A trading journal is the yin to the yang of a trading plan. The two can work independently, be different, and have differences of opinion, but having one without the other is a little like having a cappacino without the creamer. It just doesn’t make sense.
What is a trading journal?
A trading journal is a record that traders keep to remember past trades, and also to improve their trading plans over time.
Think about world class American football players. Before each game, they review tapes to find weaknesses in the other team, and strengths that they should be mindful of. Great golfers practice more than average to hone their skills, but they also review their swings to see where they may have gone wrong on a course. In reviewing their swing, they can see that maybe their ball landed in the water because of hip movement or swinging form.
Traders are the same way. Keeping a trading journal helps traders to create a document to showcase the ebbs and flows as life as a trader. A trading journal is important to your psyche, as well as your completely logical trading plan.
In the following pages, we’ll show you how to build a trading journal that minimizes both emotional and financial damage to your trading plan, while maximizing the profit potential.
