Today we will talk about what most traders avoid and underestimate: the Trader’s Journal.
Traders believe that the Trader’s Journal is a waste of time, but in fact the Trader’s Journal directly affects the trader’s income.
Why keep a trader’s diary?
If you keep an honest and unbiased journal, over time you will get many statistics of entries, exits and emotions experienced when trading.
This is a useful database that will help identify weaknesses and recurring errors, helping to correct them and not repeat them again.
What should I write in the diary?
Date and Time of the occurrence of the signal.
The chart at the time of entering the market, for clarity, you can make notes justifying the trader’s actions. If the work is done on graphical analysis, then markup is necessary.
The result of the negotiation. Regardless of whether the trade is closed by take profit, stop or ahead of schedule manually, it is advisable to attach a chart.
Comment. The trader’s ideas about entering/exiting the market are briefly stated here. It is advisable to register emotions, for example, “the signal complies with the rules, but there is a feeling that it is not worth entering” or “the chart has not reached the Fibo level a little, the volume has decreased”.
This is the minimum necessary.
You can also add the following elements to the report:
maximum layout in percentage and in the currency of the deposit.
The state of capital after the closing of the position.
duration to keep the transaction open.
Losses due to swap, spread.
How not to keep a diary
The key violation of the rules when keeping a diary is a frivolous attitude towards it. If you keep a diary just to fulfill a formality, then it won’t be of any use. With this attitude, important information about psychology and emotions is guaranteed to be missed.
If a trader is lazy, does not accompany the transactions with illustrations of the state of the market, forgets to make part of the transactions, the value of the report decreases.
Trade analysis and their emotions at the entrance
When analyzing trade, the most difficult thing is to give their shares a sober assessment. If, for example, you placed a limit order in violation of the strategy rules, and this caused a loss, you do not need to explain your error by external factors.
That is why it is extremely important at the time of entry to indicate not only the technical characteristics of the transaction, but also the emotions. No one will control the correctness of keeping a diary, you have to learn it yourself.
As for the analysis, after accumulating a series of statistics, first of all, look for emotional losing trades. This is one of the most common mistakes made by traders. I recommend starting trading optimization with this.
A trader’s journal is a tool that indirectly affects trading results. Teaches you to work in a measured way with an assessment clear from each entry point. Keeping a journal allows you to remove the emotional component of trading over time and therefore improve results.
I recommend getting into the habit of keeping a journal from the start, entering information about all transactions into it. Regular analysis will show weaknesses in trading, it remains only to eliminate them and continue trading. To make the task easier, you can use helper services that collect an array of statistics in automatic mode.