By VIKRAM
When we were in primary school, we had a report card with all our marks and overall performance recorded over last one year, all mentioned in that one card…
Every international cricket match has a score card, with how much a batsman scored against how many balls,how he got out…same for bowlers, with all stats in one score card….
When I was working in sales & marketing profession, we had a daily report format…where we need to mention our daily customer calls, how many orders we booked, outcome of the meeting etc on daily basis…
So,every profession expects you to be disciplined in life by recording your daily activity….
So,same applies for Trading….
But Most traders don’t have a trading journal or don’t see any importance about having one….because, we all Traders(including me when I was new) are busy and running after that one “holy grail strategy”….which doesn’t exist…
But, why New Traders are not giving importance for Trading journal?
Reason could be, they don’t know how to create a trading journal or they don’t know the importance of it or they don’t know what to write in it.
Reason could be anything…..So, in this post, I am going to explain it on how to create a trading journal.
By the end of this post, you’ll know how to create Trading Journal and most importantly how it can help you to become a successful Trader.
So. Let’s get started….
Why every Trader should have a Trading Journal?
Every Trader should have a “diary” that records their daily trading activity.
Trading Journal will give you a big picture on your trading journey…whether you are growing as a Trader or No…what mistakes you are making and how to avoid those mistakes.
When I started Trading in 2004, even I didn’t have any Trading Journal neither I heard about that…I thought if I want to see which days I made money or lost money, anytime I can go to my brokers Trading history and I can see whether I made profit or Loss…But, that can only say which day you made profit or loss….but it won’t give you big picture, it wont tell you why you made profit on that day, on which pattern you made profit…where was your entry on your chart, which candle, where was your exit,where was your SL (stop loss), how much cumulative points you earned, reason to take that trade, what was your emotion before taking that trade etc etc…
If you have a trading journal, you can look back at your previous trades, which days you made profit,which days you lost, reason for taking that trade, identifying which patterns are helping you in making money and in which patterns you are losing money…
Focus on those Trades that are giving you consistent profits… and avoid those which are giving you losses….and that’s it….you have find your edge in your Trading.
How to create Trading Journal
Now, let’s see How to create Trading Journal and what all the factors need to be included in that.
Most of traders create their trading journal by just writing down their entry price, exit price, profit & loss, points earned/points lost etc.
But, it will only give you overall picture and won’t give you more details, like your emotion at that point, your analysis of the markets, why you took that trade, which pattern you traded etc…
That’s why your trading journal should have 2 parts…
One will have excel format with all your entry/exits/profit/loss etc on excel format and second, another folder with daily chart screenshot with exact entry and exits marked on the chart on candle itself, your emotion behind taking those trades, most importantly reason to take that trade and pattern you traded….
Only then you’ll get a full picture of your Trading activity of that particular Day….
Believe me…initially it may sound like extra work for you…but once you start doing it rigorously, you will really enjoy it….and you yourself will see improvement in your Trading performance and you will make it a point to record
all your Trades at the end of each day…
It has been years now, I have not missed a single day without recording my trades in my Trading journal and taking a screenshot of daily chart and marking precise entry and exits on chart, and mentioning reason behind those trades,mentioning patterns I traded, all in my trading journal format.
If you are wondering what exactly you have to put in your Trading Journal, then you need to have below points.
(at the end of this blog post you can see screenshot of part of my trading journal)
Next is, How to review your trading journal
This is where your “Aha” moment comes…
Go back to your trading journal and see which day you made profits and pull out that chart and see why you made profit and which pattern you traded that day.
Once you become an experience trader, and when you go back to trades and charts which you took trades during your initial days you will wonder how naïve you were to take such trades.
Look for pattern which lead to your losses and also patterns which lead to your winners…Focus on those patterns which are consistently giving you profits….
These simple adjustment can reduce your losses and help you to increase your profits.
Tools to prepare Trading Journal and saving your chart.
You can use simple tools like MS Excel or Google sheet for trading journal…For capturing your charts screenshot, you can use snipping tool or if you are trading with Tradingview, it has a option to take snapshot to to capture and save it in your folder.
Conclusion
Remember, Trading Journal is the one which differentiates casual trader from a professional Trader…..
If you are looking at Trading as a profession and planning to make a living or to make consistent money, then you should have a trading journal…. because, it helps you to find your edge, your strength & weakness, and improve your trading performance over the long run.
Believe me, maintaining a Trading Journal can really bring a change in your trading performance….initially you may feel like it is pain to enter all those details in the trading journal, but when you start analyzing it, after few days you yourself will realize how good decision it was to maintain a Trading Journal and how it is helping in your trading journey.
(If you have any questions or any suggestion put it in the comment below)
Check the below screenshot of my Trading Journal(due to space constraints you can see only 9 columns here)
