Getting started with your own trading journal is actually quite simple. At its most basic, you could create a well-structured excel sheet.
Once you’ve configured your trading journal to meet your needs, it’s time to think about how to keep it up to date.
A well-maintained trading journal containing details – data, charts, and notes – of your trades can arm and empower a trader to increase his chances of success while lowering the risk quotient. Of course, getting the most out of the trading journal is dependent on how well and frequently it is reviewed, as well as some practical takeaways gleaned from it.
Here is an outline to help you keep your journal.
Trades done: Log in all trades with the stock name, time of transaction, entry and exit price, trade size, target and stop loss, and other relevant information.
Supporting charts: Technical indicators and trendlines can provide a more visual backdrop in this case. Aside from the levels of support and resistance, the exit and entry points can also be useful.
To support the data points, including a chart of the trading period adds a graphic element to the details.
Additional texture with notes: Having some of your thoughts and observations can give a personal touch to the journal entry that can be invaluable later. Including some of your own thoughts and observations can add a personal touch to the journal entry that will be useful later.
Along with the numbers and images, adding some texture in the form of notes will help.
Though keeping a trading journal is one of the most important factors in a trader’s success, day traders or short-term traders find it difficult to keep a journal due to the time commitment. It may be counterproductive and result in missed trades when an opportunity arises.
You do not need to record every single trade you make; instead, make a note when something significant occurs so that you can review your trades and determine what worked and what did not. You could even take screenshots of your daily transactions, organise them in folders, and review your trading history instead of keeping a handwritten journal.
It is not always good news
Many traders fail to keep journals because of failures and mistakes they make along the way. Instead, you should make observations, try to identify trading mistakes, and avoid making the same mistakes again.
Given the utilitarian nature of a trading journal, and in order to get the most out of it, there are some steps and best practises to setting it up and running it.
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