When you think of journaling, you probably picture a tween girl nibbling the tip of her pen while describing her first crush, or a sensitive youngster bottling up his hormones, putting down his thoughts on paper, and then crumpling it up. In any case, the connotation is far from adulthood. But is it?
Keeping a trading journaling is a very useful thing to do. It is your space for logging trading activities and your thoughts before and after deals. It is a proven tool of self-assessment, discipline, and planning. No successful traders feel ashamed when speaking about their trading journals. Instead, they are proud of how easily they’ve managed to improve their performance by mastering their emotions, applying simple metrics, and precisely following their trading plan.
Why journal?
Truth be told, journaling takes a lot of time and effort. When you first start, the benefits may not be immediately evident. Even so, two or three weeks in, you’ll enjoy the first results and be glad you stuck with it.
You may wonder, “Why on earth should I journal? I was fine before, lost money here and there, but who didn’t!”
That’s a fair question, and I have a quick and easy answer: the trading journal will discipline you, teach you not to give in to emotions, follow your plan, and make your strategy work. Over time your losses will become less random and unexpected, and market trends more comprehensible and predictable.
Remember - just W-R-I-T-E!
W – Write whatever you want. You may choose to put down any information, thought, or emotion that might be useful later for you personally. There are no strict guidelines here. Later in the article, I will provide some tips on what experts advise traders to document in their journals.
R – Review good and bad decisions. It is crucial not to concentrate only on your failures. Profitable deals are no less important to document in detail, as they are your goal.
I – Inspect successful traders. You need to realize what typical patterns may result in a profitable trade. The most painless way of exploring this is to follow and imitate the best market performers. You can do this with FBS via our CopyTrade app, which is also an excellent community of like-minded traders!
T – Take chart screenshots. Nothing is as descriptive as a real picture of price movements. Do not hesitate to save charts, along with your comments on what you see and how the market will change in the near future.
E – Explore your emotions. They are your worst enemies, as well as your only weapon. Trust and control them! When you see them described on a piece of paper, they don’t look as powerful and dramatic as they seem during a trade. Little by little, you’ll learn to channel the sentiments towards winning.
What to journal
Do you feel motivated to start? This is the moment when you begin to overcome your blank page. I’ve prepared a list of what you may want to record in your first trading journal.
1. Market conditions
First, decide on how you frame the market in general and who you are as a trader. You can take a short quiz and calculate your chances in Forex.
Financial markets are no place to relax, they are more of a ‘lull before the storm’ kind of venue. Nevertheless, they have rules and behavior patterns that you can explore, manage, and attach to your strategies.
With experience and an advanced feeling for the market, you will develop confidence that will help you feel like the king of the world when you win, and survive losses with dignity.
2. Your mental state
Record how you feel before a trade. Whether you are elated or anxious at the very beginning may be critical to your behavior, concentration, and ability to react quickly. Some trades are rather unemotional, while others give you the heebie-jeebies and make you whistle in the dark for luck. Your feelings during the trade are significant and not to be ignored.
This practice enables you to acknowledge your thoughts and the emotional triggers behind every trade you make. It gives you a sense of what states of mind you should be avoiding, trains you to handle pressure, and helps you capitalize on your strengths.
Once you learn to understand your behavior, the deals you close will get the boost they need!
3. A trade scenario
I don’t want to be a killjoy, but I will. Trading is not a fun gambling ride. If you still see it this way, quit before it is too late, and your account still features a beautiful ZERO.
Various paths may lead to success in trading, but some metrics make the market and your behavior in it more organized and structured.
To sum up all the mentioned info, here are some points you can use in your journal. The example does not use real market prices and calculations.
Date: 26 September
Trading instrument: EURUSD
Timeframe: 15 minutes
Entry: 1.09445 10:48
Exit: 1.09017 12:48
Position size: 3
Balance at entry: £20 000
Balance at exit: £21 035
Profit/loss: +£1035
Screenshots:
A screenshot of the entry point with a precise explanation of why you started trading at this specific point and where you put the stop-loss line. A screenshot of your chart at the exit point is no less important, as it will show you what happened after you left the deal. You can later analyze whether it was the best exit option or not.
Fundamental analysis
Write a few sentences about any events that influenced your decision to trade.
Technical analysis
Describe why you entered the deal based on your chart analysis.
Mindset
Note how you were feeling. Analyze if you were emotionally neutral or felt stressed, anxious, or angry.
Trading plan
At this point, you should assess whether you followed your plan and performed the actions prescribed by your trading system, or got led off-course by some other factors, or your emotional state. Be brutally honest!
Conclusion and analysis
Do not skip this section! All the previous steps were leading up to this one. Meditate on all your correct decisions, failures, and unexpected market situations. Soon, you’ll extrapolate the pattern of favorable conditions that lead to the best results for you. Also, you’ll be more engaged with your trades -a consistent and disciplined journal enthusiast.
Start journaling today!
Use your chance to invest in self-development and performance improvement. It sounds complicated, but it is 100% worth it!
In your journal, nobody will tell you what, how, or when to write down. You can be yourself - an independent self-starter with exceptional motivation and an unconditional drive to gain knowledge.
With your journal, you’ll soon learn to be a disciplined trader who follows the plan with robot-like precision, accurately predicts the results of market volatility, and records their path to success in their professional diary like all the successful pros do.
This is not mere flattery; this is the truth: you are a meticulous and thorough trader. With FBS by your side, you’ll be unstoppable.
Let your learning curve be productive!