A trading journal is a very effective means of spotting some of the weaknesses of the trading strategy. By doing so, you will be able to improve your overall performance in CFD trading and pinpoint the right entry and exit points. Keeping a well-rounded trading journal is what every successful trader does. It is the best thing to do to spot then eliminate if there are any recurring patterns that could lead to losses.
What Should A Trading Journal Contain?
A trading journal is a set of notes arranged accordingly by date. It has all the trades that you have done, each of them representing the trades that you have taken as a trader. If you want to see the overview of your previous trades, you can easily do it with the help of a trading journal. And it doesn’t matter what asset you invested on like Apple stocks, crude oil, Shiba Inu cryptocurrency or some ETF.It also has entry points, exit points, position sizes, trade directions, trade results, and all the other information that is deemed useful in trading. Most traders focus more on rounding up their risk management strategy and trading strategy but they should also know the
The Importance of a Trading Journal
There is great importance in creating a trading journal. It helps provide important insights into the trading performance of the trader. If you keep a detailed trading journal, you can easily analyze your previous trades, their results, and how you managed to succeed or lose are all recorded here. Successful traders love to record their activities on a trading journal because they find it useful if they want to check out their previous trades at a later time.
Spotting mistakes in trading is also very easy with a trading journal while helping you fine-tune the trading strategy that you have. Additionally, when you write on your trading journal regularly, you will also be able to identify your personal behavioral patterns that contributed to the losses that you have.
Important Elements of a Trading Journal
Date and Time – every time you enter a trading position, you must record it in your journal. The time and date must be written alongside. After every trade, you must also enter the time and date because this will help you arrange your entries accordingly.
The Instrument being traded – this entry describes the financial asset that you have traded. Aside from the instrument, you must also include the market just to make it easier for you to filter the type of market when you need it.
The Trade Direction – in addition to the ones mentioned above, you must also include the trade direction when entering information in your trading journal.
The Entry and Exit Prices – this entry requires three separate fields. This information is very important and you must be keen when writing it. These three fields are for your entry price, take profit level, and stop-loss level.
The Position Size – to determine if the position size actively meets the ones you set on your risk management plan, you need to put on your position size in every trade that you make.
The Result of the Trade – finally, you need to input the result of the trade on your CFD trading journal.