Online trading is a rather complicated activity, but you can master it very well by adopting some tips and advice. The best traders make it their duty to write a daily trading journal. Yes, it is indeed a newspaper where the trader tells everything that happened during his day. The objective is to improve its performance even further. So how do we do it?
What is a trading journal?
Like a teenage girl’s diary, a trading journal is a written medium on which the trader tells about everything that happens in her life as a trader. Contrary to some popular belief, it is not a trading schedule or program on which the trader would rely to make the right decisions. Nor is it about setting trading objectives.
While remaining focused on trade, it is more a question of putting on paper the decisions, impacts and emotions felt. You can then do it on paper or create a special Word document dedicated to the psychology of the moment. The way things are reported on paper will not always be the same depending on everyone’s strategy. You can use a notebook to make your journal but the most modern ones will go through a spreadsheet as excel to make crosses, cross-references to have the performances in the form of visuals or tables;
How to describe your trading?
First of all, it should be stressed that keeping a trading journal should not interfere with trading itself. Thus, it is not advisable for the “scalper” to write his moods in the heart of a trade. Indeed, he must stay focused and keep an eye on entry and exit knowing that his decisions are made to the second. However, there is an interesting option to keep track of the sessions: the use of a dictaphone. The trader can then describe the trading day once the rush has calmed down.
Things are easier for an intra-day trader. Indeed, after opening a position, he just needs to manage his emotions well while monitoring the trade. He can then take the time to describe everything that happens, what he does and how he feels. He should not hesitate to write down every detail of what happens: fluctuations, his feelings about variations, his hopes, his convictions… He can also comment on current events while writing his fears. Every detail can be mentioned. This allows the trader to describe his decisions and how he has managed the trade.
So how can you improve with the trading journal?
The trading journal therefore contains all the thoughts and actions of the trader. The most interesting thing is that the latter does not necessarily remember everything. This is easily understandable as the tension is at its height in the middle of trading.
By reading this journal, it is possible to better understand your own trading psychology, which is very beneficial especially in the case where the trade has ended in failure. This allows the trader to adjust his way of doing things and make improvements if necessary. When he is calm, he can better reflect and identify the best actions and decisions in view of the situation. The trading journal is therefore a very interesting tool for improving both the way you act and your attitude.
In summary, the trading journal gives the trader the opportunity to observe his trading style. He can correct his mistakes through a “post-trade” analysis. It is a very effective way to improve, make better decisions and adopt a winning attitude.
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