Trader’s diary. Why and for what you need it

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Trader’s diary. Why and for what you need it?

Are you determined to succeed in trading? If yes, then before you start your journey as a trader, you need to have a transaction log (so-called trader’s diary ), in where you need to regularly include a statistics for all deals.В

Trading statistics is a key element in the initial phase of trading. Keeping statistics of transactions, by itself, is the only way the concept of yourself as a trader, identify own mistakes and miscalculations, as well as prevent their further occurrence…

If you haven’t started a trader’s diary while trading binary options, it is likely you simply don’t realize how valuable and useful it can be for your success. All professional traders share one common thing – they are successful keep their own trader’s diaries. Therefore, if you are still losing on the deal, then you should think about your own trader’s diary!

Why you need a trader’s diary

– What? Trader’s diary? Hah-ha-ha – how it is funny! Why do I need to start keeping it? I am fully confident that can always keep all in my mind! Why should I waste my own time on it, if I can remind myself everything?!

Nostalgically, the word “diary” reminds all of us about our school years. That is why we associate it with something unserious. In most cases, except the banal trader laziness, such kind of a perception will negatively affect on trading. But in the professional world of trading “trader’s diary” is a statistical document, which consists of trading statements. As a result of long time of trading, it accumulates information for further analysis. The conducted analysis allows to properly manage the risk of loss of investment, that is, to increase the level of profitability of the trading strategy.

So let’s be honest, over some time you will start to forget some really important details. It is natural that time dulls our memory, from this we can clearly remember the gist, but not the valuable nuances. Taking notes in the diary about every held transaction, you will be able to monitor your progress and compare past decisions and results with present.

Important conditions of keeping the trader’s diary

… Start and keep your own diary from the first days of opening a trading account with a chosen broker.

… Include in your diary note about your own trading strategy, rules of entry/exit in /from the deal. Additionally identify and designate: number of transactions per day/month, allowable level of risk on a single trade. It is important to mention the indicators and add screenshots of each trade with the notes (ideally with descriptions).

… It is recommended to keep a records about the emotion you have experienced before, during and after single trade. Write down directly about what you have felt at that moment, was it fear, anger, joy, excitement… Your psychological state is extremely important!

… Systematically try to sum up all results on weekend or on monthly basis. Specify: the number of transactions with positive and negative results; the most profitable/unprofitable assets (e.g. currency pairs); timeframes and expirity periods with best results. Also, include your own analysis of screenshots and cast away the false signals.

… Include the goals. Every time you reread your trader’s diary notes, you will automatically remember yourself something you are aspiring. Also, you will clearly understand the reasons of your stops and failures on the way to the desired.

So how to do it? For traders who keep the diaries doesn’t matter actually how to do it. You can start even making handwritten notes. Nope, it’s not too late to use the trader’s diary, because starting making notes is possible at any time. As practice shows, even an experienced traders often ignore this, regularly pull the time for capturing important information.

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Please remember, that you always need to write down a complete information in the report about the operations. Hence, you need to note the key characteristics of each every trade (in addition to basic, such as date of trade, price, option type, result, etc., the you have individually determine what parameters will be included in your trader’s diary).

Regarding reviews, it is not worth too much bother and try to economically correct describe your thoughts, do it briefly by using understandable for you words about the reasons for starting deal and its result.В In the end, each trader’s diary will be like a detailed report of the trade on the exchange. Also good to make briefly a further notes about your daily trading plan at the very beginning of the day. There also should be specified the possible price of support/resistance levels. As a result, the diary itself will be showing you is it possible to stick to scheduled trading rules and plan as a whole or not.

Taking into account all previously said, it is important to mention next:

В» be sure to note all the necessary information about deal, immediately after its close;

В» you should not hold back and falsificate even the smallest details, because you are the only one who are using this, and it’s in your best interest to have at hand truthful statistics;

В» use electronic diaries – they are the perfect way to process the statistics and save time.

Don’t be lazy and monitor every trade! All this will allow you to improve your own trading strategy and achieve the desired results. Analyze your diary at the end of the day and at the end of the week/month. Write down all results and make notes in end of each held trade. In the process of trading statistics collection you need to analyze:

» the percentage of trades closed with profit and loss;

В» estimate the strength of given arguments about the appropriateness of starting each deal;

В» try to trace the patterns of time orders and time peaks of profitable trading.

Start to keep a trader’s diary or not is a purely your personal choice. All depends on the desires and goals that you follow. Perhaps you strive to winning real progress and achieve the way a professional trader or you simply comfortable with staying at same level with what is already gained.

It’s only up to you!

If there is real desire, then try for the beginning use a demo account from IQ Option, where you can also successfully start your trader’s diary and try your hand!

