Trading journals are easy to keep and you will benefit from one in more ways than you might have ever imagined.
If you want to separate yourself from the unsuccessful traders and give yourself a great start, then do yourself a favour and keep a trading journal. You will find the successful traders religiously complete their journals and for several good reasons, that they might not understand themselves, but we will take a look at why we think they are important.
First it is so important that a trader learns from his/her mistakes and successes in order to grow as a trader. Also to help refine your trading plan/style this in turn will make you more profitable. To help you do this you must document every trade review them periodically and make the necessary changes to improve your win rate.
Your trading journal does not have to be a very elaborate design. In fact if it is to intricate and it takes too long to fill in there is a very real chance that it might start to be counter-productive. It might end up taking more of your time and effort then you actually spend studying the charts and making your trades. You must stick a happy medium in order to both reap the benefits from keeping your journal and maximize your trading time. It can be as simple as writing down certain details of your trades in a note book, but it would be so much more powerful option if you have some excel knowledge, to use a simple trading spread sheet.
There are no hard and fast rules about which information must be kept but here are some ideas for you. See what works for you. Keep what's good and leave what's not it's your journal after all.
1. Date and time of trade (both entry and exit)
2. Which currency pair you traded.
3. Whether the trade was long or short (direction)
4. Trade size (how much you traded)
5. Trade entry size (point at which you entered the trade)
6. Trade exit size (point at which you exited the trade)
7. Net pips (gained/lost)
8. Net profit/loss (how much money)
9. Money management parameters (initial risk/reward ratio)
10. Stop loss (a must in every trade the point where you plan to exit the trade if it starts to go against you)
11. Profit Target (where you plan to close that trade and take your profit)
12. Strategy use
13. Market conditions
14. Screen shot of the chart used (a helpful reminder but not essential)
15. How you felt at every stage of your trade.
The last one #15 is a great exercise as we have explored in psychology 101 trading is not just about the nuts and bolts of the trade or your skill as a trader but a large part of trading is how you handle yourself in the market.
The last way in which your trading journal will help you is directly after you close a trade. It will give you time to calm down after a win or a loss. Time well spent gathering your thoughts and evaluating the situation. It will keep you from diving straight back into the market, especially after a loss, on what may turn out to be an ill-advised or risky trade.
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