Reader question: why write down prices or chart by hand?

Here’s the first in a series of posts answering reader’s questions. Bob asks:

Adam, question for ya if thats alright… I was noticing on part of your free course it was referring to writing down closing prices of a few select financial instruments each day… what is the rationale behind doing something like that?

Bob is referring to a module in the free course where I talk about both charting by hand and writing down prices periodically as an exercise. This is one of the more controversial suggestions I’ve made over the years. When I see trading forums where people recommend my work (which is always flattering and appreciated, by the way!), it’s not uncommon to see someone say something like “just ignore the part about writing things down by hand.”

However, the suggestion to do so is not a casual suggestion, and I have many emails and messages over the years from traders who say that this simple exercise transformed their results. Most recently, a trader who was on the floor a few decades then traded a few systems off the floor for the past 10 years found my work and dedicated himself to doing some hand charting. He’s now profitable and credits this exercise with developing both intuition and analytical skills.

So… this may seem strange, but don’t dismiss it too quickly!

Computers are important and we couldn’t do most of what we do without good support from technology. I’ve spent a lot of time coding and developing systems, tools, screens, and frameworks that help me manage a large amount of data on a daily basis. I’m not stuck in the past…

But there is benefit to picking up a pencil. When you do this, it slows your brain down. I’m convinced it engages a different part of your brain. My experience as a creative artist (classical composer) echos this—my first drafts were almost always done with pencil and paper, despite the fact I had top quality notation and transcribing software. There’s also recent research that shows students tend to learn better when they take notes by hand instead of using a computer, probably because another layer of thinking and analysis goes into this kind of note-taking.

So there are three answers:

1) it slows you down and makes you look deeply. Computers and easy access to charts, scanning and screening tools—all these things give us breadth and the ability to see many things. This exercise makes you go deeply into one thing.

2) It engages a different part of your brain. It encourages rhythm, whether that is every 5 minutes or every day; simply writing down current prices keeps you engaged and focused on markets. Looking at a chart is very passive/receptive. Drawing charts by hand (and/or writing down prices) is also active/creative. You will see differently.

3) It works. I’ve experienced it in my trading, and so have many other traders. The naysayers are generally struggling, developing traders who, and I say this with all respect, might not know what is a good thing to do and might not know where to focus their time. I have not had one, single experienced trader do this exercise and tell me it was a waste of time.

What will it cost you to find out? A total investment of 10 minutes (maybe) over the course of a week? Try it and see what it does for you!


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.