All successful traders keep a trading journal!
Why is it so important?
The simple answer is that you need to develop a ‘learning loop’ (see the diagram on the right – a continual process of :
The trading journal provides the feedback mechanism, by keeping records of previous trades. Traders can build on their skills by examining their practices, performance, behaviour and gaps in knowledge.
A trading journal will help keep you organised and accountable. When you start to write your mistakes on paper, you will think twice about breaking rules or repeating mistakes.
Your trading journal has to be based on your own trading plan and provide your with a contiuous feedback on your performance both trading and emotionally. So while we can give you a sample trading journal (on the next page) you will need to customise it to suit your own plan.
One last point, there is no point in just keeping records – when you identify a weakness or a gap that affects your trading then ACT ON IT. Use your knowledge to improve yourself and in turn your trading business.
A day without learning is a wasted ay in a trader’s career!