User’s Guide

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Introduction

Insight Trading Journal is much more than your average trading journal. When used properly it has the

potential to increase your profits, save you a lot of time, and increase your discipline. In addition to the

guidance found here, there are instructional videos on our Facebook page and YouTube channel. Links to

many of these videos can be found within this user’s guide where appropriate.

Increase Your Profits:

Insight has many different data analysis tools that allow you to take a deep dive into your trading and

understand areas where you need to improve. Making just one adjustment to your trading by using

Insight’s tools can easily pay for Insight almost immediately.

Save You Time:

Our memories aren’t as good as we think they are. Imagine having just 100 trades where you had applied

a particular strategy. How much time would it take to go back and see how well you managed them, and

try to determine whether there was perhaps a more profitable management approach. Insight’s Strategy

Tester™, Percent Captured Reports, and All Trades Report can show you how well you are managing your

trades in seconds, saving you hundreds of hours in trade follow up.

Increase Your Discipline:

Nothing changes a person’s habits more quickly than seeing something first hand. Seeing is believing.

When you track your trades you start to realize things you hadn’t before. Maybe a strategy you love is

really just breakeven over time, or maybe one of your most profitable strategies could be a lot more

profitable if you held for larger targets. Insight can help show you these truths, and help you stick to a

more disciplined trading approach.

This user’s guide is broken down into six sections, one section for each of the sections shown in figure 1.

Account

Strategies

Sources

Tags (Custom Tags)

Trades

Analysis

Figure 1: Insight Sections Shown at the Top of the Screen after Log In

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Insight’s Active Help on Demand

You’ll notice at the bottom of Insight there is a question mark. This is Insight’s help on demand feature. If

you click on the question mark at the bottom of the screen it will open a help bar. In this bar you will find

some instructions and tips on how to use Insight when you click on various input fields within Insight. See

figure 2 below for an example of help on demand when you click on “Sharpe Ratio” within the Overview

Report.

Figure 2: Insight Active Help on Demand Example

Insight’s Smart Screen Size

Insight was designed to optimize the use of desktop screen space, and Insight will look great on your tablet

and even your phone. This is perfect for traders who want to evaluate their results on the go using their

tablet or enter their trades on a tablet next to their PC. Also, because the features on the screen will adjust

to the screen size automatically, Insight is also perfect for traders who have limited screen real estate –

which is often the case!

Smooth Intuitive Single Page Navigation

Insight was designed with “single page navigation”. While most web sites jump around from page to page,

once you’re logged into Insight, you’ll always remain on the same webpage. This makes for a very smooth

and user friendly experience. You have to experience it to really appreciate it.

Insight’s Dynamic Saving

With Insight, you’ll never have to click “save”. As soon as you enter something into Insight, it’s

automatically saved for you. If you are used to saving all the time, it may take some getting used to, but

once you do, you’ll love it!

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Insight Trading Journal User’s Guide - Table of Contents

ACCOUNT 5

1. ACCOUNT STATUS 5 2. PROFILE 5

STRATEGIES 6

1. ADD NEW STRATEGIES 6 2. TAG YOUR TRADES WITH ONE OF YOUR STRATEGIES OR “NO STRATEGY” 6

SOURCES 8

1. ADD YOUR TRADE SOURCES 8

TAGS 9

1. CREATE CUSTOM TAGS 9 2. TAG YOUR TRADES WITH YOUR CUSTOM TAGS 9 3. FILTER AND ANALYZE YOUR TRADING RESULTS USING CUSTOM TAGS 10

TRADES 11

1. MANUALLY ENTERING TRADES 11 1.1. MAX MOVE (ALSO REFERRED TO AS MAXIMUM FAVORABLE EXCURSION) 11 1.2. THE DIFFERENCE BETWEEN AN ERROR AND NOTIFICATION 12 2. IMPORTING TRADES 13

