So, you want to make millions trading? Who doesn’t? The only problem is how do you know which trading habits are working for you and which are working against you? Most successful traders make it a point to keep a trading journal where they can keep track of and analyze their trades. A trading journal doesn’t have to be fancy and can be as simple as writing down certain details of your trades in a notebook or in a word document, or much better in Google Docs. However, seeing as how Excel is better suited for numbers and charts, it might be a better option for those familiar with the program.
So, what should you include in your trading journal? Here are 10 critical factors to get you started:
- The general market conditions for that specific trading day. For example is there a lot of volatility in the market, is the market trading lower or higher, ranging or trending?
- Why you entered the trade, the time you entered the trade, and the price you entered the trade.
- Why you exited the trade, the time you exited the trade, and the price you excited the trade.
- Whether the trade was a long or short trade.
- What happened with the market from the time you opened the trade to the time that you closed the trade.
- The money management parameters you used in the trade and which we covered in our previous lessons on the subject.
- Many traders will also attach a chart with their analysis on it to help them remember the trade when they review their trading journal.
- Where you were weak that particular day and what you are going to do to address those weaknesses.
- Where you were strong that day and what you are going to do to address those strengths.
- Any other thoughts that you had that day which should be noted.