Trading is a competitive field. Gain and loss are a part of trading, but how do you learn from your mistakes, form a strategy, and thrive in the business? A trading journal could help answer the question.
The global equity trading in the last quarter of 2020 stood at a value of $34.8 trillion. So how do you make your mark in this booming sector? Here, look at how journaling a trade might be of help and how you can do so.
What Is a Trading Journal and Why Should You Keep One?
A trading journal is where you keep track of all your trades. The usual information contained in these journals is the trade you made, the money you made or lost, the reason you decided to make the trade or not. Depending on your convenience, you can use software, service, excel sheets, or a notebook to keep track of your trades.
The reasons why you should journal your trades are:
- You know what trading strategies are working and what have gone downhill
- You can study data and improve on your trading tactics
- Consistent journaling, seeing your results and performance over time will help you develop a trading routine
- You can make your trading decisions backed by experience and data
- It can help you become a better trader in the long run
How to Journal Your Trades?
Use a Trading Journal Tool
There are various solutions available in the marketplace that lets you easily keep track of your trades and also provide a deep analysis of the numbers. These tools are available in service and software format, meaning you could pay for a subscription or buy the software.
The advantage of using a trade journal tool is that the user-friendly platform will let you input your trades and notes with ease. In addition, it will generate an in-depth analysis of the trades you have made and provide a comprehensive view of your account. With such reports and data, you can formulate strategies for making successful trades.
Leverage Excel Sheets
If you are familiar with using excel sheets, then you can use them for journaling your trades. You can create a simple or elaborate trading sheet depending on your expertise. It is not one of the most user-friendly tools available out there. You can input numbers quickly but making and reading detailed notes could pose an issue.
Good Old Pen and Paper
If you have the time to invest in noting down trades on paper, then do go ahead with it. The method you choose to journal your trades depends on your comfort and convenience. Ensure you are writing down trades on a daily basis for accurate data collection.
Keeping track of your trades, how well you performed or how much you lost, your thought process are the data points that you need to collect and analyze. A journal will help you gain consistency and formulate better strategies for success. A trading journal is the best pick among the various tools available as it is easy to use for studying and viewing your trades on a single platform.