ANALYSIS 14

1. THE VARIOUS SECTIONS UNDER ANALYSIS 14 2. INSIGHT’S ANALYSIS FILTERS 14 3. INSIGHT’S OVERVIEW REPORT, UNDER THE SUMMARY SECTION OF ANALYSIS 16 4. INSIGHT’S ALL TRADES REPORT, UNDER THE SUMMARY SECTION OF ANALYSIS 17 5. INSIGHT’S PERCENT CAPTURED REPORT, UNDER THE SUMMARY SECTION OF ANALYSIS 17 7. INSIGHT’S DAY OF WEEK AND TIME OF DAY REPORTS, UNDER THE COMPARISON SECTION OF ANALYSIS 18 8. INSIGHT’S STRATEGY COMPARISON REPORT, UNDER THE COMPARISON SECTION OF ANALYSIS 19 9. INSIGHT’S CURVE GENERATOR™ 20 10. INSIGHT’S STRATEGY TESTER™ 22

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ACCOUNT 1. Account Status

Here you will find information regarding whether or not your account has been activated. If you have

created a free account and have yet to activate it, you will see the message shown in figure 3. The free

trial version of Insight Trading Journal gives you full access to all of Insight’s features; the only

restriction is that the analysis of your trading results is limited to 20 trades. There are two ways to

activate your Insight account and gain access to analysis of unlimited trades. The first is to buy Insight

directly through the website by clicking “Buy Now”. Once “Buy Now” is clicked, there will be an option

to enter a Promotion Code, if you have one. The second is to purchase an Activation Code from one of

our partners.

Figure 3: Account page, Free Trial

2. Profile

Also under the account page you will find your account profile. Here you can change your e-mail

address and password.

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STRATEGIES 1. Add New Strategies

Under the strategies section you can add each of your trading strategies. Two strategies are shown in

figure 4, as an example. There is also a section for any notes you may have on each strategy, such as

the strategy’s trading rules. You can add unlimited strategies and also change the name of your

strategies at any time.

Figure 4: Strategies page

2. Tag Your Trades with One of Your Strategies or “No Strategy”

Once your strategies are entered into Insight, they will appear under the “Trades” section in the “Select

Strategy…” drop down menu. You will notice that under this drop down menu there is an option to

select “No Strategy”. No Strategy reporting is a built-in feature of Insight. If you take a trade and upon

your trade follow up you realize that it did not meet the rules of your pre-planned strategy, then select

“No Strategy” from the drop down menu.

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Insight Tip – “No Strategy” Reporting

No Strategy reporting is extremely important to understand and use appropriately. The reason

why traders should track their trades by strategy is so they can use Insight’s many analysis tools

to help them improve each strategy. For example, you can use the Strategy Tester to evaluate

your trade management or the Time of Day report to evaluate how the strategy performs

during different times of day. If you categorize a trade as a “Morning Gap Long” because at the

time of the trade you believed it was, but later you reviewed the trade and realized that you

broke some of your strategy’s rules, you should now categorize the trade as “No Strategy” (see

figure below). By applying this approach, your analysis of your Morning Gap Long strategy will

be more accurate.

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SOURCES 1. Add Your Trade Sources

Under the Sources section you can add each of your trade sources. A trade source is who found your

trade. Many traders trade in an online trading room or perhaps they are in an office with other traders.

If someone else found the trade you took, add them as a trade source. This will allow you to analyze the

results when you take their trades.

Figure 6: Trade Source Section

Insight Tip – How to Properly Use Source Reporting

Trading is a game of odds. All great traders have losing trades and many great traders have a

lot of losing trades. Success is not about avoiding losses, it is about keeping loses small and

having the occasional large winner – so you come out profitable over time. Keep this in mind

when taking trades from another source. If you are randomly taking trades from an online

moderator for example, but not taking all of the moderator’s trades, then you will not achieve

the same results and may very well lose money when the moderator makes money. Also, any

trade you take should be a strategy of yours too. For example, taking random trades you don’t

typically take because you are bored is not the proper way to use a trading room. Use the

additional eyes in the trading room to find trades that you’d take anyway, then categorize

that trade with the trade source so you know how dependent you are on that source finding

your trades.

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TAGS 1. Create Custom Tags

Creating “Custom Tags” is a perfect way to track and analyze anything you want. Custom tags are

created just like strategies and trade sources. An example of a custom tag can be found in figure 7.

