Keep track of all your trading activities in a trading journal. Doing so eventually turns your trading journal into a reference manual that can become an invaluable tool for helping you recall what you’ve done to identify what works and what doesn’t. A trading journal also can help you analyze your trades and trading systems to determine which aspects of trading you do well and which ones you need to work on.

When you develop a trading system, save ideas and test results in your journal. When you enter a position, record everything about the trade. Include your thoughts as you contemplate making the trade. When you have a what-was-I-thinking moment later on, you can find the answer in your journal. Using a loose-leaf binder to hold your trading journal is probably best. Print before and after charts for each trade and include them in the journal. Keep detailed notes about each trade, and about the system you used to trigger the trade.

At a minimum, your notes need to include the following:

✓ Trade date
✓ Currency Pair symbol
✓ Number of lots and why you chose that number of shares
✓ Whether you bought long or sold short
✓ Which system triggered the entry signal
✓ Which system triggered the exit signal
✓ Where you placed your initial stops
✓ If and why you moved your stops
✓ What caused you to exit the position and why
✓ Amount of spread
✓ Percentage gain or loss from the trade
✓ Amount of slippage
✓ Whether any economic reports or news announcements were made around or during the time of the trade
✓ Duration trade was open, and most important:
✓ Your thoughts, hopes, and fears that you had before opening the position and while the position was open

You can also use your journal to save magazine articles that influenced your thinking. Cut out and save the new high and new low lists from the newspaper. Keep a record showing leading and lagging industries. Save sector charts along with your trade records. Whatever information you use to make trading decisions needs to be in your trading journal. You can improve only the things that you measure. Record statistics about your trades. Include the duration of each trade. After you close a trade, write down what you might have done differently. Find out whether you can identify signals that can help you recognize similar situations in future trades.

Although keeping the journal is important, it is useful only when you review it regularly. Spend a little time every week or month reviewing all your trades, so you can pinpoint consistent mistakes or missed opportunities.
Translate to English Show original