Why You Should Keep a Trading Journal
Do you keep a trading journal? If not, you could be hindering your progress and success as a trader. In this infographic and post, we’re delving into some of the most important reasons why to keep a trading journal.
What is a trading journal?
In a nutshell, you can think of a trading journal as being like the day trader’s equivalent to a ship’s voyage log. A trading journal is a means by which you monitor your progress as a day trader, noting what you did during the day, what processes or methods you employed, and what results you experienced.
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The format of your trading journal can be tailored to your personal style. It might be as simple as keeping notes with an actual notebook and pen, or it might be a detailed document and spreadsheet on your computer. Regardless of the format, when executed with frequency and consistency, your trading journal can turn into a powerful tool to help your career advance.
How can a trading journal help advance your day trading career?
There are a number of ways in which a trading journal can help you become a stronger trader and become more financially successful. Here are just a few:
Identify trends and patterns. As you keep track of your trades over days, weeks, and months, chances are that you’ll begin to see certain trends emerge. You may notice that you’re frequently exiting trades too early or late, for instance. In this way, your trading journal can give you insight on where you could use some improvement. On the flip side, it can also help you identify how to make more money by repeating and refining past successes.
Stay accountable. Your trading journal forces you to stay honest with yourself about what you are (and aren’t) doing. This element of accountability can be a powerful motivator. When you know that you’ll be logging your day’s activities in your journal, for example, you’re less likely to take an extended break during peak hours.
Track your emotions. In your trading journal, you can (and should) log how you feel emotionally during your trades. This can help you identify when you’re making emotionally driven decisions to your detriment. Overall, observing your emotions during different phases of the trading process can help you improve your trading psychology.
Monitor progress toward goals. As a trader, it can be easy to lose track of how much progress you’re actually making day in and day out. However, if you faithfully maintain a trading journal, you can flip back on occasion and really take a look at how far you’ve come and how much closer you are to attaining your goals.
Keep this infographic by your work area as a reminder of the many benefits of keeping a trading journal to improve your career, increase your confidence as a trader, and ultimately, to help you make more money!
Do you keep a trading journal?
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