Figure 7: Custom Tags Section Showing the Custom Tag “Entered Too Soon”

2. Tag Your Trades with Your Custom Tags

Once your custom tags are entered into Insight, they will appear under the “Trades” section in the

“Custom Tags” drop down menu, as shown in figure 8 (below). To access the custom tag drop down

menu simply click on “Custom Tags”. Custom tags that are selected for the given trade have the switch

to the right, as shown for the custom tag below, “Entered too soon”.

Figure 8: Trades Section Showing the Custom Tag “Entered Too Soon”

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3. Filter and Analyze your Trading Results using Custom Tags

Perhaps we are jumping a little ahead here, but now is a good time to introduce you to Insight’s

analysis tools and filters. There will be much more on this later. Shown in figure 9, you can see that

we have filtered for only trades that have been tagged with the custom tag “Entered Too Soon” (note

the filter within the red box). Notice that all other filters say “Any Direction” or “Any Timeframe”. This

means that trades in any direction or any timeframe will be included in the analysis, however, only

trades that were tagged with “Entered Too Soon” are included.

The report shown is Insight’s Overview Report. A video on Insight’s Overview Report can be found on

YouTube or our Facebook page. Click here to access the video. Notice that this trader is not profitable

when “Entering Too Soon”. This gives the trader valuable information and now they now that they

either need to stop entering too soon, obtain more data to see if the poor performance continues, or

change another aspect of how they are entering so that the results become profitable. Insight’s

Overview Report is just one of many reports and analysis tools.

To watch a video on how to use many of Insight’s tools together, including an example of using the

custom tag “Entered Too Soon”, visit our Facebook page or YouTube channel. You may also click here.

Figure 9: Filtering Results for Trades Tagged with the Custom Tag “Entered Too Soon”

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TRADES 1. Manually Entering Trades

To manually enter a trade simply slick on “+ Add trade” under the Trades section. There you will find

all the different pieces of information you can record for each trade. If you have questions on what to

enter in each field, Insight’s active help on demand provides basic explanations. Included below are

instructions for selected features of the Trades section of Insight.

1.1. Max Move (also referred to as Maximum Favorable Excursion)

The Max Move is the maximum value of each trade prior to the trade hitting your stop loss. The Max

Move field is important to enter because it allows Insight the ability to evaluate your trade

management against potential results. Insight’s Strategy Tester, Percent Captured Report, Curve

Generator, and All Trades Report depend on this field being populated.

If a trade never hits your stop loss, then you have to use some judgment on what to enter in this field.

Some examples of how to best use this field if your stop loss isn’t hit are included below.

Example 1: You enter a day trade with no intentions of holding overnight. You enter the

trade at 100.00 with a stop loss at 99.00. The trade goes on to trade up to 102.23 and then

back down to 101.97, before rallying and closing at 103.73. It never traded down to your

stop loss of 99.00. The next day the stock continued higher. What should you enter in the

Max Move field?

Answer 1: Enter 103.73. The fact that the stock traded higher the next day is not relevant

because this was a day trade, not an overnight position.

Example 2: You enter a swing trade at 50.00 with a stop loss at 49.00. You typically only hold

swing trades 2 to 5 days and have difficultly holding through big drawdowns. This stock went

to 55.00 after 5 days. After 10 more days the stock traded down to 49.39 but never hit your

49.00 stop loss, before taking another month to trade up to 60.00. What is an appropriate

value to enter in the Max Move field for this trade?

Answer 2: It’s likely most appropriate to enter 55.00 for the max move. This is because the

stock went to 55.00 in 5 days, which is about the max of your planned holding period. Also,

since holding through huge drawdowns is difficult for you, you would have had a hard time

holding through the huge drawdown to 49.39.

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Insight Tip – Using Max Move Appropriately

Another way to think of the Max Move is to think of it as the maximum move you could have

reasonably expected to capture with your trading plan and your own trading psychology. The

example below illustrates this point.

