Keeping A Daily Trading Journal Is Very Important For Your Trading Success!

The most important thing that you need as a trader is discipline and common sense. There is no Holy Grail in trading. No trading system or indicator will make you rich. But discipline when practiced patiently overtime will turn your small amount into a huge fortune. How to become a disciplined trader? One way to become a more disciplined trader is to keep a daily trading journal. This is what the traders at the hedge funds and big banks do. They meticulously keep a daily trading journal that details everything about their daily trades.

As an individual trader, keeping a daily trading journal is even more important as you are trading with your own money that you can't afford to lose. Capital preservation should be your number one strategy. Live to trade another is what you need to learn and inculcate in yourself.

For every trade that you make, you need to have a strong rationale for entering into the trade with clear cut entry, exit, take profit and stop loss strategies. When you enter into a trade, you should know beforehand when you are going to exit in the worst case scenario. Learn to manage risk first and only then think about taking profit.

Many traders think of the profit first and risk later. It should be other way around. First manage risk, once you have managed risk, only then you should think about take profit. Learn to take a calculated risk each time you enter into a trade plus develop the habit of learning from your mistakes. Now your daily trading journal need to have at least the following three parts. Let's discuss them.

Currency Pairs Checklist:

This part of the daily trading journal should include your daily outlook on the different currency pairs that you trade. Calculate the daily range of the pairs that you trade using pivot points. Predict how the currency pair is going to behave in the next few days. Mark those currency pairs that are ranging with their support and resistance as well as those that are trending.

Potential Trades:

This part of the daily trading journal should include the list of trades that you plan to trade in the day plus the strategy that you will employ.

Completed Trades:

In this part of the daily trading journal, you should audit all your completed trades. Try to learn from your mistakes. Analyze each completed trade. Figure out where you went wrong in case of a losing trade. In case of a winning trade, think if you could have done it better.

In the end, developing the habit of keeping a daily trading journal will help you become a disciplined and a successful trader in the long run who knows what he is doing.

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