Forex Trading Diary: Why it is needed
Trading diaries are an important tool for any trader. You can use it to keep track of your previous trades. Diaries help you notice patterns and give a structured description of the market situation. It does not matter what exactly you trade. In any case, a trading diary will help you to better analyze your trading and improve your trading performance.
The benefits are many, but they can be summarized into two big categories:
Trading more consistently
You can use your experience to avoid mistakes in future trades. For example, you'll be able to take out emotion-based trading. Making trading decisions based on feelings rather than clear data never ends well. With a diary, you'll be able to set clear rules for entering and exiting a trade, for example. This way, you can develop a structured plan and make good profits from online trading.
The more information you have, the more data you will be able to analyze. Noticing patterns in your trading is very important. For example, you may make more money at certain times of the day. Certain indicators may work best on certain assets. All of these things you will be able to notice if you keep your journal consistently.
What to include in your journal
In short, you should write down everything at all times. Record information after each trade. Describe in detail the metrics before the deal, during the deal, and key closing details. You can write down how you felt about the deal and how you did it.
Ideally, you will have complete data on all your deals. Then you can analyze them and draw conclusions.
What to record:
- The date of the transaction;
- The time of the trade;
- The configuration that led to the trade;
- The market in which you are trading;
- Lot size of the position;
- The long or short position;
- Price at the time of entry;
- Price at the time of exit;
- Stop Loss;
- Profit or loss;
- What you risked.
Screenshots are also very useful. Save the charts at the time of entry and at the time of exit. Later you will go back to your diary and be able to see market trends.
You have closed the trade and entered all the information. Now you need to record your impressions. Write down what went well and what went so-so. Add simple descriptions and definitions - sort of tags.
It is very important to describe how you feel when you are trading. This is an opportunity to assess what is affecting your trades. You may have missed an entry point due to absent-mindedness, or maybe you got out too early due to nerves. You may be trading on emotion and not even realize it.
Such factors are not easy to quantify. Nevertheless, they are very important in understanding your trading behavior. For example, whether your risk aversion is causing you to miss opportunities or whether you are losing money by taking too much risk.
Over time, you will compile a detailed database of your trading behavior. This will allow you to develop strategies to increase profitability and work on behaviors that are causing losses.
Paid trading diaries
One of the most practical innovations for traders are programs that connect to your trading platform and automatically create an interactive trading diary for a fee. These tools also offer intuitive charts, commentary and tips to help you improve.
Notable for its gamification feature that challenges traders based on their performance. This is a fun way to put into practice the lessons learned in analysis. The program also integrates with well-known platforms such as MT4, MT5 and cTrader.
In addition, Edgewonk offers user-friendly dashboards with clear layouts. The program analyzes the characteristics of your trade and shares ideas on how to improve your technical trading.
Popular for its artificial intelligence feedback and automatic profit and loss calculation. The program also automatically syncs with supported brokers. This saves you from having to manually enter trading information.
Tradersync is one of the best logs you can buy online. The program can be used in many different ways and includes sample trading setups, information on how emotions affect trading, market research, and more.
Free Trading Diaries
If you like simplicity and don't want to spend a lot, use these resources:
- Microsoft Excel;
- Google Docs;
- Google Sheets;
- Apple Numbers.
Trading diaries are structured records of your investment activity. They allow you to look back and analyze what worked and what didn't and improve your trading performance in the future. Consider keeping a diary or diary to improve your skills!