How to improve trading performance over the weekend?

Where did the idea to create such a tool for traders come from?

The idea came as a result of playing poker. At the time, I was trying to build my database. You always know who you’re playing against and you made notes on those players to, try to tackle their personality.

And when I got into trading it was clear to me that I want to have a journal as well because I wouldn’t know what to improve, how to improve, what the hell I’m doing on the charts. I was looking for a solution and back then there was nothing but one journal on the market. That didn’t really suit my needs, so I started building my own journal in Excel and it grew from there.

That time I met my business partner and he had some really cool ideas as well as to what to add to the journal. Eventually we had such a big Excel file with 100 of hours of work put in it. Then we had an idea that maybe we should try to sell this because every professional trader says you need a journal but there is no solution out there. And yes, people bought it.

That’s how we started. From the Excel file that people bought. It’s hilarious.

What is your professional background aside poker?

I studied philosophy and I was a corporate worker in China and Beijing for a German automotive brand. I didn’t really like my job. Some of my friends, that I knew from earlier, went into poker and some of them were making really good bucks, so I became a poker player and from there later graduated to trader. That worked out quite well.

It’s quite an amazing story. Did you took part in any tournaments?

I was mostly a cash game player. Sometimes I would play in tournaments but I really enjoyed cash game the most. If there was a tournament in Macau or in the Philippines or so, I would go there as well just because the games were there and juicy but most of the time I wouldn’t join the tournaments. I would just play cash game with the tournament players because they are so bad at cash games.

So, you actually played poker at the table in the rooms with guys who drink vodka or something, smoke cigars like in the movies?

Pretty much yes, sometimes it was like in the movies.

Amazing. Did you ever witness any violent scenes or something like that?

I was robbed once at gunpoint. That happened after an underground game, which while it’s more than 10 years ago so I can say it was not a legal game, but when you leave those games fishy stuff can happen.

I was in 2010 in Berlin at the European Poker Tour. That was robbed by people with machine guns. That was ridiculous. Suddenly everyone jumped up from the tables and they started jumping and running and I was like “what the hell is going on?” and they were trying to steal the pot of €10,000,000 €11,000,000 or so. It’s crazy.

So, you were a big fish in this in this poker world?

I did quite well. There were many fish that were bigger than me but I did quite well for myself.

What an amazing story, like from the James Bond movie. Okay, let’s go back to traders.
What problems do you solve for traders?

I think a lot of traders have the issue when they start trading that they don’t even know where to start.

Our journey forces you to think about the framework because you need data, you can’t measure apples and bananas and then compare them. It doesn’t make sense. You also need a statistically viable sample size which is at least 30 to 50 trades that you take exactly with the same rules so you can say “okay there is a basic edge here” or not. By using our journal, you are forced to make at least 50-60 trades and then see where that leads you.

We also help people with their trade management because we have found out that it’s a huge problem, especially for beginner traders. I always like to say the last objective moments is before you open a trade and then as soon as you’re in the trade all weird things happen to your brain like the hormones and the dopamine, everything goes nuts. With our journal you can see whether your trade, management actually makes you money or whether you should just trade a set and forget approach, for example.

You can also check, and that is a really big one, what drives the profitability for you individually. I also coach a lot of traders, every time I give them my strategy, the thing that really works is to first understand the principles and then create the system yourself. You can only do that by using a journal, so to speak. You can find out what really drives the profits you make individually because there are as many systems as there are traders. This is what I believe in.

So, it’s a feedback loop. You can study, you can improve your trading, your psychology too. Are there any other serious problems?

Yes. The biggest problems besides trade management system and not knowing what actually makes you profitable and what makes you unprofitable.

Plugging your leaks is a big thing as well. Very small, subtle changes to your strategy can make a huge impact on your bottom line over a year or even over a month.

For example maybe you find out that every Monday you lose money and on the other 4 days you make money or you start giving back all your profits in the afternoon.

You can simply stop trading in the afternoon. You can also try to make the afternoon trade work, but usually losses occur because you are mentally exhausted. Afternoon trading is different.

How can you help traders to increase their profits?

In our trading journal, we track various metrics. My primary focus is on identifying the setups my students use and whether they have specific criteria for these setups. I then analyze the performance of these setups, determining which ones generate the most profit and which ones yield the least.

Sometimes, a trader may have multiple profitable setups, but one of them only produces marginal profits with a high number of trades. In such cases, I advise them to drop it because it consumes their mental capital. Just because a setup generates some profit doesn’t mean it’s worth pursuing if it’s not significantly profitable.

Additionally, I examine factors like the day of the week and the financial instruments traded. Some traders work across different asset classes, such as FX and CFDs, each based on underlying futures.

I’ve noticed that some traders excel in certain asset classes while struggling in others. By identifying these patterns, traders can focus on their strengths and mitigate their weaknesses.

Using tools like Edgework, traders can quickly identify their weaknesses and refine their strategies. This process often involves trading less but achieving higher profitability. Trader development is often about removing ineffective strategies rather than adding new ones.