Many traders want to know why they are struggling, what they can do to improve and what it takes to become successful. A lot of the time the answer can be found in a trading journal.
What is a Trading Journal?
A trading journal is the place where you record all your trades and other trading related activities. These records are kept for later review.
How can Keeping a Trading Journal Help You?
A trading journal can help you:
- Identify mistakes.
- Reveal your strengths and weaknesses.
- Identify periods and market conditions / regimes when you are trading well and when you are trading poorly.
- Track your progress.
- Identify what works and what doesn’t work for you.
- With keeping important stats like your win rate, profit / loss ratio, win / loss ratio, maximum drawdown and consecutive losses, number of trades, expectancy, etc.
The above is all great, but can only help you if you act on it. That is, using the information from your trading journal to improve your trading.
Keeping a trading journal and using its information will instill discipline, hold you accountable and ultimately improve your trading.
What should be in a Trading Journal?
The following is a good starting point of what to have in your trading journal:
- The date and time of entering and exiting the trade.
- The instrument you traded.
- The time frame you traded.
- Entry (why you entered, type of entry, etc).
- Stop Loss.
- Position size according to your risk / money management plan.
- Trade management and exit.
- Profit / loss amount.
- A screenshot of the chart.
You should be able to compare the info you record in your trading journal to that of your strategy. Even if you just start by recording the above info on the chart itself and keep it as a reference for future review, I do encourage you to make a start and give it a try.
A trading journal is a free trading tool that can be key to improving your trading, why not give it a shot?
Thanks so much for reading. Hope you and the family are safe and well.
Thanks and Regards,
Trading SOS SOS