As "Keeping up with the Kardashians" is integral to show-business, so "Keeping up with the trading journal" should be an integral part of your Forex trading. Being a broker, we keep a real-time record of all your trades, but there are many advantages to maintaining a separate trading journal.
First and foremost is the educational aspect. A well-kept, detailed trading journal will help you learn more than a book or even a seminar. Having everything on the record will help you identify your strengths and weaknesses. Moreover, it will help you learn valuable lessons such as what economic events you should avoid, how much you can risk per trade, how successful each trade was, and so on.
Secondly, it’s a brilliant planning tool. You can and should include your plans for each trade within your journal pages. That way you'll be able to set parameters for each trade, considering every possible aspect. For example, when to enter the market, how much you can risk, and what your profit target is, among other factors.
Thirdly, it will help you verify your performance. You'll be able to see how well your methodologies perform in changing market conditions and re-adjust them if necessary. It's essential to review your systems so that they deliver in the trending market. For example, are my stop loss orders too tight, or are they too loose? Should I start using a different timeframe? These are questions you'll be able to address once you have a fully comprehensive trading journal.
Lastly, your trading journal will help you ensure confident decisions in the marketplace. With a trading plan and a journal, your trades won't feel random, and losing trades will be anticipated. Thus, your losses won't make you feel like a loser. Having a trading journal provides a crucial mental and emotional benefit.
A trading journal will help you progress as a trader and ensure educated and wise investment decisions. It will measure the success of each trade and provide you with feedback that will help you develop and evolve your trading skills. Moreover, if you study it carefully, it will help you change your habits from destructive to constructive. Remember that all experienced traders have one and so should you.