Reasons Why You Need to Have a Trading Journal Today

If you don’t have a trading journal yet, these reasons will definitely convince you. Read on!

Historical Record

Over a span of time, your trading journal will provide a historical perspective. Not only will it summarize your trades—it will also provide, at a glance, the state of your trading account, showing each individual trade and the accumulated effects of all of your trades up to this date.

Basically, the trading journal makes good as your personal performance database and this can provide you with the ability to go back in time and determine how often you traded, how successful the trade was, which currency pairs performed better for you and even what timeframes gave you the best profit percentages.

Based on how analytical you want to be, you may be able to acquire a ton of information from your recording habit.

Planning Tool

Not only should a good trade journal record your actual trade data, but it should also offer information on what your plans are for each trade.

This feature enables you to consider each trade before you take it by setting parameters for where you want to enter, how much  risk you can accept on the trade, where your profit target will be set and how you will manage the trade as it proceeds.

In other words, the journal becomes a way for you to record your thought using actual numbers. It also makes it possible to convert wishful thinking into practical reality. It makes a basis of methods for planning your trade, and trading your plan.

Methodology Verification

Another very important result of keeping trading journal is the fact that, over time, it will verify your methodology. You will be able to see just how well your system performs in changing market conditions.

You may be able to know more about the manner your system performs in a trending market, a range-bound market, different time frames, and the impacts of your trading decisions, such as stop-loss orders.

In order to retain the full details for the logic behind a particular methodology, the trading journal must be comprehensive.

Mind Pattern Modification

Another useful feature of your trading journal will be the solid help that it provides in forcing you to change your habits from destructive to constructive. As you learn the best way to trade your plan, you will also learn to develop greater level of confidence.

Your profitable trades won’t feel so random, and your losses will be “planned for,” and thus won’t jig your psyche in a way that will make you feel that a loss means you are a loser.

Your confidence is a very important mental and emotional factor in trading. It is the antidote for the fear and greed cycle in which many traders from Forex Broker List will get caught. Fear and greed is a natural, hardwired response in most humans.

If you are winning, you want to win more; if you are losing, you feel fear and panic as your account dwindles towards zero.

Having a journal that gather your statistics sets up a trading plan by determining parameters of action needed. It also provides a rear view mirror like  LBLV Broker Review so that you can measure how well you executed each trade. Most importantly, it provides you with the feedback to develop and evolve your trading skills, is an extremely valuable tool for becoming successful.