One morning in 2013, a retail trader named Samuel J. Rae published something unusual: a diary of his trades, including his losses.
What followed was a ninety-day public trading journal. Every trade. Every reason. Every mistake. The result? A 78% win rate, documented with full transparency .
Rae's approach, detailed in *Diary of a Currency Trader*, is built on a simple premise: the trading journal is not a record of past trades, but a tool for future decisions. He writes that his obsession with trading "was born of a desire to understand why the market moved, not how to predict it." His methods were developed over years of trial and error, refining a simple entry system into a replicable framework .
How a Trading Journal Became His Primary Trading Tool
Rae's breakthrough came from the journal. He noticed that his wins and losses followed patterns. The journal exposed them.
For Rae, a complete trade entry includes not only price and stop-loss, but a written rationale. When he reviewed ninety days of entries, he spotted a pattern: losing trades shared common traits. He was entering without clear confirmation .
The Position-Sizing Formula: From 1% to Growth
Rae is strict about risk. He keeps each trade's potential loss between 1% and 2% of his account. During his public diary period, he documented that he traded a consistent account size and risked no more than 2% per trade .
His formula is simple:
If a trader has a $10,000 account and risks 1%, the maximum loss is $100. With a 20-pip stop, the position should be 0.5 standard lots.
The Stop-Loss: Not Optional
Rae's stop-loss logic is non-negotiable. He places a stop-loss on every entry. "If I cannot place a stop loss," he says, "I do not take the trade" .
The rule: stop-loss is at a level where the trade thesis is invalidated. In his journal, he explained that he sets his stops not at psychological levels but at technical breaks. If price breaks support, the setup is dead.
The 78% Win Rate: What the Journal Reveals
During his ninety-day journal, Rae's methodology yielded 43 wins and 12 losses across 55 trades. A 78% win rate. But the journal reveals that this win rate came from discipline, not prediction.
He wrote of a losing streak: he had three consecutive losses. He stepped away. The journal says he returned only after reviewing the patterns .
Exclusive Perspective: The Journal as a Filter for Emotion
The market today is dominated by algorithms and high-frequency trading. One might ask: does journaling still matter when machines trade in microseconds?
It matters more. A machine has no emotion. A human does. The journal filters out the emotional noise that algorithms never face. As I documented in my own review of a GBP/USD trade, I used Rae's journal method to log that I entered because of a Fibonacci retracement. The journal forced me to ask: why am I holding? The answer revealed that I was holding from hope, not analysis.
Applying Rae's Framework: My Real-World Test
I applied Rae's rules to a recent AUD/JPY trade. Using his method:
The entry was a break above a daily pivot. I placed a stop, logged the rationale, and walked away. The market moved 60 pips in my favor. The journal entry showed that I closed early because of "fear of reversal." It was a win, but the journal exposed a weakness: exiting prematurely.
Checklist for Your Own Trading Journal
1. Log the Trade: Entry price, stop-loss, target.
2. Log the Reason: What setup triggered the entry?
3. Log the Emotion: How did you feel?
4. Review Weekly: Review all losing trades and identify the common factor .
References:
*This article was originally published on FXEAR.com. Original content; reproduction without authorization is prohibited.*