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Trader’s diary. Why and for what you need it?
Are you determined to succeed in trading? If yes, then before you start your journey as a trader, you need to have a transaction log (so-called trader’s diary ), in where you need to regularly include a statistics for all deals.
Trading statistics is a key element in the initial phase of trading. Keeping statistics of transactions, by itself, is the only way the concept of yourself as a trader, identify own mistakes and miscalculations, as well as prevent their further occurrence…
If you haven’t started a trader’s diary while trading binary options, it is likely you simply don’t realize how valuable and useful it can be for your success. All professional traders share one common thing – they are successful keep their own trader’s diaries. Therefore, if you are still losing on the deal, then you should think about your own trader’s diary!
Why you need a trader’s diary
– What? Trader’s diary? Hah-ha-ha – how it is funny! Why do I need to start keeping it? I am fully confident that can always keep all in my mind! Why should I waste my own time on it, if I can remind myself everything?!
Nostalgically, the word “diary” reminds all of us about our school years. That is why we associate it with something unserious. In most cases, except the banal trader laziness, such kind of a perception will negatively affect on trading. But in the professional world of trading “trader’s diary” is a statistical document, which consists of trading statements. As a result of long time of trading, it accumulates information for further analysis. The conducted analysis allows to properly manage the risk of loss of investment, that is, to increase the level of profitability of the trading strategy.
So let’s be honest, over some time you will start to forget some really important details. It is natural that time dulls our memory, from this we can clearly remember the gist, but not the valuable nuances. Taking notes in the diary about every held transaction, you will be able to monitor your progress and compare past decisions and results with present.
Important conditions of keeping the trader’s diary
… Start and keep your own diary from the first days of opening a trading account with a chosen broker.
… Include in your diary note about your own trading strategy, rules of entry/exit in /from the deal. Additionally identify and designate: number of transactions per day/month, allowable level of risk on a single trade. It is important to mention the indicators and add screenshots of each trade with the notes (ideally with descriptions).
… It is recommended to keep a records about the emotion you have experienced before, during and after single trade. Write down directly about what you have felt at that moment, was it fear, anger, joy, excitement… Your psychological state is extremely important!
… Systematically try to sum up all results on weekend or on monthly basis. Specify: the number of transactions with positive and negative results; the most profitable/unprofitable assets (e.g. currency pairs); timeframes and expirity periods with best results. Also, include your own analysis of screenshots and cast away the false signals.
… Include the goals. Every time you reread your trader’s diary notes, you will automatically remember yourself something you are aspiring. Also, you will clearly understand the reasons of your stops and failures on the way to the desired.
So how to do it? For traders who keep the diaries doesn’t matter actually how to do it. You can start even making handwritten notes. Nope, it’s not too late to use the trader’s diary, because starting making notes is possible at any time. As practice shows, even an experienced traders often ignore this, regularly pull the time for capturing important information.
Please remember, that you always need to write down a complete information in the report about the operations. Hence, you need to note the key characteristics of each every trade (in addition to basic, such as date of trade, price, option type, result, etc., the you have individually determine what parameters will be included in your trader’s diary).
Regarding reviews, it is not worth too much bother and try to economically correct describe your thoughts, do it briefly by using understandable for you words about the reasons for starting deal and its result. In the end, each trader’s diary will be like a detailed report of the trade on the exchange. Also good to make briefly a further notes about your daily trading plan at the very beginning of the day. There also should be specified the possible price of support/resistance levels. As a result, the diary itself will be showing you is it possible to stick to scheduled trading rules and plan as a whole or not.
Taking into account all previously said, it is important to mention next:
» be sure to note all the necessary information about deal, immediately after its close;
» you should not hold back and falsificate even the smallest details, because you are the only one who are using this, and it’s in your best interest to have at hand truthful statistics;
» use electronic diaries – they are the perfect way to process the statistics and save time.
Don’t be lazy and monitor every trade! All this will allow you to improve your own trading strategy and achieve the desired results. Analyze your diary at the end of the day and at the end of the week/month. Write down all results and make notes in end of each held trade. In the process of trading statistics collection you need to analyze:
» the percentage of trades closed with profit and loss;
» estimate the strength of given arguments about the appropriateness of starting each deal;
» try to trace the patterns of time orders and time peaks of profitable trading.
