Every good trader has his tricks and secrets. But you consistently find different similarities amongst the top traders. On the one hand, it is of course the key-skills like discipline and persistency.
On the other hand, many successful traders answer to the question: “What is the secret of your success?” with: ”my trading diary”.
Why a trading diary at all?
There are several reasons for that. The main goal that is tried to be realised with a trading diary is of course the improvement of one’s own performance.
On your road of becoming a good trader; discipline is a must have and discipline requires control. Here is where the trading diary comes into play.
Through exact charting of the single trades and the reasons why those trades were actually conducted you can retrospectively exactly say where potential weaknesses hide. Without detailed documentation this would not be possible.
A short example: You are an enthusiastic soccer player and regularly go to soccer training on Wednesday evenings. When reading your trading diary you notice that over the last months; you had a particularly weak trading performance on every Wednesday. This could cohere with the fact that on Wednesday during the day; you were already thinking about the soccer training and haven’t completely concentrated on trading. Thanks to your trading diary you can get wise to such patterns and correct your mistakes.
Those who made a mistake and do not correct it, will commit another one (Konfuzius).
A further essential reason to conduct a trading diary is that you should forget as fast as possible about an agreed or already finished trade, no matter if it ended with profit or loss. Only if you are “free” from your past you can fully concentrate on your next transaction. Thanks to the records you can “write the trade out of your head” and go on to the next trade without emotions. (emotion control is a very important aspect when trading)
Which medium should I use?
Of course, every trader is different and has his own preferences. Many still prefer a classic, physical book where they note their trades.
Another very simple opportunity is to just use a tabulator calculation program like “Excel” or “Open Office Calc”. Like this you can easily evaluate the single trades by links.
For all internet freaks conducting an own trading blog is ideal. Nowadays, everybody can very easily start a free blog by help of WordPress, Blogspot or other blogging platforms.
If you do not have any experiences with weblogs then we are pleased to help you. Simply write an e-mail to email@example.com and we are going to establish a professional trading blog for you.
Of course, you can give the trading diary a solid base and acquire a software with costs.
What should I note?
First of all, you should note the factors: Time, what have I bought, at which entry course, where has the trade closed, etc. Moreover, it is favourable to also note the reason, i.e. why you agreed on the trade (if you conduct a trading blog, then you can also attach a screenshot).
But also psychology and physical well-being play an important role. So, everything what comes to your mind should be noticed (dispute with your girlfriend, bad lunch, …)
Retrospectively, i.e. a few days later, you can take another objective look to your entry and when something else comes to your mind then you can add a “subsequent-entry”
You can see: A trading diary turns losses of “play money” into “apprentice’s due”.
The best for you would be starting today! You will not regret it!