What is a Trading Journal?
A Trading journal is a tool that you can use to keep track of all of the trades that you have made. It can be as detailed as you want and can be kept both digitally or on an actual journal. The surprising thing is that many people perceive trading journals to be a gimmick and thus forgo the benefits that they could attain if they kept these journals.
Trading journals have a lot of benefits such as giving you the ability to keep track of and monitor your progress, see which of your strategies and systems have the most amount of success, and help you determine areas which require improvement. Trading Journals can even be used to test the waters before you dive into an unfamiliar market!
A good Trading Journal is one that has information about each and every single one of your trades. You must not omit a trade because of any reason since the trading journal is not something that you keep as a source of pride or proof of your successes. The purpose of the trading journal is to help you review weaknesses in your trading methodology and help you bridge those weaknesses.
While writing your trading journal, remember to include as much relevant information about every trade as possible. Not only should you mention the profit/loss, but you should also include why you went long/short and what were the reasons for you being right or wrong. This way, you will have a lot of information once you sit down to review your trading journal.
Still, it is important to not be too detailed, since it might make it harder to stick to in the long run.
One last thing that you should try to do while keeping a trading journal is to write down your emotions. It is best to keep track of how you felt both in general and specifically about the trade before, during, and after you placed it.
Keeping track of your emotions will be of immense help during the review phase as once you become aware of them, you will learn to control them. Once you have contained your emotions, you will be less likely to make rash decisions which can only impact your trades in a negative manner.