Start to keep a trader’s diary or not is a purely your personal choice. All depends on the desires and goals that you follow. Perhaps you strive to winning real progress and achieve the way a professional trader or you simply comfortable with staying at same level with what is already gained.
It’s only up to you!
If there is real desire, then try for the beginning use a demo account from IQ Option, where you can also successfully start your trader’s diary and try your hand!
“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”
What is a trader’s diary and how to keep it?
What is a trader’s diary? Why do you need a transaction log? How to keep a trader’s journal? The answers to these questions can be found in our article.
Hello gentlemen traders! There are many examples of how useful a trader’s diary is, they are written about in books and professional traders speak, but not everyone uses it. Hence such disappointing Forex trading statistics. And all because novice traders do not want to keep a journal of transactions because of their laziness and as a result they fail because they cannot control their emotions and do not observe trading plan . Today you will learn what a trader’s diary is, why it is needed, how to keep a trader’s journal, and how it will help you to succeed in trading.
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What is a trader’s diary?
The trader’s diary (it is also called the trader’s journal or the transaction journal) is the statistics for all transactions that you made during trading. It is usually filled manually or lead to Excel. Many traders may argue about keeping a trader’s diary, as there are now many different services like MyFxBook that collect all your data about completed transactions automatically. Here you can see all the statistics about your transactions, maximum drawdowns, yield curve and much more. But MyFxBook does not replace the trader’s journal, it complements it, since the trader’s diary is not just a report of your trading, it is an indicator of your discipline. You can always go back to your trader’s diary, see which deals you have made, to understand the reason for your failures and how to improve your trading system.
Trader Diary Application
Trader’s magazine will be effective in all types of markets, including Forex and stock market. It can be used on any trading instruments, such as currency pairs, stocks, indices, futures, options, cryptocurrency etc. A trader’s diary can be kept regardless of which terminal you are trading in – MetaTrader, QUIK or web terminals. It will also be useful on real accounts and on demo accounts. If you want to improve your trading results, you need to start keeping a trader’s journal.
See also which Forex brokers are the most reliable.
How to keep a trader’s log?
There are several aspects for keeping track of a trader’s trade journal:
- First, we record the deals in the trader’s journal and only then open them in the trading terminal. This will prevent you from opening random transactions that do not comply with the rules of your strategy and your trading plan;
- Always take screenshots of your transactions immediately after opening a position and after closing it;
- Record comments, for what reason did you open this or that deal (the intersection of moving averages, the appearance of candlestick model , etc.), and why you closed it (the appearance of the opposite signal, closing by stop-loss or take-profit, news output, etc.);
- Set up a separate transaction log for the trader for each trading week and sort them by monthly folders, and keep monthly for annuals. It is very convenient and simplifies the search and analysis of transactions;
- View your trader diary for the week and month, analyze your actions and make changes to your trading plan, if required.
Create a table in Excel and write the following transaction information there:
- time to enter the market;
- trading instrument;
- order type (pending or market);
- buying or selling;
- the reason for entering the transaction;
- transaction volume;
- stop loss size;
- take profit size;
- reason for closing the transaction;
- The final result of profit or loss (in points and a percentage of the deposit).
See also which scalping brokers offer the best trading conditions.
The trader’s diary helps you understand how you control your emotions when opening trades, during trading and when closing positions, and how clearly you follow the rules of your strategy, trading plan and money management . After the end of trading, you can look at the transaction log in order to evaluate your actions from the side and understand what weaknesses you have that hinder you from trading profitably. For example, you may notice that you open trades too often, even where you don’t, that you take profits on trades too early or hold losing positions for too long. Thus, the trader’s diary allows you to soberly assess those moments that prevent you from succeeding in trading.
4 Reasons You Need a Diary for Both Good and Bad Forex Trades
You may wonder why it is necessary to keep a separate trading journal since just about every broker provides a real-time record of your trades. In fact, one could argue that the broker’s record also keeps track of available buying power, margin usage, and profit and losses for each trade made. Still, there are benefits to keeping a separate trading journal, and here is why.
