A diary for traders and a diary for emotions.
This is simple. If you do not control the effectiveness of their operations and if you don’t keep statistics, you’re playing the lottery.
The records of their operations help you control not only the trading process, but also their emotions. They show a complete picture of their struggle with the market. An image that you can then learn from.
Keeping a trading journal is not difficult at all. The most comfortable is to do it in an Excel spreadsheet or in Google Docs.
In fact, all you need from a trading journal is
the opening and closing time of the operation;
the name of the asset;
the volume of the operation or the size of the lot;
notes (what indicator, what system is used);
And the result
This table will give you many opportunities to analyze their operations. And more importantly, it will save you impulsive entries.
You will not forget anything on the table.
What else could be added? For example, an expanded description of reasons for entry or reasons for failure. A screenshot taken before opening a trade is very helpful. Some people even record a mini-video, but this is, in my opinion, unnecessary.
All these data are proof. And you show them to yourself later, whether the trade was successful or not. If it was successful, note that it was an excellent entry according to your plan. If not, take apart your errors and write them down.
This diary is treated with a lot of negligence. You shouldn’t keep these kinds of journals because you “have to” because someone has said something. You have to feel an urgent need to do it, to register your emotions.
How and when to do it? The easiest way is sincerity. Be honest with yourself. You cannot be successful in trading if you constantly lie to yourself.
Your job is simply to understand how you feel before, during and after the operations.
Typing a bunch of words is not an option, it takes time. It makes sense to create a keyword dictionary. Some even use hieroglyphics or emojis for this purpose as each emojis is a significant image.
By doing this, you begin to understand yourself much better. Every day we experience a fairly fixed set of emotions. Always fear, greed, boredom, joy (much less often than other emotions). In trading in general, emotions are complex, where a thought is followed by an emotion and vice versa.
By exposing your emotional portrait, you will immediately see their weak points. Let’s say the fear that the operation will not work. And what is this fear, their reasons?
Lack of practice (uncertainty);
you do not have enough confidence in your trading system (doubts);
you have violated money management and are afraid of losing it (fear);
you’re working your last dime and you’re scared (scared)
you’re sick of all the technicalities (impatience)
trade is lost (outrage).
What to write in the diary?
Everything related to trading: before, during and after. Trading is a set of skills and certain abilities, regardless of the specific techniques or tools chosen. And the final result depends on the systematization of your skills. It depends on how well you follow your own plan, how you execute it, and how you monitor it.
The diary must include
your motivations, why you got into this business;
what is the market for you, how do you evaluate and analyze it;
how you analyze mistakes and missed opportunities;
How do you track your trades?
Everything must be prescribed. You can have a simple list; you can have a complex program, whatever you want. Formalize your approach to operations. This is the only way to turn an amateur into a professional trader.
Take screenshots. Many of them with descriptions. At Tradingview, they are done with a button. You don’t even have to install a separate program.
Study your trading journal
The journal is a gem. Is his life trading. On weekends, when there are no trades, it is a good time to open it and dive into the study of your last trading week. As you review it, try to answer the following questions:
What was the correct lot size, considering the risks?
Was the entry as successful as you thought?
What tools could be used to improve it?
Did you think things through patiently or did you open a trade because you couldn’t wait?
Did you follow the trading plan when opening the trade?
What happened to the support and resistance levels during the trade?
Was there any big news?
By constantly asking yourself these and similar questions, you will learn to control their emotions and you will be able to treat the market as a regular and structured job, in which there can be no surprises, because you have thought everything in advance and know how to act in case of profits and losses.
What to do with the statistics?
Nothing complicated. The diary is actually needed for two things:
to find something that works; and what is known is useless.
The journal allows you to find answers to many questions regarding currencies, the best days of the week to trade, special instruments and much more.
if you follow their day trading, you are on the path to professional trading. In this way, you rely on structural logic and not on your memory, which regularly fails us, also due to the continuous influence of emotional factors.
Use it, regularly, do it yourself. Be honest with yourself. Talk to yourself, criticize, praise, if there is a reason to do so. don’t save all their emotions inside you, as they will later resurface through wrong business decisions.