Trading Journal: Important step towards Professional trading

By | September 1, 2019 7:36 pm

Elite performers in all competitive fields study the past to help improve their ability in the future. The same goes for elite traders. Today we will disucss 3 reasons why you should keep a trading journal.

You’ve most likely heard it before that journaling can be used to improve your trading, but for whatever reason may not have tried it before. Maybe it was too tedious or too time consuming? Regardless of your rationale against journaling, I do think you should reconsider.

A good parallel to this is the world of professional sports. You have athletes that have physically trained their whole lives to be the best at what they do, but a large part of their routine is reviewing past matches, games, and learning their opponents. They look for weaknesses in their game in order to improve themselves and look for weaknesses in their opponents to exploit them. This is the exact same attitude a professional trader should have when they review past trades. Consider the following 3 reasons to begin adding a journal to your trading routine.

  •  Trading Journals Increase Trading Consistency

The most basic use of a trading journal is to increase consistency. This is done by detecting errors made on your previous trades and making sure you do not make the same mistakes again. You will want to review each setup and review your rules to make sure that you are following them correctly.

Some obvious errors would be reading system signal incorrectly . Some harder to detect mistakes might be opening a trade too early without letting a setup to fully develop.


  • Journals Keep You Accountable

Depending on the route you take, trade journals will keep you accountable in one of two ways. Either you will keep your trade journal private and review it on your own, or allow other traders to take a look at it and give feedback. Both methods are effective and will help keep you accountable.

If you go the personal journal route, it’s probably easiest to keep your thoughts and screenshots inside a Word doc (although a physical notebook could work to simply jot down your thoughts.)

If you go with more of a public journal, you will probably want to record your trades and thoughts on an online blog or forum. This will allow traders from anywhere in the world to see your trades win, lose or draw.

Whether you are reviewing your journal yourself or allowing people online to review it, this gives you extra incentive to place clear, valid trades on your account and make it more difficult to deviate from your strategy. You will know in the back of your mind that you will have to face your decisions later on in your journal and possibly have to face others if your journal is public. This will help you become more aware of times when you let emotions dictate your decisions rather than your strategy’s logic or when you decide to “get creative” and place a rogue trade without a strong basis for it.

It’s good to have accountability. Many traders can fool themselves into thinking they are rationally making trading decisions only to find out later that they didn’t follow their strategy at all.

  • Journals Help You Improve Your Trading Technique

Diligently looking at your trades over and over again is what separates ‘minor league’ traders from the professionals. Seeing how each trade plays out you may discover tweaks that can be made to further improve your strategy. Getting better every day is what it’s all about, and having a journal to go back and review can certainly do that.

Trade Like a Professional Athlete

Trading is hard and it’s competitive. It is clear who the winners and losers are and in order to be the best you need to emulate what the best do. It takes a little bit of extra time to journal, but it could make all the difference. Create a journal to increase your consistency, increase accountability and improve your trading technique.

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