Do you have the habit of writing a journal? What do you write in it? You must be writing about to do activities, and memorable event or just anything in particular. It helps you to keep a track of your life and enables you to know the important and valuable things that matter to you the most. If you have a journal, then you must have tried to read what you wrote in the past. When you see them, what do you feel? You must feel happy when you see the accomplishments and get fired up to work more. Again, you might feel how much you grew up as a person within that time. You realise the mistakes you have made in the past and what you did to resolve them. A journal truly helps you to evaluate as a person.
In the same way, maintaining a trading journal can help the UK trader to evaluate his ways of trading at the end of the day. A trading journal is a log where a trader notes down all his actions, plans, outcomes of a trade. In simpler words, a trading journal is used to record the input and outputs of trading. It is helpful to identify your weaknesses and strengths in your trading style. Since you also need to note down your monetary transactions in it, it makes you more accountable and helps in money management. The main purpose of a trading journal is evaluation. So, when you evaluate your previous trades, you get to know your best strategies and the loopholes. Thus, it gives you the chance to cancel out the loopholes by acting accordingly.
Therefore, as a trader, you should maintain a journal to evaluate your trading as well.
But you cannot input random words or numbers in it. Then it will be tough for you to understand what you wrote when you try to analyse it in the future. There are also some manners of continuing a journal and today we will be discussing them.
Different types of record
You can keep your records anywhere preferable by you. You can note down in a diary or if you prefer working online, you can maintain spreadsheets. Even though using spreadsheets decrease the hassle by a lot, you can use a diary if you are more comfortable with it. Many professional traders often relies on the online trading journal which track their trading account changes automatically. But this automated process is often ignored by the experts. The use the old fashioned way and note down the details of each trade in the manual way. Recording each steps in the market using such approach provides significant advantage to sort out the problems at trading.
During the weekend, you can revise your trading journal and know about the weakness of your trading system. But if you rely on a digital journal, you will not give enough emphasize on your portfolio. To avoid hassle in the trading profession, the novice traders are asked to develop the habit of using the old paper based trading journal. If you find it hard, start with the digital journal and make sure you are evaluating the results at the end of each trading day.
Identify important information
An ideal journal should contain information like trading strategies, entry and exit price of trades, loss and profit amount, reasons why a trade failed or won etc. Never write stuff that is irrelevant to your trade. Also, try to keep your journal as minimal as possible. But to identify the critical information, you will always need to use a premium broker. Read this article and learn about the professional broker. Remember the fact, without using the professional broker, you will not be able to identify the critical information at the right time.
Using keywords in a trading journal can save you a lot of time and becomes easy to understand a situation better. You can use the short form of words like, instead of writing Forex every time, you can easily denote it with FX. Thus it saves you time and space. You don’t have to write things in details while using the trading journal. Use short forms from the start and this will save huge time. Never make things complex by using long form of keywords. This will make things lot harder when you try to deal with the intense market volatility. Try to make your trading journal as short as possible so that you can easily take better decision without having much stress.
Journal maintenance can be a bit of pain at times. But if you don’t keep a track of your trades regularly, you might miss out on the small details. And in trading, even the smallest thing matters. So, while the information is still fresh and you are conscious of every detail of a situation, note them down in your journal. Note down every single thing. It will also save you from forgetting anything important. Never stop updating your trading journal as it will make things really hard. Follow strategic steps in each steps so that you know the INS and OUT of your trading actions. By doing so, you will be able to change things super-fast and this will make you more confident.
Now, writing a journal won’t be of much use if you do not check and evaluate it properly. As a trader, you should sit with your journal before every trade. Check up on how you traded previously considering the situation and find out your mistakes. Also, look for the solutions of the mistakes. That way, you will be fully prepared to start a new trade.
A trading journal is like a personal guideline for a trader. It is also a way to check out if your trading strategies are working or not. So, if you still don’t have a trading journal, don’t just wander around. Go and prepare one immediately.