How to keep a trader journal?
Why you need a trader journal
It would be nice to have a computer in your head to manage you while you’re trading. But none of us have such a computer. We learn to control all our actions and suppress fears, greed, and emotion ourselves. It is uncontrolled emotions, haste, and recklessness that most often interfere with earning. With a journal you will easily understand exactly what’s blocking you. After that, the main thing is not to forget your weaknesses while trading!
Trading journals are kept by such well-known traders as Warren Buffett and George Soros. Nothing can prevent us from approaching the matter like a professional. You can start right now!
What to write in your journal
Your journal should contain the following information:
- a detailed description of the trading strategy (including the conditions for concluding transactions);
- a description of your established money management rules (including strict control of the risk percentage for each transaction and the allowable loss percentage per day);
- a daily trading plan (including the release time of important market news, your trading time, and trading assets).
All this will be necessary in order not to miss out on profitable moments and remind yourself of the basic principles and rules of trading.
While trading, consistently keep statistics on transactions, noting the following:
- the exact time of each transaction;
- the trading asset;
- the basis for opening the transaction (for example, the release of important macroeconomic news or signals from technical indicators);
- the result of each transaction;
- mistakes made;
- the path of error solution.
In the end, it is necessary to conduct a comprehensive review of your trading and draw conclusions.
You’ll see that soon you’ll eliminate all your template errors, and the number of winning trades will increase significantly!
Template example
The trader journal – it is as individual as your desktop. You will figure out what to write and in what order in the process of adding new items and removing old things you don’t need. You can start with this simple template:
| Trans
action |
Date and day of week | Basis for concluding the transaction | Trading asset | Transaction size | Transaction result | Errors | Error solution |
|---|---|---|---|---|---|---|---|
| 1. | Tuesday, February 28, 2017 | Trading system indicator signal | EUR/USD | 2% of the account amount | Profit | Transaction without errors | – |
| 2. | Tuesday, February 28, 2017 | Trading system indicator signal | EUR/CHF | 2% of the account amount | Loss | I didn’t wait for an accurate indicator signal, and I chose an asset that almost never has a trend to trade on a trend strategy. | Conclude transactions only on a precise indicator signal; only trade on trending assets |
| 3. | Tuesday, February 28, 2017 | Trading system indicator signal | GBP/USD | 4% of the account amount | Profit | I exceeded the size of trading risk for the transaction | Use no more than 2% of the account amount for the transaction |
| 4. | Tuesday, February 28, 2017 | Trading system indicator signal | USD/JPY | – | Could have been profit | I was afraid to conclude the transaction, doubting that the market would move in the right direction for me | Just follow the rules of the trading strategy |
| 5. | Tuesday, February 28, 2017 | No signal | EUR/USD | 80% of the account amount | Loss | I concluded a transaction without using a trading strategy; I significantly increased the trading risks | Don’t be impulsive and take a balanced approach to trading |
Don’t be lazy to fill out your journal and analyze your errors. Over time, you will learn how to manage your emotions and your money!