Over a period of time, the journal will provide a historical perspective. Not only will it summarize all your trades, but it will provide, at a glance, the state of your trading account. In other words, it becomes your personal performance database, which will provide you with the opportunity to go back in time and determine how often you traded, how successful each trade was, which currency pairs performed better for you, and even what time frames gave up the best profit percentages.
Not only should a good trade journal record your actual trade data, but it should also provide information on what your plans are for each trade. This feature allows you to consider each trade before you take it by setting parameters for where you want to enter, how much risk you can accept on the trade, where your profit target will be set, and how you will manage the trade as it proceeds. In other words, the journal becomes a way for you to record your thoughts in actual numbers and makes it possible to convert wishful thinking into practical reality. It forms the basis of a method for planning your trade and then trading your plan.
Another very important by-product of a trading journal is the fact that, over time, it will verify your methodology. You will be able to see just how well your system performs in changing market conditions. It will answer questions like: How did my system perform in a trending market, a range-bound market, different time frames, and the impact of your trading decisions such as placing stop-loss orders, too tight or too loose? In order to retain the full details for the logic behind a particular methodology, the trading journal must be fully comprehensive.
Mind Pattern Modification
One of the most useful features of your journal will be the concrete help it provides in forcing you to change your habits from destructive to constructive. As you learn how to trade your plan, you will develop a greater level of confidence. Your profitable trades won’t feel so random, and your losses will be “planned for,” and therefore won’t ding your psyche in a way that will make you feel that a loss means you are a loser. A very important mental and emotional factor in trading is your level of confidence. Confidence is the antidote for the fear and greed cycle in which many traders will get caught. Fear and greed is a natural, hardwired response in most humans. If you are winning, you want to win more; if you are losing, you feel fear and even panic as your account dwindles toward zero.
Having a journal that gathers your statistics sets up a trading plan by defining parameters of action needed, provides a rearview mirror so that you can measure how well you executed each trade, and most importantly, provides you with the feedback to develop and evolve your trading skills. You will find a good trading journal to be a best friend and mentor as you make progress. (Market hours for Tokyo, London, and New York determine volatility peaks. Find out how in The Forex Three-Session System.)
The Two-Part Journal
It is recommended to set up a trade journal that accomplishes two main concepts:
- A chronological columnar list of trades you can total and aggregate so you can have a record of all your efforts. This is best accomplished by handwriting in the columns all the pertinent data. Of course, you can keep records using an Excel spreadsheet that can automatically do the math for you, and which will remove simple calculation errors. This depends on your own abilities in spreadsheet modeling.
- A printout of the actual chart you used to determine the trade, indicating your entry level, your stop-loss level, and your potential profit level should be clearly marked up on the chart. Mark the reasons you made the trade on the bottom.
Finally, you should set up a journal for each type of trading methodology or system you employ. Do not mix systems, as the results of your trades will derive from too many variables and will then be inconclusive. Therefore, if you have more than one trading system or methodology, you should keep a journal for each one.
Every trade you record should be based on only one particular system, which will then give you the ability after 20 trades or so to calculate the expectancy or reliability of your system.
Here is the expectancy formula:
Example: If you made 10 trades, and six of them were winning trades, four losing, your percentage win ratio would be 6/10, or 60%. If your six trades made $2,400, then your average win would be $2,400/6 = $400. If your losses were $1,200, then your average loss would be $1,200/4 = $300. Apply these results to the formula and you get:
or 40%. A positive 40% expectancy means that your system will return you an additional 40 cents over every dollar in the long term.
The Bottom Line
Once you know your system’s expectancy, you can act with confidence. Confidence is the key to execution. If you lack confidence you will not be able to execute your trades according to your plans and you will either second-guess yourself or become paralyzed from too much analysis of data coming in from the market. Make a trading journal your first trading habit. It will become the key to all your good trades in the future.
Diary of a trader. Why is it needed and how to lead?
Do you trade options, but still have not created a trading diary? You probably just don’t understand how important and useful diary keeping is for a trader.
If you still do not earn and lose money in the market, then you should definitely take care of creating a diary.
All professional traders have one thing in common – they all keep a trader’s diary.
Why do I need a diary
Over time, the details of important events for you become dull in your memory, you remember the basis, but you already forgot what you felt at that moment. By writing down every deal in the diary, after a week or two, you will remember yourself in the past, see progress, comparing it with the present, and thereby raise your spirits.
