Hey trader,
I have a notebook on my desk that has saved me more money than any indicator I have ever built.
It is not fancy. It is a paper blotter with a pen next to it. I have been writing in it for 39 years.
Every trade I take goes in that book. What I did right. What I did wrong. Why I broke a rule I already knew.
This weekend, I want to show you exactly what goes in it and why your own version could save you a decade of pain.
The same review discipline is what powers the signals inside my Genesis Cog Scanner, and once you see it written out, you will understand why I trust the process.
I have worked hedge funds, Fidelity, CJ Lawrence, and ThinkOrSwim. I have a CFA, a CMT, and an English literature degree where I specialized in Shakespeare and Robert Frost.
The notebook has outlasted every job, every credential, and every market regime.
The One Job the Book Does
The book has one purpose. It stops me from making the same mistake twice.
I take inventory of things I did right and wrong. I make notations. That is the entire system.
If I lose money on a trade, I do not just close it and move on. I write down what rule I broke.
When I open the book a year later, I am reading evidence in my own handwriting. The pattern is impossible to argue with.
Most traders skip this step because the next setup is already loading. The position closes, the screen refreshes, and the lesson disappears.
The 100% Rule
Here is what I have learned in 39 years of writing in that book.
If I violate any of my rules, I lose money. There is almost 100% probability I will lose on that trade.
That is not a feeling. That is what the entries show me when I read them back.
The rules in the book are not exotic. They are common sense, written down so I cannot pretend I forgot.
What Goes in the Book
These are the questions I write against every trade:
- Could I sit at a hedge fund table and talk about this company for three minutes without embarrassing myself.
- Did I keep the position inside my 4% size cap.
- Was the slope of the chart supporting my direction or fighting it.
- Did I act on a tip, a CNBC upgrade, or my own research.
- Did I break a rule I already knew by heart.
One yes on the wrong row tells me why the trade went bad. The book turns invisible patterns into visible ones.
Wells Fargo, This Week
Here is how the book worked in real time on Friday.
Wells Fargo is sitting on my radar. The value is compelling. I want to buy it.
I will not touch it. My blotter has too many entries that start with “bought on the way down” and end in a loss.
Everybody at Genesis Cog asked me why we are not buying it. My answer was simple. I do not buy on the way down.
That is the book talking, not me. I have written that lesson down enough times that I no longer need to relearn it with real money.
The Short That Could Not Lose
Compare that to the Burn Signal HIG short I closed this week. I shorted on the break, covered at 132, and walked away clean.
It was impossible for me to lose because I shorted on the way down when it broke. Same week. Same trader. Two opposite outcomes.
The book is the reason I knew which side of the slope I belonged on.
Your Assignment This Weekend
You do not need 39 years of experience to start. You need a notebook, a pen, and the honesty to write down the trade you wish you had not taken.
Open it tonight. Write the last five trades you remember. Note whether you broke one of your own rules on each one.
After a month of honest entries, you will see your version of “do not buy on the way down” written in your own handwriting. That is when the habit starts paying you back.
If you want the full framework these rules live inside, my Genesis COG System is where I put all of it together.
See you Monday.
Professor Jeffrey Bierman
Creator of the Genesis COG System
