|
By contrast, the person who does not keep a trading journal may improve over time, but that improvement will be much slower and more sporadic than if he/she HAD kept such a written record. Of course, most traders do NOT keep such a journal and that is why the vast majority show little or no improvement in what they are doing over long periods of time.
Ironically, Trading itself is very counter-intuitive and requires almost the exact opposite of the skills you learn in everyday life, and that serve you so well in daily life. Hence, if you have no way of reviewing, assessing, and thereby improving your progress, you are very unlikely to progress at all.
What sort of Trading journal should you keep? Clearly, the absolute bare minimum is to record the details of the trade itself; date, entry price, long or short, size of position, market entered, stop loss level, and so on. However, beyond that you need to record a whole range of other factors.
You should write a brief note about your reasons for doing the trade, i.e. the details of the trade setup itself. You should record your own level of certainty about the trade on a score from 1 to 10, where 10 is absolutely certain that the trade will succeed. Score yourself too at the same time, i.e. your own state of physical and mental alertness, again on a scale of 1 to 10. You may also wish to make brief notes about the external environment around you: is your life peaceful or are you going through hell at the moment? If you are a woman, you would definitely wish to record whereabouts you are on the monthly menstrual cycle, as this could definitely affect your trading.
I think you get the general idea. Record as much relevant information as you can that you think influences your Trading. Doubtless, you may come up with other factors that you will wish to record in addition to those mentioned. By all means, record those too.
Likewise, when you take a trade off, or are stopped out of it, make note of all the basic trade data as before, but also record what took place during the trade, the mental/emotional processes that you went through, and most importantly make immediate note of any lessons that you learned from the experience.
If you continue to do this over the days, weeks, months and years of your trading career, it will be like gold to you. You will notice all sorts of trends about yourself that can only improve your trading. For example, you may notice that when you are most certain about a trade is when they are most likely to end in profit. You may find that every time you put on a position with a mediocre chance of success, you lose. If you even record what you ate that day, you might discover that every time you eat a heavy lunch, your trading suffers!
The point is that you can only improve upon what you know about, and you can only know by maintaining a continuous written record that you review regularly. So, my advice to you is start your trading journal today!
Online Trading Rebel Home
[../inc/footer.php]