8 ways to keep your cool while trading
A trading diary/journal is essentially a log that you keep to track all of your trading activity. This will help you keep an objective view of your trading style, as well as assist you when making important decisions. Here’s a handy guide on how to create a successful trading plan.
Your trading journal should focus on three objectives:
- Supporting your trading plan/strategy
- Helping you make informed and reliable trading decisions
- Reviewing and amending your trading performance and future trading plans
Here are 8 tips to help you create and maintain an effective trading diary
- Keep a record of all your trades
This will allow you to look over all your past trades and you will then be able to notice a pattern of inconsistency. You will also be able to see where you have made mistakes and poor trading decisions meaning you can note this down for the future.
- Be honest when making notes in your trading diary
Make sure you are noting down why you made a certain decision and how you felt when the market moved in your favour or when the market moved against you. This will prevent you from making decisions based on emotions.
- Make sure you reflect on your trades monthly
Just note down what went wrong and what went well. Also, remember any changes to the strategy you made and then write down what you want to achieve the following month.
- Record your intentions
When you record each open position, make sure you think about why you wanted to make that certain trade, how you exited the trade and the end results of the trade.
- Do it straight away
Get in the habit of noting things in your trading diary before the start of each trade you make and after you exit the trade.
- Include the market
Not only are you writing things down about you as a trader but you should also be writing about the market conditions. This is so you have a clear understanding of all the factors involved when you are trading.
- Capture charts
Take screenshots if you can of intraday charts, you can then add comments to this and it will help you detect any patterns.
- Write down quantitative information about your trades
For example, how many trades you have made, the number of winning and losing trades and the end profit and loss figures.
Take a look at our article on the significance of trading psychology and if you missed our guide on creating a successful trading plan you can read it here. Try our free demo trading account and start accessing over 200 financial instruments with real market conditions.
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