Why Trading Journals Are Vital

Your whole trading history is documented in a trading diary. It entails recording the outcomes of each deal so that you may subsequently evaluate your overall performance. Keeping such thorough records also enables you to make factual conclusions when you're unhappy and questioning your trading strategy following a string of unsuccessful deals.

The majority of new traders minimize the value of keeping such a log because they assume they will have no trouble remembering their biggest failures or wins. But keeping such a daybook is not simply a means to remember mistakes; it is also a way to preserve detailed records of your trading activities, which will help you determine the strengths and weaknesses of your trading strategy.

When you start having disappointing trading outcomes, which cause demoralization, trading logbooks seem to be helpful. You need to consult your diary when you can't always pinpoint the precise cause of the disappointing outcomes.

providing answers to inquiries like “Is my trading system still working？” Taking a look at your prior trading sessions would make answering questions like “Should I keep trading the same method despite my recent losses？” more simpler. For instance, you can discover a departure from your original trading plan that you weren't even aware of.

A thorough data log can also help you spot certain periods of time when, despite following your trading plan, your average earnings are off by a given percentage. This could be a result of the seasonality of some events, the frequent publishing of economic figures, etc.

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Maintaining a thorough trading log is mostly intended to stop you from acting impulsively, which will eventually save you money. To the extent possible, you must record all sorted data, including trade entries and exits. It's also helpful to take screenshots of your trading session on your platform to keep track of your thoughts and to visualize everything.

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When maintaining a diary, there are a number of actions you need to do. Before truly committing to a position, you must first list your motivations for applying. This manner, a rationale that is impartial to potential disappointment and that you may utilize afterwards is assured. Another benefit of maintaining a

The advantage of using a daybook is that you can organize it as a spreadsheet to create an equity chart and see the entire profit from a single trade or a series of deals. After a losing run frustrates you, a chart like this one that displays a positive balance of your trading history may be utilized to lift your spirits and boost your confidence.

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Why Trading Journals Are Vital

Prior to making a deal, you should write down your views to force yourself to reconsider your approach. You shouldn't carry out the order if you can see that you are taking the position for any other purpose than to carry out your plan.

The so-called “revenge trading” should also be avoided. It often occurs when a novice trader has a protracted losing streak or an unanticipated large loss, which frustrates him and compels him to make a quick transaction in an effort to recoup his losses. This typically has a domino effect and results in further losses. Experienced traders with years of trading under their belts would likely stay untouched and unfazed by such an incident, but newcomers to the market should handle it by taking a break and clearing their heads rather than risking additional money without thinking it through.

Exit strategy is equally important as Exit-the-Account-icon-0827114029 Second, before taking the job, you should also write down your departure strategy. In other words, it is necessary to arrange and record all aspects of a transaction ahead, from the entrance to the exit, in the trading notebook.

In order to prevent sentiments of uncertainty or greed that may surface during the transaction, it is essential to have a pre-planned exit strategy. The easiest method to ensure an objective departure point is to have it written down before feeling under pressure since people are impulsive and unreasonable. Naturally, you may decide to deviate from your original plan when trading, but you must first analyze why by examining your notes.

Third, if you have changed from your original intention after leaving a trade, you should note why you terminated a position. This makes you pause and think. The most frequent cause of people deviating from their predetermined approach is a lack of discipline, which takes years of training to develop.

Record your screen.

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Screenshots, which represent trade entries and exits, are also seen to be particularly helpful since they give a precise representation of market movement and your position with a time stamp. A screenshot will help you recall how a certain deal went even if you can't.

Without the pressure of being in the market, picture precisely what you were seeing at the moment. This enables you to evaluate your plan of action further.

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The fourth and most crucial rule is to always evaluate your trading performance and absorb lessons from your blunders. You need to take your time and carefully consider not just your blunders, but also the positive movements you've made and what you might have done even better, after writing down your trades and taking pictures of the entrance and exit positions.

Having your mistakes recorded in your personal trading notebook, which you can go to even years later, is the finest method to learn from them. Since every scenario is unique to you, you cannot find this knowledge in any book or lecture. These thorough records will reveal not just your skills but also your best transactions and your flaws. A log with a long history will enable you to see a pattern in your most lucrative positions, which you can then concentrate on to make even more money. Professional traders strive to minimize their flaws while utilizing their strengths. They have a strong sense of self-awareness.