You enter a swing trade at 100.00, with a stop loss at 99.50. You risk $1000 per trade (i.e. your

risk unit is $1000). It moves to 102.00 almost immediately (up $4000) and you exit the trade

per your trading plan at 101.63. It then moves back down to 99.59 the next day. The

instrument than chops around for two months between 105.00 and 100.00 almost hitting

your stop loss several times before moving higher over the course of several months to

117.00. Although 117.00 is technically the maximum move to date it’s unlikely that you would

have been able to hold through all the chop to reach that target, therefore, the most likely

appropriate value to enter in this field is 102.00. However, if you have extremely good

patience and your trading plan is such that you expect to hold for lengthy periods of time

through a lot of chop, then perhaps 117.00 could be entered. You need to ultimately decide

what the most appropriate value for this field is.

1.2. The Difference Between an Error and Notification

Insight will check trades for “errors” and “notifications” and give you symbols next to a given trade

for either one. The error icon is an exclamation point and the notification icon is a flag.

An error is an indication that something is sufficiently wrong with the information in the trade that

the trade cannot be included in your analysis. For example, the total exit share size is greater than the

total entry share size.

A notification is simply an indication that there is something still open with the trade, for example,

perhaps you have not entered the Max Move yet for that particular trade.

Insight Tip – Filtering for all trades with an error or notification

The Trades section has a field to search for trades. This is very useful as you get more and

more trades into Insight. To search for all trades with an error you can type “error” into the

search field. To search for all trades with a notification, you can type “notification” in the

search field. This tip can also be found in Insight’s active help on demand bar when you click

in the search field.

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2. Importing Trades

We made trade importing very easy. Under the Trades section simply click on “Import trades from

CSV file”. When you do this, you will see a list of supported brokers. Simply click on your broker. You

can also watch a video on trade importing by visiting our Facebook page, YouTube channel, or by

clicking here. If you don’t see your broker on our supported broker’s list, please e-mail us at

support@insighttradingjournal.com, and we would be happy to work with you to add your broker.

Insight Tip – Why we recommend manually entering your trades

While auto-important is a very popular feature, we still recommend manually entering trades.

The reason is simple. There is some very important information that your broker just won’t

have. For example, how would your broker know what strategy the trade was, what

timeframe the trade was based on, what the trade source was, or what custom tags might

apply. For this reason we recommend manually entering your trades each day while you trade

or after the trading day. The alternative is either going back later and entering this information

or not doing it at all. If you don’t do it all, you are putting yourself at a huge disadvantage to

all those traders that are analyzing their trading in more detail. If you want to thrive in this

business, let alone survive, you must be willing to put in a little extra work – this is especially

true when it comes to trading follow up, chart reviews, and analysis of your trading results.

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ANALYSIS 1. The various sections under analysis

There are four sections under the main Analysis section of Insight. These sections are Summary,

Comparisons, Curve Generator, and Strategy Tester. These sections can be seen below in figure 10

under the filters.

Insight Tip – Viewing your analysis tools in dollars or risk units

At the top center of Insight’s analysis section, you have the ability to select a “$” or the letter

“R”. See figure 10 below. This allows the various reports and tools to be displayed in dollars or

Risk Units. If you don’t know what a Risk Unit is, see the next Insight Tip for an explanation. For

traders who have different strategies that risk different amounts, it will be more appropriate to

view your reports in Risk Units. For example, if you have some day trading strategies that risk

$50 per trade and others that risk $250 per trade, viewing a comparison by strategy in risk units

will provide a more accurate assessment of which strategies are performing best.

2. Insight’s Analysis Filters

Insight’s filters are what allow you to analyze every area of your trading. Shown in figure 10 are the

filters you can choose from, including the custom tag filters which make Insight fully customizable.

Filters apply to all of Insight’s analysis tools when one or more filter is selected. Below are the filters

you can choose from.

Direction (long, short)

Timeframe

Strategy

Source

Any Custom Tag

Date Range

Quarter

Earnings Season

Non-Earnings Season

Any combination of

filters

Figure 10: Insight’s Filters and Four Sections of Analysis

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Insight Tip – The Risk Unit (R) and Reward-to-Risk

Professional traders typically don’t speak in terms of percent gains; this is reserved for

investors and talking heads on TV. Understanding and using the risk unit is important for the

aspiring professional trader. To have a risk unit, you have to have an entry price and a stop

loss. Without a stop loss, it is impossible to have a risk unit. Let’s look at the example below.

