Do You Know How to Make a Trading Diary?


September 14, 2021, | AtoZ Markets-Whenever we want to be online financial market traders, we should always consider drawing up a work plan or a so-called trading diary.

In a trading diary, traders should write down their goals and results, to measure whether the trading process they are carrying out is efficient or not. A good trader always carries a trading diary with him.

A work plan or a trading diary is a planning instrument for the development of a job or task. A trading diary must contain:

  • Goals: It is understood as what you want to achieve as a trader of the online financial markets.
  • Objectives: They are specific statements of expected results that can be measured/evaluated. The goal is what you want to achieve, while the goal is how to achieve it in operational terms.
  • Activities: They are the specific expressions of the tasks to be carried out to achieve the outlined objectives. They must be made with the specific dates on which they will take place.
  • Results: Here we must keep a log of the results of our trading operations. They must be concrete, observable, and tangible results.

Difference Between Market Winners and Losers

  • A winner creates his detailed trading plan. A loser thinks that a trading plan is something he will get the day he has learned to trade successfully.
  • The winner designs strategies with high positive expectations combined with money management and tries to avoid curve-fitting. He knows that in the long run, the market determines the outcome. A loser continually changes his system based on the single result of the last few trades. He is afraid of what might happen to him in the market in the future. His exit point varies depending on his mood. He will close positions precipitously when he fears losing his gains or when he thinks the market will turn against his position.
  • A winner knows that his method will give him long-term results if he implements it correctly. A loser continually looks for a new “magic” indicator to avoid making money-losing trades.
  • A winner knows in his heart of hearts that he is responsible for the outcome of every trade. A loser assumes responsibility only for winning trades and blames brokers, news, funds, etc. for losing trades.

Market Winners Vs Losers

  • A winner tries not to get emotionally involved in the outcome of his trades. A loser thinks he is the master of the market whenever he closes a big winning trade and brags about his short-lived success by claiming to have beaten the market.
  • A winner knows he is a winner even after 12 consecutive negative trades. A loser thinks he is worthless as a person after 5 consecutive negative trades.
  • A winner thinks that his negative emotions in trading are a good starting point to investigate the root of the problems that need to be improved to grow as a trader. A loser knows that it is the market that causes the feeling of anger and pressure but thinks that it is simply the result of struggling with this beast.
  • A winner knows that he needs to continually work on his emotions and feelings related to trading as he grows in success and equity. A loser thinks he just needs to buy additional software and systems, and perhaps look for the latest Guru from whom he can learn his secret.

Factors to Consider When Preparing My Trading Diary

  1. The money I am going to invest.
  2. Type of trading I am going to do.
  3. Working hours.
  4. Pairs to operate.
  5. Time Frame that we use.
  6. The strategy that I am going to use with previous backtesting.

Daily Trading Discipline

For a trader to be efficient and successful over time, he must always have a strong trading discipline. This discipline is acquired over time, and therefore it is very important to follow the methodology that we have outlined in our trading diary.

Trading discipline must be constant. Something we work on every day to become the best traders we can be. Below you will find some recommendations to achieve it:

  • Always trade only the time frame that your strategy has proven to work.
  • Learn about how the world economy is doing. Read every day the principal financial news.
  • Watch the news calendar for the week.
  • Open the platform and view the previous day’s lows and highs and the pivot points in the chart.
  • Mark supports and resistances on the charts.
  • Use Trend lines.
  • Wait for the entry signals or triggers of your strategy.

Emotions Are Very Important in Our Trading Diary

Conclusion

A diary trading is good if you are disciplined in keeping it. If operations are not accurately tracked, it is difficult to judge how well they are performing. This must be an ongoing effort, and we must be thorough and honest with our trading operations.

Likewise, always quantify your results, and when you write your trading entries after a month, you will have learned a lot about yourself and your discipline of trading.

Keeping a trading diary is something you have to experience yourself. Only through this experience will you become a successful trader.

Did you find this article useful? Are you a beginner or an experienced trader? Leave us your comments so we can help you.

  1. Carlos says:

    I’d enhance the quality of this post by adding a few online trading journal tools to make your reader’s lives easier. There are many out there such as trademetria.com and tradervue and free ones like traderbench.

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