As a new trader you will fight many battles within yourself. Some people will fight with over-trading their account, failing to abide by a stop loss, trading on tips and rumors as well many other demons that seem to plague new traders. One of the best ways to cure many of these problems is to simply keep a trading journal or diary. By doing this a trader can review what they did, evaluate why and most importantly, be honest with themselves. When I started to do this I was able to see my real faults. This is so important because like many things in life, as traders we never want to admit when we are wrong or made a mistake. We all have an ego and the ego usually wins most of the time, but a real truthful trading journal will help cure the problems faced by most traders.
Let’s take a deeper look at how this has benefited me and how you can utilize it as well…
Here are some of the things I would write down as a stock trader in my journal. I would check the overall trend of the market. That was pretty easy to do. I would simply watch the S&P 500 chart and see if it was trading above the 50 and 200-day moving averages. Once I knew the trend I would attempt to go with it instead of fighting it. This is where a trading journal was so important. I realized that when I tried to short a stock in an overall uptrend my trade rarely worked out. These days I do not short stocks in a bull market, thanks to my old trading journal lessons driving that point home!
Another thing that I did in my trading journal was to write down the reason for every trade I take! For example, if I took a trade based on a consolidation break-out on the charts I would write that down. Then I would write down where that chart setup would fail. This helped me set and place a stop loss on the trade. By writing all of this down I learned what trade setups worked the best. Basically, the more you document in the trading journal the more information you have to learn from.
Remember, trading and investing is a marathon and not a sprint. We are always learning in this business and there are always new things to discover. To this very day, I fill up a 100 page notebook every month and continue to discover new things about the market all the time. Never stop learning, always seek to grow and what will follow is more abundance in your life. All new traders should keep a trading journal and watch the continued growth that comes with it.
Bullseye Trading has logged in 17 consecutive winning trades since it began on September 2, 2019! This performance is verified and documented. Check out EVERY trade now right here.