These are among the first questions I ask beginners. Perhaps they will be of help to you:
1. What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it?
2. Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading? Scalping? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches are selected deliberately and for thoroughly-considered reasons.)
3. Have you found an instrument -- futures, stocks, ETFs, bonds, options -- that provides you with the range and volatility you require but also the safety that enables you to relax and trade in an objective and rational manner?
4. Have you yet found a time (5m, 15m) or tick (1t, 200t) interval that gives you enough trading opportunities but also gives you enough time to think about what you're doing? If you want to limit your trading to the "morning", are you physically and psychologically prepared to trade all day?
5. Are you looking to catch a reversal in the hopes that it will become a trend? Or are you looking to trade series of reversals within the day's or week's range? Or do you prefer to wait for a breakout and trade what may become a trend? Or would you rather wait for a retracement in what may be shaping up to be a trend?
One is more likely to get what he wants if he knows exactly what it is that he's looking for.
Which brings us to definition. All else flows from this. Unless one has defined the setup, he cannot have tested the setup. If he has not tested the setup, he has no idea of the probability of its success. With no idea of the probability of success, any trades made off the undefined setup are essentially guesses. And if one's purpose in initiating and maintaining a journal is to wend one's way through a fog of feeling, then the process could go on for years, though it's more likely that the journal -- if not the entire effort -- would be abandoned long before that.
Therefore, I encourage beginners -- once they've addressed the above questions -- to focus on the setup. One setup. Determine its characteristics. Define it so specifically and so thoroughly that you can recognize it without any doubt whatsoever in real time.
Only after the setup is defined and tested (and it can't, ipso facto, be tested until it's been defined) can one even begin to think about where to enter, what the target ought to be, where the stop should be placed, and so on. By rushing ahead into the "trading" aspect, one merely expands the amount of time it will take to develop the necessary skills. Nothing is gained by painting the house before scraping it, cleaning it, and priming it.
