A successful trader almost always has a trading journal that contains all records of their trading activities. Moreover, this trading journal is like a diary containing the trader’s travel notes complete with all the steps ever taken.
Then, is having a trading journal is an obligation for a trader, especially for novice traders who are learning online trading? The answer is, it is certainly not mandatory. However, trading journals can be very valuable for those of you who want to improve trading skills quickly.
Check out 4 reasons why you need to have a trading journal:
1. Trading History Note
Experience is the best teacher. This proverb is very suitable to describe the most important trading journal function, which is to record all trading activities that you have ever done. A good trading journal will contain a detailed trading history, complete with reasons and analysis and thoughts that you do behind it.
By reviewing these records, those of you who are learning online forex trading will be able to find the trading mistakes you have made and their effects. Then, you won’t repeat the same mistake later.
2. Help to Make a Trading Plan
By learning the mistakes and steps of trading in the past, you will be easier in developing the next trading strategy. Because you already know things like what can and may not be done.
Thus, a good trading journal must also be filled with targets and trading plans that can be a guide for you in making further trading.
3. Trading Method Verification Tool
In trading, there is no 100% correct strategy. Thus, every trader needs to have a trading strategy that suits their trading style and goals. Trading journals can help you find the trading strategies and methods that are most suitable for you to use. According to Atoz Markets, you should learn yourself first, what kind of trader you are.
By comparing your previous trading performance recorded in a journal, you will easily find out which trading strategies and methods are successful and fail.
4. Evaluate Your Own Trading Habits
One of the most important uses of trading journals is that trading journals can force you to abandon bad trading habits and turn them into good ones. The longer you are accustomed to following the trading plans and strategies that you have made, the more disciplined you will become.
Winning in trading will no longer be felt like luck. Moreover, a defeat or loss in trading has become a part that no longer makes you uneasy. The existence of concrete evidence that certain trading strategies are better than other strategies will make you more confident in developing the best trading strategy and running it.