In this example, the trader has entered this trade at 100.00 and placed a stop loss at 99.00.

This means the trader has risked $1.00 per share. The trader has a share size of 1000 shares

so the risk unit on this trade is $1000.00.

The next step is to evaluate this trade’s reward-to-risk. You can see that the trade’s target

price is approximately two risk units away from the entry price. This means that the trade has

a reward-to-risk of 2-to-1.

Insight Tip – Don’t underestimate the importance of reward-to-risk

Trading is a game of odds. Even the prettiest looking trade with a poor reward-to-risk should

almost certainly be passed on. Of course there are exceptions to every rule in life, but in

general you should only be taking trades that have a minimum reward-to-risk ratio of two.

This way, when you do get a trade that reaches its full potential, it will pay for many of the

inevitable losings trades that should cost you no more than one risk unit each.

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3. Insight’s Overview Report, Under the Summary Section of Analysis

Insight’s overview report contains stats that every trader should know about their trading. At a

minimum every trader should understand their overall batting average and sharpe ratio. The

incremental and/or cumulative profit may be turned on or off by clicking the legend below the chart.

To watch a video on this report click here.

Figure 11: Insight’s Overview Report

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4. Insight’s All Trades Report, Under the Summary Section of Analysis

Insight’s all trades report shows each trade’s net profit and each trade’s max profit. It is a very

powerful yet simple way to evaluate how well you are managing your trades. You’ll notice in figure

12 that the black bar above the white bar represents each trade’s maximum profit potential, while

the white bar represents the trade’s net profit. You can turn on/off either series by clicking on it in

the legend to the right of the chart.

Figure 12: Insight’s All Trades Report, Includes Net Profit and Max Profit

5. Insight’s Percent Captured Report, Under the Summary Section of Analysis

Insight’s percent captured report shows you what fraction of trades are capturing each percent

captured level. This report uses percent captured levels of 10% and rounds down. For example, if a

trade captures 48% of the maximum move, then that trade will be in the 40% level on this report. This

report also only includes winning trades.

Figure 13: Insight’s Percent Captured Report

Insight Tip – What is a “Good” Percent Captured

Typically, you should strive to capture between 30% - 60% of your trade’s maximum move on

average. If you are capturing under 30% on average and as a majority of your trades, you may

want to see if you can develop a more profitable trade management approach.

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6. Insight’s Comparison Reports

Insight’s comparison reports can help you see where your trading strengths are and where you need

to improve. They include the following reports:

Direction (long vs. short)

Day of Week

Time of Day

Timeframe

Strategy

Trade Source

Some examples of these reports are shown below.

7. Insight’s Day of Week and Time of Day Reports, Under the Comparison Section of Analysis

These two reports will ensure you understand any trends in your performance throughout the week

and throughout the trading day. Since Insight is designed for swing trading and day trading, the Day

of Week and Time of Day reports exclude any trade that has a timeframe assigned as “Daily”. This is

because these are assumed to be overnight (e.g. a swing trade) trades, and by excluding them these

reports will remain accurate for analyzing day trading performance.

Figure 14: Insight’s Day of Week and Time of Day Reports

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8. Insight’s Strategy Comparison Report, Under the Comparison Section of Analysis

This report allows you to see how each of your strategies compares to the others in terms of

performance. Keep in mind that if you risk different dollar amounts for each strategy, this report will

be more appropriately viewed in risk units. This report also shows you how “No Strategy” trades are

performing.

Figure 15: Insight’s Strategy Comparison report

Insight Tip – Using “No Strategy” Reporting to Develop Discipline

When you are first starting out trading, it is very difficult to know what trades to take. You

likely just received an education and have many tools at your disposal. Don’t worry, this is

normal. However, during this period it is very important that you do as little damage to your

account as possible while developing your skills and learning what you are good at. You can

minimize the damage by recognizing that you will very likely end up taking trades that are not

in your plan. When you do take these, risk a very small amount (e.g. $20) and categorize each

trade as “No Strategy” within Insight. When you do this, it’s likely you will begin to see how

damaging these results are, and this will begin the process of changing your psychology to a

more disciplined approach.

