Every trader should monitor his own progress and constantly develop himself. It will not only keep him up-to-date but also allow him not to make the same mistakes over and over again. There is a special tool that will simplify this process. It is called a trading journal. A must-have tool for every Binomo trader. Let’s see why it is so important to write it.
What does a trading journal include?
A trading journal is a place where you write some details about every transaction you make. It can be in paper or electronic form. Whichever is more suitable for you. What is important is to note all your actions in the Binomo trading platform so you have a possibility to review them in the future.
So, in the trading journal, you must write all your trades. But what details should it contain?
You should specify what type of trade you entered. What type of asset you traded and what amount of money you invested. Also how long the transaction lasted and how it ended.
Name the reasons that made you open this trade.
List the tools you used, the indicators, and the strategy applied.
Describe accompanying feelings. Whether you were excited at the moment of trading or nervous, tired or relaxed.
Where you traded. Was it from your home or way to work? Or maybe on your holiday. What the time of the day was.
Then, you can write whatever you think is valuable to remember about your trading. This is your trading journal and it should be tailored to your needs. In fact, you can discover some information listed above does not matter to you. But I suggest you begin from them and with time you will recognize better what kind of data you need in your journal.
The importance of having a trading journal
There can be found plenty of reasons why having a trading journal is so important. Here, I will tell you about three of them.
Help to start earning money
Beginners often meet many obstacles on their way. They do not know where to start, what asset to choose, which tools to apply or how to keep emotions in check. This is a normal phase that every trader has to pass. And the trading journal will help to deal with it.
Writing down from the very beginning each trade makes it possible to review past actions and learn from them. You will see when your transactions end well and when they do not. You can, for example, discover that the best time of the day for you is the evening. Or that this particular asset brings you the highest profit.
Moreover, you do not have to open trading positions with real money at the beginning. Binomo offers a special demo account supplied with virtual cash. So you can make transactions there, write them all in the trading journal, analyze what serves you and what does not, and then begin investing in the live account.
Helps to stay on the right way
Let’s say you know what time of the day is best for your performance, what kind of instruments and strategies. You have started to invest real money. And something goes wrong. You lose a trade, then another, you get anxious and nervous. You have to come back to the right way somehow.
This is the moment you should look through your trading journal. Investigate the circumstances around lost transactions. What external and internal conditions were. What the situation in the market was at that moment. Make a conclusion and go back to trading.
This is why it is so vital to keep the trading journal all the time, not only at the beginning. It will help you to catch the moment something went wrong and change the approach next time.
Help to outperform others
You naturally want to be on the winning side. Because there are always two sides, someone wins, someone loses. Additionally, there are brokers between. They take an average payout that an average trader makes and then they offer an average return. So to win, you have to do all to outperform others. To be on the winners’ side.
If you keep your trading journal from the beginning, you are already further than the traders who neglected this task. So be scrupulous and do not forget about the journal.
Making the best use of the trading journal
I am going to share 3 tips on how to use the trading journal in the most effective way.
Simplify your life
A trading journal can be kept successfully on paper. It is possible that this is the way you would prefer to do it. However, using a spreadsheet file will simplify your life. Modern technology is so advanced that the computer makes many things for you. You will save time as even complicated calculations will be done within seconds. And by having results faster, you will be able to evaluate your trading faster.
Make a table
Again, a trading journal can be written in many ways. For instance, in full sentences. However, reading long paragraphs takes a lot of time and makes it difficult to conduct fast analysis. That is why, I think, the best way to write a trading journal is in the form of a table. It simplifies things and allows you to assess the situation at a glance.
In the table, you can use symbols, single words, and numbers. You can prepare your own rating scale for the accompanying feelings, for instance. Make it simple and the analysis will be easier and faster.
Make it yours
Every trader is different so their trading journals will look different. And they should. The trading journal should be yours, should answer your needs. So get to know yourself well, understand your reactions and decisions. Observe how hunger, or sadness influence you. Maybe you are a person who works well under the stress, maybe not. Consider your risk tolerance. Some will prefer riskier trading as they are bored otherwise. But there are also people who would rather play it safe.
Think about your needs and preferences and include them in your trading journal. You can add whatever serves you.
Conclusion
A trading journal is a place where you keep track of all transactions you make. It is a very useful tool and you should write it from the very beginning. It will help you to understand your decision-making process better. It will help you to assess what kind of asset is better for you, what time of the day, and many other factors that influence your trading performance.
I suggest you write a journal in a computer file and in the form of a table. Do not forget it is a personal thing so make it yours by adding whatever items you consider important.
Do not forget about the demo account offered on the Binomo platform. Start there and you will get time to know yourself as a trader better and to know what your trading journal should look like to serve you optimally.
Wish you happy trading!