Trader's diary and trading plan - important components of success
People are influenced by their emotions. But for a trader, emotion is the worst enemy. If you can't control your emotions, then you're trading will not bring you income. That's why those who can learn not to succumb to the influence of their emotions succeed in the financial markets. Basically, the difference between a professional and an amateur is in the ability to control your emotions. A professional does not allow himself to be overpowered by emotions. It's the other way around for the dilettante.
A beginner trader learns from his mistakes and successes. How to see and understand them? The answer to this is trader's diary. Many online resources devoted to trading now offer their services in this direction. They are, as a rule, paid, and they are still worth sorting out.
A beginner trader does not have his own system. I don't take into account copied or purchased ones. The trading diary allows a trader to earn statistics necessary for development of his strategy, to develop the basis of trader's discipline.
Trader's trading plan and sample diary
First of all, every working day should begin with drawing up a trader's trading plan. In order to make it correctly, it is necessary to carry out a comprehensive analysis according to the following scheme:
- Analyze the movement of the selected currency pair by timeframethat you are using. Construct on it all trend lines, supports and resistances, channel lines and levels. Record for yourself separately the values of the three nearest to the current price resistance levels and three support levels. Determine the direction of the trend. Draw several indicators that you use in your TS on the price chart and determine the types of signals they provide. Remember, the indicators provide only confirmation of your intentions. The intentions themselves you formulate from the analysis of the chart.
- Analyze the movement of the selected currency pair on the chart for several periods below. Repeat the actions described in point 1. Remember that the levels and lines constructed on the higher timeframe have priority over the levels and lines of the lower timeframes.
- Analyze the fundamental data, both those that have been released by the time you start your work and those that will be released during the day. Evaluate their influence on the movement of currency.
- Draw up a scenario for yourself when the price reaches a certain value you have allocated. Plan for yourself the opening price and the expected target (closing a position with a profit), as well as the closing price of a position with a loss. When setting profit and loss objectives, constantly weigh up whether the game is "worth the candle". Do not open a position if the expected profit is equal to or less than the projected risk, i.e., the value of the projected profit is less than or equal to the projected loss.
- Once you have a trading plan, implement it. Remember: the right decisions must be based on logical principles.
Never deviate from your trading plan!
It is better to do nothing at all for the day than to do something contrary to the planned plan. In this case, at least, you will not lose anything.
Some say that they summarize the statistics of profits and losses for a certain period of time and it is enough for them. Trader's Diary allows the novice trader to answer the most important question: "Why did this happen?
For me, the most important columns are "Reasons for entry" and "Reasons for loss. In the "Reason for entering" column, I thoroughly describe why I entered the trade, what reasons I was guided by. If my trade closed in the red, I analyze the reasons for entering the trade, looking for my mistake.
This practice allows you not only to keep statistics of profits and stop lossThe programmer must also analyze his mistakes, identify patterns in price behavior, and test combinations of computer indicators. To reveal acceptable for yourself profit/loss ratio. At last, keeping such a diary simply trains a trader to discipline, reduces psychological pressure and adds confidence in his actions.