| Keeping a trading journal is vital to developing your | | | | like the day's high, low, and close, but knowing these |
| trading and trading psychology. Here are five | | | | can keep you in sync with the markets you trade. |
| common mistakes traders make in keeping the | | | | Solution: Keep track of your market by writing down |
| journal and what you can do about them: | | | | key data. Add important indicators you follow and |
| Mistake #1 - Fail to Keep a Trading Journal - I know | | | | general market statistics such as advancing and |
| this sounds silly, but many traders don't keep a | | | | declining issues. After a while, you may surprise |
| trading journal. They think it's unnecessary, don't | | | | yourself at how well you begin to pick up on the |
| know how, or think it's too much trouble. Some | | | | nuances of your market. |
| traders are reluctant to record their trading losses | | | | Mistake #4 - Important Data About You Are Not |
| and errors. | | | | Recorded - Trading psychology is a key part of |
| Solution: Keep a Trading Journal! Make it your goal to | | | | trading. Just like trade patterns that set up regularly, |
| get a notebook and make an entry in your journal | | | | traders have patterns, too. It is important to know |
| before your head hits the pillow tonight. Set aside | | | | these. |
| notions that it's unnecessary and too much trouble. | | | | Solution: On each trade, record your thoughts and |
| Keeping a trading journal is necessary if you want to | | | | feelings. This is the best way to understand your |
| become a competent trader. And, if you are | | | | personal trading psychology. Look for patterns in |
| reluctant to look at your losses and errors, keep in | | | | your actions. Are you constantly trying to counter |
| mind that hiding from them will not help you correct | | | | trade a trending market? Are you scaring yourself |
| your errors. You need to understand first what is | | | | out of good trades? Look to identify and address |
| going wrong before it can be fixed. | | | | your patterns. |
| Mistake #2 - Only Trades Are Recorded - Although | | | | Mistake # 5 - No Review of the Journal - Some |
| recording trades is very important, it's insufficient. If | | | | traders think that if they write down what happened |
| all you have are the trades you took, you don't have | | | | while trading today then that's good enough. It's not. |
| much useful information because it doesn't help you | | | | You need to do more to capitalize on the benefits |
| get better. | | | | offered by the trading journal. |
| Solution: Summarize why you took the trade. How | | | | Solution: Review your journal regularly. A weekly |
| was the market trading when you took this trade? | | | | review is a good practice. Regular review will not only |
| Adding this information can help you understand | | | | help you see where your trading can be improved; it |
| conditions under which a trade is likely to work | | | | will also help you see progress. Watching yourself |
| verses when it isn't likely to work. | | | | develop will lead to greater confidence in your trading |
| Mistake #3 - Important Market Data Are Not | | | | - another benefit of keeping a trading journal. |
| Recorded - Traders may ignore writing down data | | | | |