How to use the Trading Journal for analyzing trading strategies and DARWINs

The Trading Journal offers a very useful overview of a trader's trading style via an analysis of historic operations.

What is it?

The Trading Journal offers a very useful overview of a trader's trading style via an analysis of their historic operations. It is important because an ability to understand it means that you will be able to discard certain risky strategies, like martingales, at a glance.

Below we detail the information you can find within the Trading Journal

A continuación, te mostramos los datos que puedes encontrar en el Trading Journal:

1. Return

A graph showing the equity curve of the underlying strategy.

2. Risk

A graph showing the D-Leverage involved in every position of the underlying strategy

3. Open trades

A graph in which you can see the number of simultaneously open trades that in aggregate form a position.

4. D-Score

A graph showing the historic evolution of the D-Score.

5. Trade distribution

A visual representation of horizontal bars showing the totality of trades the strategy opened that specifies the underlying asset traded, the length of time the trade was open, and the date of open and close.*

*This information is only available if the trader has not decided to hide his underlying trades.

Underlyting strategy THA

Further detail

In addition to these 5 graphs, the Trading Journal has a column on the right hand side containing detailed information specific to a given position. By moving your mouse over a position on the graph, this information will automatically update with information specific to the position in question.

Data position underlying strategy

Where can I find the Trading Journal?

You can access the Trading Journal from two locations:

  1. From a DARWINs profile by clicking on the "Underlying Strategy" tab
  2. From the strategy itself by clicking on the "Trading Journal" tab

Trader Configuration

A trader has the possibility of hiding their trades so that other users cannot see their details. To do so, proceed to the settings section within the underlying strategy and click on relevant option as in the images below.

Privacy settings

privacy settings 1


Traders should think long and hard before deciding to activate their privacy settings as many investors are reluctant to invest in DARWINs that are less transparent. As such, unless you firmly believe that a failure to hide your trades will result in losing your edge, we recommend that you do NOT activate these settings and so maintain maximum transparency.

Use cases

Below we analyse to Trading Journals to see what conclusions we can draw from a traders activity..

Example 1

Here we have a strategy with:

  1. Constant exposure to the market
  2. A consistent level of leverage
  3. No more than 1 trade opened at any given time

Independently of any further analysis you might want to do, you already have a wealth of information.

Trading Journal Ejemplo 1

Example 2

In this second strategy we can observe:

  1. Much less continuous exposure to the market
  2. A relatively high leverage
  3. A relatively short trading time frame with scaled entry and exits
Trading Journal Ejemplo 2

Example 3

In our third example we can observe:

  1. A strategy with sudden significant spikes in leverage, accompanied by
  2. An increase in the number of open trades, generally coinciding with
  3. A substantial decrease in the account equity

This type behaviour is consistent with a high risk strategy, commonly called a martingale

Trading Journal Ejemplo 3

Tips

1. Zoom

To facilitate a better viewing experience, left-click your mouse button and drag to zoom in on a specific period of time.

Zoom Trading Journal

2. Identifying Martingales

As detailed in example 3 above, a martingale is characterised by a simultaneous increase in the number of opened trades and D-Leverage, and a decrease in the account equity.

The zoom functionality comes in handy to study timeframes exhibiting these characteristics in depth. IN the example below, we can see that while the number of open trades was increasing, the trader was not diversifying, rather he was going longer and longer EURUSD.

Trading Journal Martingalas

3. Risk Stability (Rs)

Although there is a specific Risk Stability Investable Attribute with its own score (Rs), over time you will be able to intuitively understand the score when looking at the Trading Journal.

A consistent level of D-Leverage is usually indicative of a high Rs score. An erratic D-Leverage n the other hand, is usually a symptom of poor risk management by the trader which will be heavily penalized in his Rs score.

Riesgo Estable Trading Journal


Riesgo no estable Trading Journal