Importance of maintaining a trading journal

In the life of investors, the scope of a proper guideline is very narrow. There is no proper guideline to teach them what trading is. Indeed, you will not need an educational degree to start a career here. But it is also true that some protocols are only understood by the investors and for outsiders, it is pretty difficult to decipher them. So, it becomes a bit difficult for the newcomers to understand the market sentiments.

Now, you cannot expect to understand all the medical terms unless you are a medical student. Similarly, you might not understand the important trading terms unless you learn them. The biggest thing is that you can never stop learning. You might also not be able to understand all the topics within a single day. You will require some time to get a grasp of the trading lessons one by one. To do that you can follow a simple step. It is to learn from your own experience. Yes, you can truly do that. To do that, you will need to maintain a trade journal. A trading journal is the best way to take note of what has taken place in a single trade.

Why are trading journals important?

Maintaining a trading journal is a sign of a disciplined investor. Some who is willing to be a consistent investor in the market needs to give up many things as well as to develop several qualities to be a better investor. Many times, it is observed that investors are experimenting with many new things to come up with their preferred trading style. This mainly happens at the beginning of the trading career of an investor. Since they lack many things during their amateur days, they need to be dedicated enough to make sure that they are developing their trading skills. Improving your skillset will be much easier when you have advanced knowledge about different asset. Visit and enhance you skills so that you can evaluate your performance in a professional manner.

When they get to evaluate their work properly then they can understand where their weaknesses are. They may lack in some places which can only be understood when those trades are analyzed at any other time. Not only the mistakes but also the strengths of an investor are also understood when he studies his previous deals. For that reason, an investor needs to maintain a trading journal.

When should one write their trading entries?

Now, an investor needs to find out in which medium he prefers to maintain the trading journal. Some might want to do it manually and maintain it in the form of books or notes. But recently, most investors maintain it digitally using spreadsheets. The pick a time for recording the entries, usually at the close of their trading day. Now, many investors like to hold their positions for a single day while many hold their positions for an extremely long time, even months in some cases. But, it is necessary to maintain all the records regularly as being late would make a trader forget about many important details.

The best time for reviewing a journal is when a trader is beginning his trading day. No matter when an investor starts, it is a good idea to check up on their trading journals at least once a day.

What should it include?

This is a question that is frequently asked by investors. An ideal trading journal should include all the strategies and trading plans of an investor. You should always be careful to write down all their money management policies every day to keep an eye on their investment. It should also include market studies as well as the influence of economic events. Furthermore, one should also be careful to include an economic calendar in his trading journal for a better fundamental analysis.

The best thing about a trading journal is that you can learn from your mistakes. As a result, they can be sure not to repeat mistakes in their trades again.

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