· By Ondrej Kavalek
How to use the trading journal effectively?
The hardest part is getting started
You can find plenty of theoretical articles about keeping a business journal on the internet. There are a number of guides on how to become a profitable trader. Trading is not for everyone, but even complete beginners with no financial background can get into trading, which is one of the great advantages of trading. But what you need to have is discipline and leadership, and that’s where most people fail. Are you one of the majority who knows how to become a profitable trader but never takes advantage of the opportunity? We firmly believe not. For all determined traders, there is EverTrader. While we can’t guarantee your 100% discipline, our platform will offer you excellent guidance.
Unlike other prop firms, we have a trading journal already built into our trading platform. Automated trading diary management allows you to keep all the necessary records of your trades under control. We track the technical data about your trades for you, taking away the hassle of maintaining an excel spreadsheet. You will also find space in the trading journal for your notes, which you should keep to understand your trades. This is the only way to replicate your most profitable trades and become a profitable evertrader.
A trading journal is an indispensable tool for any trader who wants to succeed in the financial markets. Although keeping a journal may seem like a bureaucratic affair, it is actually a valuable source of information. Systematically recording trades allows you to analyse your strategies, understand your decision-making errors and provide you with feedback that is crucial to improving your trading results.
Why keep a trading journal?
The main purpose of a trading journal is to provide the trader with an overview of his trading activities and decisions. In the journal, you record not only the basic details such as the date, market, entry and exit prices, position size, and financial outcome of the trade, but also the reasons that led you to make the trade and the strategies you used. It’s also useful to keep a record of your emotional state when you enter a deal and after the deal is closed, which will help you identify how emotions affect your decision-making.
How to keep a trading journal?
In order for your trading journal to bring you the most value, it should contain at least the following sections.
Detailed records: Record each trade with as much detail as possible. This includes technical or fundamental factors that you have considered when trading.
Reflection of the business situation: After each business session, reflect on what went well and what didn’t. Evaluate the effectiveness of your strategy and consider possible adjustments to your strategy in the future.
Performance monitoring: Regularly evaluate the success of your trades, track profitability, the number of successful and unsuccessful trades, and try to find patterns that lead to success or failure.
Monitoring the volume traded. Risk is practically the only thing that a trader can manage. That is why it is extremely important to ensure proper money management. So in your journal, it’s good to keep track of how much volume you’re using and whether you’re consistent in this. It’s not hard to make money in one business. The key is to preserve profits and protect capital.
Using the technical setup. If you are trading using technical analysis, then it is advisable to start with e.g. with 2 setups (double bottom, bounce from support…) and look for them in the market and write down for each trade which setup it was. After some time, you can view your most profitable setups and the most unprofitable ones in our diary. This then allows you to focus more on the setups that make you money and less on the ones that lose you money.
Milos started with an initial capital of $50,000.00 and now boasts a profit of 14.26%, a gain of +$7,128.71. His sales performance is impressive:
Total number of shops: 90
Profitable trades: 81
Losing trades: 9
Win ratio: 90%
Total revenue: $10,284.61
Total losses: $2,731.34
Profit factor: 3.77
Profit: $7,128.71
Payout with 80% profit share: $5,702.97
Milos’ Strategy: scalping on the DAX Index
Benefits of keeping a regular trading diary
By regularly keeping and analyzing a trading journal, you will not only keep better track of your trades, but also gain a deeper understanding of your trading style and preferences. This method allows you to better adapt to changing market conditions and optimize your trading strategies.
Learn how to keep a trading journal to help you identify the strengths and weaknesses of your trading strategy and improve your decision making. Effective journaling is the basis for objective evaluation and continuous improvement of your business skills.
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