What is a trader's diary and how do I keep it?
What is a trader's diary? Why do I need a transaction log? How do I keep a trader's log? You will find answers to these questions in our article.
Hello, gentlemen traders! There are many examples of how useful a trader's diary is. professional traders write about it in books and talk about it, but not everyone uses it. Hence such disappointing statistics of Forex trading. This is because novice traders do not want to keep a log of transactions because of their laziness and as a result fail, because they cannot control their emotions and do not follow the 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 achieve success in trading.
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What is a trader's diary?
A trader's diary – also known as a trader's journal or transaction log) is a statistical data on all the trades that you have made while trading. It is usually filled in manually or stored in Excel. Many traders may object to 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 view all statistics about your trades, maximum drawdowns, yield curve, and more. But MyFxBook does not replace the trader's log, it complements it, because the trader's diary is not just a report on your trades, it is an indicator of your discipline. You can always go back to your trader's diary and see what trades you made to understand the reason for your failures and how to improve your trading system.
Scope of the trader's diary
The trader's log will be effective on all types of markets, including Forex and stock markets. It can be used on any tostock instruments such as currency pairs, stocks, indices, futures, options, cryptocurrencies, etc. You can keep a trader's diary regardless of which terminal you are trading on-MetaTrader, QUIK, or web terminals. It will also be useful on both real accounts and demo accounts. If you want to improve your trading results, you need to start keeping a trader's log.
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How do I keep a trader's log?
There are several aspects to keeping a trader's transaction log:
- First, we record transactions in the trader's log and only then open them in the trading terminal. This will save you from opening random trades that do not comply with the rules of your strategy and trading plan;
- Always take screenshots of your trades immediately after opening a position and after closing it;
- Write down comments on why you opened a particular trade (moving average intersection, candle pattern appearance, etc.), and why you closed it (opposite signal appearance, stop loss or take profit closing, news release, etc.);
- Create a separate log of the trader's transactions for each trading week and sort them by monthly folders, and store the monthly ones in annual ones. This is very convenient and simplifies the search and analysis of transactions;
- View your trader's diary based on the results of the week and month, analyze your actions and make changes to your trading plan, if necessary.
Create a table in Excel and write the following information about transactions there:
- time to enter the market;
- trading instrument;
- the type of the order (pending or market);
- buying or selling;
- reason for entering the transaction;
- volume of transactions;
- stop loss size;
- size take-profit;
- reason for closing the transaction;
- the final result of profit or loss (in points and as a percentage of the Deposit).
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The trader's diary helps you understand how you control your emotions when opening trades, during trading, and when closing positions, as well as how well you adhere to the rules of your strategy, trading plan, and money management. After the end of trading, you can view the transaction log to evaluate your actions from the outside and understand what weaknesses you have that prevent you from trading profitably. For example, you may notice that you open trades too often even where you shouldn't, that you take profits on trades too early, or that you hold losing positions for too long. Thus, the trader's diary allows you to soberly assess the points that prevent you from achieving success in trading.
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