“General Risk Warning: Binary options trading carry a high level of risk and can result in the loss of all your funds.”

Trader’s Diary – should I have one?

Hello, fellow forex traders!

Today we will talk about such a thing as the Trader’s Diary. This is an important element of success that can become critical on your path. Today we will talk about why we need a diary, about the so-called hindsight bias, about what types of diaries exist, which ones are better and what you need to put in a diary.

Why do I need a diary, if there is Myfxbook?

Many traders have a question: “Why do I need a diary if I have monitoring on myfxbook?”. That is, why do you need to have your own statistics if the site automatically calculates the percentage of profit in a month/day, various trading indicators, all transactions are visible and so on?

I would like to start with the fact that monitoring and diary perform different functions. Monitoring is the tracking of indicators, the analysis of transactions, which, for example, will help to identify leading currency pairs, trading in which the most successful and lagging instruments, whose indicators are worse.

The diary performs a somewhat different task; it is primarily working with psychology. One of the main tasks of the diary is to help you avoid the so-called hindsight bias (mistake). Hindsight mistake is a phenomenon when, after the event, you feel as if it was easier to foresee it than in reality.

Hindsight Bias

This is a popular psychological phenomenon, having over 800 studies devoted to it. The fact is that a person’s memory is arranged in such a way that he can very quickly learn new information and connect it with the already available knowledge. For example, you will learn about the victory of the home team in a football match. The information you receive is linked in your head with the knowledge already available about the parameters of the players, the work of coaches, league politics and so on. Once there is a close connection between the old and new information, you can begin to experience a sense of clarity, the past becomes more understandable, and it seems to you that this victory was easy to predict. Traders often like to talk about transactions that they did not conclude (but they knew that the price would definitely go there!).

With the help of the diary, you can eliminate these post-factum judgments and record your analysis without distortion at the time of the transaction. After that, you can already watch and draw conclusions, have you seen what you then seem obvious or not.

Ways to keep a diary

Paper or combined diary

The most obvious way is to keep a paper diary. We all know that trading appeared long before modern computers. The first stock exchanges were on market squares, where merchants traded for some kind of goods. Then there were already more organized exchanges, trader’s pits, where traders simply shouted out prices. If then there were computers, they occupied half a room.

Naturally, Excel did not exist then, so the recording of transactions and the drawing of charts also was carried out manually. Accordingly, the diary could also be in paper form. Nobody makes you draw a chart for each transaction, just save its screenshot.

In MetaTrader, this is done quite simply: Right mouse click > Save As Picture > Active Chart, and uncheck “Post Image Online.”

So, you print out screenshots and paste them into some large notebook, best of all in A4 format. In general, you can insert a chart into a Word file so that the top is the picture itself, and below you can add a description of the transaction. Then, fasten such pages together, you will get a paper diary in electronic form, kind of combined.

But, nevertheless, a diary written by hand, allows you to better remember information, due to the inclusion in the work of fine motor skills. The result of such work will be more noticeable than in the case of using a fully electronic diary or a combined version. But, this is already a matter of taste.

Electronic diary

The electronic version of the diary is, in fact, the same combination that we do not print, but simply store it on a computer. You can also keep a diary in Excel, especially if you do not use screenshots. For example, you trade solely on the fundamental, then you can write down the date, the transaction itself, how many lots and what currency was bought, and the basis for the transaction: “Trump wrote a tweet about launching missiles towards North Korea, so we buy/sell the dollar.”

Alternatively, you can run a mini-blog with your transactions on LiveJournal, Facebook, or create a thread on the forum, like Forex Factory. People publish not only their transactions, but also simply write down their thoughts, share ideas. This option is interesting because you can get constructive criticism of your actions. True, not everyone can share his or her transactions for moral reasons. Therefore, a forum or a blog topic on that will not suit all traders.

There are also web-based services for keeping a diary. For example, the EdgeWonk service. But, this service is more devoted to the analysis of transactions, that is, it resembles the analog of the myfxbook service, MarketStat and the like. In my opinion, a diary should be presented in a more classical form.

Video diary

Another way to keep a diary is to record a video. It is suitable for those who actively trade: scalpers and adepts catching fast movements, when printing and recording each transaction is simply technically inconvenient. But, to comment on your actions right at the time you open your deals can be very useful, even if you do not revise it later.

Of course, it will not hurt to review, but when you record and comment on the video, willy-nilly, you become more aware. Let’s say you are opening a chart and think that now the moving average will break the price and say it out loud. What stop-loss / take-profit, when you are going to close the deal, which lot and why….

What to write in a diary

Let’s start with the obvious thing:
• Date of trade;
• Screenshot;
• The result of the transaction;
• Comment.