As you progress as a trader, you should be taking fewer and fewer “No Strategy” trades and

begin to focus more and more on what is working best for you.

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9. Insight’s Curve Generator™

Insight’s Curve Generator is a tool used to plot equity and risk unit curves alongside potential profit

curves. A potential profit curve is a theoretical curve that is plotted using various percent captured

levels. For example, if you plot the 30% capture curve alongside your actual equity curve, the 30%

capture curve would represent what your equity curve would look like had you captured 30% of every

trade’s move. The Curve Generator only includes trades where a max move was entered.

To plot various percent captured curves, or potential profit curves, simply click on the series to the

right of the chart.

Figure 16: Insight’s Curve Generator, Showing only a Cumulative Net Profit Risk Unit Curve

Important Note: It is worth noting here that while Insight’s Percent Captured report only includes

winning trades (it is used to analyze how well you are managing winners), the Curve Generator

includes losing trades as well. It was designed this way because otherwise the equity curves plotted

would always be rising, which wouldn’t be helpful or accurate. Due to this, a lower percent captured

is generally acceptable. While a percent captured above 40% is pretty good on the Percent Captured

Report, it is great for the Curve Generator – this is because losers are included (as a percent captured

of 0%), which brings the average percent captured down.

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Insight Tip – Using the Curve Generator™ to Evaluate Improvement

Over Time

One way to use the Curve Generator for more than plotting your risk unit or equity curves is

to plot these curves alongside some potential profit curves and see if you are improving over

time. Let’s look at an example. In the first figure below you will see that this trader is

capturing on average 20% of the move on all trades for the strategy plotted, including losers

being counted as 0% capture. For the strategy plotted, you can see that the performance is

pretty consistent and the trade management approach is performing consistently by

capturing about 20% over time.

Now in this next figure, you will see that the trader’s net profit curve is getting much closer

to the 10% capture line.

This alerts the trader that their performance is getting worse. Now you might be thinking

that any drawdown will alert the trader to this, but that is not necessarily true. Notice that

the 20% capture curve plotted is still rising pretty aggressively, this shows that there is still

plenty of profit potential in these trades. At the very least this trader should do a little extra

trade follow up to see what is going on before this drawdown gets worse.

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10. Insight’s Strategy Tester™

Insight’s Strategy Tester™ is a unique and easy to use tool that compares your actual trade

management results to an all-or-nothing approach. Let’s take a look at what it includes; please refer

to figure 17 below. The chart on the left shows you what percent of your trades reached various target

levels. For example, you can see in figure 17 that about 30% of this trader’s trades reached a 2R target

level; that is, about 30% of this trader’s trades reached a reward-to-risk level of two. You can also see

that very few trades reached 4R or greater. This tells the trader that this strategy isn’t very conducive

to the home run trade. The strategy is far more profitable when going for a base hit and exiting the

trade near 2R.

The chart on the right shows your actual results as a horizontal black line. The white area chart shows

potential results at various target levels. Anything above the black line is money left on the table.

Leaving money on the table is a fact of trading, it can’t be avoided; however, if there is too much

white area above the black line the trader should consider changing their trade management. For

example, had the trader used a 2R all-or-nothing management approach, the results could have been

19R, instead of only 8.09R. The best trade management approach is also summarized beneath the

charts.

To watch a short video on Insight’s Strategy Tester, click here.

Figure 17: Insight’s Strategy Tester

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Insight Tip – Using the Strategy Tester™ to Improve Your Trade

Management

The Strategy Tester compares your actual trade management to an all-or-nothing (AON)

approach. The AON approach is a type of trade management that does nothing, and allows

the trade to either reach its target or its stop loss. Using an AON approach is not necessarily

practical, because it can be very hard psychologically to watch a trade move in its intended

direction and to do nothing for a long period of time. Due to this, use the Strategy Tester as a

starting point for evaluating your trade management. It’s not necessary to switch your trade

management to an AON approach just because the Strategy tester compares your

management to AON. However, if you are routinely not capturing enough of your trades and

leaving too much money on the table, a management adjustment is likely necessary.