Why Do You Need a Trading Journal? 📝
Updated: Feb 3, 2022
📖 Trading Journal is a crucial element in your trading education.
Even though the majority tends to neglect it, in fact, it is considered to be the essential part of a daily routine of a professional trader.
In this post, we will discuss why you should keep a trading journal & how it enhances your trading performance.
Let's start with the obvious:
✍️ Trading journal is applied for recording your trading positions:
winning and losing ones.
With that, you can monitor your current performance, identify the mistakes that were made and examine your decisions.
❌ Analyzing the errors you learn your weaknesses & the situations when it is preferable not to trade. You adjust your trading strategy accordingly in order to avoid similar mistakes in future.
💪 Examining the winning trades you learn about your strengths.
You identify the trading instruments, the trading setups where your strategy reaches the highest accuracy.
⚖️ Working with the numbers you can measure your investing exposure and calculate your account drawdowns. You can analyze your losing streaks & your long-term/mid-term/short-term account statistics.
📈 Analyzing the figures you can measure your progress over time by comparing your current results with the old ones.
😡 Keeping the record of your emotions, you can measure & quantify the psychological element of your trading. You may calculate the percentage of emotional decisions being made and their effect.
🌟 Consistent journaling makes you disciplined. It teaches you to strictly follow the rules of your trading plan & constantly learn from your mistakes in order to hasten the path towards a more disciplined and profitable trading career.
A trading journal should be simple and tailored to your specific trading style and the goals you would like to achieve.
I hope that my words will inspire you to keep a trading journal!
Do you have the one already?