There can be several screenshots, for example, before and after the transaction, or screenshots with different TF. In the comment, you can specify a transaction plan in advance or an analysis of past transactions.

You can also record your emotional state by rating on a five-point scale (as far as you are in the flow).

In addition, you can write any nuances about the transaction like how you feel at that time. It may seem ridiculous, but it’s a signal about psychosomatics – the subconscious tells you that it’s not worth entering into a deal. There is a well-known story about how George Soros’s son told that he ran to close the deals when his back hurt, regarding it as a signal.

The diary is a good thing, it helps not only to analyze the transactions but also to splash negative emotions – it allows you to look at them differently, in a slightly different light. That is, you are, as it were, reporting your emotional reactions, and then you can return and reconsider them.

Pay much attention to transactions that were opened by the rules and without strong emotional outbursts, not worth it. If the transaction is allocated some kind of a strong loss or profit, it should be analyzed more carefully. Everything that deviates from the average statistics is worthy of analysis.

Also, you can analyze the groups of transactions and, for example, compare them with previous groups. Let’s say we take groups of 20 trades, and consider them an average profit, loss. Then you can observe how the indicators improve or, conversely, deteriorate – and adjust their trading strategy.

Conclusion

The benefits of maintaining a trader’s own diary are hard to overestimate. At least, it’s worth trying to start a diary and see what happens. Perhaps after a while, you will see how your results start to improve and you will learn not to rethink the wrong transactions after the fact.

What is a trader’s diary and how to keep it?

What is a trader’s diary? Why do you need a transaction log? How to keep a trader’s journal? The answers to these questions can be found in our article.

Hello gentlemen traders! There are many examples of how useful a trader’s diary is, they are written about in books and professional traders speak, but not everyone uses it. Hence such disappointing Forex trading statistics. And all because novice traders do not want to keep a journal of transactions because of their laziness and as a result they fail because they cannot control their emotions and do not observe trading plan . Today you will learn what a trader’s diary is, why it is needed, how to keep a trader’s journal, and how it will help you to succeed in trading.

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What is a trader’s diary?

The trader’s diary (it is also called the trader’s journal or the transaction journal) is the statistics for all transactions that you made during trading. It is usually filled manually or lead to Excel. Many traders may argue about keeping a trader’s diary, as there are now many different services like MyFxBook that collect all your data about completed transactions automatically. Here you can see all the statistics about your transactions, maximum drawdowns, yield curve and much more. But MyFxBook does not replace the trader’s journal, it complements it, since the trader’s diary is not just a report of your trading, it is an indicator of your discipline. You can always go back to your trader’s diary, see which deals you have made, to understand the reason for your failures and how to improve your trading system.

Trader Diary Application

Trader’s magazine will be effective in all types of markets, including Forex and stock market. It can be used on any trading instruments, such as currency pairs, stocks, indices, futures, options, cryptocurrency etc. A trader’s diary can be kept regardless of which terminal you are trading in – MetaTrader, QUIK or web terminals. It will also be useful on real accounts and on demo accounts. If you want to improve your trading results, you need to start keeping a trader’s journal.

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How to keep a trader’s log?

There are several aspects for keeping track of a trader’s trade journal:

  1. First, we record the deals in the trader’s journal and only then open them in the trading terminal. This will prevent you from opening random transactions that do not comply with the rules of your strategy and your trading plan;
  2. Always take screenshots of your transactions immediately after opening a position and after closing it;
  3. Record comments, for what reason did you open this or that deal (the intersection of moving averages, the appearance of candlestick model , etc.), and why you closed it (the appearance of the opposite signal, closing by stop-loss or take-profit, news output, etc.);
  4. Set up a separate transaction log for the trader for each trading week and sort them by monthly folders, and keep monthly for annuals. It is very convenient and simplifies the search and analysis of transactions;
  5. View your trader diary for the week and month, analyze your actions and make changes to your trading plan, if required.

Create a table in Excel and write the following transaction information there:

  • time to enter the market;
  • trading instrument;
  • order type (pending or market);
  • buying or selling;
  • the reason for entering the transaction;
  • transaction volume;
  • stop loss size;
  • take profit size;
  • reason for closing the transaction;
  • The final result of profit or loss (in points and a percentage of the deposit).

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Conclusions

The trader’s diary helps you understand how you control your emotions when opening trades, during trading and when closing positions, and how clearly you follow the rules of your strategy, trading plan and money management . After the end of trading, you can look at the transaction log in order to evaluate your actions from the side and understand what weaknesses you have that hinder you from trading profitably. For example, you may notice that you open trades too often, even where you don’t, that you take profits on trades too early or hold losing positions for too long. Thus, the trader’s diary allows you to soberly assess those moments that prevent you from succeeding in trading.

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