Why does a trader need a journal?
If you still do not make money and continue to lose money in the market, you definitely need to take care of keeping a trader’s journal. Any professional trader can confirm that.
Why do we need such a journal?
To make progress
If you write down every trade in the journal, in a week or two you will not only remember your feelings and emotions, you will also see your progress and thereby create a positive atmosphere for further trading.
It is a journal that helps a trader to turn the trading experience of one day into a trading experience of ten days. You can read about it in a book “One Good Trade” written by Mike Bellafiore.
To make your work easier
Objective understanding of the connection between the successes and failures of the past makes it possible to model successful performance in the future. Any intuition is based on one’s experience. And if you really have a desire to learn and succeed in the financial market, you must constantly record your achievements and misfortunes.
Many traders laugh at the idea of keeping such records. They say that they still remember everything perfectly and that’s a waste of time. And isn’t it ridiculous to lose your deposit over and over, mark the time, get angry, and give up when you are halfway?
Trading is hard work. And keeping a trader’s journal is an essential part, which can facilitate your work significantly. Along with risk management, money management and a trading plan, it’s something you are unlikely to succeed without.
Control your finances and your emotions
One should start keeping a trader’s journal from the very first days of one’s trading career, as soon as you’ve opened a brokerage account. How can one do it right? There’s nothing difficult in it:
- Write down the trading strategy and the entry rules you must stick to, as well as the number of trades per day and per month, the risk of a deal and the indicators you use. Take a screenshot of each transaction and a description for it.
- Track your emotional state before, during and after the trade. Fear, greed, excitement, anger … The trader’s feelings are extremely important, feel free to write everything that you feel and think!
- Sum up the results regularly on the weekends or at the end of each month. Calculate the number of successful and unsuccessful trades. Find out which currency pairs were the most profitable and vice versa. What timeframes and expiration dates gave better results. Analyze the screenshots, and filter the misleading signals.
As a result, you’ll get a detailed picture of your trading process. You will see which trades were profitable and why, and what you could and should do again.
There is the same thing about negative transactions. Analyze them, and each time you will make fewer and fewer mistakes of the same kind.
Stick to your goals
Write down your goals. You will come across them each time you read your trading journal and recall why you are making these moves and why you stopped at some point on your way.
It is important to remember that one keeps a journal for oneself. You must have a desire to do it, as well as an understanding what you need it for. Trying to work with the journal for a pure formality won’t do any good. Don’t waste your time beginning.
It’s up to you whether to keep a journal or not. Everything depends on your goals and plans. At best, you will end up with neither a loss nor a profit, and at worst, you will continue to lose … Or you would rather proceed along the path of professional trading and make progress.