I know you must have heard the majority of professionals say keep a journal. Did you listen? well if you didn’t you should. I started journaling in my early days of trading. I stopped cos’ I felt I could keep the knowledge in my head. My trading went well for a while until I just couldn’t remember a lot of stuff. Things went badly. I lacked discipline due to failed strategies, bad trading psychology, improper risk management, and all the issues the newbies face you can name them.
REASONS WHY IT’S IMPORTANT TO KEEP A JOURNAL AS A TRADER.
A wise man once said: ” a mistake isn’t a mistake when repeated twice it’s a choice”. I kept making the same choices every single time and felt bad after. You can call it a guilty pleasure. I did them without knowing why I did. You must have heard of words like FOMO (fear of missing out), FOL (fear of losing. okay I just made this up), REKT (wrecked), and FUD (fear, uncertainty, and doubt).
I can bet you if you keep a journal all these words will be things of your past. A journal helps to keep a record of everything; your mistakes, lessons from your mistakes, your backtest results, losses, profits, valid chart patterns, valid candlestick patterns, risk management and you even get to learn to read candles like the palm of your hands (that’s if you can read that). So are you ready to take the next step into improving your trading journey? if yes! I will tell you what I keep in my journal, why, and what it helps with. Let’s dive in!
THE CONSTITUENTS OF YOUR TRADING JOURNAL.
The first step is to pick a market you interested in. To be a better trader, you can’t be everywhere, trading every instrument you find in the market. As for me, I love the NASDAQ100 (the only instrument I trade) and XRP (because of investments and still doing my research). Then, of course, you not going to write on tissue paper get a book better yet a journal (I think it looks like the ones we call “dear diary”). Your journal should consist of the following;
- The date: you want to keep a record of when stuff happened, why it happened, what your reaction was when it happened etc. The date is important cos’ it makes you a detailed trader, not just someone following the crowd like you have actual facts for stuff.
If your someone without a strategy, you might want to be very particular about the next information which is;
2. Your setup/plan: This is a very important part of your trading journal because it allows you to build your own trading style, risk management pattern, strategy and develop better trading psychology. What it entails; time (time of the trade taken. NewYork, London, or Asian), key support and resistance areas, candles patterns, chart patterns, timeframe, entry and exits, the direction of the market, lot size (calculate the amount your willing to risk for that trade not win but lose).
3. The review: Now this is the part where you take down lessons and mistakes made in your trades. They should be detailed so that you can actually learn not to repeat them. Be careful to also write your winners; what leads to them (chart patterns, candle patterns, etc). Don’t just try it for the first week and dump or write and dump NO! revisit them, study them and watch yourself grow.
In my trading journal, because I have surpassed this stage it consists of: date, time of the trade, plan either long or short, risk (the amount I’m willing to lose), lessons from that trade (why and what), and the strategy used for that trade. If you found this useful do leave a comment, like, and share thanks!