During trading, a lot of questions are bound to arise pertaining to your ability to make adequate profits to keep your business venture afloat. These questions owe to the fact that trading is a continuous learning process and what may have worked a few years ago may not work for the current economic climate and as such, you need a guide to show you when you get off track. The more track you keep of your trades, the more your insight and hence the more experienced a trader you become with time.
Recording milestones is a method that is used to help people become better at what they do. This practice has been taken up by scientists who realized that if they kept track of all their achievements and setbacks in each experiment, they had better chances of realizing what they wanted. In the same manner, keeping a trading journal is one of the key steps towards realizing adequate profits from your business.
Benefits of keeping a trading journal
With a tracking journal, you can record the earnings and losses that you have made from each trade in a detailed manner. When recording a trade, it is important that you jot down as much information as is useful to the determination of what went wrong or right in the form of the date of entry as well as the hour during which the trade occurred, the moves you made during the trade, the size of your positions, the reasons behind the opening or closing of the trades as well as if the outcome was negative or positive.
You do not have to write down the information in full sentences and neither does your grammar have to be correct. All that matters is that you can understand what you have written down when you refer to your notes at a later date. If you can jot down a few words that make sense to you, that will save you a lot of time.
You should have a strategy when trading as it helps you achieve your goals better when compared to operating without one. Reviewing your trades helps you tell whether your strategy is working towards your goals or not and should you find that it is not going the way that you hoped it would, you can make a few tweaks here and there to help you reach your goals.
Reviewing your trades helps you learn from your mistakes. For example, you may find that you have not been having a reason as to why you are entering or exiting a position and that is the main reason behind your failures in trading. Learning from your mistakes helps you make better decisions in trading in future.
Once you have gotten a hang of what works and what does not work for you, you will be able to come up with good strategies. Keeping track of your trades will instill a sense of discipline in you that will help you better deal with trades.
With time, you will be in a position to see the bigger picture involved in the whole trading process which will help you put what you have learnt in the past into good use.
We advise you to start recording in your trading journal as from the first day of your trading career for the best results. If you are already trading without a trading journal, get one now and keep track of each milestone as you watch yourself grow into a more experienced trader.