Get the low-down on how to do this effectively with TradeZella's definitive guide.
Author - TradeZella Team
Keeping track of your day trades is essential to your success as a trader. As well as helping to keep you organized – great for tax season – it can also vastly improve your performance.
Whether you’re using powerful day trading tracking software or more basic systems like spreadsheets and notepads, these tips will help you to start tracking day trades like a boss.
Why is it so important to track day trades?
We know admin isn’t always the most exciting thing in the world. After all, who wants to spend time on data entry when you could be doing literally anything else? But believe us: when it comes to day trade tracking, the effort it worth its weight in gold.
When you track your trades correctly, you’ll find yourself sitting on a treasure trove of information. With the right analytics tools, the ‘boring’ data transforms into useful analysis that can help you reach your goals faster.
Having a record of every trade you make helps you to see how far you’ve come. It’s great to look back over your trades and see how much you’ve improved.
And, when you go back and review your journal, it can help you to learn important lessons. It can help you spot any common mistakes you're making. Ultimately, you’ll become a better trader when you track and trade.
We’ve talked about the importance of using a trade journal before, so if you’re still not sure about the benefits of tracking your trade, we recommend reading that first.
Otherwise, read on for our top tips on keeping track of day trades...
Tip 1: Choose the best day trading tracker for your needs
Choosing the best day trading tracker doesn’t just mean choosing the option with the most features and lowest price. It means finding something that works for you and your trading style.
When it comes to trade trackers, there are so many options: ranging from simple spreadsheets to full-service software like TradeZella. It’s all about finding the one that will help you meet your goals fastest.
There’s no point in choosing an option that you don’t enjoy using.
If your journaling experience is bad, or boring, you’re less likely to keep at it. So, when you’re deciding what type of tracker to use, think about what will encourage you to keep going – even on the bad days.
If you respond better to in-depth analysis with lots of visual graphics, then a journaling software like TradeZella will be your best bet. It’s loaded with comprehensive features that can help you to up your game.
For example the analytics dashboard helps you to track the metrics that matter most. You can easily identify where you’ve gone wrong, and download tailor-made reports to discover your strengths and weaknesses.
Or maybe you’re someone who’s super comfortable with Excel, or another spreadsheet software.
You enjoy writing complex formulas, and creating visualizations of data your own way. If that sounds like you, you may want to start your day trade tracking journal as a spreadsheet.
If so, there’s no point trying to reinvent the wheel. Download our free trading journal template to get started.
Tip 2: Track important day trading metrics
Tracking your day trades is about more than simply recording the basics like entry and exit price – although that’s important, too.
You’re going to get the most value out of your journal once you start digging into what the numbers actually mean.
For example, it’s all good seeing that you made a $20k profit on a trade. But, if you were down $27k at one point, what does that mean for your strategy?
The most important part of journaling is making sure that you’re tracking the most important metrics – for example your profit/loss (P/L) and R-multiple. That is, your profit expressed as a multiple of the risk you took on the trade.
So, if you risk $500 dollars on a trade and make $2,000, that’s a 4R trade because you made four times the amount you risked.
Similarly, if you didn’t place a stop loss and lose $500 when you only wanted to lose $250, that’s a -2R trade.
TradeZella calculates this metric for you and uses it to show how successful your strategies are.
If you’re not using our journaling software, it’s also easy to calculate R-multiple with a simple spreadsheet formula.
Or, if you’re using pen and paper, with a calculator. You just need to divide your profit or loss by the amount you risked.
So, in the profit example above, 2000/500 = 4: hence the number 4R.
And 500/250 = 2, hence -2R (‘-‘ because it’s a loss).
Tracking this number will help you to see how well you’re really doing on your day trades.
Tip 3: Use analytics to improve your day trading
When you track your day trades regularly, you’ll start to notice patterns.
For example, maybe you always trade badly on a Monday because you’re feeling anxious after taking the weekend off.
Or maybe you always exit as soon as you see the first sign of a price drop – even if your strategy says to hold out longer.
One major benefit of using software like TradeZella instead of a spreadsheet is that the algorithms notice these little quirks automatically.
These patterns are flagged, so you can start to work on them.
Of course, it’s also possible to look for patterns in spreadsheets. One way to do this is to use filters.
Start by looking for days with low R-multiples, for example, and see if you can pick out any patterns.
Obviously, it’s faster to use tailor-made software, as it has lots of analytics tools for long-term success.
Some people enjoy the process of diving into the data themselves, although it is a little slower.
If you’re doing it this way, just be sure to set aside plenty of time to dive into the data.
And, the more you keep up with journaling, the more rich the data will become.
As you have more information to analyze, you’ll find more examples of your strengths and weaknesses. You’ll be able to work on these and become more successful.
So, how long does it take to see the benefit of day trade tracking?
If you’re only working with one strategy, it won’t take long to see patterns. Maybe 10-11 trades.
But, if you flip between a few strategies, it can take a little longer to build up enough data.
That’s why it’s so important to be consistent.
Tip 4: Have a space for reflection
Once you start day trading, it’s important to keep going. It’s also important not to miss out any information that could be useful further down the line.
Depending on the tracking method you’re using, you’ll probably have sections for key data – such as time of entry, symbol, position sizing and so forth.
It’s also important to have a section for ‘other observations’.
This can be anything and everything, from your thoughts on the state of the market to what your mood is like today.
At some point in the future, you might realize there are some data points that you’re not tracking that you really should be.
Being as comprehensive as possible early on – and filling in your ‘other observations’ as much as possible – will mean you have even more data to analyze.
If you realize you need a new section in your journal, you can go back and add data for old trades from this catch-all section.
One of our top tips for this is to set aside a little time before the markets open each morning.
Consider your strategy and start writing down your thoughts. Think about what you’re going to do today, and plan accordingly.
Keep your journaling software or spreadsheet open in a separate window, and record every trade as soon as you enter and exit.
Try to do this as you go along so that nothing is left out. If you’ve had a busy day of trading, it’s easy to forget to track things.
That’s another reason software like TradeZella is so useful. It integrates with most major brokers, so pulls in your trades automatically.
So you can spend less time on the boring data entry, and more time on important reflection.
Tip 5: Use TradeZella day trading tracking software to reach your goals
Some people prefer spreadsheets, but if you really want to superpower your day trade trading it’s worth using TradeZella.
Our easy-to-use interface and data-driven insights mean it’s way more than just a regular trading journal.
Seamless integration with popular brokers like Thinkorswim and Robinhood means less time spent on the admin of journaling, and more time reaping the rewards. As well as analytics and reports, TradeZella also offers tailor-made advice based on how you’re performing.
Other performance-enhancing features include the ability to replay your trades, tick by tick, and find the flaws in your execution.
You can also log your strategies in a playbook, and see – at a glance – which ones are working for you, and which ones aren’t.
Day trading can often feel chaotic. Things move so fast.
As well as helping you to feel more organized, tracking your day trades with TradeZella gives you access to powerful tools that can improve your performance.
So, are you ready to supercharge your day trading power? Register for TradeZella today.