Trader's Diary - is it really necessary?

Why do I need a trader's diary?

The psychology of successful trading is given as much attention as, say, a trading strategy. A trader can earn on short-term or long-term trading, use tehanalysis or his own hunches, but he must have certain psychological qualities. Successful Trader does not give power to his emotions, does not allow fear, greed and panic moods to influence his decision-making. It is clear that anyone, even the most self-confident person, experiences negative emotions when he or she fails. All that remains is to learn to control these emotions, to manage them.

Trading - work that requires constant concentration and discipline. Sometimes a mistake or lack of attention to detail can be too expensive. There is no room for uncontrollable emotions - just as a good actor plays the feelings and experiences of his character, so the trader controls his reactions. Experienced, successful traders, having once developed a strategic line, follow it without flitting from side to side and without constantly asking themselves the question, "Am I wrong?

Almost all successful traders have one thing in common - they lead diary or a journal. There they record data about when and why a trade was made, its results and the experience gained.

Those who do not learn from past mistakes are not insured against repeating them in the future - this proverb is especially true for trading. Most traders, especially beginners, make the same mistakes. Stress and worry may cause inadequate reaction to the situation. That's why trading diary is necessary: it makes it possible to analyze our logic, motives, actions, and thinking. The conclusions obtained as a result of such analysis will allow us to avoid repeating mistakes.

Trader's Diary makes the trader more thoughtful and confident.

The benefits of keeping a trader's diary:

1. identifying the logic of the trades and the processes that guide you during them;
2. Tracking events, market signals and their influence on trades;
3. assistance in managing stress and emotions.

Trader's Diary helps you identify your weaknesses and strengthen your strengths. For example, you make a trade whose idea seems flawless. But later, distracted by emotion, you discover that there was no reason for optimism at all. Understand your mistakes, fix them - that will be the first step in improving your own strategy. In addition, even before you enter the market, you should clearly understand (or better write down) the reasons that prompted you to make that particular trade. This will allow you over time to develop the automatism of making the right decisions.

The main requirement for the structure of the trader's diary - providing a detailed and objective record of trades. The diary should be organized in such a way that all the pros and cons of trading are clearly visible. Usually in trader's diary The following points are reflected:

1. Trade:
- the date and time of the transaction;
- data on entering a position (long or short position, price);
- type (swing trade, long-term or daily);
- the reason for the trade is the logic and strategy behind it;
- Stop - time and level of setting a stop loss;
- The limit price at which you are willing to exit a position;
- The pluses are the positive aspects of trading;
- disadvantages - potential problems.
2. Result:
- update (after some time, update the information about the trade - the current profits or losses, the set stops, etc.);
- output - price, date and time ;
- the reason for the exit - the price has reached the target or stop level, etc;
- profit/loss - absolute and relative values (dollars and percentages);
- conclusions (what did this trade teach you, what did you do right and what did you do wrong?).

В trader's diary It makes sense to keep a graph on which the entry and exit points are marked. Another point worth including is your psychological state (nervousness, confidence, emotionality, etc.) - this can be of invaluable service to those who are unable to control their emotions. The level of detail of the recorded information is limited only by your imagination and time - the more detailed the diary is, the better. With a competently constructed chart, comparing the maximum possible profit with the profit received, you can understand why the exit from the trade was too early or too late.

So, from trader's diary the type of trade made, the market conditions under which it was made, the time and the price of execution become clear. In case of loss-making operation the received information should answer the main question: losses are the result of accidental mistake or incorrectness of the strategy used?

Naturally, to analyze the situation and draw any conclusions can only be after some time, getting rid of emotions. It is quite possible that the conduct of the diary may pose some difficulty for hyperactive scalpers и Daytraders. They are more comfortable leading trader's diarybut by evaluating profitability or loss not by trades, but by days.

Maintaining trading diary will significantly help in developing a new strategy. In addition to testing the trading system itself, the diary will reveal the potential of the developed strategy.

Analyzing past trades can often be painful-it's not easy to relive losses over and over again. But it is a necessary step on the road to getting rid of unnecessary habits and steering your strategy in the right direction.