What is a Trading Journal?
A trading journal is a powerful tool, and is either kept and maintained manually (offline), or hosted and made available to traders online. With it, traders are able to review, measure, and track their performances so they can develop their aspects of their technic as time progresses.
Keeping a trading journal is one of the best tactics to improve trading. Journaling might seem like a simple or easy task, but getting started can be highly challenging. Do you have a trading journal app on your phone? Keeping a professional journal is crucial in any performance or mission-driven initiative.
Keeping a trading journal is one the first steps towards developing one’s trading skillset.
How Important is a Trading Journal?
The transaction history from your forex broker provides some information, but it doesn’t reveal why you opened the trade or closed it. At a minimum, the trading journal should include the profit or loss for the day, the execution time, entry and exit prices, and notes about the market conditions. However, you can put much more in the journal.
How do you keep a good trading journal? Express any thoughts about making a trade you might have, including any explanations for why it succeeded or failed. The answers will be helpful to review later. The results can more accurately reshape trading strategies by providing details about your entry and exit points. The more information you include, the more insight you will have. You can review successful trade strategies and those that didn’t make the cut.
The bonus is that the stock trading journal is also about realizing your techniques and grasping your psychology. In other words, you need to understand how your emotions can work in your favor or not in your favor as it pertains to trading. Sometimes you second-guess yourself by overthinking and wind up screwing up the trade. You probably think you shouldn’t use your emotions in business, but your gut instinct is a highly effective tool. Don’t discard it as non-essential.
Do You Need a Trading Journal?
Most traders jot down information on their charts throughout the day, and while it’s true that one image can convey a story, it can’t tell the complete story. Besides writing about what didn’t go right that day or what did, new strategies, and market conditions, can be done in addition to taking a screenshot of the trading day.
Make sure to include some annotations on it. Save each screenshot using the date as the file name. You can keep them in a trading folder on the cloud or your hard drive. You may want to create folders for each month and year for easy access. Online trade simulators and free trading journal software make journaling convenient and easy to do.
Reviewing Your Journal
Since you’ve created a trading journal, you can review your notes for a particular month. You can identify problems, the number of trades you made, your strengths, losses, and trade results. Studying your journal is a positive way to work on your weak areas and improve your overall performance. That is why you should use a trading journal.