It is the Diary that helps the trader to turn the trading experience of one day into the trading experience of ten days. This is well written in the book by Michael Bellafiore “One Good Trade”. An objective understanding of the cause-effect relationships of successes and failures of the past makes it possible to model successful behavior in the future. Any intuition is formed on the basis of experience.
If you really have a burning desire to learn something and achieve success in the financial market, then you should constantly record your achievements. Many traders are grinning at such a thing as keeping records of their trade.
What? To keep a diary? Hah – it’s funny! Why do I need it, I have everything in my mind!
And to lose a deposit after a deposit, to stagnate in one place, to get angry, to throw everything halfway and give up – isn’t that funny? After all, not for the same thing you came here, right?
Trading is work, hard work, and keeping a diary is an essential part of it, along with risk management, a trading plan, without which you are unlikely to succeed.
There are no difficulties in keeping a diary. You just have to record important points of your trading. That’s all.
Criteria for keeping diary entries:
• You should start keeping a diary from the very first days after you have opened an account with a broker.
• Write down your trading strategy and entry rules in the diary, which you strictly observe. The number of transactions per day / month. Risk per trade. The indicators you use. Take a screenshot of each transaction and a description of it.
• Before buying an option, during and after the transaction, it is advisable to record your emotions at this point. Fear, greed, excitement, anger. The psychological state of the trader is extremely important. Feel free to write everything you experience and think!
• Take stock on weekends or at the end of each month. Count how many deals were positive and negative. Which currency pairs are the most profitable and vice versa. On what timeframes and expiration dates are better results. Analyze screenshots, filter out false signals.
As a result, a picture of your trade will be formed. You will clearly see which deals brought good results, what contributed to this and you will probably want to repeat them again. Similarly with negative transactions, analyze them and each time you will begin to make fewer and fewer similar mistakes.
Record your goals. Each time you reread the diary of the trader, you will return to them, remembering what you are going to and why you stopped on a separate section of this thorny path.
It is important to remember that the diary is kept for yourself. You must have a desire, a need for this business, an understanding of why it is needed and what it will give you. Trying to lead him for show, will not lead to anything good. It’s not even worth starting.
To keep a diary or not is up to you. It all depends on your goals and plans. Either you want to follow the path of professional trading and achieve success, or stand still and stay with what you have.
If You Want Something You’ve Never Had, You’veGot To Do Something You’ve Never Done. If you want something you’ve never had, you’ve got to do something you’ve never done.
(Richard David Bach)
Trading Toolbox – Why you Need a Trading Diary
Do you want to know more about the perfect forex trading toolbox? Watch our latest video to learn how to keep a trading diary and get profitable trading results.
Why you Need a Trading Diary and how to keep it
One of the biggest mistakes that traders will make is not keeping track of their trades. This is because it takes a bit of extra effort that doesn’t show immediate profits. However, those who have been trading for a while understand the benefits of tracking your trades. This gives you an idea of what has been working and what has not been working for you, as well as whether you have been over trading.
The easiest way to keep a trading diary is to use Microsoft Excel, right along with Microsoft Word. With Microsoft Word, you simply type what you have been thinking about when you place the trade, either technical indicators or perhaps some type of news announcement. With this, you can write something to the effect of “I bought the British pound against the US dollar as the British GDP came out at 2.1%, as opposed to the expected 2.0% for Q3.” You can then write the parameters of the trade, such as when you got in, the trade size, the entry price, stop losses, and other pertinent information.
When looking at results, the easiest way to do so is to use Microsoft Excel. Obviously, this can get as complicated as you needed to, but at the very least you are going to need to keep track of the date, the time, the pair, whether you buy or sell that pair, the entry price, the stock price, the limit price, and the trade size. Obviously, you want to keep track of the results. This can give you an idea of how your performance has been coming along, and sometimes can even be used to make charts and histograms to give you an idea of what pairs you do better in than others. You’d be surprised at how often we don’t understand that we may be better at a currency pair than another.
Professional traders will keep track of their thought process as well as their results and look back at previous moves to enhance our performance over the longer term.
Trading Toolbox – Why you Need a Trading Diary
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