The secret to success is always sought by traders. The key to being a successful trader is having a plan and knowing what tools you need to implement it.
As a trader, keeping a trading journal will help you become more successful. Essentially, it is a record of everything that happened during the transaction. Include the market conditions, the size of the trade, the expiration time, prices, whether or not you were successful, and even your emotions. Personalize your journals according to your trading style.
It may seem tedious and time-consuming to keep a journal at first. Although you will learn discipline and consistency from recording your trades, both are beneficial in the long run. A closer look at the benefits of maintaining a trading journal follows.
Notes can be used to determine which trading strategies are effective, and which might be worth revisiting. Make sure you keep a close eye on what charts you are using, what patterns you are watching, and how certain events affect your trades. The underlying mistakes that cost you money will eventually become apparent. A false signal could have fooled you if you exited a trade too early, set your stops and limits at the wrong places, or set your stops and limits at the wrong times. Write things down so you don’t make the same mistakes again.
If traders have detailed records of past trades, their strengths and weaknesses can be better understood. It is a good idea to write down your feelings – it will help you understand if you are making business decisions based on emotion, and thus hurting your business. As a trader, a trading journal gives you valuable insight into your strengths and weaknesses.
Keeping your progress in perspective becomes more difficult the longer you trade. You will be able to remember what you want to accomplish if you write down your goals. Looking back on where you started and seeing how far you’ve come serves as a source of inspiration as well. As a trader, you can keep track of your growth with a trading journal, which helps you gain confidence.
Trading journals have a number of advantages; the reasons above only scratch the surface. Entry into a journal need not be tedious. You can design them however you want, as long as you include the most important information that is useful for your trading style. Feeling creative? Get started today!